1. The 2 nd Industrial Revolution

2. Understanding the Economy Define Economy: a system for producing and distributing products and services in society. What type of Economic System do we have in the United States? Capitalism

3. The basic ideas of capitalism Economic growth can best be achieved by private choices “free enterprise”  Private ownership of property and businesses.  Individual choice – consumers, investors, workers.  Private profit – as an incentive to achieve. Bottom line: all economic decisions should be made by individuals. people are free to work hard, take risks and create wealth.

4. The government’s role in a Capitalist System To stay out of private economic decisions “leave alone…hands off” “Laissez-Faire” Benefits for people and business? Dangers for people and business?

5. What does industrial mean? What do you notice about the picture? How would you define the term industrial? Factories, machines, technology, production, manufacturing

6. What is a revolution? A Major Change The 2 nd Industrial Revolution – a period of rapid growth in the U.S. manufacturing in the late 1800’s.

7. #1 Causes of the Industrial Revolution: Land and Resources Cause Homestead Act of 1862 – Gave 160 acres of cheap land west of the Mississippi River to anyone who applied Effect Increased population West Growth of western cities (Kansas City, Chicago) New markets (place where goods are bought and sold) Improved economy

8. #1 Causes of the Industrial Revolution: Land and Resources An abundant supply of natural resources Copper Nickel Gold & Silver New Building Materials New Power Sources: (raw materials) Concrete Steel Oil (Kerosene, gasoline, diesel fuel) Electricity

9. Bessemer Sparks a Revolution Steel is Iron made stronger by heating it and adding other metals. Henry Bessemer created a process that created steel in minutes instead of the old way that could take up to a day or more. Lower price for steel led to: Growth of cities (up and out) Improved infrastructure (Bridges, nails, wires, pipes) Railroad Cars and tracks (30,000 miles of track in 1860 to 193,000 miles by 1900)

10. # 2 Causes of the Industrial Revolution Cause New Inventions Effect Over 1,000 inventions – revolutionized American life. Stock ticker Phonograph Microphone Incandescent light bulb Power generation station Telephone Airplane

11. Thomas Edison “Wizard of Menlo Park” Thomas Edison “Wizard of Menlo Park” http://www- tc.pbs.org/wgbh/amex/edison/sfeature/so ngs/maryhadlamb.mp3

12. Alexander Graham Bell Telephone, typewriter, printing technology

13. #3 Causes of the Industrial Revolution Cause A Large Industrial Work Force Where did this large work force come from? Effects Cities Grow New Factory Jobs Civil War veterans craftsmen became industrial workers. Rising population – increasing birth rates.

14. # 4 Causes of the Industrial Revolution: Building the Transcontinental Railroad Why Build a Transcontinental Railroad? Growth of West Coast West Coast gold and silver Connect East with West for business Solidify the Union Achieve Manifest Destiny

15. Significance of the Railroad Biggest and best engineering project of its time Made the country smaller Helped spur interest in Homestead Act Improved communication Led to other transcontinental railroads and shorter branches

16. Railroad Routes – 1870 & 1890

17. # 5 Causes of the Industrial Revolution: Growth of Corporations Understanding Capitalism Capital = $$$ Corporation – Stockholder – Dividend A business that is formed by selling shares of ownership (stock). person who owns a part of a corporation Money paid by a corporation to its stock holders

18. # 5 Causes of the Industrial Revolution: Growth of Corporations 1.How are corporations operated? They must receive a legal charter by a state government. Stockholders elect a Board of Directors. 2. What are the advantages of “incorporating?” Selling stock allows a business to raise large amounts of capital (money) very quickly. It spreads the risk of owning a business among all of the stockholders.

19. # 6 Causes of the Industrial Revolution: Government Support of Big Business How did the Federal government help businesses expand? Kept taxes on business low. Passed tariffs on imported goods (which raised their prices). Policies of open immigration (cheap labor) Loans, subsidies and land grants to railroad companies. Refusing to pass laws to regulate the behavior of big businesses.

20. # 7 Causes of the Industrial Revolution: Business Entrepreneurs Created and owned new kinds of businesses… …by combining the other factors of production.

21. Cornelius Vanderbilt: Railroads

22. Andrew Carnegie – Carnegie Steel Co.

23. John D. Rockefeller – Standard Oil

24. James Pierpont Morgan: Banking and Steel

25. monopoly One company controls the production, distribution and sale of a product throughout an entire region (or country).

26. The Problem with a Monopoly Competition between businesses eliminated… small business crushed. Wages and hiring conditions were fixed. Markets were controlled – production levels and prices were fixed… Consumers had little or no real choice!

27. Why didn’t the Federal Government act to pass laws to regulate the actions of these large and powerful companies? Corruption!

28. Early attempts to restraint big business Interstate Commerce Act (1887) American towns, businesses and farms were at the mercy of railroad companies. The first attempt to regulate the railroad industry: - outlawed secret rebates - rates were regulated - Interstate Commerce Commission (ICC) created to enforce the law and investigate complaints.

29. Early attempts to restraint big business The Sherman Anti-trust Act (1890) Meant to prohibit monopolies …any business action “in restraint of trade” was illegal.