Robber Barons Business Inventors And Labor

Factors Encouraging Industrial Growth Natural Resources: abundance of raw materials, such as coal, copper, zinc ---fertile soil—good streams for water power Constitution: stable currency for business transactions –regulation of interstate commerce- levying tariffs on imports-patents-states couldn’t tax each other on imports or exports 5 th and 14 th amendments

Government helped industry by Land grants and cash subsidies to railroads High tariffs Maintaining a policy of laissez-faire National Banking Act Other factors: Growth of American polulation: 5million in million in 1900

Causes of Rapid Industrialization 1.Steam Revolution of the 1830s-1850s. 2.The Railroad fueled the growing US economy:  First big business in the US.  A magnet for financial investment.  The key to opening the West.  Aided the development of other industries.

Innovations 3.Technological innovations.  Bessemer and open hearth process  Refrigerated cars

Causes of Rapid Industrialization 4.Unskilled & semi-skilled labor in abundance. 5.Abundant capital. 6.New, talented group of businessmen [entrepreneurs] and advisors. 7.Market growing as US population increased. 8.Government willing to help at all levels to stimulate economic growth. 9.Abundant natural resources.

Goodyear Famous for the process of vulcanizing rubber

Edison o Wizard of Menlo Park” o light bulb, phonograph, motion pictures.

Dictaphone

Phonograph 1877

George M Pullman Sleeping Cars

Pullman’s Company Town

Westinghouse Alternate Currents—Air Brakes

Morse

Alexander Graham Bell telephone 1876

Elisha Otis Invented the safety device to prevent elevators from falling Steam powered passenger elevator

Wright Brothers Kitty Hawk, NC – December 7, 1903

Henry Ford Believed in a Fair Wage

Cornelius Vanderbilt In the early 1860s, Vanderbilt started withdrawing capital from steamships and investing in railroads. By 1867, he owned the New York Central and Harlem railroads. By 1873, he had connected Chicago to New York City.

The Breakers The Breakers was built as the Newport summer home of Cornelius Vanderbilt II, a member of the wealthy United States Vanderbilt family. The 70-room mansion boasts approximately 65,000 sq ft (6,000 m2). of living space. The home was constructed between 1893 and 1895 at a cost of more than $7 million (approximately $150 million today.

Inside

Marble House Summer home of William and Alva Vanderbilt The Breakers was built as the Newport summer home of Cornelius Vanderbilt II, Designed by renowned architect Richard Morris Hunt and - 70-room mansion boasts approximately 65,000 sq ft of living space. The home was constructed between 1893 and 1895 at a cost of more than $11 million (approximately $260 million in today's dollars.

Inside the Marble House

Biltmore House It is the largest privately-owned home in the United States, at 175,000 square feet and featuring 250 rooms. Still owned by one of Vanderbilt's descendants, it stands today as one of the most prominent remaining examples of the Gilded Age

Leland Stanford Central Pacific Railroad-Governor- California

Rockefeller “horizontal integration—allied with competitors to monopolize a given market

Rockefeller Rockefeller provided major funding for a college in Atlanta for African-American women that became Spelman College (named for Rockefeller's in-laws who were ardent abolitionists before the Civil War). The oldest existing building on Spelman's campus, Rockefeller Hall, is named after him. Rockefeller gave $80 million to the University of Chicago turning a small Baptist college into a world-class institution by Rockefeller also provided financial support to Yale, Harvard, Columbia, Brown, Bryn Mawr, Wellesley and Vassar.

Carnegie Veritical Integration—controlled all aspects of an industry One of the earliest, largest and most famous examples of vertical integration was the Carnegie Steel company. The company controlled not only the mills where the steel was manufactured but also the mines where the iron ore was extracted, the coal mines that supplied the coal, the ships that transported the iron ore and the railroads that transported the coal to the factory, the coke ovens where the coal was cooked,

Carnegie’s Philanthropy $ The Anglo-Saxon race is superior. $ “Gospel of Wealth” (1901). $ Inequality is inevitable and good. $ Wealthy should act as “trustees” for their “poorer brethren.” $ To sum up: The wealthy entrepreneur must assume the responsibility of distributing his fortune in a way that it will be put to good use, and not wasted on frivolous expenditure

Libraries By the first few years of the 20th century, Carnegie had refined the giving of libraries into a neat, streamlined procedure. Over 33 years, he provided funds for 2,811 libraries in all, including 23 in New Zealand, 13 in South Africa, and one in Fiji. Ordering a library from Carnegie was as easy as ordering a sofa from the Sears Catalog.

J P Morgan Self-conscious about his rosacea, Morgan hated being photographed

Carnegie and Morgan Carnegie built a single company that owned iron ore deposits in the Mesabi Range –steamboats on the Great Lakes and steel mills in Pittsburg used the Bessemer process and improved the quality of steel In 1901 J P Morgan bought out the Carnegie interest for 500 million Morgan combined various steel companies under a single company-the United States Steel Corporation—first billion dollar corporation in the United States

Morgan’s Museum and Library Metropolitan

Gustavus Swift ( ) headed a large American corporation that revolutionized the meatpacking industry by using refrigerated railroad cars, strict cost controls at his plants, and "vertical integration." His practices helped overcome consumer mistrust of processed meat and inspired the vast, mechanized meatpacking businesses depicted in Upton Sinclair's infamous 1906 novel "The Jungle".

Charles A Pillsbury Pillsbury introduced a system of company profit sharing in addition to regular wages, as reward for their interest in the success of the business. As a consequence, no strikes ever interrupted the Pillsbury business.

James Duke American Tobacco Company

New Business Ideas 1.Laissez Faire  the ideology of the Industrial Age. Individual as a moral and economic ideal. Individuals should compete freely in the marketplace. The market was not man-made or invented. No room for government in the market!

Government Intervention Railroads-First regulated industry Railroad Abuses: 1. high rates-monopoly in this area-watered stock 2. discrimination regarding rates-rebates for large shippers-small shippers full price-long hauls often cost less than short hauls 3. political corruption-use of bribery-contributions to political parties-free passes 4. Grange protested abuses but faced setback in Wabash v Illinois

Government Intervention 1887  Interstate Commerce Act Provision—1. forbade discrimination in rates or rebates 2. Prohibited railroads from charging more for a short long than a long haul 3. prohibited pooling 4. ordered a ten day motice and public posting on new railroad rates 5. Declared that railroad rates should be reasonable and just 6. established the ICC Weaknesses—1. vague language 2. shortage of qualified personnel 3. complexity of railroad business 4. courts not sympathetic.

Regulating Trusts 1877  Munn. v. IL 1886  Wabash, St. Louis & Pacific Railroad Company v. IL 1890  Sherman Antitrust Act  in “restraint of trade”  “rule of reason” loophole 1895  US v. E. C. Knight Co-American Sugar Refining company controlled 98%—Court ruled that refining was a local activity The court ruled that manufactur

Standard Oil Company Created by Rockefeller in Ohio By 1879 Standard Oil Company controlled over 90% of the country’s oil refineries Ordered Dissolved the Ohio Supreme Court Reorganized as a holding company and it was ordered dissolved by the United States Supreme Court Court ordered the 34 member companies to function as separate units

Share of World’s Market

Herbert Spencer Social Darwinism British economist. Advocate of laissez-faire. Adapted Darwin’s ideas from the “Origin of Species” to humans. Notion of “Survival of the Fittest

Social Darwinism in America William Graham Sumner Individuals must have absolute freedom to struggle, succeed or fail. Therefore, state intervention to reward society and the economy is futile He criticized welfare programs for foolishly disrupting this rightful stratification and unfairly burdening what he called "the forgotten man," the autonomous citizen who worked hard and pulled his own weight.

Social Darwinism in America William Graham Sumner Individuals must have absolute freedom to struggle, succeed or fail. Therefore, state intervention to reward society and the economy is futile He criticized welfare programs for foolishly disrupting this rightful stratification and unfairly burdening what he called "the forgotten man," the autonomous citizen who worked hard and pulled his own weight.

The American Dream Horatio Alger Rags to Riches Myth or Reality