CH13: Age of Innovation & Industry

Bell Ringer

• What is the difference between the 1st & 2nd industrial revolution?

• How did the Bessemer Press turn Iron into Steel?

• What is the first fully electrified city in the USA?

YOU DON’T NEED TO WRITE THIS

• The Industrial Revolution covers just about everything: economics, social issues, business, government, immigrants, etc…

• For this reason I have divided the Industrial Revolution into two themes:– Inventions/Business & Economics– Social Issues

Two Industrial Revolutions?!?!?!1st Industrial Revolution

• Period from 1760 to the 1820-1840

• Shift in production done by hand to use of machines

• Noted by water & steam driven machines, as well as improvement in manufacturing and other processes– Cotton Gin & Cotton Mills

2nd Industrial Revolution• Corresponds to the mid/late

1800s and goes until about World War I.

• Begins around the introduction of Bessemer steel in the 1860s

• Ends with electrification, mass production, and assembly lines– Communication, Transport, Oil,

Steel, Electricity

1860s America

1900s America

What Changed?– Between the 1860s and 1900s what changed that

made America look so different?• New Technology and Inventions helped to

revolutionize the US in a very short period of time

• None of this however would have been capable without investment.

• The willingness of individuals to risk their money on inventions in return for large returns is at the heart of Capitalism.

Transport• Old Way: Horse & Carriage • Cars

– Become available for the first time in the USA around the 1900s (NOT Ford…yet)

• Flight– The Wright brothers would have the first successful test flight

in 1903– This success will encourage others to improve the airplane,

and soon they will become important parts of society • Railroads

Steel• Old Way: Iron (Soft & Brittle)• Steel– Iron is mixed with carbon to make it

stronger, harder, and lighter– Before 1850 making steel was

expensive– Bessemer Press (1855): determines

blowing air through iron while it is molten removes the impurities. Steel can now be made cheaper & faster

– Andrew Carnegie invests heavily in steel and it becomes the metal of choice for construction, railroads, and bridges

“Rock Oil”• Old Way: Whale Oil (for Lamps)• Oil (Rock Oil)– A Canadian scientist figured out how

to take ground oil (crude oil) and make it usable in lamps (Kerosene)

– Edwin Drake (a railroad conductor) saw how companies only collected surface oil for use.

– He learned about salt drilling techniques, leased some land, and successfully drilled the first oil well.

– Oil would quickly boom into an important new industry as it was used for lamps, lubricating machines, and eventually fuel for cars.

Communication• Old Way: Mail & the Pony Express• Telegraph– Samuel Morse created an alphabet of dots and dashes– This simple system would be test for the first in 1843– By 1900 there was nearly 1 million miles of telegraph

wires & 60 million messages sent a year

• Telephone– Alexander Graham Bell spent 12 years

working on the phone- finally had success in 1876

– He would found the Bell Telephone Company in 1877, and by 1893 there would be more than 250,000 phones

– At the end of 1893 Bell’s patent ran out meaning anyone could start a phone company

– Independent companies sprang up across the country, and by 1920 there were about 13 million phones in use

Electricity• Thomas Edison would finally successfully complete

his light bulb (after 1,000s of failures)• In 1882 Edison would set up a central generating

station in NYC, others copy the idea (other big cities)• By 1891 there were 1,300 such stations providing

power to about 3,000,000 light bulbs

Black & Woman Inventors of the Industrial Revolution

• Dr. Daniel Hale Williams: One of the first successful open heart surgeries

• Jan Matzeliger: revolution in shoe production. Before 10/day, After 150/day (Died of TB)

• Madame C.J. Walker: developing and marketing a successful line of beauty and hair products for black women

Economic Theories• Planned (Command) Economy: Economic system where decisions and investment are made by a central planning authority (ie Government)

• Market Economy: Economic System where supply, investments, & distribution are made by businesses based on consumer demand

• Mixed Economy: Economic system where features of planned and market economy both exist

New ways to do Business

• With all these new businesses developing people didn’t always have the money to start a company by themselves. So what do you do?

• You make a Corporation, and that leads to…– Monopolies– Trusts/Pools– Holding Companies

Corporations• Corporations are recognized by

law as being separate from the owner (technically their own people).

• A corporation can own property, borrow money, sue, be sued, etc.

• Corporations sell stock, which give investors partial ownership of the company

• This allows corporations to raise a large amount of money quickly, and protects owners from financial danger

Corporations (?)• Goal: make to most money

possible• Therefore competition is bad– Monopolies: Own all of an industry

(or a huge portion)– Trusts/Pools: A small group

(trustees) owns multiple companies and stops competition between them

– Holding Companies: A parent corporation that owns enough voting stock in another corporation to control its board of directors (ergo controls its policies and management)

Rockefeller & Standard Oil

Government Involvement (or lack)• In the late 1800s people realize big

business is limiting competition for their own gain

• The US Government does little to stop it, and in most cases encourages it with:– Laissez-Faire: “allow to do” Supply &

Demand forces would regulate business, and it was government’s job to keep their hands off

– Social Darwinism: The best run businesses with the most capable people would survive & prosper

Government Involvement (or lack)• The Government

would help by:– Giving millions in land

to Railroad Companies– Placed Tariffs (taxes) on

foreign goods forcing consumers to buy US products at higher prices

– Being bribed by businessmen to keep things “correct”

Real Government Action• Congress passes the Sherman

Antitrust Act (1890) – Outlaws monopolies, trusts, and

other forms of restricted trade– The laws were written by those

who favors laissez-faire policies, and Congress left it to the Supreme Court

– The Court was bias, and said that the Anti-Trust laws only applied to trade, not manufacturing

The Gilded Age

• This period of US history is generally known as the Gilded Age.

• It was shinny and gold outside, but inside it was marred by corruption and social unrest

– Entrepreneurs: Risk-takers who started new businesses & succeeded (Social Darwinism)

– Captains of Industry: Supporters, smart men who took advantage of technology & circumstances

– Robber Barons: Gained their money by abusing the system, using others, and held it over everyone

– Philanthropists: All three men would donate large sums of money to worthy causes: education, public works, public buildings

Carnegie (Steel), Rockefeller (Oil), Vanderbilt (RR)