The Nation Industrializes, Chapter 16

Foundations for Industrialization Resources, Skills, Capital, and New Federal Policies –Abundant natural resources (iron ore, coal, oil, gold and silver, and copper) –Experienced workforce (Especially in New England (interchangeable parts)) The Transformation of Agriculture –Homestead Act 1862 provided that any person could receive free, as much as 160 acres of government land –Land-Grant College Act 1862 – gave land to each state to fund a public university, which was required to provide education in engineering and agriculture and to train military officers –New machinery (McCormick Reaper (1849)) A single farmer and a team of horses could harvest 2 acres in an hour as oppose to a single farmer with a hand tool harvesting 2 acres in a day

McCormick Reaper

Fig. 16-1, p. 419

The Dawn of Big Business Railroads: The First Big Business –Government aid (Pacific Railway Act of 1862) Congress provided the Union Pacific and Central Pacific companies with sizable loans and with 10 square miles of the public domain for every mile of track laid –Nationwide market Railroads, Investment Bankers, and “Morganization” –Reduce competition (Pools) –Increase efficiency (“Morganization”) Method implemented by John Pierpont Morgan, that companies seeking his help reorganize to simplify corporate structures and to combine small lines into larger, centrally controlled systems.

J.P. Morgan

Andrew Carnegie and the Age of Steel –Carnegie led the way in manufacturing –Created the largest and most complex steel company of all U.S. Steel –Vertical integration The Dawn of Big Business

Andrew Carnegie

Survival of the Fittest? –Social Darwinism (Promoted by Herbert Spencer and William Graham Sumner) argument for unrestrained competition (laissez fair approach to government) Gospel of Wealth ( The idea that the wealthy should return their riches to the community.) Carnegie funded 3,00 libraries, 4,100 church organs, give to universities, built Carnegie Hall, and created several foundations. Henry George (San Francisco journalist) argued that material progress does not merely fail to relieve poverty – it actually causes it Lester Frank Ward ( Sociologist) argued that biological competition produced bare survival, not civilization. The Dawn of Big Business

Expansion of the Industrial Economy Standard Oil: Model for Monopoly –John D. Rockefeller –Horizontal then vertical integration Thomas Edison and the Power of Innovation –electricity

Laying the Economic Basis for a New South –Southern textile industry –Tried to reduce dependence on Cotton Tobacco Expansion of the Industrial Economy

Incorporating the West into the National Economy War for the West –Plains Wars ( atch?v=bLUwbGRmv9U) –Ghost Dance/ Wounded Knee (1890)

p. 437 This photo shows the insensitive treatment of the Lakotas who died at Wounded Knee. They were buried in a mass grave, still frozen as they had fallen.

Boom and Bust: The Economy from the Civil War to World War I Cycles of Growth and Depression in the 1870s and 1880s –1873 Depression (Lasted from 1873 until 1879) 355 banks closed own (No bailouts) 54,000 businesses failed Economic Collapse and Depression in the 1890s –1893 Depression (Two major contributing factors: the slowing of both agricultural expansion and railroad construction (Morganization))

The “Merger Movement” –Large number in manufacturing and mining (J.P. Morgan creates U.S. Steal) –Economic weakness revealed by the depression –Failed to provide long-term economic stability Boom and Bust: The Economy from the Civil War to World War I

Fig. 16-3, p. 446

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