1. Industrialization 1860 - 1914

2. Capitalist Mythology Mix of free-labor ideology & Social DarwinismMix of free-labor ideology & Social Darwinism –Democratic version: society composed of competing interests; morally neutral –Hierarchical version: elites naturally rule, & middle- class Christian morals are norm “Rags-to-Riches” myth“Rags-to-Riches” myth –Horatio Alger –Andrew Carnegie “Laissez-faire” – gov’t should not regulate business“Laissez-faire” – gov’t should not regulate business Andrew Carnegie

3. Legal Basis Limited liability corporationLimited liability corporation –Investor only liable for amount invested, not entire debt of company –Between 1850-1900, average capital investment increased from $700,000 to $1.9 million Corporation considered to be a person with rightsCorporation considered to be a person with rights Freedom of contractFreedom of contract –Each worker free to negotiate terms –Meant no collective bargaining by unions

4. Playing Monopoly

5. John D. Rockefeller and Standard Oil 1860 – began refining oil in Penn.1860 – began refining oil in Penn. 1872 –created cartel to fix railroad rates1872 –created cartel to fix railroad rates Bought out competitionBought out competition –controlled 90% of refining by 1879 1882 – created investment trust1882 – created investment trust –Stockholders put shares in trust –Held stock in separate state co.s 1892 – Standard Oil of Ohio trust dissolved by Ohio Supreme Court1892 – Standard Oil of Ohio trust dissolved by Ohio Supreme Court 1899 – Standard Oil of NJ – 1 st holding company1899 – Standard Oil of NJ – 1 st holding company John D. Rockefeller in 1872

6. Standard Oil’s Cleveland refinery, 1899

7. Tycoon Cartoon

8. The House of Morgan J. Pierpont Morgan channeled European capital into U.S. businessesJ. Pierpont Morgan channeled European capital into U.S. businesses Father was partner in London banking houseFather was partner in London banking house Demanded seats on boards of companies whose investments he handled (interlocking directorates)Demanded seats on boards of companies whose investments he handled (interlocking directorates) 1901 - Morgan bought out Carnegie for $500 million, creating U.S. Steel1901 - Morgan bought out Carnegie for $500 million, creating U.S. Steel

9. Corporate Mergers

10. Inventions & Innovations Alexander Graham Bell invented telephone in 1876Alexander Graham Bell invented telephone in 1876 –Bell Telephone Co. organized in 1877 (later became AT&T) –Bought out Edison’s patent for carbon microphone Bell makes first long-distance call, Chicago to New York, 1892

11. The Wizard of Menlo Park Thomas Edison: –Phonograph (1877) –Incandescent lightbulb (1879) –mimeograph –Direct current electric transmission –Motion picture

12. Inventions (cont.) George Westinghouse developed alternating current (1886)George Westinghouse developed alternating current (1886) –Could transmit electricity over long distances –Czech immigrant Nikolas Tesla invented AC motor Granville T. Woods had 35 patentsGranville T. Woods had 35 patents –Automatic circuit breaker –Electromagentic brake Westinghouse AC motors at Chicago’s World Fair, 1893 Nikolas Tesla

13. Railroad Expansion 1870-1890

14. Industrial America

15. Value Added by Sector, 1869 - 1899

16. Mechanization & Specialization Frederick W. Taylor was most famous efficiency expert –Broke down jobs into separate motions –Designed equipment to maximize efficiency & minimize time for each motion

17. Mechanization & Specialization, cont. Henry Ford introduced moving assembly line (1913) - further isolated tasksHenry Ford introduced moving assembly line (1913) - further isolated tasks –Each worker remains stationary & performs same task, over & over –1908 = 10,000 Fords sold; 1914 = 248,000 Fords sold

18. Reducing Labor Costs 1880-1900: employed women went from 2.6 million to 8.6 million 1890: 18% of kids between 10-15 employed Accidents common, even after safety equipment installed