AP US: Unit 9 January 11, 2012 With help from Ms. Susan Pojer AP US: Unit 9 January 11, 2012 With help from Ms. Susan Pojer

Essential Question Industrialization increased the standard of living and the opportunities of most Americans, but at what cost?

“The Big Four” Railroad Magnates Charles Crocker Mark Hopkins Leland Stanford Collis Huntington

In 1869 both companies reached each other at Promontory Point in Utah.

Railroad Construction

Great advances in railroads also improved them: Steel – Stronger and more durable rails Standard track gauge – no need to switch trains Westinghouse Air Brake – helped efficiency and safety Pullman Palace Cars – shiny and pretty, but not so safe

Railroads changed America: Unified America Connected farms to cities so farmers could make money on food and urban areas had a market for finished goods Stimulated movement west –Immigrants lured by RR advertisements (to sell RR land grants to) –Farmers lined up on RR lines Connected country so farmers began to plow up the prairie and tear down forests to sell trees Changed time – Standard Railroad Time –Put in place on November 18, 1883 –Set up time zones Created millionaires

Wrongdoing in Railroading Corruption was widespread in railroads as people quickly tried to make profits. Stock Watering was used - inflating the value of a stock with hype before selling it Even though they were titans in their time, it was difficult to turn a profit. –Pools were invented to divide the business over a certain area and share the profits. –More expensive short haul (vs. long haul) prices also helped the railroads profit – hurt the farmers though

Government Fights the Railroads Farmers (with help from the Grange) finally began to complain. Government passed the Interstate Commerce Act of 1887 –Prohibited rebates and pools and required railroads to openly publish their rates. –Forbade unfair labor discrimination against shippers and outlawed charging more for a short haul. –Also set up the Interstate Commerce Commission (ICC) that would enforce the new legislation. –The problem is the ICC’s control of the railroads was minimial, but at least it allowed the railroads a place to disucuss their competition instead of using rate wars. This was the first attempt by Washington to regulate business for the good of the people.

Causes of Rapid Industrialization 1.Steam Revolution of the 1830s-1850s. 2.The Railroad fueled the growing US economy:  First big business in the US.  A magnet for financial investment.  The key to opening the West.  Aided the development of other industries. 1.Steam Revolution of the 1830s-1850s. 2.The Railroad fueled the growing US economy:  First big business in the US.  A magnet for financial investment.  The key to opening the West.  Aided the development of other industries.

Causes of Rapid Industrialization 3.Technological innovations.  Bessemer and open hearth process  Refrigerated cars  Edison o “Wizard of Menlo Park” o light bulb, phonograph, motion pictures. 3.Technological innovations.  Bessemer and open hearth process  Refrigerated cars  Edison o “Wizard of Menlo Park” o light bulb, phonograph, motion pictures.

Thomas Alva Edison “Wizard of Menlo Park”

The Light Bulb

The Phonograph (1877)

The Ediphone or Dictaphone

The Motion Picture Camera

Alexander Graham Bell Telephone (1876)

Alternate Current George Westinghouse

Alternate Current Westinghouse Lamp ad

The Airplane Wilbur Wright Orville Wright Kitty Hawk, NC – December 7, 1903

U. S. Patents Granted 1790s  276 patents issued. 1990s  1,119,220 patents issued.

4.Unskilled & semi-skilled labor in abundance. 5.Abundant capital. 6.New, talented group of businessmen (entrepreneurs) and advisors. 7.Market growing as US population increased. 8.Government willing to help at all levels to stimulate economic growth. 9.Abundant natural resources. 4.Unskilled & semi-skilled labor in abundance. 5.Abundant capital. 6.New, talented group of businessmen (entrepreneurs) and advisors. 7.Market growing as US population increased. 8.Government willing to help at all levels to stimulate economic growth. 9.Abundant natural resources. Causes of Rapid Industrialization

New Business Culture 1. Laissez Faire  the ideology of the Industrial Age.  Individual as a moral and economic ideal.  Individuals should compete freely in the marketplace.  The market was not man-made or invented.  No room for government in the market!  Individual as a moral and economic ideal.  Individuals should compete freely in the marketplace.  The market was not man-made or invented.  No room for government in the market!

2. Social Darwinism × British economist. × Advocate of laissez- faire. × Adapted Darwin’s ideas from the “Origin of Species” to humans. × Notion of “Survival of the Fittest.” × British economist. × Advocate of laissez- faire. × Adapted Darwin’s ideas from the “Origin of Species” to humans. × Notion of “Survival of the Fittest.” Herbert Spencer

2. Social Darwinism in America William Graham Sumner Yale Professor and proponent of Laissez Faire. Sociological work said government intervention is useless $Individuals must have absolute freedom to struggle, succeed or fail. $Therefore, state intervention to reward society and the economy is futile! $Individuals must have absolute freedom to struggle, succeed or fail. $Therefore, state intervention to reward society and the economy is futile!

New Business Culture: “The American Dream?” 3.Protestant (Puritan) “Work Ethic”  Horatio Alger [100+ novels] 3.Protestant (Puritan) “Work Ethic”  Horatio Alger [100+ novels] Is the idea of the “self-made man” a MYTH??

New Type of Business Entities 1.Pool 1887  Interstate Commerce Act  Interstate Commerce Commission created. 2.Trust (Monopoly)  John D. Rockefeller 1.Pool 1887  Interstate Commerce Act  Interstate Commerce Commission created. 2.Trust (Monopoly)  John D. Rockefeller  Standard Oil Co.

Standard Oil Co.

New Type of Business Entities 2.Trust:  Horizontal Integration  John D. Rockefeller 2.Trust:  Horizontal Integration  John D. Rockefeller  Vertical Integration: o Gustavus Swift  Meat-packing o Andrew Carnegie  U. S. Steel  Vertical Integration: o Gustavus Swift  Meat-packing o Andrew Carnegie  U. S. Steel

New Type of Business Entities

Iron & Steel Production

U. S. Corporate Mergers

New Financial Businessman The Broker:  J. Pierpont Morgan The Broker:  J. Pierpont Morgan

Wall Street – 1867 & 1900

The Reorganization of Work Frederick W. Taylor The Principles of Scientific Management (1911) Frederick W. Taylor The Principles of Scientific Management (1911)

The Reorganization of Work The Assembly Line

% of Billionaires in 1900

% of Billionaires in 1918

The Protectors of Our Industries

The ‘Bosses’ of the Senate

The ‘Robber Barons’ of the Past

Cornelius [“Commodore”] Vanderbilt Can’t I do what I want with my money?

William Vanderbilt $ The public be damned! $ What do I care about the law? H’aint I got the power? $ The public be damned! $ What do I care about the law? H’aint I got the power?

The Gospel of Wealth: Religion in the Era of Industrialization $ Wealth no longer looked upon as bad. $ Viewed as a sign of God’s approval. $ Christian duty to accumulate wealth. $ Just another part of the Protestant Ethic $ The Anglo-Saxon race is superior. $ Inequality is inevitable and good. $ Wealth no longer looked upon as bad. $ Viewed as a sign of God’s approval. $ Christian duty to accumulate wealth. $ Just another part of the Protestant Ethic $ The Anglo-Saxon race is superior. $ Inequality is inevitable and good.

Carnegie and The Gospel of Wealth Andrew Carnegie $ Should not help the poor. But instead should support things that will help people raise themselves up – like libraries $ Wealthy should act as “trustees” for their “poorer brethren.” $ Should not help the poor. But instead should support things that will help people raise themselves up – like libraries $ Wealthy should act as “trustees” for their “poorer brethren.”

Regulating the Trusts 1877  Munn. v. IL Business interests used for public good should be regulated by state governments 1886  Wabash, St. Louis & Pacific Railroad Company v. IL states cannot directly regulate interstate commerce…anti Munn and led to ICC 1890  Sherman Antitrust Act This forbid combinations in restraint of trade – bigness, not badness was the sin 1895  US v. E. C. Knight Co. Anti-Sherman. Known as the Sugar Trust Case – federal government cannot regulate manufacturing monopolies 1877  Munn. v. IL Business interests used for public good should be regulated by state governments 1886  Wabash, St. Louis & Pacific Railroad Company v. IL states cannot directly regulate interstate commerce…anti Munn and led to ICC 1890  Sherman Antitrust Act This forbid combinations in restraint of trade – bigness, not badness was the sin 1895  US v. E. C. Knight Co. Anti-Sherman. Known as the Sugar Trust Case – federal government cannot regulate manufacturing monopolies

Sherman Anti-Trust Act (1890) Benefits: –First real government regulation of the trusts – would lead to more Problems: –This was an all talk, no show act as it was unable to control trusts at all until –The one thing the Sherman Anti-Trust Act was used for was attacking and curbing the power of labor unions that were deemed to be restricting trade.

Relative Share of World Manufacturing

Modern ‘Robber Barons’??

DBQ on Westward Expansion