Chapter 4

Describe the factors that led to Industrialization in the late 1800’s What was the impact of industrialization on Americans in the late 1800’s Analyze the growth of big business and the American public’s reaction to it. What steps did the government take to limit the power of big business? What problems faced workers in the late 1800’s and what action did they take to improve their conditions? o Protective tariff Laissez faire Thomas Edison Monopoly Cartel Corporation Horizontal integration Vertical integration Trust Social Darwinism ICC Sherman Anti- trust Act John D. Rockefeller Andrew Carnegie Sweatshop Company town Socialism Knights of Labor AFL Haymarket Riot Terence Powderly Samuel Gompers Eugene Debs Homestead Strike

End of the Civil War marked a big change in the United States Innovation, technology improved peoples lives Inventors, scientists and business leaders turned the United States into an Industrial giant Railroads, natural resources, immigrant labor, innovation, capitalism supported by the government allowed the “second industrial revolution” to occur

Changed America from an agrarian decentralized country to an urban industrial society Shortage of labor after the Civil War led to mechanization Government imposed protective tariffs and kept out foreign competition Government helped create interconnected national transportation, communication network Electric power allowed machines to be more powerful and efficient Created a system of applied research to the industrial process Changed the nature of work in America

Natural resources- coal, timber, many navigable rivers, in 1859 oil was discovered it became a new source of inexpensive energy Workforce growth- immigrants pushed from their homeland and pulled by the opportunity that America offered. Mechanization of agriculture pushed many farmers to the new, growing cities to find work. Provided new industry a huge workforce Capitalism- system of free enterprise allowed entrepreneurs to fuel industrial growth, established factories, created jobs, attracted foreign investment Government Policies- encouraged growth of business. Provided railroads millions of acres of land to link the country. Passed protective tariffs, encouraged laissez- faire policies Strong legal system and private property rights encouraged investment and growth

Late 1800’s drive for efficiency led to innovation. Number of patents increased at this time Business invested heavily in new technology and innovation created new industries and expanded old ones Technology changed more peoples lives than political or intellectual ideas at this time Innovations and inventions included: electricity, communications (telegraph, telephone, wireless telegraph) steel Steel was made cheaper by the Bessemer Process, allowed the development of skyscrapers, suspension bridges, elevators

Transportation, technology effected how people lived- Railroads expanded and new technology improved commerce based on rail travel- refrigerated cars for transporting meat and produce, improved telegraph Time zones invented to make scheduling rail service more efficient suburbs developed, people living outside cities could commute to work on trains and streetcars Commuter trains and subways appeared in major cities Automobiles and airplanes developed in the early 20th century, created a new industry

American agricultural and manufacturing exports dominated international markets I.American farms became more mechanized many farmers moved to cities. II.Exports expanded American economy and United States grew as a world power III.Goods could be transported on rails to ports where they could be loaded onto steamships Cities provided access to new goods but higher cost of living made many farmers dependent on wages from factory work

Before Civil War many businesses owned by one person or family, business was local Industrialization brought the rise of large scale business and mass production- emphasized maximum production, national and international distribution Railroads provided access to raw materials and a way to get products to a large number of consumers Business leaders lured by profits responded with new business methods

Corporation people share ownership through stock ownership, created huge pool of capital to invest in the business, run different factories Corporations worked to maximize profits, tried to pay workers as little as possible, pay low prices for raw materials. Monopolies were formed to gain complete control of a product or service charge low fares to put others out of business, Others tried to eliminate competition by forming cartels to keep prices artificially high

Businessmen developed more efficient ways of doing business and organizing their companies Two new methods were vertical and horizontal integration Horizontal Integration- consolidating many firms into one business (Standard Oil and refineries) Vertical Integration- gaining control of the many different businesses that make up all parts of a products development

John D. Rockefeller, Andrew Carnegie, J.P. Morgan, Richard Sears and Alvah Roebuck were men skilled in organizing and promoting big business. Rockefeller, Carnegie were known for their innovations in organization J.P. Morgan developed investment banking Sears and Roebuck were the pioneers of mail order retailing

Obsessed with order, precision, tidiness he decided to bring order to the oil industry Recognized the potential for profits in the oil industry, his company Standard Oil of Ohio, he began to buy out other refiners in 1870 in less than six weeks he controlled 90% of all oil refining in the United States He soon began to purchase all aspects of production barrels, pipelines, tank cars, oil storage facilities and he made deals with railroads to ship his products cheaply

Established a trust to make his business more efficient and centralize control of the business, established the idea of a holding company (controlling the majority of stock of many different companies At the end of his life Rockefeller gave most of his fortune away, he gave away more than $500 million over his lifetime

Born in Scotland to a poor family experience a rise from rags to riches During the Civil War developed a military telegraph system After the war- built railroad bridges, steelmaking and investments In 1873 Carnegie began to concentrate on steel

Not a technical expert but a salesman, promoter and organizer Hired men of ability to run business and used the most up to date machinery Bought out struggling companies and had a philosophy of continual innovation Stood out as a thinker and publicized a philosophy for big business, “ The Gospel of Wealth” (1889) When he retired at 65 devoted himself to giving away his fortune for the public good. Gave money to universities, libraries, parks, churches, public buildings

Born to a wealthy family Used his connections to bring capital from Europe to the United States to invest in businesses Purchased stock and bonds wholesale and sold them for a profit- beginning of investment banking Morgan began to consolidate these companies into trusts By the 1890’s he was in charge of one sixth of the nations railroads Morgan believed that control brought stability to the economy 1901 Morgan purchased Carnegie’s steel and iron holdings Created the first billion dollar corporation in the United States

Many new products in the later 1800’s needed markets. How did retailers reach the millions of people that lived in small towns and isolated farms In the 1890’s two Chicago entrepreneurs Richard Sears and Alvah Roebuck began offering goods by mail. They purchased goods in high volume from wholesalers and sold it at prices lower than the local rural stores The development of free rural mail delivery in 1898 meant that rural Americans could purchase goods that before were expensive or only available to city dwellers The new business helped create a truly national market