Objective 5.02 Explain how business and industrial leaders accumulated wealth and wielded political and economic power.
Natural Resources Fuel Industrialization Edwin Drake-used a steam engine to drill for oil Made removing oil practical and lead to a boom in the oil industry Refineries made oil into kerosene and gasoline which became more popular with the invention of cars
Bessemer Process Iron Ore was also plentiful in the United States Carbon removed from iron helped form steel Henry Bessemer and William Kelly developed the Bessemer Process to remove the carbon and other impurities from Iron
Bessemer and Kelly Steel needed for Railroad production
Inventions promote change 1. Thomas Alva Edison Invented the light bulb and electric power Helped businesses in America operate machines
George Westinghouse 2. George Westinghouse-added innovations that made electricity safer and cheaper Developed a large Generator called the Niagara Plant that sent power to Buffalo Also invented the transformer
Alexander Graham Bell Invented the telephone in 1876 that opened up the worldwide communication network
Christopher Sholes Invented the typewriter in 1867 Changed the way people worked
Big Business and Labor Andrew Carnegie John D. Rockefeller
Andrew Carnegie By 1899 the Carnegie Steel Company produced more steel than all of the steel factories in Great Britain Innovations Accounting Systems Offered workers stock in the company Encouraged competition Make better products cheaper
Gospel of Wealth Describing how it is the job of wealthy people to be philanthropist or give back to the community Carnegie gave over 90% of fortune away
Gospel of Wealth Rev. Russell Conwell - “Acres of Diamonds” Robber barons vs. philanthropists ¡“godliness is in league with riches” ¡Rockefeller- God gave me my money Rev. Russell Conwell - “Acres of Diamonds” ¡Carnegie- those entrusted with society’s riches have to prove themselves morally responsible
Russell Conwell Acres of Diamonds - 1890 Takeaways? -Persian Farmer’s Story Union Army Captain Deserted post Sermon repeated 6,000 times before he died in 1925 Founded Temple University Takeaways? -dig in your own garden! -the rich and poor deserve their situation
Control of Steel Industry Carnegie controlled most of the steel industry through vertical integration He bought out his suppliers (coal fields and iron mines), ore freighters and railroad lines He also attempted to buy out his competitors in the steel industry which is horizontal integration
Why was Carnegie successful? Carnegie explained his success through hard work and innovations Others offered the explanation of Social Darwinism Herbert Spencer applied Social Darwinism to the evolution of human society Carnegie’s success comes from his ability to survive (“survival of the fittest”)
“Social Darwinists”- survival of the fittest Contempt for poor- their own making 14th amend- courts ruled corporations as people- used against labor
Gov’t Tackles the Trusts Sherman Antitrust Act- 1890 ¡No distinction b/t good & bad trust ¡No means of enforcement, lots of loopholes ¡Used against labor ¡SC of the period almost always favored business
South in the Age of Industry Sharecropping Cigarette-making machine ¡James Buchanan Duke- Trinity College- Durham
Idea of “New South”- Henry Grady Atlanta Constitution - Confed. funeral story ¡RRs cost too much ¡Textile mills in south ¢Cheap labor ¢Family work for wages ¢Bound to company town
Impact of the New Industrial Revolution Standard of living increase Growth of cities, decline of agriculture (Jefferson) Life by the whistle Horatio Alger Myth - self made men were rare
Horatio Alger Writer who wrote many rags to riches stories Showed how you could get rich by working hard and being virtuous
U. S. Steel Formed by J. P. Morgan in 1901 by combining the Federal Steel Company with Carnegie’s steel operations Holding company-did nothing but buy out the stock of other companies
John D. Rockefeller Standard Oil Company Gained control of 90% of the oil industry by 1890 Merged with other oil companies through illegal trust agreements which allowed him to gain total control of the oil industry
Standard Oil Company
Vanderbilt Family Cornelius Vanderbilt established a large shipping and railroad empire Vanderbilt University (1873)
Robber barons Business men who accumulated large personal fortunes from anti competitive or unfair business practices Carnegie, Rockefeller, Morgan and Vanderbilt were all called Robber barons