1. The Second Industrial Revolution
Section 1
Chapter 19

2. Focus Questions
What developments occurred in the steel, oil, and electric-power industries during the Second Industrial Revolution?
What changes occurred in the way that businesses were organized?
Why did some Americans oppose monopolies, and what actions did they take against them?

3. An Age of Steel
Technology advances were important to the Second Industrial Revolution (this was the period of rapid growth in the U.S. manufacturing in the late 1800s)
By the mid-1890s the U.S. had become the industrial leader of the world
Some of the most important advances took place in the steel industry

4. An Age of Steel
In the 1850s, Henry Bessemer found a quick, cheap way to make steel by blasting hot air through melted iron to quickly remove waste materials
The Bessemer Process took only 10 to 20 minutes to convert several tons of iron into steel

5. An Age of Steel
The steel rails were at first used for railroad but eventually it will be used for building tall buildings and bridges
Air breaks on trains allowed them to carry heavier loads and travel faster
George Pullman designed elegant passenger and sleeping cars that made long-distance trips more comfortable
Railroads had a major impact on the development of the country’s economy

6. An Age of Steel
Cities that had major rail lines grew a great deal (Chicago and Kansas City)
As rail travel and shipping increased, railroad and their related industries employed more and more people

7. New Sources of Power
The use of petroleum was another breakthrough in the late 1800s
Edwin L. Drake proved that it was possible to pump crude oil from the ground (oil became big business)
The late 1800s became a time when oil will be used to power machinery
In German engineer Nikolaus A. Otto invented an engine powered by gasoline, another fuel made from oil
By the 1900s American manufacturers were building thousands of cars

8. New Sources of Power
Orville and Wilbur Wright were bicycle makers and built a light weight airplane with small gas-powered engine
They first piloted flight on December 17, 1903 in Kitty Hawk, North Carolina and patented the airplane in 1906

9. New Sources of Power
Thomas Alva Edison investigated the practical uses of electricity
He was awarded more than 1,000 patents
Edison and his team of inventors invented the light bulb in 1879
He also helped provide electricity to cities

10. New Sources of Power
By 1866 a telegraph wire was laid on the floor of the Atlantic Ocean connecting the U.S. and Great Britain
Alexander Graham Bell invented the telephone in 1876
By the mid-1890s major cities had telephone lines through out the city

11. Free Enterprise and Big Business
As the economy grew the federal government favored free enterprise– government did not interfere with business
The late 1800s the policy continued in the form of laissez-faire capitalism (little or no governmental control of the market economy
Laissez faire is French for “allow to do”
The government provided protective tariffs and land grants for railroad companies

12. Free Enterprise and Big Business
Entrepreneurs– people who start new business had a lot of freedom and many opportunities
Many entrepreneurs formed their business as corporations
Corporations sell shares of ownership (stock) to a number of individuals known as a stockholder
Stockholders get a share of the company profits
Corporations must be approved by a charter from the state

13. Free Enterprise and Big Business
The stockholders choose a board of directors who then choose the main leaders of the corporation
Stockholders are not personally responsible for the debts of the business (stockholders are only out the money they invested)
By 1900, more than 100 million shares a year were being sold on the New York Stock Exchange

14. Business Leaders
Entrepreneurs and business leaders were some of the most respected members of American society
Politicians praised prosperous businessman as examples of American hard work, talent, and success
Andrew Carnegie– was one of the most admired business leaders of the late 1800s
He borrowed money and invested in iron mills and the bridge building business
In 1873 Carnegie focused his efforts on steel production
By 1901 Carnegie’s mills were producing more steel than all of Great Britain’s steel mills combined

15. Business Leaders
He used vertical integration– owning the businesses involved in each step of a manufacturing process (iron ore mines, the coal fields, and railroads needed to support the steel mills)
John D. Rockefeller was a powerful businessman who made his wealth in the oil field (Standard Oil Company)
Rockefeller also used vertical integration to become the country’s largest oil refiner
Rockefeller got lower railroad costs and even convinced some railroad companies not to do business with this competitors

16. Business Leaders
Rockefeller also used horizontal integration which is owning all the business in a certain field
By 1880 he controlled 90 percent of the oil-refining business

17. Business Leaders
Rockefeller had a monopoly on oil and formed a trust– grouping together of a number of companies under one board of directors
Rockefeller could drive up prices with these practices

18. Social Darwinism and Philanthropy
Many people who favored free enterprise also believed in social Darwinism
It was loosely based on Charles Darwin’s theory of natural selection
Darwin believed that species evolved by adapting to their environments over long periods of time

19. Social Darwinism and Philanthropy
Social Darwinism said that “survival of the fittest” also determined who would succeed in human society
Some argued that government regulation of business hurt the “natural” economic order
It was a poor person’s responsibility to work for a better life

20. Social Darwinism and Philanthropy
Some felt the wealthy had the duty to aid the poor
Some practiced philanthropy-- giving money to the needy
Andrew Carnegie gave $350 million to charities during his lifetime

21. The Antitrust Movement
Critics of big business said that unfair business practices were responsible for the successes of many large companies
Large companies would often drive small companies out of business
Trusts would match each other’s prices on goods to avoid competition

22. The Antitrust Movement
Many wanted government to control monopolies and trusts
People who favored trusts felt that the trusts were more efficient and gave the consumer dependable products and services
Many in Congress were sympathetic to big business but voters wanted change

23. The Antitrust Movement
In 1890 the Sherman Antitrust Act was passed and it outlawed monopolies and trusts that restrained trade
The act unfortunately did not clearly define what a trust was in legal terms
The law was difficult to enforce and corporations and trusts continued to grow

24. Focus Questions
What developments occurred in the steel, oil, and electric-power industries during the Second Industrial Revolution?
What changes occurred in the way that businesses were organized?
Why did some Americans oppose monopolies, and what actions did they take against them?