Industrialization in the United States

Reasons for Rapid Industrialization Available natural resources Available natural resources –Coal, iron ore, copper, lead, timber, oil Labor supply Labor supply –Natural rate of population increase –Increasing number of immigrants Growing market Growing market –Increasing population –Improving transportation & communication systems

New Sources of Power New Sources of Power –Electricity, Oil Available capital Available capital –European & American investors Labor-saving technology increased productivity Labor-saving technology increased productivity –Protected by patents & copyrights –Factory system

Government policies created climate for business to grow Government policies created climate for business to grow –Laissez-faire –Protection of private property –Stable currency –Subsidized railroads with land grants & loans –Protective tariffs –Wars increased demand for goods

Inventions Inventions –Communications – transatlantic cable, telephone –Typewriter –Cash register –Adding machine –Consumer goods – Kodak camera, fountain pen, Gillette safety razor

–Edison’s (research laboratory) Menlo Park – apply trial and error technique, team approach to research  phonograph, incandescent lamp, mimeograph, motion picture camera, dynamo to generate electric power –Westinghouse – air brake for railroad cars, transformer for high-voltage alternating current → lighting of cities, electric street cars, subways, appliances, & machinery

Marketing to large numbers Marketing to large numbers –Department stores (Macy’s, Marshall Field) –Chain Stores (Woolworth’s) –Mail order companies (Sears & Roebuck, Montgomery Ward) –Packaged food (Kellogg, Post) –Refrigerated railroad cars (Swift meats)

Types of Business Organizations

Business Organizations before the Civil War Form of Business AdvantagesDisadvantages Proprietorship Owner close to customers & workers Owner close to customers & workers Has total control of management Has total control of management Receives all profits Receives all profits Owner assumes all risks (Unlimited liability) Owner assumes all risks (Unlimited liability) Limited capital Limited capital One manager’s perspective One manager’s perspective

Form of Business AdvantagesDisadvantages Partnership More capital can be raised More capital can be raised Risks are shared Risks are shared More management perspective More management perspective Profits must be shared Profits must be shared Unlimited liability for owners Unlimited liability for owners Dissolves if one partner leaves (limited life span) Dissolves if one partner leaves (limited life span)

Proprietorships and Partnerships were most common forms of business organizations because most businesses were small-scale operations and these were relatively easy to set up Proprietorships and Partnerships were most common forms of business organizations because most businesses were small-scale operations and these were relatively easy to set up

Business Organizations after the Civil War FormAdvantages Disadvantage s Corporation  Increased capital through sale of stock  Risks shared  Losses limited to investment  Greater number of investors  Ownership transferable  Subject to corporate taxes  Management removed from customers & workers  State & federally regulated

Corporations are “legal persons” and can Corporations are “legal persons” and can –own property –lend and borrow money –sue and be sued –hire and fire people –pay taxes –DONATE TO POLITCAL ADS (Supreme Crt. Decision 2010) Corporations allowed Corporations allowed –nationwide operations –more efficient access to wider sources of capital –more protection to investors

1.) Specialization increases Interdependence FACT: Regions become interconnected and interdependent through communication of ideas and sharing of resources

2.) Industrialization brought both positive and negative changes FACT:

3.) A mass production society is closely related to mass consumption FACT:

4.) Government incentives promote industrialization FACT: HOW?