The Triumph of Industry 1865-1914 New York City, 1860s

Key Terms and People Entrepreneur Protective Tariff Laissez faire Patent Thomas Edison Bessemer process Suspension bridge Time zone Mass production Essential Question: How did industrialization and new technology affect the economy and society?

First Industrial Revolution Began in Britain during 1700s - Textile Industry Key Components: Steam Engine Factory System Key Resources: Iron Coal Diagram of Watt’s Steam Engine, 1755

Second Industrial Revolution Began around 1850s Dominated by steel, oil and electricity Bessemer Furnace, Kelham Island Museum, Sheffield England

Think About It… What sorts of items were necessary during the Civil War? How did the Civil War encourage industry?

America’s Natural Resources Vast resource supply helped fuel growth Coal mines along east coast Thick forests cut down for lumber First oil well drilled in 1859 Strip Coal Mine, Sullivan County, PA

What impact might this have had on industry? Immigration in the U.S. Post Civil War – large influx of Europeans and Asians due to: Political unrest Religious discrimination Crop failures 1881 – 750,000 immigrants 1905 – more than 1,000,000 per year What impact might this have had on industry?

Street Life in New York Published in 1868 by Horatio Alger Told the story of a poor boy who rose to wealth and fame by working hard From “rags to riches” story Horatio Alger, 1832-1899

Can you think of any other economic systems? What is Capitalism? Free enterprise; individuals own most businesses Entrepreneurs – people who invest money in a business or product in order to make a profit. Can you think of any other economic systems?

Government Policies Gave railroad builders large pieces of land in order to link East and West coasts. Protective Tariffs – taxes that made imported goods cost more. Laissez-faire – allowed businesses to operate under minimal government regulation.

Think About It… What factors spurred industrial growth in the late 1800s?

Innovation Drives the Nation Patent – grant by the federal government giving the inventor the exclusive right to develop, use, and sell an invention for a set period of time Original Microwave Oven Patent Dr. Percy Spencer, 1950

Major Inventions of the 1800s 1844 – Telegraph 1846 – Sewing Machine 1852 – Safety Elevator 1880 – Light Bulb 1884 – Steam Boiler Furnace Thomas Edison

Drawing of Henry Bessemer, Vanity Fair, 1880 The Bessemer Process Steel – Henry Bessemer, a British engineer, developed a process for purifying iron, which resulted in a strong, lightweight steel. What impact do you think this had on society? What is steel currently used for? Drawing of Henry Bessemer, Vanity Fair, 1880

Technology and Transportation 1883 – Three transcontinental railroad lines in the U.S. 1884 – Delegates from 27 countries decided to divide the world into 24 time zones, one for each hour of the day During most of the 1800s towns set their clocks independently. By 1883, why did this become a problem?

Railroad Steam Engine, late 1800s The Railroad Effect Trains transported large amounts of goods, cheaply, quickly and efficiently Allowed business to obtain raw materials easily, and opened up new markets to sell goods What is mass production? Why did this occur? Railroad Steam Engine, late 1800s

Think About It… How did new technologies shape industrialization?

Impact of Industrialization Globalization Linked world markets; American economy expanded As United States grew into a world power, it often conflicted with political views and political policies of other countries. American Society Farms became mechanized=fewer workers, joblessness=influx of workers to cities Greater access to goods and products; no longer made items by hand Increased cost of living, depended on cash wages Environment Late 1800s – industrial waste is rapidly rising = Midwest; soil erosion and dust storms Congress’ response – National Park Service; Yellowstone, 1872

Question for Reflection What impact did industrialization have on Americans?

The Rise of Big Business Key Terms and People: Corporation Monopoly Cartel John D. Rockefeller Horizontal integration Trust Andrew Carnegie Vertical integration Social Darwinism Interstate Commerce Commission Sherman Antitrust Act Essential Question: How did big business shape the American economy in the late 1800s and early 1900s?

Think About It… Before the Industrial Revolution businesses were not very large. How did the IR change this?

Corporations Corporation – A business in which a number of people share in the ownership Advantages – Greater access to resources Share cost of ownership Has the same rights as individuals (buy and sell land, sue in court, etc.)

The Competitive Edge Wide-spread advertising JP Morgan – investing in research Monopoly – corporation that has complete control of a product Cartel – group of corporations that band together in order to eliminate competition from other businesses J.P. Morgan John D. Rockefeller Henry Flagler Andrew Carnegie

Horizontal and Vertical Integration Horizontal Integration – creating a giant company with low production costs by consolidating many firms into one company Ex. Rockefeller – Standard Oil Company Vertical Integration – consolidating many different businesses involved with the development of a specific product Ex. Rockefeller and Carnegie

What is a Trust? Ohio law prevented one company from owning stock in another, thus preventing horizontal integration. Rockefeller’s lawyer created the TRUST to get around this law. Trust – companies assign their stock to a board of trustees, who combine them into a new organization. The trustees run the organization, and then pay themselves dividends on the profits.

Think About It… What strategies did corporations use to decrease costs and increase profits?

Robber Barons or Captains of Industry? Small businesses squeezed out of business Cartels often set unfairly high prices ROBBER BARON! Provided jobs for millions of workers Technological development Economy boomed CAPTAINS OF INDUSTRY!

Social Darwinism Charles Darwin, On the Origin of Species (1859); animals evolved based on the process of natural selection – “Only the strong survive” This theory was soon applied to American capitalism. What do you think were the results of this?

Social Darwinism Wealth was a measure of one’s inherent value; those who had it were most ‘fit’ Laissez-faire: Government should stay out of the business world. This process of “natural selection” would make the country grow rich and strong. Many used this theory to validate racist beliefs and values. Cited poverty-stricken condition as evidence of the inferiority of minorities!

Government Regulations Interstate Commerce Commission (1887) Oversaw railroad industry to fight price-fixing and pooling First government agency to regulate business, but was weak: Could only monitor railroads that crossed state lines Could not make laws or control railroads transactions Could force railroad industry to submit records to Congress

Government Regulations Sherman Antitrust Act (1890) Outlawed any trust that operated “in restraint of trade or commerce among the several states.” Was rarely enforced but started a trend of government oversight and regulation Sen. John Sherman