1. A New Industrial Age
Chapter 6
Franz

2. The Expansion of Industry
Section 1

3. Learning Targets
I can explain why industry improved so much in the late 1800’s.
I can evaluate how new technology changed Americans’ lives.

4. Natural Resources Fuel Industrialization
Some Background…
After Civil War, U.S. was still farming nation
By 1920, became industrial power
Industrial Boom due to:
Natural Resources
Gov’t support of business
Growing Urban Population

5. Natural Resources Fuel Industrialization
Black Gold
Native Americans used oil for natural uses
By 1840, Americans used it to light lamps
Edwin L. Drake
Used steam engine to pump oil out of ground
Oil Boom
Oil companies started up across the nation
Started to distill oil into kerosene
Would later discover use for gasoline too

6. Oil in L.A.

7. Natural Resources Fuel Industrialization
Bessemer Steel Process (1850)
Coal and Iron were abundant
Injected air into molten (hot) iron to remove carbon and other impurities
This created early version of steel!
Much stronger
Easy to make, abundant resources
What can you do with steel?

8. Natural Resources Fuel Industrialization
New Uses for Steel:
Railroads (track)
Farming Machinery
HUGE construction
Brooklyn Bridge (1883)
Skyscrapers

9. Inventions Promote Change
Some Background…
Plentiful resources and impressive ingenuity changed the way people lived and worked

10. Inventions Promote Change
The Power of Electricity:
Thomas Edison (1876):
Perfected incandescent light bulb
Created system that distributed electricity across city
By 1890, electricity powered most businesses
Could locate wherever they wanted
Allowed business to grow tremendously

11. Inventions Promote Change
Inventions Change Lifestyles:
Christopher Sholes
The Typewriter
Alexander Graham Bell
The Telephone
Women found work in factories
Workers’ standard of living improved
Less back breaking work
10 fewer hours each week

12. The Age of the Railroads
Section 2

13. Learning Targets
I can explain how the transcontinental railroad influenced American Business
I can describe how the Federal government influenced railroads

14. A Little Background…
The growth of railroads benefitted the nation, but also led to corruption and led to the need for government regulation.

15. Railroads Span Time and Space
A National Network:
By 1856, went to the Mississippi River
Transcontinental Railroad
By 1869, the U.S. had a railroad that went from east coast to west coast
1865 = 30,000 miles of track
1890 = 180,000 miles of track!

16. Railroads Span Time and Space
Romance and Reality:
Railroad workers have new opportunities
Hired Chinese and Irish Immigrants
Also hired Civil War veterans desperate for work
In 1888, 2,000 men died, 20,000 were injured!

17. Railroads Span Time and Space
Railroad Time:
Noon = sun at its highest
Noon in Boston was 12 minutes later than New York!
1869, proposed dividing world into 24 time zones
U.S. would get four
Eastern, Central, Mountain, and Pacific
Helped businesses become more efficient

18. Opportunities and Opportunists
New Towns and Markets:
Railroads linked towns
This promoted new business
New towns emerged along railways
Denver and Seattle

19. Opportunities and Opportunists
George M. Pullman:
Built a factory for making “sleeper” cars for trains
Built a city for his workers
Provided housing, medicine, etc…
Eventually faced a strike when he refused to lower rent, when he cut pay

20. Opportunities and Opportunists
Credit Mobilier:
Stockholders of the Union Pacific Railroad
Organized a construction company
Gave them a corrupt contract, and pocketed the profits themselves
Even game some of the $ to buy congressmen’s approval!

21. The Grange and the Railroads
Railroad Abuses:
Railroad companies favored businesses over farmers
Often fixed prices with other railroads to eliminate competition and drive up profits
Farmers had little choice who to transport goods with

22. The Grange and the Railroads
Granger Laws:
Farmers, or Grangers, got together to try and create change
Voted for legislators that would support their cause
In Munn vs. Illinois the Supreme court supported the new Granger Laws that limited prices

23. The Grange and the Railroads
The Interstate Commerce Act:
At first, Supreme Court said Federal Government could not regulate trade from state to state
So Congress acted:
Created Interstate Commerce Act
Allowed Fed to control trade by railroad through the states
Unfortunately, the act was not well enforced

24. The Grange and the Railroads
Panic and Consolidation:
Corruption, mismanagement, overbuilding, and competition pushed many railroads towards bankruptcy
The “Panic of 1893”, an economic depression, made things even worse
By 1900, just 7 companies controlled 2/3 of the nations railroads

25. Big Business and Labor
Section 3

26. Learning Targets
I can describe the growth of American business in the late 19th Century
I can evaluate how effective American Business policies were

27. Carnegie’s Innovations
1873:
Andrew Carnegie visits a British Steel Mill
Impressed by Bessemer Process
Decides to start his own steel business
1899:
The Carnegie Steel Company made more steel than all of Great Britain!

28. Carnegie’s Innovations
New Business Strategies:
Make better products, more cheaply
Use of machines
Better accounting (accurate costs)
Encouraged competition amongst assistants
Vertical and Horizontal Integration

29. Carnegie’s Innovations
Vertical Integration:
Carnegie bought out all of his suppliers
Controlled wages, and prices
Helped to increase profit
Coal, railways, iron mines

30. Carnegie’s Innovations
Horizontal Integration:
Carnegie also tried to buy out his competition
Those he didn’t buy, he forced out of business
Lowered prices enough that competitors couldn’t make it
Once competition was limited, his profits increased dramatically

31. Social Darwinism and Business
Charles Darwin
Was a biologist who created theory of evolution and survival of fittest
Darwin’s theories were applied to society
Social Darwinism
If you made good products at a reasonable price, you would succeed
If you didn’t do this, you would fail

32. Social Darwinism and Business
Principles of Social Darwinism:
Natural Selection
Businesses with the strongest traits would survive
Businesses with weaker traits would not
The government should not interfere
In time, only the strong would pass on its ideas to the next business

33. Social Darwinism and Business
A New Definition of Success:
4,000 new millionaires after the Civil War!
Social Darwinism supported Protestant ideas of work ethic
And that riches were a sign of God’s favor
The poor must be lazy!

34. Fewer Controlled More Growth and Competition:
As companies grew, many tried to limit their competition
Went against natural laws of Social Darwinism
Tried Horizontal Integration (controlled competition) in the form of mergers
Buying out stock of competition
Holding Companies
Job was to buy stock of competition!

35. Fewer Controlled More Growth and Consolidation: John D. Rockefeller
Oil Tycoon
Used Trusts to control Oil Industry
He and other oil companies entered into a trust
They would share profits
Rockefeller owned most of the trust, and thus had a monopoly on the Oil Industry

36. Fewer Control More Rockefeller and the “Robber Barons”
Many of these successful businessmen became wealthy doing bad things
Bought out competitors
Paid workers low wages
Lowered prices to drive out competition
Then raised prices even higher to increase profits!
So they gained the title of “robber barons”

37. Fewer Control More Rockefeller and the “Robber Barons”
Despite bad name, they did do some good
Rockefeller gave away over $500 million
Carnegie gave away 90% of his fortune
Their donations have helped fund the education of generations

38. Fewer Control More Sherman Anti-Trust Act
Government was worried there was no longer fair competition
So they enacted the Sherman Anti-Trust Act of 1890
Was supposed to make it harder for Rockefeller to form trusts and control an industry
In reality, it became very hard to enforce!
Rockefeller and others found ways around the law

39. Fewer Control More Business Boom Bypasses the South:
The North continued to prosper
Strong industry and plentiful resources
Controlled the railroads
The South:
At the mercy of Northern Industries
Mostly farming