CHAPTER 19THE GROWTH OF INDUSTRY

Section1

• East and West coasts are connected

• Plains areas are populated

• trade moving N, S, E, W and overseas

• What was once a “chopped up” nation—now whole

• More people—more stuff

• Supply/Demand

• Who could get it quicker, cheaper, more economical and in bigger quantities –the challenge

• Set up our nation on a wild ride

• THE INDUSTRIAL REVOLUTION

RAILROAD EXPANSION

• 1890’s five Railway lines crossed the country

• thousands of miles of new track laid

• Larger railroad companies bought smaller ones—consolidation

• known as railroad barons

Railroad Barons

• Cornelius Vanderbilt—New York

• Leland Stanford--California

Railroad stimulates the Economy

• carried raw materials– iron ore– coal– timber

• carried manufactured goods from factories to market

• carried produce from farms to cities

• helped iron mining– need for tracks– need for locomotives

• 1900 started using steel– stronger than iron– add carbon & other elements

to iron

• helped other industry– lumber industry: supplied

wood for RR ties– coal: fuel for locomotives– labor: people had to do all this

stuff!

Improving the Railroads

• Each R/R built it’s tracks to its own specs

• no unified code• tracks not

interchangeable• made travel inefficient• adopted a standard

gauge

Railroad Technology

• 4 major technological developments

• 1. Air brakes-Westinghouse

• 2. Janney car coupler—Janney

• 3. Refrigerator Cars—Gustavus Swift

• 4. Pullman sleeping car—George Pullman

• next

Westinghouse Air Brake

Refrigerator Car

Competition

• Big companies—breed competition

• offered discounts to lure customers

• discounted money had to come from somewhere!

Railroads change America

Eastern business started moving West

Redistributed the population

Changed the way people thought of time

How far is it to Tallahassee?Orlando?Mobile?Opened up the United States to

economic growth; united different regions of the nation

Section 2

http://www.youtube.com/watch?v=z0gZHkO1IJA

• The Telegraph

• Samuel F.B. Morse

• Introduced 1844

• Western Union Telegraph Company

• US and Europe connected

Ring, Ring, Ring…

• Alexander Graham Bell

• Born in Scotland

• 1876 developed the telephone

• “Mr. Watson, come here. I want you”• Formed Bell Telephone Company• 1890 sold 500,000 phones

The race was on…

• 400,000 new patents from 1860 – 1890

• What is a patent?

• New inventions:– typewriter-1868– adding machine-1888– camera-1888 (George Eastman)– vacuum cleaner-1889

Somebody turn the light on!

• Thomas Alva Edison

• goal: invention a minor invention every 10 days; a major invention every 6 months

• received 1000 patents• phonograph• motion picture projector• telephone transmitter• storage battery• dictating machine• light bulb

• power plant production– designed them to produce electric power to

deliver it to his lightbulbs– 1st power plant built in 1882

• illuminated 85 buildings in New York City

• George Westinghouse-1885– built transformers

• send electric power cheaper and to places farther away

African American Inventors/Engineers

• Lewis Howard Latimer- filament for the lightbulb

• Granville Woods- electric incubator & electromagnetic brake; automatic circuit breaker

• Elijah McCoy- mechanism for oiling machinery

• Jan E. Matzeliger- shoemaking machine

Transportation

• Two new modes of transportation– by land and by air

• Henry Ford

• 1908- Model T is born

• Assembly Line

• mass production

It’s a bird, It’s a plane…

• Orville and Wilbur Wright – 1903

• 1st plane- wood/canvas with 12 hp engine

Section 3

•An Age of Big

Business

1850 - 1900

The Timeline

• 1859- Oil Discovered in Titusville, PA

• 1870- Rockerfeller organizes the Standard Oil Company

• 1890- Sherman Antitrust Act Prohibits monopolies

• 1900- Andrew Carnegie rules the steel industry

Economics

• What was this sticky substance?

•OIL

• Edwin L. Drake- beginning of the petroleum industry

Economics

• Companies need cash to survive

• Cash = Capital

• How to raise capital= corporation

• Corporation= shares/stocks

• stock=sold to public

• public= shareholders

• shareholders=partial owners

• partial owner=earned dividends• company prospered=stock rose in value• high stock value = sell for a profit• company failed = stock fell in value• low stock value = lost investment

• buying/selling of stocks on the market is the stock exchange

• Railroads 1st to form corporations

• manufacturing firms next

• others fell into place

• growth of corporations feeds the industrial expansion of America

Where did the $$ come from?

• Businesses borrowed money from banks

• Banks made money from profits on loans

The Oil Business

• Late 1800’s Titusville well produced 15 barrels a day

• Like the gold rush, an oil rush began in the East—Pennsylvania, Ohio, West Virginia

• One of the 1st big names in Oil

• John D. Rockefeller

John D. Rockefeller

• http://youtube.com/watch?v=_y7XbLri4ZE

The Standard Oil Trust

• Built empire using horizontal integration– combining competing

companies together

– pressured customers not to deal with rival companies

– pressured R/R’s to give him rebates

• I’ll pat your back/ you pat mine

Power….

• Increased control by forming a trust• Step 1- Rockefeller bought stock in lots of

other oil companies

• Step 2- Shareholders of those companies traded their stock for Standard Oil stock

• Step 3- Now B.O.D. of Standard Oil had ownership of other’s stock and could manage their companies.

• Created a monopoly- total control by a single producer

• Standard Oil (Rockefeller) became the oil master

The Steel Industry

• Steel – a new big business

• Expensive to manufacture

• New techniques brought costs down and change the industry

• 2 new methods to make steel– Bessemer Process– Open hearth process

• Steel mills emerge in western Pennsylvania/Eastern Ohio near iron ore

• Pittsburgh becomes steel capital of US among other eastern cities

Bessemer Process

Open Hearth Process

Andrew Carnegie

Andrew Carnegie

• http://www.youtube.com/watch?v=h_kMkQCZV8o

• Son of a Scottish immigrant• began as a telegraph operator• worked up to manager of the Pennsylvania RR• 1865 invested in iron industry• built a steel plant near Pittsburg• used the Bessemer process• Named company J. Edgar Thompson Steel

Works

Vertical Integration

• 1890– Carnegie dominated steel industry• Built it through vertical integration• acquired companies that had the

resources, services, equipment he needed– coal and iron mines, warehouses, ore ships,

railroads– 1900 combined all his companies into the

Carnegie Steel Company– produced 1/3 of all steel

• Carnegie sells out

• J. Pierpont Morgan

• $450 MILLION

• Formed Carnegie with other companies

• United States Steel Corporation (US Steel)– 1st billion dollar corporation

US Steel

Make it and Give it Away

• Philanthropists- use money to benefit the community

• Rockefeller, Carnegie• Carnegie Hall-concert hall • Carnegie Foundation for the Advancement of teaching• University of Chicago

• Rockefeller Institute for Medical Research

Carnegie Hall

University 0f Chicago

Corporations grow and grow …

• Like Standard Oil, US Steel etc. more and more companies “merged”

• Pro’s and Con’s– helped growth– power in the hands of a few

people

• Monopolies—defenders believed– reduced competition = great

economic stability– opposition– lack of

competition, fear of unstable prices

Government steps in

• 15 states limited monopolies

• companies set up shop in other states

• 1890 congress Sherman Antitrust Act--”to protect trade and commerce against unlawful restraint and monopoly”

Section 4

No more Mom and Pop joints

• Industrial growth increased jobs

• more people working, bigger payrolls, larger staffs

• factories once family owned/now corporations

• led to poorer working conditions

• less personal• 10 – 12 hr wk days• fired for any reason• immigrants would

work for lower pay– (out servicing

overseas today)

Working Conditions

• http://www.youtube.com/watch?v=n9oDbphV8nM

• noisy, unhealthy• accidents common• burns from molten steel• cave-ins from coal mines• gas and coal dust inhalation• sweatshops common in garment district• firetraps

Who made what?

• Salaries-– women made ½ salary

of men– common for children

under 16 to work– Laws passed to

protect kids

Labor Unions formed

• Trade Unions

• Knights of Labor– Secret organization– allowed groups no others

would– lost membership during

strikes

• AFL– wanted same things as

others– collective bargaining– lasted through strikes

• Women and the Unions– Mother Jones

– Triangle Shirtwaist Company

– International Ladies’ Garment Workers Union

The Unions Act

• Depression of the 1870’s and 1890’s

• Unions “strike” back

• Railroad Strike of 1877– used strikebreakers

• Haymarket Riot of 1886– protest leads to killings—leads to bomb– labor unions linked to terrorism

• Homestead Strike of 1892– Carnegie’s steel plant– non-union workers– armed guards, militia

• Pullman Strike of 1894– cut wages– closed plant– railway union responds– government intercedes

Homestead Strike

Pullman Strike