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

3. Causes of Rapid Industrialization 1.Steam Revolution of the 1830s-1850s. 2.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. 1.Steam Revolution of the 1830s-1850s. 2.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 3.Technological innovations. * Bessemer and open hearth process * Refrigerated cars * Edison  “ Wizard of Menlo Park ”  light bulb, phonograph, motion pictures. 3.Technological innovations. * Bessemer and open hearth process * Refrigerated cars * Edison  “ Wizard of Menlo Park ”  light bulb, phonograph, motion pictures.

6. Thomas Alva Edison “ Wizard of Menlo Park ”

7. The Light Bulb

8. The Phonograph (1877)

9. The Ediphone or Dictaphone

10. The Motion Picture Camera

11. Alexander Graham Bell Telephone (1876)

12. Alternate Current George Westinghouse

13. Alternate Current Westinghouse Lamp ad

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

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

16. “Model T” Prices & Sales

17. U. S. Patents Granted 1790s  276 patents issued. 1990s  1,119,220 patents issued.

18. 4.Unskilled & semi-skilled labor in abundance. 5.Abundant capital. 6.New, talented group of businessmen [entrepreneurs] and advisors. 7.Market growing as US population increased. 8.Government willing to help at all levels to stimulate economic growth. 9.Abundant natural resources. 4.Unskilled & semi-skilled labor in abundance. 5.Abundant capital. 6.New, talented group of businessmen [entrepreneurs] and advisors. 7.Market growing as US population increased. 8.Government willing to help at all levels to stimulate economic growth. 9.Abundant natural resources. Causes of Rapid Industrialization

21. Iron & Steel Production

23. Oil Mining Sugar Steel Meatpacking Beef/Cattle Construction Telegraph Telephone Railroad Marketing Sewing Machine Vacuums Typewriters Automobile Salt Coal Agricultural

24. New Business Culture 1.Laissez Faire  the ideology of the Industrial Age.  Individuals should compete freely in the marketplace.  Own their own business and use their skills to better our culture and make profit for themselves.  No room for government in the market.  Government should allow for natural competition for the betterment of our society.  Individuals should compete freely in the marketplace.  Own their own business and use their skills to better our culture and make profit for themselves.  No room for government in the market.  Government should allow for natural competition for the betterment of our society.

25. 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. ” × 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

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

27. New Business Culture: “The American Dream?” 3.Protestant (Puritan) “ Work Ethic ” * Horatio Alger [100+ novels] Is the idea of the “ self-made man ” a MYTH??

28. New Type of Business Entities 1.Pool 2.Trust  John D. Rockefeller 1.Pool 2.Trust  John D. Rockefeller * Standard Oil Co.

29. FORMATION Organized by associates and legalized through state charter OWNERSHIP Stockholders, according to number of shares CONTROL AND MANAGEMENT Through Board of Directors, elected by the stockholders (usually one vote per share of stock held) NET PROFITS AND LOSSES Dividends: to stockholders = profits Lose: only the amount invested by stockholders according to number of shares LIMITED LIABILITY

30. Conglomerate A group of unrelated business owned by a single corporation. Still used today by companies that merge. Pool Competing companies that agree to fix prices and divide regions among members so that only one company operates in each area. Outlawed today. Trust(Monopoly) Companies in related fields agree to combine under the direction of a single board of trustees, which meant that shareholders had no say. Outlawed today. Holding Company A company that buys controlling amounts of stock in related companies, thus becoming the majority shareholder, and holding considerable say over each company's business operations. Outlawed today.

31. New Type of Business Entities 2.Trust: * Horizontal Integration  John D. Rockefeller * Vertical Integration: A. Gustavus Swift  Meat-packing B. Andrew Carnegie  U. S. Steel

32. New Type of Business Entities

33. Standard Oil Co.

34. U. S. Corporate Mergers

35. Industrial Consolidation: Iron & Steel Firms

36. Captain of Industry Monopolized the steel industry Rags to riches story---came from Scotland very poor. Bessemer ProcessUsed scientific ideas (Bessemer Process) to develop a better way to produce steel and sell a quality a product for an inexpensive price. Used Horizontal integration. Captain of Industry Monopolized the steel industry Rags to riches story---came from Scotland very poor. Bessemer ProcessUsed scientific ideas (Bessemer Process) to develop a better way to produce steel and sell a quality a product for an inexpensive price. Used Horizontal integration. Carnegie Picture

37. Captain of Industry Came from a wealthy family Came from a wealthy family Bought a substitute during the Civil War. Bought a substitute during the Civil War. Standard Oil Formed the first modern corporations in the oil industry Standard Oil first billionaire Was the first billionaire in the U.S. by 1900. Vertical Integration and Horizontal Integration Used Vertical Integration and Horizontal Integration to gain a monopoly in the oil business. Cartoon Rockefeller

38. Formed a steamship company in 1829 Dominated shipping along the Atlantic 1849 established steamship that carried people from New York to San Francisco in Gold Rush days After Civil War Vanderbilt bought most railroad lines from New York to Chicago Worth over $100 million Formed a steamship company in 1829 Dominated shipping along the Atlantic 1849 established steamship that carried people from New York to San Francisco in Gold Rush days After Civil War Vanderbilt bought most railroad lines from New York to Chicago Worth over $100 million

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

40. Wall Street – 1867 & 1900

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

42. The Reorganization of Work The Assembly Line

43. “The Protectors of Our Industries”

44. The “Bosses” of the Senate

45. The “Robber Barons” of the Past

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

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

48. The Gospel of Wealth: Religion in the Era of Industrialization Russell H. Conwell $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. $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.

49. “Robber Barons”  Business leaders built their fortunes by stealing from the public.  They drained the country of its natural resources.  They persuaded public officials to interpret laws in their favor.  They ruthlessly drove their competitors to ruin.  They paid their workers meager wages and forced them to toil under dangerous and unhealthful conditions. “Captains of Industry”  The business leaders served their nation in a positive way.  They increased the supply of goods by building factories.  They raised productivity and expanded markets.  They created jobs that enabled many Americans to buy new goods and raise their standard of living.  They also created museums, libraries, and universities, many of which still serve the public today.

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

51. Philanthropist Gave millions to colleges and libraries.Gave millions to colleges and libraries. It was the sacred duty of the wealthy to give back to society who has given to him. Stressed education as a means to better one ’ s self. Carnegie Hall Cartoon Carnegie

52. Philanthropist Gave millions of his money to hospitals and colleges.Gave millions of his money to hospitals and colleges. University of ChicagoUniversity of Chicago Spellman CollegeSpellman College National ParksNational Parks United NationsUnited Nations WilliamsburgWilliamsburg Cancer ResearchCancer ResearchPhilanthropist Gave millions of his money to hospitals and colleges.Gave millions of his money to hospitals and colleges. University of ChicagoUniversity of Chicago Spellman CollegeSpellman College National ParksNational Parks United NationsUnited Nations WilliamsburgWilliamsburg Cancer ResearchCancer Research Rockefeller

53. Philanthropist donated $1 million to Vanderbilt University

54. 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. 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.

55. World’s Industrial Output

56. BIGGER IS BETTER trust or monopoly A trust or monopoly controls an entire industry make product cheaper lower prices for customer

57. The Problem w/ Monopolies Artificially high prices Highly unstable economy –Panics of 1837; 93 Threatened ability of individual Threat to the wage- earning husband Class resentment Gap b/w rich and poor widening

58. Wealth Concentration Held by Top 1% of Households

59. % of Billionaires in 1900

60. % of Billionaires in 1918