Presentation on theme: "Questions What is the most important invention of today?"— Presentation transcript:
1 Questions What is the most important invention of today? Who was the first billionaire in U.S. History?Why do we have time zones?Who had more money: Rockefeller or Bill Gates?How did industrialists create monopolies?Is the game “Monopoly” related to this time period?Were men like Carnegie and Rockefeller positive or negative for the country?What were the causes and effects of industrialization?
3 Industrialists, Wealth & Power 1865-1920 IndustrializationIndustrialists, Wealth & Power
4 Innovations/Inventions Bessemer ProcessElectricityTelephoneEscalatorElevatorLight bulbElectric sewing machineAssembly lineCentral heatingElectric trolley carsRefrigerated rail carsWhat was the most important innovation of the “Gilded Age”?
6 Brooklyn Bridge Built 1883 Suspension bridge Symbol Impact of industry ManufacturingFortunes made by fewHard labor
7 Steel Workers & Production Bessemer ProcessRefine iron into steelLarge quantities cheaply (2,000 tons in 1867 to 7 million tons in 1900)Steel more durable than iron (train tracks, girders, beams, cables)
8 Skyscraper Flatiron building NYC (1901) Steel structure Steel fueled growth of constructionChanges in American citiesGrowth, need for spaceTaller buildings = profit for developers
9 Andrew Carnegie & Fellow Businessmen Innovation & invention sparked growthBy ,000 millionairesAndrew CarnegieImmigrantBessemer process, wealth through steelPhilanthropist in later lifeMillionaire” a trustee for his poorer brethren”Produced 80% of nation’s steel
10 Carnegie Sold the company to J.P. Morgan in 1901 for $480 million He gave away over $350 millionCarnegie HallCarnegie LibraryThe Carnegie Endowment for International PeaceThe Carnegie Institution of WashingtonThe Carnegie Foundation for the Advancement of TeachingThe Carnegie Hero FundsBuilt 2,509 libraries
12 Pennsylvania Oil Field First successful well in Titusville, PA in 1859Industrialists raced to exploit oil reserves refining became big business
13 Refining One barrel yielded: 60-65% illuminating oil 10% gasoline 5-10% benzoyl or naphtha (volatile inflammable liquid used as a solvent in dry cleaning, varnish making, etc.)with the remainder tar and wastes
14 John D. Rockefeller, Sr. Began as a bookkeeper Went into refining with partnersBought out partners for $72,500Partnered with brother called company “Standard Works”Bought refineries to eliminate “wasteful” competitionBy 1879, controlled over 90% of American refining (he was only 40 years old!)
15 Why? the state of the oil business was chaotic entry costs were so low in both oil drilling and oil refining, the market was glutted with crude oil with an accompanying high level of wasteweak firms in their attempts to survive drove prices down below production costs hurting even the well managed firms such as his own
16 How Rockefeller did it… Created a “trust”Stockholders of indep. Companies agree to exchange shares of stock for trust certificates issued by firms such as Standard OilShareholders receive dividends, but lost control of managementGained a virtual monopoly over oil industry
17 Rockefeller cont’dBy making its own barrels, glue, hoods, pipelines, food for horses, etc... Standard Oil enlarged each time his profit marginThe costs of barrels dropped of $1.25 each, sparing $4 million per yearprice of metal boxes was lowered of 15 cents, sparing $5 million per yearUsed oil byproducts (gasoline - when gas engine became available)
18 Rockefeller Philanthropy $75 million to University of ChicagoRockefeller Institute for Medical Research$50 million to General Education Board (to improve schools in the South)Rockefeller Sanitary Commission (to eradicate hookworm)Rockefeller Foundation (food, health and work for poor)
20 New York Central Railroad Co. RailroadsCornelius VanderbiltNY and Harlem RRHudson RRNew York Central Railroad Co.
21 "I have been insane on the subject of moneymaking all my life." -- Vanderbilt, quoted in the New York Daily Tribune, March 23, 1878.
22 Railroad Transportation was key to industrialization Move freight and passengers1860 only 30,000 miles of track (most in East)Needed to load, unload several times to move it (why is this bad?)
23 “The Commodore” Cornelius Vanderbilt After Civil WarQuit school at 11 to help his poor family1810 $100 loan and started his first boating businessSteamship route through Nicaragua to compete with Panama route (This netted $1 million/year)Age 70 switched to RR business
25 How he did it… Builders began consolidating rail lines “Vandy” bought rails between NY & ChicagoNY Central RR refused to sell, he refused to let passengers and freight transfer from NY Central to hisNY Central finally soldBy 1877, controlled 4,500 mi. of track
27 Consolidated Rail Lines Inexpensive and faster shippingRR companies laid track side-by-side so traffic could move in both directionsCaused Time Zones to be created!
28 Vanderbilt’s Philanthropy $50,000 to the Church of Strangers$1 million to Central University (now Vanderbilt University)Left the rest of his fortune to his son William
29 William H. William Henry Vanderbilt (above) Also, Jay Gould (right leg), who handed Vanderbilt's father, Cornelius, two of his rare defeats in building a railroad empire.Gould indirectly forced the younger Vanderbilt and others to build larger integrated rail systems.Cyrus W. Field (left leg), developer of the New York Elevated Railroad (and the first transatlantic cable).Field was the brother of Stephen J. Field, a Justice of the U.S. Supreme Court.
30 A Footnote to the Vanderbilt Fortune When asked by a reporter whether railroads should be run for the public benefit, William Vanderbilt responded,"The public be damned!"
31 Today’s Dollars $100 billion= GDP of Portugal Could pay 7 times over for the recovery of W. Europe after WWIICould pay to send a man to the moon 4 timesCould pay for 5 international space stations
32 Wealth Rankings (today’s dollars) Rockefeller $189.6 billionCarnegie $100.5 billionVanderbilt $95.9 billion - began with $100 loan!Astor $78 billion (fur trading)Bill Gates’ Microsoft stock worth $29.93 billion (down from over $100 billion before the tech. stock plunge)
33 Do the following at the bottom of your notes… Write a one-sentence summary of what you learned so farWrite a one-sentence reaction to the informationMake a Prediction: Predict which factors you think allowed these men to do all of this.Make a Prediction: What effect do you think they will have on American society?Evaluate: So far, do you think men like Carnegie and Rockefeller were positive or negative for the country? Why?
34 Key Factors Natural resources Improved transportation Coal, oil, iron oreImproved transportationrailroad, mechanized farming equipmentGrowing labor force - immigrationInnovation in technology (inventions)“Social Darwinism” philosophyLaissez-faire government policiesNo income tax, no environmental controlsBacked management over labor
36 Robber Barons or Captains of Industry? Drove companies out of businessExploited workersCut corners on quality“bought” government officialsOvercharged for goodsPolluted environmentUsed natural resourcesIndustrial espionage
37 Robber Barons or Captains of Industry? Willing to gamblePhilanthropyInventions/innovationsLowered cost of products (economies of scale)Improved overall quality of life
39 Impact of Industrialism Benefited middle class with mid-level jobsPoor water, sewage systemsLittle education among factory workersDisease typhoid, cholera in filthy citiesInflated prices at company storesLong hours, injuries on jobLow pay but better than Europe
40 Change and Discrimination Women entered work force but paid lessWomen in textile mills 50% of men’s payChild labor - almost 2 million childrenMinorities and immigrants - CA Chinese self-employed to make more $Businesses pitted minorities against each other
41 Organized labor Shorter hours More pay Elimination of child labor Some unions discriminatedStrikes and violence
42 Food Contamination Fraud - narcotics sold as cures Canned foods - dangerous additivesMuckrakers - The Jungle, McClure’sUsed writing to expose corruption, wrongdoing
43 Toll on Environment Mining Clear-cutting forests Overgrazing livestock Chicago River - “great open sewer”Air pollution from burning coal to power machines