V. Smokestack America A.Before War – little interest in heavy industry 1. War spurred industry 2. 1870 Bessemer Converter & Open-Hearth Steel Production.

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V. Smokestack America A.Before War – little interest in heavy industry 1. War spurred industry Bessemer Converter & Open-Hearth Steel Production a. reduced labor needs b. brought several stages of production under one roof B. Steel replaces Iron 1. Railroad rails no longer flatten & split 2. Railroad engines held more steam & pull more weight 3. High rise buildings 4. Suspension bridges 5. New steel Navy (battle of the Ironclads Virginia & Monitor) 6. Fencing, Nails, Hinges, Needles, Etc.

2 C. Steel Changes the power source to Coal 1. Animal power, Water power, wood, & now Coal D. Capitol 1. 1/3 Railroad cost paid by Europeans 2. Stocks become popular a. John Pierpont Morgan starts selling them in his bank b. expand during 1880s & 1890s E. Transportation & Communication 1. Pony Express 4/3/ /24/1861 a. 10 days from St.Joseph, MO to Sacramento, CA b. ended with first transcontinental telegraph line 2. 1 st Transcontinental Railroad 1869 a. 4 more by Western Union Telegraph ran along side each Railroad track

3 F. Railroads 1. first big business in the U.S. a. at first one man operation b. transcontinentals too large & expensive for one man i. initial investment, upkeep too much ii. rates, competition and management too much 2. cooperative monopolies a. divided up areas among themselves b. established rates in cooperation c. competed only when trying to take over d. pressure sometimes cut wages for workers 3. First ones to instigate efficiency studies a. told when to run b. how much to carry

4 c. established first time zones 1880s e. first management studies i Erie Railroad hired Daniel McCallum ii. separate workers from management iii. helped establish business administrators iv. others followed railroad's lead G. Business Expansions 1. Vertical a. put all phases of an operation under one roof b. companies expand in all phases of their industry c. Andrew Carnegie built up the steel industry i. backward expansion a. coal b. iron

5 ii. forward a. transportation - railroads b. shipping lines 2. Horizontal a. most railroads expand this way buy up competition b. John D. Rockefeller of Standard Oil of New Jersey i. controlled 84% of country's oil production by 1898 ii. Robber Barons or Industrial Giants

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