Essential Question: Warm-Up Question: How did the “Second Industrial Revolution” transform the U.S. during the Gilded Age? Warm-Up Question: To what extent had the United States developed a “national market economy” by the outbreak of the Civil War (1860)? What developments were still needed to improve America’s national market economy? Lesson Plan for Monday, November 24, 2008: Warm-up question, The Rise of Industry & Urbanization Notes

Gilded Age Industrialization During the Gilded Age, American businesses were transformed: Massive corporations replaced small, family businesses New technology, transportation, marketing, labor relations, & efficient mass-production By 1900, the U.S. was the most industrialized country in the world

The Business of Invention 19th-century inventors led to an “Age of Invention”: Cyrus Field’s telegraph cable Business typewriters, cash registers, adding machines High-speed textile spindles, auto looms, sewing machines George Eastman’s Kodak camera Alexander G. Bell’s telephone By 1905, 10 million Americans had phones; (Bell Telephone Co became AT&T) 13

The Business of Invention Thomas Edison, the “Wizard of Menlo Park,” created the 1st research lab in New York Edison Illuminating Co was the to 1st use electric light in 1882 Tesla’s alternating current (AC) allowed electricity to travel over longer distances & to power streetcars & factories

Patents Issued (1850-1899)

The Business of Invention New technologies allowed for increased industrial production New machines were incorporated into the first assembly lines which allowed for continuous & faster production of goods The railroad linked every region of America & allowed for a mass consumption of goods 13

Chicago Meatpackers: The 1st “Disassembly Line”

The Midwest Made Meat for America A new-and-improved “market revolution”: More regional specialization made mass production & mass consumption possible (Chicago→meat, St Louis→beer, & Minneapolis→grain)

New Methods of Marketing Marketing became a “science”: Advertising firms boomed Department stores like Macy’s & Marshall Field’s allowed customers to browse & buy Chain stores like A&P Grocery & Woolworth’s “Five & Ten” Mail-order catalogues, like Montgomery Ward sold to all parts of America 14

New Forms of Business Organization “Trusts” use a board of trustees to manage a company “Holding companies” oversee & manage other subsidiary companies New types of business organization were used to increase profits: “Trusts” & “holding companies” integrated various businesses under 1 board of directors Vertical & horizontal integration maximized corporate profits Frederick Taylor’s “scientific management” emphasized time efficiency & mid-level managers Led to monopolists like Carnegie, J.P. Morgan, & Rockefeller 13

Vertical & Horizontal Integration U. S. Corporate Mergers By 1900, 1% of U.S. companies controlled 33% of all industry

New Forms of Business Organization Business leaders used a variety of ideas to justify their wealth: The “Gospel of Wealth” argued that it is God's will that some men attained great wealth Social Darwinism taught that natural competition weeds out the weak & the strong survive Were monopolists “captains of industry” or “robber barons”? 14

The “Robber Barons” of the Past

The Industrialization of America

The Second Industrial Revolution was fueled by 3 industries: railroads, steel, & oil

The Railroad Industry America’s first “big business” was the railroad industry: Railroads stimulated the coal, petroleum, & iron/steel industries Large companies bought small railroads, standardized gauges & schedules, & pooled cars Small lines in the east acted as tributaries to the 4 great trunk lines into the West 3

Cornelius “the Commodore” Vanderbilt was the most powerful figure in the railroad industry Jim Fisk

Problems of Growth Speculators like Jay Gould built & bought rail lines to profit with little concern for efficient use But, the railroad industry faced problems due to overbuilding in the 1870s & 1880s: Mass competition among RRs RR lines offered special rates & rebates (secret discounts) to lure passengers & freight on their lines Pooling & consolidation failed to help over-speculation 8

Problems of Growth RR bosses asked bank financier J.P. Morgan to save their industry: Morgan created a traffic-sharing plan to end wasteful competition “Morganization” fixed costs, cut debt, stabilized rates, issued new stock, & ended rebates Created a “board of trustees” By 1900, 7 giant (centralized & efficient) rail systems dominated 8

The Steel Industry Steel transformed world industry: Allowed for taller buildings, longer bridges, stronger railroad lines, & heavier machinery Andrew Carnegie’s company made more steel than England Carnegie converted his steel plants to the Bessemer process & was able to out-produce his competition & offer lower prices Andrew Carnegie was the great example of the “American Dream” & social mobility Henry Bessemer (& William Kelly) turned iron into steel in 1850s—process allowed for mass production of steel 9

International Steel Production, 1880-1914 The U.S. was ideal for steel production because it had lots of coal, iron, & railroads

Rockefeller and Oil Petroleum also changed industry New industrial machines needed kerosene for lighting & lubricants John D. Rockefeller monopolized the oil industry, lowered oil costs & improved the quality of oil By 1879, Standard Oil ruled 90% of all U.S. oil & sold to Asia, Africa, & South America In 1863, John D. Rockefeller created Standard Oil Company in Cleveland (at age 24!); he also used spies, bribery, threats 12

Standard Oil: The Monster Monopoly?

Essential Question: Reading Quiz Ch 18 B (625—639) What role did the business leaders play in stabilizing the chaotic business cycles of the Gilded Age? Reading Quiz Ch 18 B (625—639) Lesson Plan for Tuesday, November 25, 2008: RQ 18B, Finish Industrialism notes, Examine Center for Learning Activity #26, Using Mindsparks overheads to develop a class discussion: Were Gilded Age corporate leaders “robber barons” or “captains of industry”?