1. Industrialization in the United States
The Rise of Industry in the United States
(1860s-1900s)

2. “The Rise of Industry”
After the Civil War (1865) the U.S. economy was based on agriculture…
By 1920, the U.S. was the leading industrial power in the world!
Enormous growth was due to 3 factors…
Natural Resources
New Inventions, Technology
Support from the GOVT

3. An Abundance of Natural Resources
MAIN IDEA: Natural resources and a large labor force allowed the United States to industrialize rapidly.

4. What natural resources were abundant in the United States?

5. Oil town/field…

6. Oil field…

7. Iron ore mine…

8. Iron ore mine…

9. Coal mine…

10. Coal mine…

11. Timber industry…

12. Timber industry…

13. Why is it important that these resources were IN the United Sates?
American entrepreneurs would pay cheaper prices! (Domestic vs. Import)
If these resources were imported, the cost would have been higher…

14. Drake Discovers “BLACK GOLD”
1859, Edwin Drake used a steam engine to drill for crude oil (petroleum)
This breakthrough started an oil boom in the Midwest and later Southwest…
At first the process was limited to transforming the oil into kerosene and throwing out the gasoline – a by-product of the process…
While petroleum oil was known prior to this, there was no market for it…
Samuel Martin Kier is credited with founding the first American oil refinery in Pittsburgh. He was the first person in the United States to refine crude oil into lamp oil (kerosene). Along with a new lamp to burn Kier's product a new market to replace whale oil as a lamp oil began to develop…
Seneca Oil, originally called the Pennsylvania Rock Oil Company, was founded by George Bissell and Jonathan Eveleth. They created the company after catching wind of reports that petroleum collected from an oil spring in Titusville, Pennsylvania was suitable for use as lamp fuel. Until this time, the primary lamp fuel had been whale oil…
Bissell found that the "rock oil" would be a practical alternative if a method could be devised to extract the oil from the ground. Interest in the Pennsylvania Rock Oil Company was initially low until a report commissioned by Bissell and Eveleth showed that there was significant economic value in petroleum…
Edwin Drake was hired by the Seneca Oil Company to investigate suspected oil deposits in Titusville, Pennsylvania. James Townsend, President of the Seneca Oil Company, sent Drake to the site in the spring of 1858…

15. First oil field discovered in Northwestern PA… Closest big city
First oil field discovered in Northwestern PA… Closest big city? Cleveland! John Rockefeller gets his start in the oil industry in Cleveland…

16. Iron just wasn’t cutting it…
Henry Bessemer started playing around with military technology…
Developed the Bessemer Process!
Early 1850s, English industrialists and inventors became interested in military technology and Bessemer himself developed a method for grooving artillery projectiles so that they could spin without the use of rifling in the bore of the gun. He patented this method in 1854 and began developing it in conjunction with the government of France…
A key barrier to the use of a larger, heavier spinning projectile would be the strength of the (iron) gun and it was not considered safe in practice to fire a 30-lb. shot from a 12-pounder cast-iron gun…
Could any guns be made to stand such heavy projectiles? This is what started Bessemer thinking about steel. At the time steel was difficult and expensive to make and was consequently used in only small items like cutlery and tools…

17. BESSEMER STEEL PROCESS
When you remove the carbon from iron, the result is a lighter, more flexible and rust resistant compound… Steel!
Bessemer process
The key principle is removal of impurities from the iron by oxidation with air being blown through the molten iron. The oxidation also raises the temperature of the iron mass and keeps it molten…

18. Importance of Bessemer
Decreased cost
Increased speed and ease of production…
Mass production
Expanded the market for Steel…
Allowed for larger and more powerful machines…
The Bessemer process revolutionized steel manufacture by decreasing its cost, along with greatly increasing the scale and speed of production of this vital raw material. The process also decreased the labor requirements for steel-making. Prior to its introduction, steel was far too expensive to make bridges or the framework for buildings and thus wrought iron had been used throughout the Industrial Revolution…
After the introduction of the Bessemer process, steel and wrought iron became similarly priced, and most manufacturers turned to steel. Some claim the availability of cheap steel allowed large bridges to be built and enabled the construction of railroads, skyscrapers, and large ships…
Other important steel products—also made using the open hearth process—were steel cable, steel rods and sheet steel which enabled large, high-pressure boilers and high-tensile strength steel for machinery which enabled much more powerful engines, gears and axles than were possible previously. With large amounts of steel it became possible to build much more powerful guns and carriages, tanks, armored fighting vehicles and naval ships. Industrial steel also made possible the building of giant turbines and generators thus making the harnessing of water and steam power possible. The introduction of the large scale steel production process paved the way to mass industrialization as observed in the 19th–20th centuries…

19. NEW USES FOR STEEL
The railroads, with thousands of miles of track, were the biggest customers for steel…
Barbed wire, farm equipment, bridge construction, and the first skyscrapers.
Brooklyn Bridge, 1888 – 1,595 ft.

20. New Inventions and the Development of Technology
MAIN IDEA: New inventions spurred economic and industrial development.

22. Edison, Westinghouse and ELECTRICITY
vs.
Thomas Edison and George Westinghouse, who, more than a century ago, engaged in a nasty battle over alternating and direct current, known as the “War of Currents.” Both men knew there was room for but one American electricity system, and Edison set out to ruin Westinghouse in “a great political, legal and marketing game” that saw the famous inventor stage publicity events where dogs, horses and even an elephant were killed using Westinghouse’s alternating current. The two men would play out their battle on the front pages of newspapers and in the Supreme Court, in the country’s first attempt to execute a human being with electricity…

23. After Edison developed the first practical incandescent light bulb in 1879, supported by his own direct current electrical system, the rush to build hydroelectric plants to generate DC power in cities across the United States practically guaranteed Edison a fortune in patent royalties. But early on, Edison recognized the limitations of DC power. It was very difficult to transmit over distances without a significant loss of energy, and the inventor turned to a 28-year-old Serbian mathematician and engineer whom he’d recently hired at Edison Machine Works to help solve the problem…
Nikola Tesla claimed that Edison even offered him significant compensation if he could design a more practical form of power transmission. Tesla accepted the challenge. With a background in mathematics that his inventor boss did not have, he set out to redesign Edison’s DC generators. The future of electric distribution, Tesla told Edison, was in alternating current—where high-voltage energy could be transmitted over long distances using lower current—miles beyond generating plants, allowing a much more efficient delivery system. Edison dismissed Tesla’s ideas as “splendid” but “utterly impractical.” Tesla was crushed and claimed that Edison not only refused to consider AC power, but also declined to compensate him properly for his work…
Tesla left Edison in 1885 and set out to raise capital on his own for Tesla Electric Light & Manufacturing, even digging ditches for the Edison Company to pay his bills in the interim, until the industrialist George Westinghouse at Westinghouse Electric & Manufacturing Company, a believer in AC power, bought some of Tesla’s patents and set about commercializing the system so as to take electric light to something more than an urban luxury service. While Tesla’s ideas and ambitions might be brushed aside, Westinghouse had both ambition and capital, and Edison immediately recognized the threat to his business.
Within a year, Westinghouse Electric began installing its own AC generators around the country, focusing mostly on the less populated areas that Edison’s system could not reach. But Westinghouse was also making headway in cities like New Orleans, selling electricity at a loss in order to cut into Edison’s business. By 1887, after only a year in the business, Westinghouse had already more than half as many generating stations as Edison. The concern at Edison was palpable, as sales agents around the country were demoralized by Westinghouse’s reach into rural and suburban areas. But Thomas Edison had an idea. Surely Westinghouse’s system must be more dangerous, what with all that voltage passing through the wires. “Just as certain as death,” Edison predicted, “Westinghouse will kill a customer within 6 months after he puts in a system of any size”

24. THE TYPEWRITER Christopher Sholes invented the typewriter in 1867…
His invention forever affected office work and paperwork…
WHO did it effect the most?
1870: _________ 5% of workforce…
1910: ______40% of workforce…

25. THE TELEPHONE
1876, Alexander Graham Bell and Thomas Watson unveiled the telephone…
1877, Bell Telephone Company = American Telephone & Telegraph Company (AT&T)

26. Free Enterprise Allowed for Massive Economic Growth
MAIN IDEA: Laissez-faire economics promoted industrialization and tariffs protected American companies from foreign competition.
Historically, the U.S. government policy toward business was summed up by the French term laissez-faire – "leave it alone." The concept came from the economic theories of Adam Smith, the 18th-century Scot whose writings greatly influenced the growth of American capitalism. Smith believed that private interests should have a free rein. As long as markets were free and competitive, he said, the actions of private individuals, motivated by self-interest, would work together for the greater good of society. Smith did favor some forms of government intervention, mainly to establish the ground rules for free enterprise. But it was his advocacy of laissez-faire practices that earned him favor in America, a country built on faith in the individual and distrust of authority…
Laissez-faire practices have not prevented private interests from turning to the government for help on numerous occasions, however. Railroad companies accepted grants of land and public subsidies in the 19th century. Industries facing strong competition from abroad have long appealed for protections through trade policy. American agriculture, almost totally in private hands, has benefited from government assistance. Many other industries also have sought and received aid ranging from tax breaks to outright subsidies from the government.
Social regulation, on the other hand, promotes objectives that are not economic – such as safer workplaces or a cleaner environment. Social regulations seek to discourage or prohibit harmful corporate behavior or to encourage behavior deemed socially desirable. The government controls smokestack emissions from factories, for instance, and it provides tax breaks to companies that offer their employees health and retirement benefits that meet certain standards.
American history has seen the pendulum swing repeatedly between laissez-faire principles and demands for government regulation of both types…

27. “Laissez-faire” Economics
Following the Civil War, the government took a “hands-off” approach (for the most part) to business throughout the country.
Laissez-faire
There were barely any Economic regulations AND Social regulations (for the most part) on corporations throughout the country.
Left to state governments
Government regulation of private industry can be divided into two categories – economic regulation and social regulation. Economic regulation seeks, primarily, to control prices. Designed in theory to protect consumers and certain companies (usually small businesses) from more powerful companies, it often is justified on the grounds that fully competitive market conditions do not exist and therefore cannot provide such protections themselves. In many cases, however, economic regulations were developed to protect companies from what they described as destructive competition with each other…

28. Post-Civil War Economics
The Civil War ends, 1865.
“Industry” is expanding in the U.S…
Entrepreneurs enter new and expanding markets…
Investors see this opportunity to… invest!
The U.S. Government does NOT impose regulations or try to control wages/prices.
In fact, they provide subsidies and give land to many of these expanding industries!

29. “Laissez-faire” Economics and Protectionism
On top of a Laissez-faire approach to the economy, the Republican dominated Federal Government practiced protectionism…
Morrill Tariff, 1861
Are tariffs good or bad? Why? Explain.
North v. South
Republican v. Democrat