3. Reasons for the Industrial Boom 1. Wealth of Natural Resources 2. Government Support of Business 3. Increasing Number of Inventions 4. Growing Urban Population

4.  “Black Gold” ◦ Native Americans made fuel and medicine from crude oil long before Europeans arrived ◦ 1840s: Americans use kerosene to light lamps ◦ 1859: Edwin L. Drake-successfully used steam to drill for oil  Led to oil boom –Kentucky, Ohio, Illinois, Indiana, Texas  Refineries rose up in Cleveland & Pittsburgh  transform oil into kerosene

5.  U.S. rich with coal and iron ◦ How do we harness it’s power???  Bessemer Steel Process (Henry Bessemer & William Kelly) ◦ 1850s ◦ Injecting air into molten iron to remove carbon & other impurities ◦ Used to produce 90% of nation’s steel ◦ Quicker and cheaper

6.  Railroads = biggest customer of steel

8.  Transformed plains into the food producer of the nation

11.  Christopher Sholes: invented typewriter (1867)  Alexander Graham Bell: Co-invented the telephone (1876) Typewriter & Telephone Created new jobs for women  Clerical work (Secretary)

12.  New machines revolutionized factory work ◦ Clothing could be massed produced ◦ Positives:  Freed workers from backbreaking labor  Reduced workweek by 10 hours ◦ Negatives:  Reduced human worker’s worth

13.  Electricity ◦ 1876- Thomas Edison: established 1 st research lab & perfected incandescent light bulb Funded mainly by J.P. Morgan, Jr.: business mogul, banker

14. Chapter 6 Section 2

15. 1. Identify the role of the railroads in unifying the country 2. List the positive and negative effects of railroads on the nation’s economy 3. Summarize reason’s for and outcomes of, the demand for railroad reform

16. Transcontinental Railroad: Rail way connecting the east with the west

17.  They gained power and influence.  They were given huge land grants by the government.  Sold for PROFIT.  1869 The transcontinental railroad was completed  In 1860 30,000 miles of railroads  By 1890 6x that. (180,000).

19. EEast= Irish and Black WWest= Chinese TTreacherous work IIn 1888: 2,000 were killed and 20,000 were injured.

24.  Cities sprang up all along railways  Railways promoted trade and interdependence within/between cities ◦ Specializing in different products  Ex: iron, coal, steel, lumber, glass

25.  Pullman ◦ Factory and Company town  Strict rules. ◦ No drinking ◦ No loitering George Pullman: Built factory for manufacturing sleeper and other railcars Created town based around the factory

28.  Cornelius Vanderbilt ◦ gained his fortune from shipping and railroad. ◦ Net worth of US$105 million in 1877 ◦ Real value estimated somewhere between US$143 billion and US$178.4 billion (adjusted for the late 2000s ◦ Vanderbilt is one of the wealthiest Americans in the history of the country.  Son: William Vanderbilt ◦ Inherited $100 million from father ◦ Took over father’s companies

29.  Credit Mobilier Scandal ◦ Owned by Pacific Union Railroad ◦ Paid 3x the cost of  Abusive rail policies. ◦ Fixed prices by railroad companies  The Grangers-farmers group ◦ Demanded government control over the railroad industry. ◦ The Granger Laws  Munn v. Illinois and the Interstate Commerce Act ◦ Gave federal gov’t and states the right to regulate RR’s in order to protect the public interest.

30.  Railroad companies fall under financial problems ◦ Lead to 1893 depression  600 banks closed  15,000 business failed  4 million people lost jobs  By 1900- 7 companies owned 2/3 of the nations RR’s.

31. 1. Identify the role of the railroads in unifying the country 2. List the positive and negative effects of railroads on the nation’s economy 3. Summarize reason’s for and outcomes of, the demand for railroad reform

32.  Identify the key players during Industrialization  How did they positively and negatively affect our nation?

33.  Capitalism: economic system in which capital assets are privately owned ◦ goods and services are produced for profit in a market economy

34.  Socialism: is an economic system characterized by social ownership of the means of production and co-operative management of the economy.

35.  Immigrant – age 12, from Scotland  Mother mortgaged house in order for Andrew to buy his first stock  Entered steel business in 1873 ◦ By 1899 Carnegie Steel manufactured more steel than all British factories combined

36. ◦ Management practices ◦ Make products better—cheaply ◦ Vertical integration: buy out the suppliers ◦ Horizontal integration: buy out competing producers  Limit competition + control of produce = $480 million

37.  Social Darwinism: some individuals flourish and pass traits onto next generation while the weak die off. (Natural selection) ◦ Success and failure in business were governed by natural law and not one had the right to intervene

38.  “If you can’t beat ‘em, join ‘em.” ◦ Many industrialists merged together  Buy out all its competition=monopoly, complete control over its industry’s production, wages and prices  Example: ◦ J.P. Morgan(United States Steel) bought out Carnegie to become world’s largest business

39.  Owner Standard Oil Company  Way to success = Join with competing companies into trusts  Controlled 90% of refining business ◦ Paid employees very low wages ◦ Sell oil at low price to drive out competition  Hike prices up  Worth estimated $392 billion ◦ $663.4 billion in adjusted dollars

40.  Carnegie donated 90% of wealth accumulated  Rockefeller donated over $500 million within his lifetime “It will be a great mistake for the community to shoot the millionaires. For they are the bees that make the most honey, and contribute most to hive even after they have gorged themselves full.” ~Andrew Carnegie The "Andrew Carnegie Dictum": To spend the first third of one's life getting all the education one can. To spend the next third making all the money one can. To spend the last third giving it all away for worthwhile causes.

41.  Sherman Antitrust Act: made it illegal to form trust that interfered with free trade between states or with other countries. (1890)