Growing Pains: Robber Barons and the Growth of U. S Growing Pains: Robber Barons and the Growth of U.S. Industry, 1870-1900 AN AGE OF BIG BUSINESS Mr. Pitcairn U.S. History 2005/06

FOUNDATIONS FOR GROWTH Factors of Production 1870-1900 time of great economic growth New technology + new business methods  allow U.S. to tap rich supply of natural resources increase production raise $ needed for growth Growth possible because U.S. benefited from “factors of production” LAND (land & natural resources) LABOR (availability of workers) CAPITAL (buildings, machinery, & tools)

FOUNDATIONS FOR GROWTH Growth of railroads after Civil War stimulates economic growth 1869: first transcontinental railroad By 1890: five major transcontinental railroads Miles of track: 1860: about 30,000 1900: almost 200,00

FOUNDATIONS FOR GROWTH Raising Capital Economic & business growth requires “capital” $ for investment Banks: businesses borrowed $ to expand

FOUNDATIONS FOR GROWTH “Corporation” Company that sells shares – “stock” – of its business “shareholders” – people who invest in a company by buying shares GOOD TIMES  shareholders do well “dividends” – cash from company’s profits stock rises in value BAD TIMES  shareholders lose investment Stocks sold in “stock markets” Railroads first businesses to incorporate

THE OIL BUSINESS 1850s oil found in PA hills Oil valuable lubricate machinery burn to produce energy 1859 first oil well Titusville, PA Edwin Drake Oil industry grows rapidly in late 1800s

THE STEEL BUSINESS Steel becomes big business in late 1800s Steel Strong & long-lasting form of iron Iron alloyed with carbon Great for railroad tracks, bridges, buildings, etc. 1860s: new methods of making steel (Bessemer process)  could produce larger amounts, more cheaply 1870s: Pittsburg, PA  steel capital of US Close to sources of iron ore (PA & OH) Large steel mills built

“Making Bessemer Steel at Pittsburgh, the Converters at Work” Charles Graham Harper’s Weekly April 10, 1886

REFERENCES “The Growth of Industry” (Chapter 19). The American Journey. New York: Glencoe McGraw-Hill, 2003. “Industrial Revolution.” Wikipedia. Wikimedia. <http://en.wikipedia.org/wiki/Industrial_Revolution>. “The American Experience: Andrew Carnegie.” PBS. <http://www.pbs.org/wgbh/amex/carnegie/>.