A New Industrial Age Chapter 6 Franz

The Expansion of Industry Section 1

Learning Targets I can explain why industry improved so much in the late 1800’s. I can evaluate how new technology changed Americans’ lives.

Natural Resources Fuel Industrialization Some Background… After Civil War, U.S. was still farming nation By 1920, became industrial power Industrial Boom due to: Natural Resources Gov’t support of business Growing Urban Population

Natural Resources Fuel Industrialization Black Gold Native Americans used oil for natural uses By 1840, Americans used it to light lamps Edwin L. Drake Used steam engine to pump oil out of ground Oil Boom Oil companies started up across the nation Started to distill oil into kerosene Would later discover use for gasoline too

Oil in L.A.

Natural Resources Fuel Industrialization Bessemer Steel Process (1850) Coal and Iron were abundant Injected air into molten (hot) iron to remove carbon and other impurities This created early version of steel! Much stronger Easy to make, abundant resources What can you do with steel?

Natural Resources Fuel Industrialization New Uses for Steel: Railroads (track) Farming Machinery HUGE construction Brooklyn Bridge (1883) Skyscrapers

Inventions Promote Change Some Background… Plentiful resources and impressive ingenuity changed the way people lived and worked

Inventions Promote Change The Power of Electricity: Thomas Edison (1876): Perfected incandescent light bulb Created system that distributed electricity across city By 1890, electricity powered most businesses Could locate wherever they wanted Allowed business to grow tremendously

Inventions Promote Change Inventions Change Lifestyles: Christopher Sholes The Typewriter Alexander Graham Bell The Telephone Women found work in factories Workers’ standard of living improved Less back breaking work 10 fewer hours each week

The Age of the Railroads Section 2

Learning Targets I can explain how the transcontinental railroad influenced American Business I can describe how the Federal government influenced railroads

A Little Background… The growth of railroads benefitted the nation, but also led to corruption and led to the need for government regulation.

Railroads Span Time and Space A National Network: By 1856, went to the Mississippi River Transcontinental Railroad By 1869, the U.S. had a railroad that went from east coast to west coast 1865 = 30,000 miles of track 1890 = 180,000 miles of track!

Railroads Span Time and Space Romance and Reality: Railroad workers have new opportunities Hired Chinese and Irish Immigrants Also hired Civil War veterans desperate for work In 1888, 2,000 men died, 20,000 were injured!

Railroads Span Time and Space Railroad Time: Noon = sun at its highest Noon in Boston was 12 minutes later than New York! 1869, proposed dividing world into 24 time zones U.S. would get four Eastern, Central, Mountain, and Pacific Helped businesses become more efficient

Opportunities and Opportunists New Towns and Markets: Railroads linked towns This promoted new business New towns emerged along railways Denver and Seattle

Opportunities and Opportunists George M. Pullman: Built a factory for making “sleeper” cars for trains Built a city for his workers Provided housing, medicine, etc… Eventually faced a strike when he refused to lower rent, when he cut pay

Opportunities and Opportunists Credit Mobilier: Stockholders of the Union Pacific Railroad Organized a construction company Gave them a corrupt contract, and pocketed the profits themselves Even game some of the $ to buy congressmen’s approval!

The Grange and the Railroads Railroad Abuses: Railroad companies favored businesses over farmers Often fixed prices with other railroads to eliminate competition and drive up profits Farmers had little choice who to transport goods with

The Grange and the Railroads Granger Laws: Farmers, or Grangers, got together to try and create change Voted for legislators that would support their cause In Munn vs. Illinois the Supreme court supported the new Granger Laws that limited prices

The Grange and the Railroads The Interstate Commerce Act: At first, Supreme Court said Federal Government could not regulate trade from state to state So Congress acted: Created Interstate Commerce Act Allowed Fed to control trade by railroad through the states Unfortunately, the act was not well enforced

The Grange and the Railroads Panic and Consolidation: Corruption, mismanagement, overbuilding, and competition pushed many railroads towards bankruptcy The “Panic of 1893”, an economic depression, made things even worse By 1900, just 7 companies controlled 2/3 of the nations railroads

Big Business and Labor Section 3

Learning Targets I can describe the growth of American business in the late 19th Century I can evaluate how effective American Business policies were

Carnegie’s Innovations 1873: Andrew Carnegie visits a British Steel Mill Impressed by Bessemer Process Decides to start his own steel business 1899: The Carnegie Steel Company made more steel than all of Great Britain!

Carnegie’s Innovations New Business Strategies: Make better products, more cheaply Use of machines Better accounting (accurate costs) Encouraged competition amongst assistants Vertical and Horizontal Integration

Carnegie’s Innovations Vertical Integration: Carnegie bought out all of his suppliers Controlled wages, and prices Helped to increase profit Coal, railways, iron mines

Carnegie’s Innovations Horizontal Integration: Carnegie also tried to buy out his competition Those he didn’t buy, he forced out of business Lowered prices enough that competitors couldn’t make it Once competition was limited, his profits increased dramatically

Social Darwinism and Business Charles Darwin Was a biologist who created theory of evolution and survival of fittest Darwin’s theories were applied to society Social Darwinism If you made good products at a reasonable price, you would succeed If you didn’t do this, you would fail

Social Darwinism and Business Principles of Social Darwinism: Natural Selection Businesses with the strongest traits would survive Businesses with weaker traits would not The government should not interfere In time, only the strong would pass on its ideas to the next business

Social Darwinism and Business A New Definition of Success: 4,000 new millionaires after the Civil War! Social Darwinism supported Protestant ideas of work ethic And that riches were a sign of God’s favor The poor must be lazy!

Fewer Controlled More Growth and Competition: As companies grew, many tried to limit their competition Went against natural laws of Social Darwinism Tried Horizontal Integration (controlled competition) in the form of mergers Buying out stock of competition Holding Companies Job was to buy stock of competition!

Fewer Controlled More Growth and Consolidation: John D. Rockefeller Oil Tycoon Used Trusts to control Oil Industry He and other oil companies entered into a trust They would share profits Rockefeller owned most of the trust, and thus had a monopoly on the Oil Industry

Fewer Control More Rockefeller and the “Robber Barons” Many of these successful businessmen became wealthy doing bad things Bought out competitors Paid workers low wages Lowered prices to drive out competition Then raised prices even higher to increase profits! So they gained the title of “robber barons”

Fewer Control More Rockefeller and the “Robber Barons” Despite bad name, they did do some good Rockefeller gave away over $500 million Carnegie gave away 90% of his fortune Their donations have helped fund the education of generations

Fewer Control More Sherman Anti-Trust Act Government was worried there was no longer fair competition So they enacted the Sherman Anti-Trust Act of 1890 Was supposed to make it harder for Rockefeller to form trusts and control an industry In reality, it became very hard to enforce! Rockefeller and others found ways around the law

Fewer Control More Business Boom Bypasses the South: The North continued to prosper Strong industry and plentiful resources Controlled the railroads The South: At the mercy of Northern Industries Mostly farming