Chapter 18: The Rise of Industrial America

I. Industrialization takes hold  Unlike South, North emerged undamaged in 1865  Reconstruction eliminated Southerners as political rivals  Depressions in , , but industrial production doubled every years

A. Natural and Human Resources 1. Huge deposits of natural resources a. coal- Appalachian Mountains Pa- Al b. Iron ore- deposits in Michigan and Wisconsin i. Soo Canal finished in 1855 between Superior and Huron ii. iron ore could now move to steel mills on lower Great Lakes 2. Abundant human resources a. mobile laborers b. population doubled between million to 75 million (14 million immigrants)

"The New Colossus" by Emma Lazarus.

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B. Public Policies and Private Investments 1. Unlike Europe, American Industry developed within a free enterprise system (laissez-faire) 2. Some government policies encouraged Industrialization a. entrepreneurs- business organizers, received special favors from Congress b. liberal immigration laws c. high protective taxes d. government sold lands with resources for cheap e. paid 1/3 of cost for railroads ($700 million) 3.Making money was the goal 4. Europe invested in America as well

C. Science and Technology 1. Inventions increased productivity a. Transportation and communication b. Universities influenced by German educators, began research 2. America impressed with inventors a. C. Latham Sholes – 1868 – typewriter b. Alexander Graham Bell – 1876 – Telephone c. Thomas Alva Edison- more of an innovator than inventor i. improved typewriter, light bulb, telephone, and telegraph ii. invented phonograph iii. Menlo Park, New Jersey – research lab

3. Technology felt almost everywhere a. canning b. textile and clothing industry i. Northrup automatic loom- bobbins changed automatically ii. standard cloth sizes iii. department stores and mail order iv. power-driven sewing machines and cloth cutters c. shoe making i. economies of scale- ability of large businesses to operate more cheaply and efficiently than smaller ones, resulting in lower per unit costs for the products of large companies. ii. by 1900, local cobblers nearly disappeared d. steel making (Bessemer process) e. oil industry (oil lubricated machine tools) f. railroad industry i. Bessemer steel replaced weaker iron rails ii. Westinghouse air brake – cars and locomotives stop at the same time iii. Kerosene lamps and better headlights for night travel

D.Railroad Building 1. largest factor in growth of industry ,000 miles 1875 – 70, > 140, – 200,000 miles 40% of world’s tracks 2. standardized track width – time zones 3. required steel, coal, lumber, iron, petroleum 4. consolidation of smaller line in MW. E. & S important as well 5. corruption and fraud plagued railroad companies (Jay Gould) 6. Cornelius Vanderbilt – famous and most successful railroad consolidator a. little respect for law or public interest b. “insider trading” 7. set examples for other companies

IIThe Growth of Big Business * Railroads were America’s first “Big Business” and were organized into corporations- or a company formed by a organized group of investors who each receive a share of ownership in proportion to the amount they invested. A. Benefits of Big Business 1. supply the national market 2. better products at a lower cost 3. separate departments - research created more efficiency

B. Advantage of Big Business shown in meat packaging 1. refrigerated railroad car enabled huge companies to sell across the country ( Swift &Armour) 2. so highly organized and so many products- they could sell meat at a loss 3. took advantage of their competitors and the public

C. Problems caused by Big Business 1. corruption 2. destroyed labor unions 3. devastated environment 4. closed local businesses 5. corrupting influence of wealth and power

` D. The Role of Corporations 1. American law allowed & conditions encouraged corruptions 2. sold stocks and bonds to raise capital 3. holding companies - one that gains control of other companies by buying their stock 4. trusts- combination of companies to gain control of an industry and reduce competition 5. horizontal integration- joining of business together that are engaged in similar business activities or processes 6. vertical integration- joining of businesses together that are involved in different but related activities