The Growth of Industry SOL: VUS.8b Objective: The student will demonstrate knowledge of how the nation grew and changed from the end of Reconstruction through the early twentieth century by b) describing the transformation of the American economy from a primarily agrarian to a modern industrial economy and identifying major inventions that improved life in the United States.

Essential Understanding: In the years after the CIVIL WAR, the United States developed into an INDUSTRIAL POWERHOUSE. Inventors and SCIENTISTS, backed by BUSINESS leaders, created an explosion of inventions and improvements. TECHNOLOGICAL change spurred the growth of INDUSTRY, primarily in NORTHERN cities.

Daily Life in 1865 No LIGHT- The rising and setting of the SUN dictated the rhythm of a day’s work since indoor ELECTRIC LIGHTING did not exist.

Daily Life in 1865 No REFRIDGERATION- People sawed blocks of ice out of frozen ponds during the winter, packed them in sawdust, and stored them in icehouses for later use.

Daily Life in 1865 Slow COMMUNICATION- Most mail from the East Coast took TEN days to reach the Midwest and THREE WEEKS to get to the West. It took several MONTHS for news to cross the Atlantic.

Development of the Corporation Corporation- a form of business ORGANIZATION that enables a GROUP of individuals to operate as a SINGLE legal entity Major Advantage = LIMITED LIABILITY –The PERSONAL assets of the owners cannot be seized in order to pay BUSINESS expenses Industrial LEADERS used the corporation to build huge BUSINESSES

Steel Processing/ BESSEMER PROCESS (1857) HENRY BESSEMER CHEAP and EASY way to make steel

Steel Processing/ BESSEMER PROCESS (1857) Possible for trains to carry HEAVIER loads on STEEL tracks instead of IRON Able to build TALLER buildings with steel, as it is LIGHTER than iron

Brooklyn Bridge

Thomas Edison

Electricity Thomas Edison invented the light bulb. He made electricity a viable source of power and light.

Bell and Prototype

Telephone Alexander Graham Bell developed the telephone in By 1900, 1.5 million telephones were in use.

Wright Brothers

Airplanes Orville and Wilbur Wright achieved the first powered, sustained and controlled airplane flight in 1903 in Kitty Hawk, North Carolina.

Wright Brothers

Assembly Line Manufacturing Henry Ford improved the assembly line process. Each worker would complete a specific job in the construction of the final product. The product would move, not the people.

I love Lucy

Before and After… Before Assembly Line Manufacturing Specialized custom products Products Built by one expert from start to finish Time consuming to make products $$$ Expensive $$$ After Assembly Line Manufacturing Standardized products Products built by many workers piece by piece Quick production Cheap products Boring jobs

Industrial Leaders

The Rise of Big Business SOL: VUS.8b Objective: The student will demonstrate knowledge of how the nation grew and changed from the end of Reconstruction through the early twentieth century by b) describing the transformation of the American economy from primarily agrarian to a modern industrial economy and identifying major inventions that improved life in the United States.

Andrew Carnegie Steel

Founded steel plants to use the Bessemer steel process.

Andrew Carnegie & Carnegie Steel Carnegie practiced “vertical integration” –owned all the steps of production of steel. –Reduced costs by not paying middlemen Coke fields purchased by Carnegie Coke fields Iron ore deposits purchased by Carnegie Coke fields Iron ore deposits Steel mills purchased by Carnegie Coke fields Iron ore deposits Steel mills Ships purchased by Carnegie Coke fields Iron ore deposits Steel mills Ships Railroads purchased by Carnegie

Created U.S. Steel Corporation in 1901 and controlled 60% of the steel business.

J.P. Morgan finance

Morgan was an INVESTMENT banker Created HOLDING companies—bought enough STOCK in other companies to be able to CONTROL them. His company, “UNITED STATES STEEL” bought Carnegie Steel

John D. Rockefeller Oil

John D. Rockefeller & Standard Oil Rockefeller practiced “Horizontal Consolidation” –owned most of the oil refineries (90%). –Drove down prices and bought out his competitors –Result = MONOPOLY – one company controls price and supply

Rockefeller’s lawyer creates a new kind of monopoly called a trust. This new trust controlled a high percentage of the nation’s oil-refining capacity.

Cornelius Vanderbilt railroads Vanderbilt owned New York Central Railroad and Hudson River Railroad.

Why were these “captains of industry” able to build such huge businesses? Government policies –Laissez-faire capitalism – very little government regulation –Special considerations – land grants to railroad builders

Why were these “captains of industry” able to build such huge businesses? Increasing labor supply from –Immigration –Migration from farms America’s possession of a wealth of natural resources and navigable rivers