1. APUSH — 1/23/2013

2. Prompt: “ The reorganization and consolidation of business structures was more responsible for the late nineteenth century American industrialization than was the development of new technologies.” Assess the validity of that statement with specific reference to business structures and technology between 1865 and 1900. What do we need to know? What is this question asking? What must we prove?

3. Relative Share of World Manufacturing

4. 1) Unskilled & semi-skilled labor in abundance. 2) Liquid capital became abundant capital. 3) New, talented group of businessmen [entrepreneurs] and advisors. 4) Market growing as U.S. population increased. 5) Government willing to help at all levels to stimulate economic growth. 6) Abundant natural resources- coal, iron, timber, oil. 7)Innovation, particularly w/ mass production in factories 8)Railroads helped fueled the growing U.S. economy. 1) Unskilled & semi-skilled labor in abundance. 2) Liquid capital became abundant capital. 3) New, talented group of businessmen [entrepreneurs] and advisors. 4) Market growing as U.S. population increased. 5) Government willing to help at all levels to stimulate economic growth. 6) Abundant natural resources- coal, iron, timber, oil. 7)Innovation, particularly w/ mass production in factories 8)Railroads helped fueled the growing U.S. economy. Causes of Rapid Industrialization

5. U. S. Patents Granted 1790s  276 patents issued. 1900s– 221, 227 patents issued.

6. Thomas Alva Edison “Wizard of Menlo Park”

7. The Light Bulb

8. The Phonograph (1877)

9. The Ediphone or Dictaphone

10. The Motion Picture Camera

11. Alexander Graham Bell Telephone (1876)

12. Alternate Current George Westinghouse

13. Alternate Current Westinghouse Lamp ad

14. New Business Culture Laissez Faire  the ideology of the Industrial Age.  Individual as a moral and economic ideal.  Individuals should compete freely in the marketplace.  Literal translation- “ allow to be”.  No room for government in the market!  Individual as a moral and economic ideal.  Individuals should compete freely in the marketplace.  Literal translation- “ allow to be”.  No room for government in the market!

15. Social Darwinism × British economist. × Advocate of laissez-faire. × Adapted Darwin’s ideas from the “Origin of Species” to humans. × Notion of “Survival of the Fittest.” × British economist. × Advocate of laissez-faire. × Adapted Darwin’s ideas from the “Origin of Species” to humans. × Notion of “Survival of the Fittest.” Herbert Spencer

16. Social Darwinism in America William Graham Sumner Folkways (1906) $Individuals must have absolute freedom to struggle, succeed or fail. $Therefore, state intervention to reward society and the economy is futile! $Individuals must have absolute freedom to struggle, succeed or fail. $Therefore, state intervention to reward society and the economy is futile!

17. New Type of Business Entities Trust:  Horizontal Integration   John D. Rockefeller- Standard Oil- brought together firms of the same business under one managing board. Essentially, they are the same company, but they look like many different companies. They are a monopoly without looking like one. Trust:  Horizontal Integration   John D. Rockefeller- Standard Oil- brought together firms of the same business under one managing board. Essentially, they are the same company, but they look like many different companies. They are a monopoly without looking like one.

18. John D. Rockefeller John D. Rockefeller- Owner of Standard Oil He employed horizontal integration. He and his lawyer Samuel Dodd created the first trust = smaller companies gave their stock to Standard Oil’s board of directors, who consolidated the operations of these companies. Rockefeller was able to gain control of almost the entire world oil market (had 90% of U.S. market) Was known for ruthless business tactics. Yet by the age of 65, he listed his profession as philanthropist. John D. Rockefeller- Owner of Standard Oil He employed horizontal integration. He and his lawyer Samuel Dodd created the first trust = smaller companies gave their stock to Standard Oil’s board of directors, who consolidated the operations of these companies. Rockefeller was able to gain control of almost the entire world oil market (had 90% of U.S. market) Was known for ruthless business tactics. Yet by the age of 65, he listed his profession as philanthropist.

19. Standard Oil Co.

20. Andrew Carnegie Brought the Bessemer process to America– Process to get steel by blowing cold air over red-hot iron. Carnegie’s infusion of technology and new business methods led this industrialist to become a steel magnet. He used vertical integration = combining all phases of manufacturing into one organization. Because of his ability to efficiently produce massive amounts of steel- It led to the use of steel for railroads, skyscrapers, and bridges during industrialization. 1890s – U.S. created 1/3 of world’s steel Sold Carnegie Steel in 1901- Led to the 1 st billion dollar company- U.S. Steel

21. “On Wealth” Andrew Carnegie $ The Anglo-Saxon race is superior. $ “Gospel of Wealth” (1901). $ Inequality is inevitable and good. $ Wealthy should act as “trustees” for their “poorer brethren.” $ The Anglo-Saxon race is superior. $ “Gospel of Wealth” (1901). $ Inequality is inevitable and good. $ Wealthy should act as “trustees” for their “poorer brethren.”

22. Iron & Steel Production

23. Railroads- America’s 1 st Big Business Railroad construction drastically increased in the period after Lincoln’s death. Companies reluctant to build in rural areas because of initial profit loss. Congress provided subsidies ($, land) to railroad companies to encourage the building of tracks through rural areas. There were numerous benefits of railroad expansion for the American government. 1) U.S. government in return received good rates for postal service and military traffic 2) It also allowed them to create a good transportation system which boosted the economy and westward expansion.

24. New Improvements In Railroad Technology Steel rails --safer and more economical Standard gauge of track width Pullman Palace Cars = “traveling hotels” Air breaks- George Westinghouse

25. Impact of Railroads on America 1)Industrial expansion = opened new markets and sped raw materials to factories. 2) Agriculture allowed farmers to send their goods to market and brought them manufactured goods. 3)Cities grew up around railroads 4)Immigration increased 5)Great Plains settlers brought in by railroads plowed up fields; lumber used for railroad ties. 6) Wealth concentration = railroad companies produced large amount of millionaires 7) Time = creation of 4 time zones to keep schedules consistent

26. Corruption in Railroads Jay Gould made $ from inflating and busting stocks of several railroad companies. They also used “stock watering” = stock promoters oversold or overvalued stocks and bonds after exaggerating actual railroad assets. They created “pool” arrangements = railroad owners agreed to divide business in certain areas and share the profits. Example of Corruption- Credit Mobilier scandal

27. Cornelius [“Commodore”] Vanderbilt Can’t I do what I want with my money?

28. New Financial Businessman The Broker:  J. Pierpont Morgan-- the banker’s banker  Used 1890s depression to merge competing banks by placing his own officers on their boards of directors-- known as “interlocking directorates”  Monopolization techniques used by J.P. Morgan in the nineteenth century. J.P. Morgan used his reputation to lure European financiers into America by taking over an industry and stabilizing it through monopoly. Morgan would then turn the industry into a single, stable, profitable entity that was much more palatable to European bankers.  Could harness so much money that he was able to Bail out the U.S govt. during an economic depression in 1907. The Broker:  J. Pierpont Morgan-- the banker’s banker  Used 1890s depression to merge competing banks by placing his own officers on their boards of directors-- known as “interlocking directorates”  Monopolization techniques used by J.P. Morgan in the nineteenth century. J.P. Morgan used his reputation to lure European financiers into America by taking over an industry and stabilizing it through monopoly. Morgan would then turn the industry into a single, stable, profitable entity that was much more palatable to European bankers.  Could harness so much money that he was able to Bail out the U.S govt. during an economic depression in 1907.

29. % of Billionaires in 1900

30. % of Billionaires in 1918

31. Prompt: “ The reorganization and consolidation of business structures was more responsible for the late nineteenth century American industrialization than was the development of new technologies.” Assess the validity of that statement with specific reference to business structures and technology between 1865 and 1900. On the notecard you were given, create a thesis and then on the back, brainstorm the outside information you would include to prove your thesis.