beginnings of big business

The iron Road 30,000In 1861, at the start of the Civil War, there were only 30,000 miles of railroad track in the United States. 200,000By 1900, there were close to 200,000 miles.

The iron Road The increase in the mileage of track also helped to increase the flow of goods and passengers across the country and helped the economy to flourish.

Iron to steel The growth of the railroad depended greatly on the creation of steel.

Iron to steel At first, rails were made of iron, but as travel on the rails grew and the trains got heavier, the iron rails could not support the weight of the trains.

Iron to steel Before the 1870s, steel was far too expensive to be used for the miles of track that needed to be covered.

Iron to steel An English inventor, Henry Bessemer, changed that when he figured out a way to convert iron into steel.

Iron to steel The Bessemer Converter made it possible for 3 to 5 tons of iron to be changed into steel quickly.

Iron to steel At the same time, new deposits of iron were found in Minnesota and steel cities, like Pittsburgh, grew quickly.

Iron to steel entrepreneursAndrew Carnegie was one America’s first entrepreneurs, people that invested their own money in new businesses in an attempt to make more money for themselves.

New money These entrepreneurs also risked their own money to build the nation’s railroads.

New money corporationsThey set up corporations, where they sold stocks, or pieces of their company, in order to raise money to do other things.

New money This also protected themselves against total loss by spreading out the money that was invested.

New money For the most part, all of these entrepreneurs had the same life story: poor boy who worked hard and got rich.

New money They were the new American heroes.

homework Read pages 119 – 124 Define: “Drake’s Folly”, wildcatter, “black gold” On page 119, answer #4 and Thinking Critically #2

“black gold” Crude oil, or petroleum, was known about for hundreds of years, but no one knew what to do with it.

“black gold” E.L. Drake, a retired railroad conductor, began to drill in his backyard in 1859 outside Titusville, Pennsylvania.

“black gold” He drilled 70 feet into the ground and suddenly struck oil.

“black gold” His oil well began to yield 20 barrels a day, which brought all sorts of oil prospectors, or wildcatters, to Western Pennsylvania.

“black gold” Oil was first shipped in barrels, then by railroad tank cars, and then by oil pipelines. Crude oil could be refined into a number of different products.

“black gold” Kerosene was the first and for many years the only product. After that, crude oil was used to make gasoline, heating oil, diesel fuel, and plastics.

rockefeller John D. RockefellerJohn D. Rockefeller was an entrepreneur who brought a number of different business practices to the oil industry.

rockefeller He decided to take his money and begin oil companies. Standard Oil CompanyIn 1870, he began the Standard Oil Company

rockefeller His goal was to make Standard Oil Company the most powerful corporation in the United States. He used many different kinds of methods to make this reality.

rockefeller He undersold his competitors and then told them they had to sell to him or face bankruptcy. He also hired spies and informants.

rockefeller trustHe set up a trust, which was an agreement among several companies in the same industry that join together to regulate production and eliminate competition.

homework READ pages 125 – 129 DEFINE: telegraph, suspension bridge, department store, chain store ANSWER: #1, 3, and 4 on page 125