“Why did America become the greatest industrial power in the world ?” Unit 2 1880-1920 Essay 1 “Why did America become the greatest industrial power in the world ?”

Unit 2 – Essay #1 “Why did America become the greatest industrial power in the world in the late nineteenth century?” Interactive Notebook: 1. Which natural resources fueled the growth of American industry? Pg. 230-231 2. Which transportation network supported industry and business? Where did it expand by 1890? Pg. 239 Map 3. Which 3 new inventions were important for the growth of American industry? Pg. 233

I. A New Industrial Age What FACTORS led to Industrialization? RAILROADS move goods, resources and raw materials  opens “NATIONAL MARKETS” = goods can be sold ANYWHERE What can you buy from : Florida ? Alaska ? Where can you send local grown fruit ?

I. A New Industrial Age National Market for perishable fruit and vegetables, thanks to: The refrigerated boxcar ! Farmers can send goods ANYWHERE !

I. A New Industrial Age B. New TECHNOLOGIES  What FACTORS led to Industrialization? B. New TECHNOLOGIES  new businesses, new JOBS See pg. 232 (the timeline) (Pick 4 new technologies)

I. A New Industrial Age Immigrants…E___ Island What FACTORS led to Industrialization? C. Growth of Urban Population in USA  leads to… CONSUMERISM = More people demand more PRODUCTS… (which creates more BUSINESSES, more JOBS… etc.)

I. A New Industrial Age D. Government encourages Big Business growth What FACTORS led to Industrialization ? D. Government encourages Big Business growth Pro-business North/FEDERALISTS won Civil War so they make laws to FAVOR Big Business and economic growth of USA  leads to… Big Business MONOPOLIES & TRUSTS “Tycoons” -- Who were they ?

Pro-business Government: Huge LAND Grants to RR companies

II. Monopoly Strategies – “playing to win” the Big Business game Business Strategies Pro-business Philosophy

Business Strategies Interactive Notes: VERTICAL Integration= combine/merge all TYPES of businesses in order to control the whole PRODUCTION process Interactive Notes: 4. Create another type of business/industry using Vertical Integration strategy? Production companies = Distribution companies = Manufacturing Companies =

Business Strategies HOROZONTIAL Integration = merge companies of one type in order to control an industry Consolidation is another term for “integration”

Business Strategies Trusts = an ILLEGAL way to merge companies. Larger companies take over SMALLER ones – but do not do so OPENLY. Rival companies do not KNOW about this take-over, which is a DIS-ADVANTAGE. Also, it unfairly eliminates COMPETITION

Pro-Business Philosophy SOCIAL DARWINISM= Herbert SPENCER said Darwin’s idea of Natural SELECTION applies to BUSINESS too. Survival of the fittest

Pro-Business Philosophy SPENCER said that the economy is better off with BIGGER/STRONGER Companies Spencer said it is good to eliminate WEAKER/SMALLER companies;

Pro-Business Philosophy This is a “NATURAL process” and that Government should not INTERFERE to save smaller companies SOCIAL DARWINISM provided an excuse for eliminating COMPETITION.

II. Monopoly Strategies & Pro-business Philosophy Example of a Monopoly Standard Oil Company John D. Rockefeller Controlled 90% of oil refineries by 1882 -- Which strategy ? HORIZONTAL INTEGRATION Example of a Monopoly Carnagie Steel Corporation Andrew Carnagie Controlled nearly 50% of steel production by 1901 – (Mining, Manufacturing, Railroads companies)Which strategy? VERTICAL INTEGRATION

III. Consequences of Monopolies & Trusts Lack of COMPETITON allows a Big Business monopoly/trust to do whatever it wishes  1. Higher PRICES for consumers (including farmers who needed R.R. transport) 2. Lower WAGES for workers JP MORGAN (who bought Carnegie’s company and made it bigger) said: “I like a little competition sometimes, but I prefer CONSOLIDATION” What do you think he meant by this?