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. Causes of Rapid Industrialization
Technological innovations. * Bessemer and open hearth process
* Refrigerated cars
* Edison  “Wizard of Menlo Park”  light bulb, phonograph, motion pictures.

5. Thomas Alva Edison
“Wizard of Menlo Park”

6. The Light Bulb

7. The Phonograph (1877)

8. The Ediphone or Dictaphone

9. The Motion Picture Camera

10. Alexander Graham Bell
Telephone (1876)

11. Alternate Current
George Westinghouse

12. Alternate Current
Westinghouse Lamp ad

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

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

15. “Model T” Prices & Sales

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

17. 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.

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??

22. New Type of Business Entities
Pool  Interstate Commerce Act  Interstate Commerce Commission created.
Trust  John D Rockefeller
* Standard Oil Co.

23. Standard Oil Co.

24. New Type of Business Entities
Trust: * Horizontal Integration  John D Rockefeller
* Vertical Integration: A. Gustavus Swift  Meat-packing
B. Andrew Carnegie  U. S. Steel

25. Iron & Steel Production

26. New Type of Business Entities

27. U. S. Corporate Mergers

28. Industrial Consolidation: Iron & Steel Firms

29. New Financial Businessman
The Broker: * J. Pierpont Morgan

30. Wall Street – 1867 & 1900

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

32. The Reorganization of Work
The Assembly Line

33. Business Leaders Andrew Carnegie
One of most admired businesspeople of the time
Focused on steelmaking
Used vertical integration, owning businesses involved in each step of manufacturing, to lower costs
John D. Rockefeller
Standard Oil Company was country’s largest refinery
Developed horizontal integration, owning all businesses in a field
Formed a trust, grouping many companies under a single board
Leland Stanford
Made fortune selling equipment to miners
Governor of California, one of founders of Central Pacific Railroad, and founder of Stanford University

34. Wealth Concentration Held by Top 1% of Households

35. % of Billionaires in 1900

36. % of Billionaires in 1918

37. “The Protectors of Our Industries”

38. The “Bosses” of the Senate

39. The “Robber Barons” of the Past

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

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

42. 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

43. “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

44. 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.

45. The Antitrust Movement
Critics said many businesses earned their fortunes through unfair business practices.
Used size and strength to drive smaller competitors out of business
Powerful trusts sold goods and services below market value until smaller competitors went out of business, then raised prices.
Some people were concerned when a trust gained a monopoly, or total ownership of a product or service.
The Sherman Antitrust Act passed in 1890 made it illegal to create monopolies or trusts that restrained trade.
The act did not clearly define a trust in legal terms, so it was hard to enforce.
Corporations and trusts continued to grow in size and power.

46. World’s Industrial Output