The Rise of Industrial America

Industrial Growth: Causes US has wealth of natural resources Explosion of inventions = better business and manufacturing efficiency Growing urban population provides workers and markets RR establish new markets - spur business growth Effects Big business emerges Business consolidates under monopolies and trusts Workers endure harsh conditions Labor unions develop Major strikes by industrial workers = violence Industrial Growth

Important individuals in the late 1800s

Growth of Big Business: Causes Technological boom Heavy investment in technology RR encourage expansion of business Social Darwinism = favorable public opinion

Railroads Create National Network After the Civil War rail tracks started to follow a standard tracks and signals. The key event to the rail expansion was the Transcontinental Railroad – Railway that traveled from coast to coast. Railroads adopted time zones in 1883.

Thomas Edison Menlo Park Laboratory Electricity Electric Light Bulb General Electric Power Plants Grammaphone Prolific Inventor

The Bessemer Process Process allowed for the mass production of steel. Steel became cheaper and more available. With steel in greater supply new building projects were undertaken. –The Brooklyn Bridge became the symbol of the new era of American technological innovations. Henry Bessemer

Growth of Big Business: Methods Vertical integration (Carnegie Steel) Horizontal consolidation [integration] (Standard Oil) Trusts Economies of Scale Monopolistic tendencies

The Big Business Model Businesses in the late 1800s transformed into a completely new form because of many factors: –Larger Pool of Capital (Money)– businesses needed large amounts of money to run. Turned to private investors. –Wider Geographic Span – railroads allowed businesses to have operations throughout the country. –Broader Range of Operations – Became responsible for all stages of operation. –Revised Role of Ownership – Owning and management became two different things. –New Methods of Managements – Specialized departments (HR, Accounting, Security, Benefits) were created to manage such large companies. What it takes to run a large company.

Rockefeller & Carnegie John D. Rockefeller – Formed Standard Oil Company in 1870 and soon became one of the world’s richest men. –Business tactics were questionable. –By the end of his life he gave $500 million in charity to help fund social well being. Andrew Carnegie – Became the main supplier of steel in U.S. in late 1800s. –Believed in “Gospel of Wealth” –Gave away 80% of fortune to education alone. He was no Santa Clause

Which one? Captains of IndustryRobber Barons

Horizontal Consolidation

Vertical Integration

Growth of Big Business: Features Large pools of capital Wider Geographic reach Changed role of ownership - “professional managers” New administrative techniques Oligopoly “Robber Barons” or “Captains of Industry” --- “Industrial Statesmen”?

Corporate Structure

Growth of Big Business: Government Relations Government: –Friendly to big business –Minimal interference (laissez-faire = hands off) –Sherman Antitrust Act (1890) - first used against labor unions NOT big business. (Would later change)

Bosses of the Senate

Growth of Big Business: Effects I US becomes industrial power internationally Many jobs available for immigrants & failed farmers Better business efficiency Higher productivity Business cycles = “Boom” and “Bust” Social class of super rich is created Income gap grows wider Labor Unions increased presence

Growth of Big Business: Effects II Increased number of workers = decreased wages (generally) Families work Increased mechanization = less need for human labor No insurance or benefits for most industrial workers Child labor Poor conditions = bad health of workers

Boom and Bust Cycles

Gradual Shift to Industrialized Labor

Child Labor

Child Labor:

Major Labor Strikes of the Late 19th century (1870s-1890s)

Social Darwinism Big businessmen began to adopt “Social Darwinism.” –An extension of Darwin’s “natural selection” process. Social Darwinists argued that society should interfere with competition as little as possible. –Believed government should stay out of businesses who were most “fit” to succeed and become rich. –Believed society would benefit from the success of the “fit” by weeding out the “unfit.”