Technology, Industrial Growth, and Big Business American History

Goals Students will be able to: Terms to Know: Examine causes and consequences of the second Industrial Revolution Compare the first and second Industrial Revolutions in the U.S. Determine how new industry, technology, and business changed the economy Identify significant inventors of the Industrial Revolution Analyze changes as the U.S. became an industrial society Terms to Know: Entrepreneur, protective tariff, laissez faire, patent, Thomas Edison, Bessemer process, suspension bridge, time zone, mass production

Industrial Natural Resources helped the country launch itself head long into the industrial revolution Coal, lumber, rivers, and oil were all abundant resources found in the America’s The United States also had the benefit of a labor increase This increase took place due to political, religious and crop issues in Europe These European immigrants poured into the U.S. and provided workers for the growing number of factories in the North

Capitalism Capitalism is an economic system based on the free market Businesses will sell what people want or they will fail Businesses operated under a laissez-faire system, one in which businesses could operate with minimal government regulation Entrepreneurs, or people who invest money in a product or enterprise in order to make a profit, were those benefited the most from this economic system Entrepreneurs were protected by the government through protective tariffs These tariffs made imported goods more expensive

Innovation Thomas Edison was one of the most prolific inventors of the time Edison patented over 1,000 patents including the light blub What do you now have to create to have a light blub work? In 1844 Samuel Morse perfected the telegraph In 1876 Alexander Graham Bell patented the telephone By 1900 there were more than one million telephones in the U.S. In 1896 Guglielmo Marconi invented the wireless telegraph

Technology and Transportation In the 1850’s, Henry Bessemer developed a process for purifying iron, resulting in a strong and lightweight metal known as steel This process became known as the Bessemer process What can we build with steel? The expansion of the American railroad also brought about change Time zones were developed to make sure that trains would run on time from region to region The expansion of the railroads also made it easier to transport goods from one place to another With fast transport and an abundance of resources, American factories were able to turn out large number of products quickly and inexpensively. This is known as mass production

Corporations To take advantage of expanding markets, investors developed a form of group ownership known as a corporation A number of people share the ownership of a company in a corporation The benefit is a pooling of resources and a share in the liability Corporations tried to make money by Lower wages as low as possible, paying as little as they could for raw materials, advertising, and paying inventors to discover new goods and technologies Other like John D. Rockefeller made deals with railroads that decreased shipping costs and helped in crease profits Some corporations tried to become monopolies A monopoly is when a business controls an entire market single handedly

Integration Businesses use different models for integration: horizontal integration and vertical integration Consolidating many firms in the same business is called horizontal integration While this was illegal in some states, forming a trust, where multiple companies are run by a new organization, is not. Andrew Carnegie, a steel producer, practiced vertical integration Vertical integration involves owning all levels of production. This helps reduces costs and allows you to charge competitors higher prices

Social Darwin and Government Regulations Many felt that the consolidation of power in trusts, cartels, and monopolies was unfair These business people were known as “robber barons” because of their unfair business practices and their ability to cheat the poor William Graham Sumner declared a state of Social Darwinism This means that the businesses and people most fit to survive would adapt to the new system and others would parish In 1887, the United States Senate created the Interstate Commerce Commission (ICC) This organization was built to oversee railroads that crossed state lines and monitor fair business practices In 1890, the Sherman Antitrust Act outlawed any trust that operated across state lines