1. The Rise of Industrialization and Big Business in America, 1870-1910
Building a Colossus:
The Rise of Industrialization and Big Business in America,

2. Life in the Late 1800s

3. Growth Factors: Understanding How Business Got So Big
After the Civil War, a number of factors contributed to America’s rapid industrialization:
The Nation’s unparalleled abundance of natural resources (timber, minerals and rivers)
The development of more efficient, labor-saving machinery and mass-production techniques (these will help increase productivity and efficiency, leading to bigger profits and more production).
Federal and state politicians imposed higher tariffs on foreign manufacturers to blunt competition from foreign countries and provide cash for a slew of internal improvements like railroads and canals.
The Federal government began issuing large tracts of land via the Homestead Act of 1862 that encouraged Westward migration.

4. Kicking It Off: Technology First
The Second Industrial Revolution was started by three primary factors:
The creation of an interconnected national transportation and communication network.
This helped create a national and international market for American goods.(Ex. Railroads, overland and undersea telegraph cables, steamships, etc.)
The use of Electric power.
Electricity created advances in the power and efficiency of industrial machinery. It also contributed to the creation of electric trolleys and subways in American cities. Additionally, it greatly enhanced the production of steel and chemicals.
The systematic application of scientific research to industrial processes.
Researchers figured out how to extract kerosene and gasoline from crude oil, and how to improve steel production using revolutionary new methods.

5. Carnegie, Steel, and His Legacy
The Man of Steel:
Carnegie, Steel, and His Legacy

6. “You Cannot Push Anyone Up A Ladder Unless He Be Willing To Climb A Little Himself”
In America, steel-making became synonymous with one man: Andrew Carnegie.
Born in Scotland, Carnegie came to America at the age of 13 and got a job working in a Pennsylvania factory for $1.50 a week.
He moved on to jobs with Western Union and the Pennsylvania Railroad, made smart investments, and, by the time he was 28, was making $50,000 a year.
He bought up or leased vast holdings of iron ore and coal in order to corner the supply of raw materials.
By 1890, America was producing 4 million tons of steel per year, mostly for the railroads, and 70 percent of it was made by Carnegie’s steel plants near Pittsburgh.

7. Carnegie’s Big Break
In 1853, Tom Scott, Superintendent for the Pennsylvania Railroad, took notice of Carnegie’s organizational abilities and hired him as his personal secretary and telegrapher.
Carnegie stayed with the company for 12 years, during which time rail construction soared and railroads were the center of a booming U.S. economy.
After Scott was promoted to vice president in 1859, Carnegie took his place as Superintendent of the western division, where he helped to make it a model of efficiency.
By 1865 it had 30,000 employees and had expanded east to New York City and West to Chicago, making it the largest private company in the world.

8. The Man of Steel
In 1865 Carnegie acquired a controlling interest in the Union Iron Company.
Traditional iron rails deteriorated rapidly under the loads of larger and heavier trains.
J. Edgar Thomson, head of the Pennsylvania Railroad began to experiment with steel rails in 1862.
Two major developments sped Carnegie’s rise to the top of the steel empire:
Henry Bessemer’s patented process for turning iron into steel was made available to American manufacturers.
Iron ore began flowing freely from deposits in northern Michigan.

9. The Man of Steel By the Numbers

10. The Man of Steel Sells Out
Using the Bessemer process, Carnegie mass produces steel for the first time in history. He produces over 11 million tons of it at the turn of the century.
With it, Pittsburgh transforms from a small town to a bustling metropolis almost overnight, almost tripling it’s population, and making Carnegie one of the richest men alive.
In 1901, Carnegie sold out to financier J.P. Morgan for the staggering sum of $447 million.
Carnegie and other giants of capitalism immodestly preached the “Gospel of Wealth,” arguing that it was natural for a few people to have most of the wealth, a sort of economic “survival of the fittest.”
As long as they used their fortunes to benefit society, they contended there was nothing wrong with it.

11. Leaving a Legacy
In his later years, he gave away more than $300 million of his fortune through his distribution of wealth (he hated the word philanthropy)
He gave money to many universities, built 1,700 libraries, and helped fund numerous hospitals, parks, halls for meetings and concerts, swimming pools, and church buildings.
He also donated 800 organs to churches around the world.
He is also responsible for Carnegie Hall in New York, and hundreds of Carnegie libraries throughout the United States.

12. John D. Rockefeller, Carnegie’s Closest Rival
The Titan:
John D. Rockefeller, Carnegie’s Closest Rival

13. The Man Who Would Be King
John D. Rockefeller, a Cleveland businessman who had made some money during the Civil War selling meat and grain.
In 1870, Rockefeller combined five companies he owned into the Standard Oil Company.

14. The Gold Standard: Standard Oil
By 1879, Standard Oil controlled 95 percent of the nation’s refining capacity, a huge network of pipelines, and large oil reserves, and by 1892, Rockefeller had amassed a fortune of $800 million.
He paid no one a profit, that is to say that Standard Oil made its own barrels, cans and whatever else it needed, an economic ideal called vertical integration.
It kept large cash reserves on hand in order to keep the company independent of banks in case of economic crisis.

15. The Principles of Big Business
Vertical Integration:
When a company expands its business into areas that are at different points on the same production path, such as when a manufacturer owns its supplier and/or distributor.
It helps companies reduce costs and improve efficiency by decreasing transportation expenses and reducing turnaround time, among other advantages. 
Horizontal Integration:  
The idea of allying with the competitors in the same market to create a monopoly for the specific area to increase efficiency.

16. Standard Oil and Its Legacy
In 1882, Standard Oil organized the first of the nation’s trusts.
A trust oversaw virtually all of an industry’s operations, from production to price-setting to distribution and sales.
It was supposedly run not by a single company, but by trustees. A trust issued certificates to stockholders in the industry’s companies and paid dividends.
The trust idea eventually brought the Standard Oil monopoly to an end in 1899.
Rockefeller amassed a huge fortune, and, as a result, became the world’s leading philanthropist, donating $500 million over the course of life to various charities.

17. Choo! Choo!!!!: The Rise of the Railroads
From 1859 to 1899, the value of the country’s manufactured products rose 622 percent, from $1.8 billion to $13 billion, and America became the world’s leading manufacturer.
It rode its way to the top on the train.
The railroad system was America’s first truly big business and its growth and impact were enormous.
In the 41 years from 1830 to 1870, about 40,000 miles of track were laid in the country.
But in the 20 years from 1871 to 1890, more than 110,000 miles were laid. In 1869, the first transcontinental line linking the East and West coasts was opened, and by 1900, there were four more.

18. Riding the Rails: Creating a Successful Business
By 1890, annual railroad freight revenues totaled $1 billion, which was more than twice what the federal government gathered yearly in revenue.
The railroads not only transported goods and people, they dictated where towns would grow and businesses would locate.
They employed more than one million people by 1900.
They helped push Congress to create four standard time zones across the country so train schedules could be worked out.

19. The First Tycoon
The railroads created or greatly expanded other industries with their demands for materials like steel for rails and passenger and freight cars.
And where the rails went, the wires went.
With telegraph stations at most train stations, the Western Union Company was sending 40 million messages a year by 1883, over 400,000 miles of wire.
There was Cornelius Vanderbilt in the East, Thomas A Scott in the Midwest, James J. Hill in the Northwest, and Jay Gould in the Southwest.
Arguably Vanderbilt was the most powerful and influential of the group.

20. Rebates For Everyone: The Influence of Railroads
Railroads bribed politicians and other entities in three main ways:
Rebate: a partial kick back of a large company's shipping costs in exchange for all of its freight business.
Long and Short Haul Abuses: a short journey where no competition existed cost more than a long one where two or more lines competed.
Graft: officials bribed public officials by giving out free train passes.

21. Regulating the Railroads
The principle that states could regulate commerce entirely local in character was established by Munn v. Illinois. 
The Interstate Commerce Act of 1887 applied to trains that crossed state lines. It  prohibited pooling, rebates, discrimination in rates and services, and required that all charges should be just and reasonable. It also provided for an Interstate Commerce Commission to supervise the administration of the act.

22. Let’s Go Shopping…In a Catalog
The Rise of Sears & Roebuck

23. Creating a Retail Empire
It was created by Richard Sears and Alva Roebuck, and became an obsession for many families not able to live in big cities.
The creation of the Sears and Roebuck mail-order catalog offered people a cornucopia of goods through the mail in the 1890s.
786 pages long, it offered groceries, drugs, tools, bells, furniture, iceboxes, stoves, household utensils, musical instruments, farm implements, boots and shoes, clothes, books, and sporting goods.
Because they could buy in high volume from wholesalers, Sears and Roebuck were able to offer the items in their catalog at a 40 percent discount through their catalog.

24. The Impact of the Catalog
By 1907, Sears and Roebuck had become one of the largest business enterprises in the nation.
The Sears catalog helped create a truly national market and in the process transformed the lives of millions of people.
With the advent of free rural mail delivery in 1898 and the widespread distribution of Sears catalogs, families on farms and in small towns could purchase products by mail that had not been available, or were too expensive previously.
By the turn of the century, 6 million Sears catalogs were being distributed each year, and the catalog had become the single most widely read book in the nation after the Bible.

25. Big Business Gets the Rights of the People
Fight For Your Rights:
Big Business Gets the Rights of the People

26. Equal Protection Under the Law
In 1886, the Supreme Court set a precedent that has been interpreted to mean that corporations have the same rights as living persons under the Fourteenth Amendment to the Constitution.
Before oral argument took place in Santa Clara County v. Southern Pacific Railroad Company, Chief Justice Waite announced: "The court does not wish to hear argument on the question whether the provision in the Fourteenth Amendment to the Constitution, which forbids a State to deny to any person within its jurisdiction the equal protection of the laws, applies to these corporations. We are all of the opinion that it does."

27. Corporate “Personhood”
From that point on, the 14th Amendment, enacted to protect rights of freed slaves, was used routinely to grant corporations constitutional "personhood."
Justices have since struck down hundreds of local, state and federal laws enacted to protect people from corporate harm based on this premise. Armed with these "rights," corporations increased control over resources, jobs, commerce, politicians, even judges

28. Citizens United: Big Business in Today’s Society
In Citizens United v. Federal Election Commission (2010), the Supreme Court ruled that the government may not ban political spending by corporations in candidate elections.

29. The Sherman Anti-Trust Act
The Sherman Antitrust Act  of 1890 outlawed all contracts, combinations, or conspiracies in restraint of trade, and all monopolies.
It is through this act that meatpacking and the Standard Oil Monopoly will be brought down a few years later thanks to Theodore Roosevelt.

30. Labor and the Creation of the Middle Class
A True Rags to Riches Story…Not

31. Whitman’s Thoughts…
“The most valuable class in any community is the middle class, then men of moderate means, living at the rate of a thousand dollars a year or thereabouts.”
Many people still believed classes did not exist during this period of time, but that was soon to change.
Between 1850 and 1890 the proportion of the nation’s wealth owned by the 4,000 richest families nearly tripled. At the top of the pyramid rested some 200 families worth $20 million or more.

32. The Consolidation of the Middle Class
In 1889, the New Century Dictionary introduced the phrase “middle class” in the United States. It reflected a growing awareness that American society had become permanently divided.
Professionals were the backbone of this new class of American society. All professions organized themselves into associations, and set educational standards for admission to the group.
By these standards professionals could command high salaries and enjoy prestige and a comfortable standard of living.

33. Becoming Middle Class
Between 1870 and 1890 approximately 200 societies were formed to establish and maintain the credentials of their members.
Some professions (doctors and lawyers) succeeded in having their standards written into law. By 1900, doctors and lawyers could practice legally only when licensed under the auspices of professional associations in the state they wanted to practice.
Despite this, professionals pay did not remain standardized, and thus made it hard to live the American dream they sought.

34. My Mind On My Money… MIDDLE CLASS PROFESSIONS (1870-1890)
YEARLY SALARIES OF THOSE PROFESSIONS
BUTCHER
$1,600 per year
SKILLED FACTORY WORKERS
$600 per year
TREASURY DEPARTMENT CLERK
$1,200 per year
SHOEMAKER
$500 per year
CASHIER/DEPT. STORE CLERK
$100-$1,000 per year (Depending on Experience)
TEACHER
$724 (National Average in 1890)
ASSISTANT PROFESSOR
$1,800 per year
FULL PROFESSOR
$5,000 per year

35. The Majority of Americans
Studies indicate that fewer than 2 percent of the wealthiest Americans at the turn of the century controlled over 1/3rd of the nations wealth.
The top 10 percent owned approximately 3/4ths of the nations wealth.
Thus rising from “rags to riches,” the very foundation of the American dream, was not easy to do in those days.
For most Americans labor was just that. Long hours, low pay, and little in the way of “benefits.”
It was not the best time to be working, no matter what your age, or gender

36. Changing Employee-Employer Relationships
Factories were often known for having little in the way of safety measures, or great health conditions.
American industries had the highest accident rate in the world. In 1913 alone there were 25,000 workplace fatalities and 700,000 job-related injuries that led to disability.
American industries had shifted from having close interpersonal relationships with their workers prior to the Civil War, to having completely impersonal, contractual relationships with them.
The American worker had become just a number or a face with no personal connections being made by employers

37. “Get to Work Boy!”: Child Labor at the Turn of the Century
After the Civil War a large contingent of young boys and girls went to work in factories, mines, mills and canneries, often for very meager wages.
Immigrants desperate for income would send their children to work in mills, mines, and factories across the country.
The only proof required to hire most children was a statement from their parents saying they were able to work.
The idea was that everyone had to pitch in, regardless of age. By 1880, one out of every six children was working full-time in some sort of job.
In factories few machines had any safety devices, and had no system for ventilating air or fire escapes.
Children, on average, suffered three times as many accidents as adult workers.

38. The Knights of Labor and the Haymarket Disaster
The most important labor organization to emerge from the late 1870s was the Knights of Labor.
It admitted everyone, and advocated a host of progressive reforms, including: the eight hour workday, equal pay for men and women, the abolition of child and prison labor, and a national income tax.
As the economy worsened throughout the 1870s and into the late 1880s, the Knights of Labor and its members grew increasingly impatient and radical in their labor aims.

39. The Haymarket Square Disaster
With the return of prosperity, trade unions called for a nationwide strike for the eight-hour day.
On May 1, 1886 workers across the country walked off their jobs in one of the largest and most successful labor walkouts in American history. In Chicago, 800,000 workers went on strike.
The Chicago strike was largely peaceful until May 4, when, at an anarchist rally at Haymarket Square, someone from the crowd tossed a bomb into a line of police. Eight policemen were killed. The number of civilian deaths was never identified, and the bomb thrower was never found.
Eight anarchists were tried for inciting violence, and four of them were eventually put to death as a result.

40. Homestead Strike
In 1892 Andrew Carnegie’s mill at Homestead, Pennsylvania, which made armor plating for American warships and steel rails for shipment abroad, underwent a major labor dispute.
In June, Henry Clay Frick, Carnegie’s partner, broke off labor talks with the American Federation of Labor (AFL), and announced that the plant would close on July 2nd, and reopen a week later with a non-union workforce.
On the morning of July 6th, 300 armed company guards were raked by gunfire and arrested by townspeople.
A week later the governor of Pennsylvania sent in the state militia, and under martial law strikebreakers reignited the furnaces.
The Battle of Homestead broke the union and showed that corporations, backed by government, would defend their interests at any cost.