The Age of industry * US History

Railroads By 1869 Railroads spanned the entire continent of the United States. The driving of “the golden spike” signaled the creation of a transcontinental railroad. What used to take months, now only took days The railroads changed time In 1869 Professor C.F. Dowd proposed dividing the earth into 24 “time zones” In 1883 the railroads synchronized their watches and standardized time in the United States

Big Business Andrew Carnegie Born to penniless parents in Scotland in 1836 Moves to America in 1848, by age 18 he begins work for the Pennsylvania Railroad Is able to invest in railroad stocks because he worked so hard. At the time of his death he was worth $475 million. Carnegie pioneered many modern business practices

Carnegie Moves Into Steel By 1899 Carnegie owned a steel company that produced more steel than all of Great Britain combined Carnegie pioneered new techniques Vertical integration Stock as pay incentive Competition amongst his employees

Social Darwinism Based on Darwin’s ideas about evolutionary biology Specific species are better adapted to succeed and others are not, those that aren’t will die out. Advanced the idea that there should not be government regulation of business because it would help the weak to survive longer than they normally would. The strong will survive This idea has root in Puritan philosophy If you are successful it’s because you worked hard for it and God favored you If you were poor you weren’t favored by God and deserved what you got Sound familiar?

Growth and Consolidation Many companies began to combine with others in their industry Mergers: When one company bought out the stock of another company, the goal was monopoly Monopoly: When one company controls their entire industry that they work in Trust: When two companies agreed to turn their stocks over to a third party and collected money from the stocks.

The Result of Unchecked Growth In 1901, United States Steel bought Carnegie Steel the result was the largest company in the world. John D. Rockefeller started Standard Oil in 1870 They processed 2% of the nations crude oil By 1880 they processed over 90% He got there through monopolistic practices Who benefits from a monopoly? At the time of his death Rockefeller was worth $336 billion dollars Bill Gates is worth $40 billion

Robber Barons Critics of Rockefeller and his like called them “Robber Barons” Criticized the massing of wealth by a few people at the top In truth many philanthropists supported the arts, libraries and other organizations Andrew Carnegie’s net worth at his death was $475 million He gave away 90% of it to the arts John Rockefeller gave away roughly $500 million Helping to found the University of Chicago

Trust Busting The government became suspicious of the wealth accumulation by so few people. In 1890, the Sherman Anti-Trust Act was enacted Made it illegal to form trusts that interfered with the free trade between states Difficult to enforce Standard Oil just reorganized their business to avoid the law Enforcement eventually stopped and consolidation continued