The Industrial Revolution Expansion of Big Business & Industry

Causes of the Revolution Railroad boom Technological innovations Cheap labor Abundance of raw materials in the U.S. Laissez-faire economic policy

The Railroads

Railroad Construction Boom 1870s – 1900s 1865 – 35,000 miles of track → 1900 – 193,000 miles

Railroad Wealth Cornelius “The Commodore” Vanderbilt – owner, NY Central RR (1867), 4,500 miles of track connecting NYC to the Midwest

Steel

Bessemer Process Impurities taken out of iron – produces STEEL

Andrew Carnegie Carnegie Steel One of world’s top producers of steel Sold to JP Morgan in 1901, became US Steel

Big Business Strategies Horizontal integration Buying out the competing businesses Vertical integration Buying the various levels of production from resource to finished product

Carnegie’s “Gospel of Wealth” Wealthy should act as “trustees” for their “poorer brethren.” Andrew Carnegie

The Oil Industry

Edwin Drake – steam powered oil drill Titusville, Pennsylvania (1859) Oil Drilling Edwin Drake – steam powered oil drill Titusville, Pennsylvania (1859)

John D. Rockefeller Standard Oil Company 1870 – 3% of US oil

Standard Oil Trust Rockefeller build his empire under the name of the “trust” Trust = Monopoly

Robber Barons Nickname given to the industrial elite of the late 1800s because of their questionable business practices. Gained wealth at the expense of workers and other businesses Rockefeller, JP Morgan, Jay Gould, Carnegie

Inequality in Society Social Darwinism - “might makes right” Society’s response to wealth and success Survival of the fittest

Government Intervention Interstate Commerce Act (1887) Interstate Commerce Commission (ICC) Regulation of freight rates (railroads) Sherman Anti-Trust Act (1890) A trust = a monopoly, therefore it’s illegal Government attempt to fight big business