1. The
Incorporation
of America

2. Essential Question
Industrialization increased the standard of living and the opportunities of most Americans, but at what cost?

3. Causes of Rapid Industrialization
Steam Revolution of the 1830s-1850s.
The Railroad fueled the growing US economy:
First big business in the US.
A magnet for financial investment.
The key to opening the West.
Aided the development of other industries.

4. The Emergence of Railroads
Between 1865 – 1890 the number of miles of RR track jumped off the map.
By 1869 the U.S. had it’s first transcontinental railroad.
Reasons contributing to this was:
Industry
Steel, iron, coal production
Homestead Act and settlers moving out west
Railroads helped fulfill the dreams of conquering the west.
Chinese immigrants suffered when building these railroads averaging 10 hour days, in all weather conditions, for little pay.
Impact of Railroads:
Country became “smaller”
Industries grew
West was settled quickly
Railroad time was created – Professor Dowd
Eastern, central, mountain, & pacific time

5. Impact of the RR Positive Efficiency in America Standard time zones
Standard track size
Standards established for moving goods
Invention of the air brake
Transportation needs met for both industry and civilian
Negative
Boom to bust industry
Huge debts & overproduction lead to RR failures
Little guy suffers
J.P. Morgan & others begin consolidating – buy low & sell high

6. Causes of Rapid Industrialization
Technological innovations.
Bessemer and open hearth process – Steel
A) construction- Brooklyn Bridge
B) Farm tools
c) Railroads
Edison
“Wizard of Menlo Park”
light bulb, phonograph, motion pictures.

7. Thomas Alva Edison
The Light Bulb
“Wizard of Menlo Park”

8. The Phonograph (1877)

9. The Motion Picture Camera

10. Alexander Graham Bell
Telephone (1876)

11. Alternate Current
George Westinghouse

12. The Airplane Wilbur Wright Orville Wright
Kitty Hawk, NC – December 7, 1903

13. Model T Automobile
Henry Ford I want to pay my workers so that they can afford my product!

14. “Model T” Prices & Sales

15. U. S. Patents Granted 1790s  276 patents issued.

16. Causes of Rapid Industrialization
Unskilled & semi-skilled labor in abundance.
Abundant capital.
New, talented group of businessmen [entrepreneurs] and advisors.
Market growing as US population increased.
Government willing to help at all levels to stimulate economic growth.
Abundant natural resources.

17. Seize the Opportunity Business Practices of the Gilded Age
Laissez Faire
Social Darwinisn – survival of the fittest
Reading: The Forgotten Man
Partnerships & Corporations: Pooling
Not putting all ones eggs into one basket
Corporations were owned by stockholders but run as an individual business
Board of directors & corporate officers run the day to day operations
Trusts & Monopolies:
Trusts are when companies agree to merge and turn over their stocks to a board of trustees.
The trustees run the company as if it were a single corporation
The point of this is to gain dominance over competing companies & businesses.
When a trusts gained complete control it was called a monopoly
Monopolies gave companies the right to raise prices and lower the quality at their own discretion

18. 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.
The market was not man-made or invented.
No room for government in the market!

19. 2. 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.”
Herbert Spencer

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

21. New Business Culture: “The American Dream?”
Protestant (Puritan) “Work Ethic”
Horatio Alger [100+ novels]
Is the idea of the “self-made man” a MYTH??
Reading: Ragged Dick

22. New Type of Business Entities
Pool  Interstate Commerce Act
Law designed to regulate the railroad industry, particularly its monopolistic practices. The Act required that railroad rates be "reasonable and just," but did not empower the government to fix specific rates  Interstate Commerce Commission created.
Trust  John D Rockefeller
Standard Oil Co.

23. Standard Oil Co.

24. New Type of Business Entities
Trust:
Horizontal Integration 
Process in which companies that produce similar products would merge in an effort to control the market on a product.
John D. Rockefeller
Vertical Integration:
Buy out all suppliers thus controlling all the raw materials gaining total control of the product.
Gustavus Swift  Meat-packing
Andrew Carnegie  U. S. Steel

25. Iron & Steel Production

26. New Type of Business Entities

27. New Financial Businessman
The Broker:
J. Pierpont Morgan

28. Wall Street – 1867 & 1900

29. Andrew Carnegie 1835-1919 Worked his way up the “ladder”
Seize the opportunities you are given
- Ragged Dick Reading
Erected a massive steel plant outside Pittsburgh using the Bessemer Process
“Lemons to Lemonade theory” – larger blast furnace
Became a model for industry

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

31. The Gospel of Wealth: Religion in the Era of Industrialization
Wealth no longer looked upon as bad.
Viewed as a sign of God’s approval.
Christian duty to accumulate wealth.
Should not help the poor.
Russell H. Conwell

32. % of Billionaires in 1900

33. % of Billionaires in 1918

34. The Reorganization of Work
Frederick W. Taylor
The Principles of Scientific Management (1911)

35. The Reorganization of Work
The Assembly Line

36. The Protectors of Our Industries

37. The ‘Bosses’ of the Senate

38. William Vanderbilt The public be damned!
What do I care about the law? H’aint I got the power?

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

40. Regulating the Trusts 1877  Munn. v. IL
1886  Wabash, St. Louis & Pacific Railroad Company v. IL
1890  Sherman Antitrust Act
in “restraint of trade”
“rule of reason” loophole
1895  US v. E. C. Knight Co.