3Learning TargetsI can explain why industry improved so much in the late 1800’s.I can evaluate how new technology changed Americans’ lives.
4Natural Resources Fuel Industrialization Some Background…After Civil War, U.S. was still farming nationBy 1920, became industrial powerIndustrial Boom due to:Natural ResourcesGov’t support of businessGrowing Urban Population
5Natural Resources Fuel Industrialization Black GoldNative Americans used oil for natural usesBy 1840, Americans used it to light lampsEdwin L. DrakeUsed steam engine to pump oil out of groundOil BoomOil companies started up across the nationStarted to distill oil into keroseneWould later discover use for gasoline too
7Natural Resources Fuel Industrialization Bessemer Steel Process (1850)Coal and Iron were abundantInjected air into molten (hot) iron to remove carbon and other impuritiesThis created early version of steel!Much strongerEasy to make, abundant resourcesWhat can you do with steel?
8Natural Resources Fuel Industrialization New Uses for Steel:Railroads (track)Farming MachineryHUGE constructionBrooklyn Bridge (1883)Skyscrapers
9Inventions Promote Change Some Background…Plentiful resources and impressive ingenuity changed the way people lived and worked
10Inventions Promote Change The Power of Electricity:Thomas Edison (1876):Perfected incandescent light bulbCreated system that distributed electricity across cityBy 1890, electricity powered most businessesCould locate wherever they wantedAllowed business to grow tremendously
11Inventions Promote Change Inventions Change Lifestyles:Christopher SholesThe TypewriterAlexander Graham BellThe TelephoneWomen found work in factoriesWorkers’ standard of living improvedLess back breaking work10 fewer hours each week
13Learning TargetsI can explain how the transcontinental railroad influenced American BusinessI can describe how the Federal government influenced railroads
14A Little Background…The growth of railroads benefitted the nation, but also led to corruption and led to the need for government regulation.
15Railroads Span Time and Space A National Network:By 1856, went to the Mississippi RiverTranscontinental RailroadBy 1869, the U.S. had a railroad that went from east coast to west coast1865 = 30,000 miles of track1890 = 180,000 miles of track!
16Railroads Span Time and Space Romance and Reality:Railroad workers have new opportunitiesHired Chinese and Irish ImmigrantsAlso hired Civil War veterans desperate for workIn 1888, 2,000 men died, 20,000 were injured!
17Railroads Span Time and Space Railroad Time:Noon = sun at its highestNoon in Boston was 12 minutes later than New York!1869, proposed dividing world into 24 time zonesU.S. would get fourEastern, Central, Mountain, and PacificHelped businesses become more efficient
18Opportunities and Opportunists New Towns and Markets:Railroads linked townsThis promoted new businessNew towns emerged along railwaysDenver and Seattle
19Opportunities and Opportunists George M. Pullman:Built a factory for making “sleeper” cars for trainsBuilt a city for his workersProvided housing, medicine, etc…Eventually faced a strike when he refused to lower rent, when he cut pay
20Opportunities and Opportunists Credit Mobilier:Stockholders of the Union Pacific RailroadOrganized a construction companyGave them a corrupt contract, and pocketed the profits themselvesEven game some of the $ to buy congressmen’s approval!
21The Grange and the Railroads Railroad Abuses:Railroad companies favored businesses over farmersOften fixed prices with other railroads to eliminate competition and drive up profitsFarmers had little choice who to transport goods with
22The Grange and the Railroads Granger Laws:Farmers, or Grangers, got together to try and create changeVoted for legislators that would support their causeIn Munn vs. Illinois the Supreme court supported the new Granger Laws that limited prices
23The Grange and the Railroads The Interstate Commerce Act:At first, Supreme Court said Federal Government could not regulate trade from state to stateSo Congress acted:Created Interstate Commerce ActAllowed Fed to control trade by railroad through the statesUnfortunately, the act was not well enforced
24The Grange and the Railroads Panic and Consolidation:Corruption, mismanagement, overbuilding, and competition pushed many railroads towards bankruptcyThe “Panic of 1893”, an economic depression, made things even worseBy 1900, just 7 companies controlled 2/3 of the nations railroads
26Learning TargetsI can describe the growth of American business in the late 19th CenturyI can evaluate how effective American Business policies were
27Carnegie’s Innovations 1873:Andrew Carnegie visits a British Steel MillImpressed by Bessemer ProcessDecides to start his own steel business1899:The Carnegie Steel Company made more steel than all of Great Britain!
28Carnegie’s Innovations New Business Strategies:Make better products, more cheaplyUse of machinesBetter accounting (accurate costs)Encouraged competition amongst assistantsVertical and Horizontal Integration
29Carnegie’s Innovations Vertical Integration:Carnegie bought out all of his suppliersControlled wages, and pricesHelped to increase profitCoal, railways, iron mines
30Carnegie’s Innovations Horizontal Integration:Carnegie also tried to buy out his competitionThose he didn’t buy, he forced out of businessLowered prices enough that competitors couldn’t make itOnce competition was limited, his profits increased dramatically
31Social Darwinism and Business Charles DarwinWas a biologist who created theory of evolution and survival of fittestDarwin’s theories were applied to societySocial DarwinismIf you made good products at a reasonable price, you would succeedIf you didn’t do this, you would fail
32Social Darwinism and Business Principles of Social Darwinism:Natural SelectionBusinesses with the strongest traits would surviveBusinesses with weaker traits would notThe government should not interfereIn time, only the strong would pass on its ideas to the next business
33Social Darwinism and Business A New Definition of Success:4,000 new millionaires after the Civil War!Social Darwinism supported Protestant ideas of work ethicAnd that riches were a sign of God’s favorThe poor must be lazy!
34Fewer Controlled More Growth and Competition: As companies grew, many tried to limit their competitionWent against natural laws of Social DarwinismTried Horizontal Integration (controlled competition) in the form of mergersBuying out stock of competitionHolding CompaniesJob was to buy stock of competition!
35Fewer Controlled More Growth and Consolidation: John D. Rockefeller Oil TycoonUsed Trusts to control Oil IndustryHe and other oil companies entered into a trustThey would share profitsRockefeller owned most of the trust, and thus had a monopoly on the Oil Industry
36Fewer Control More Rockefeller and the “Robber Barons” Many of these successful businessmen became wealthy doing bad thingsBought out competitorsPaid workers low wagesLowered prices to drive out competitionThen raised prices even higher to increase profits!So they gained the title of “robber barons”
37Fewer Control More Rockefeller and the “Robber Barons” Despite bad name, they did do some goodRockefeller gave away over $500 millionCarnegie gave away 90% of his fortuneTheir donations have helped fund the education of generations
38Fewer Control More Sherman Anti-Trust Act Government was worried there was no longer fair competitionSo they enacted the Sherman Anti-Trust Act of 1890Was supposed to make it harder for Rockefeller to form trusts and control an industryIn reality, it became very hard to enforce!Rockefeller and others found ways around the law
39Fewer Control More Business Boom Bypasses the South: The North continued to prosperStrong industry and plentiful resourcesControlled the railroadsThe South:At the mercy of Northern IndustriesMostly farming