Technology and Industrial Growth

Encouraging Growth After the Civil War, industrial growth that had started during the war continued to flourish. This was due to a variety of factors: Abundance of natural resources, including the discovery of oil by Edwin Drake. Increased immigration from Europe and Asia Forced out by political upheaval, religious discrimination and crop failures.

Encouraging Growth 3) Capitalism encouraged the emergence of entrepreneurs. Government aided this by passing protective tariffs and adopting laissez-faire policies. A protective tariff is a tax that would lead to imported goods costing more than those made locally. Laissez faire= businesses operate w/minimal government regulation. This was illustrated in the 1868 novel Street Life in New York by Horatio Alger which told the story of a poor boy who worked hard and rose to fame.

New Technologies New innovations– the desire for increased efficiency and innovation in the late 1800s led to many patents. These were grants given by the government to develop, use and sell an invention for a period of time. Electric light bulb Thomas Edison Telephone Alexander Graham Bell Steel Henry Bessemer Bessemer Process= purifying iron and turning it into strong, lightweight steel.

New Technologies Expanding rail network demonstrated a need for the creation of time zones to regulate train schedules. Natural resources + rail network= more growth! Many goods were now manufactured by machines instead of by hand.

Impacts of Industrialization Industrialization had many impacts on the United States. Increased population in cities immigration and need for unskilled labor; Increased foreign trade as the U.S. expanded its markets; Increased pollution and waste from factories caused people to start being concerned for their environment.

Fighting for Profits Businesses in the 19th century transitioned from family- owned to large corporations, where many people shared ownership. To an investor, this meant that if there were economic problems, no one individual would lose too much– only what they had initially invested. A corporation had the same right as an individual, such as: Buy and sell property Sue in courts

Fighting for Profits The main goal of the corporation was to maximize profits and there were new ways in which corporations decreased costs to increase profits. Horizontal integration= consolidation of many firms in the same business into one larger corporation. Vertical integration= controlling different businesses that make up all phases of a product’s development

New forms of Companies Some corporations wanted to increase profits by taking complete control of a product. This was known as a monopoly. Competitors were either bought out or pushed out of the market. Once there was no competition, a business could charge whatever price it wanted for a product. Another type of company was the trust. In this company, the stock would be assigned to a board of trustees, who would then buy stock in another company.

New forms of Companies In other instances, corporations would work together to limit production in order to control prices. This was known as a cartel. The Organization of Petroleum Exporting Countries is one that’s still in existence today.