Industrialization Unit 2

Questions: How did you feel after the “assembly line” activity? What problems do you foresee when it comes to Industrialization Which invention did you research? Which invention do you think had a greater impact on the people of its time, the internet or electricity?

U.S. Economy Capitalism: economic system in which capital assets are privately owned goods and services are produced for profit in a market economy

Other type of Economy Socialism: is an economic system characterized by social ownership of the means of production and co- operative management of the economy.

A New Industrial Age

Objectives 1 and 2: How did Industrialization affect our nation positively and negatively? Identify and describe the key capitalist and industrialist and their impact on American Society

America Industrialized because… Abundance of natural resources Coal, iron, timber, petroleum and waterpower Abundance of Labor Immigration increased population Workers of all ages Investors invested large amounts of capital ($) Monopolies Government promotes economic growth No regulations like European countries Laissez-faire: hands off, no gov’t interference

Industrial Revolution *Industrial growth was not inevitable- America worked hard- but industrialization brought social benefits and costs. Major revolutions in transportation and communication Railroad- most significant invention of the century!

Empire on the Rails- Vanderbilt Video Advantages Better than a ship- More direct routes, greater speed, greater safety, dependable schedules, larger volume of traffic, year round service Tied the country together Independence and specialization Ex: Chicago-meat, Texas-cattle, Florida-fruit Mass production and mass consumption Paved the way for business development How to handle modern business Labor relations, government regulation, management, etc.

Disadvantages of the Railroad Corruption in business Competition and greed J.P Morgan Saves the Day! Redesigned and managed railroads, and took control of industry Other industrial empires…

Andrew Carnegie & Steel Advances in Steel promoted changes Helped construction of longer bridges, taller buildings, stronger railroad track, deadlier weapons, better plows, heavier machinery, and faster ships. Bessemer Steel Process- steel produced quicker and cheaper Andrew Carnegie Immigrant from Scotland Manufactured more steel than all of Britain's factories combined 1 million tons a year, employed 20,000 workers Sold business to J.P Morgan

Brooklyn Bridge

Skyscrapers

Andrew Carnegie-Why was he so successful? Management practices Make products better—cheaply Vertical integration: buy out the suppliers Horizontal integration: buy out competing producers

Rockefeller and Oil -video Oil boom- “Black Gold” Edwin Drake drilled the first oil well John D Rockefeller- built the Standard Oil Company Developed system of “trusts” or monopolies Way to success = Join with competing companies into trusts

Inventions That Changed Society Christopher Sholes: typewriter (1867) Alexander Graham Bell: telephone (1876) Typewriter & Telephone Created new jobs for women  Clerical work (Secretary)

Inventions Promote Change Electricity 1876- Thomas Edison: established 1st research lab & perfected incandescent light bulb Funded mainly by J.P. Morgan, Jr.: business mogul, banker

Industry Changes Society Nation of Consumers Millions of dollars spent in advertising Impacted all Americans (rich, poor, rural, urban, ethnic groups) Labor of millions of men and women built the new industrial society Pros and cons

Captains of Industry….or Robber Barons?? Identify the key players during Industrialization How did they positively and negatively affect our nation?

Vocabulary Monopoly - only supplier of a particular commodity(eliminates competition) Trust- agreement between competing companies to take over market through a board of trustees(group who ran separate companies as one) Robber Baron - cruel and ruthless businessmen who would stop at nothing to achieve great wealth Captain of Industry - powerful industrialist who uses his wealth in a positive way Anti-Trust - law that promotes or seeks to maintain market competition by regulating anti-competitive conduct by companies

Andrew Carnegie +Donated $ for Libraries +Self made- American Dream +Donated billions in today’s equivalent -Crushed Labor Unions -Slashed wages of workers -Homestead Steel Strike-

JP Morgan +Standardized companies +Donated $ to research institutes and universities +Saved the US economy multiple times -Monopolies and intimidation -manipulated ALL people for his own gain (including President of US) -Shady business

John D Rockefeller +Made 1% of the US GDP to help economy +Donated billions of dollars to colleges +Revolutionized business practices -Monopolies- eliminated competitors -poor working conditions for workers -”Cleveland Massacre”- The so-called Cleveland Massacre was the beginning of John D. Rockefeller's drive toward an oil monopoly, and it is considered one of his shrewdest operations. The fact that he carried out this campaign in the midst of the most unfortunate episode of his business career (the demise of the infamous South Improvement Company) truly shows just how focused and ruthless Rockefeller could be. Launched in late 1871 by Tom Scott, the president of the powerful Pennsylvania Railroad, the South Improvement Company (S.I.C.) was a secret alliance between the railroads and a select group of large refiners aimed at stopping "destructive" price-cutting and restoring freight charges to a profitable level. According to the pact, the railroads would raise their rates, but would agree to pay rebates to Rockefeller and other large refiners, thus securing their steady business. In addition, the latter were to receive the proceeds of the "drawbacks" levied on nonmembers, who as a result would end up paying much higher prices for their shipments of oil. When news of the secret deal was leaked to newspapers in Pennsylvania's Oil Region, the area most hurt by it, the independent oilmen were stunned and outraged. Fourteen-year-old Ida Tarbell, the daughter of one of them, witnessed the reaction: "At the news all Oildom rushed into the streets," she wrote 30 years later in her The History of the Standard Oil Company. "Nobody waited to find out his neighbor's opinion. On every lip there was but one word, and that was 'conspiracy.' For weeks the whole body of oil men abandoned regular business and surged from town to town intent on destroying the 'Monster,' the 'Forty Thieves,' the 'great Anaconda,' as they called the mysterious South Improvement Company. Their temper was shown by the mottoes on the banners they carried: 'Down with the conspirators'; 'No compromise'; 'Don't give up the ship!'" Rockefeller, one of the leading members of the new alliance, thought it preposterous to deem it a conspiracy: "There is so much false pretence in all this talk about rebates!," he would argue in an interview conducted almost 50 years later. "Rebates and drawbacks were a common practice for years preceding and following this history. So much of the clamor against rebates and drawbacks came from people who knew nothing about business. Who can buy beef the cheaper -- the housewife for her family, the steward for a club or hotel, or the quartermaster or commissary for an army? Who is entitled to better rebates from a railroad, those who give it for transportation 5,000 barrels a day, or those who give 500 barrels -- or 50 barrels?" But the secrecy and dubious legality of the pact soon earned the independents popular sympathy. Calling it "the oil war," the New York press seized on the clash between S.I.C. refiners and Pennsylvania oil producers, who had decided to boycott the new alliance. Finally, in April of 1872, the South Improvement Company's charter was repealed by the Pennsylvania legislature before it had even conducted a single transaction. The independents were ecstatic. But Rockefeller, indifferent to the fact that he had been singled out as the villain in the Oil Regions drama, refused to dwell on the fallout from this, his first big failure. "We, the Standard Oil people, did not originate the South Improvement Company," he said years later. "It was not our idea. We did not organize it, did not think from the beginning that there was much promise in it. We acceded to it because [its leaders], we hoped, would be helpful to us ultimately. We were willing to go with them as far as the plan could be used; so that when it failed we would be in a position to say, 'Now, try our plan.'" As it turned out, Rockefeller had been carrying out "his plan" even before the demise of S.I.C. Eager to consolidate the refining industry, he set out to eliminate what he called "ruinous" competition from his most immediate rivals. In less than six weeks, between February and March of 1872, he used the threat of the big new alliance and a sophisticated range of tactics to buy up 22 of his 26 Cleveland competitors. While the public and many in the industry were caught up in the South Improvement Company crisis, Rockefeller had already moved beyond that momentary defeat. He now controlled what would become the foundation for the biggest industrial empire of its time. "It was really the first great step on John D.'s march to industrial supremacy," says biographer Ron Chernow, "because once he had a monopoly over the Cleveland refineries, he then marched on and did the same thing in Pittsburgh, Philadelphia, Baltimore, New York, and the other refining centers. So that was really the major turning point in his career, and it was really one of the most shameful episodes in his career."

Cornelius Vanderbilt +Standardized the Railroad +Donated Ships in the Civil War +Vanderbilt University -Monopolies eliminated competition -intimidated competitors with railroad blockades -bribery and corruption in government

Henry Ford +Ford company revolutionized Assembly Line +Ford company revolutionized the automobile +Set a new standard for employee treatment -Monopolies -Broke up labor unions

George Pullman +Created the Pullman car…changed the luxury of travel +Changed the atmosphere around which factories were built +Established towns throughout the country -Obsessive control over this towns and workers -Charged high rent to town’s residents -Paid workers very little

Andrew Mellon + -

Thomas Edison +Established world’s 1st research laboratory +