The Rise of Industrial America

1865-1900By 1900, the U.S. had emerged as the

leading industrial power in the world. Its manufacturing output exceeded that of its three largest rivals, Great Britain, France,

and Germany

Factors of Growth Natural Resources: coal, iron ore, copper, lead,

timber and oil Labor supply: immigrants and population growth Capital: money to invest in new business ventures Technology: 440,000 patents between 1860 and

1890 Government: business friendly policies protected

entrepreneurs Transportation: railroads, steamboats

Entrepreneurs!

J.P. MorganOne of the richest men in the world

Andrew Carnegie Scottish Immigrant who

started working in a factory at age 12.

Invested wisely and entered the steel industry at age 38.

By 1901 sold his steel company for $250,000,000!

Gave hundreds of millions to charities (libraries)

Wrote Gospel of Wealth

Entrepreneurs!

1835 -1919

John D. Rockefeller Started oil-refining

business during the Civil War.

Elimination of competition! 1882 his company,

controlled 90% of all American oil refining.

Gave hundreds of millions to charities.

Entrepreneurs!

1839 -1937

J.P Morgan Banker: made loans to

businesses. Purchased and reorganized

many bankrupt businesses (profit).

Bought Carnegie Steel and reorganized it into the United States Steel Corporation (the world’s largest).

Entrepreneurs!

1837 -1913

Henry Ford Created the

assembly line

Paid laborers a good wage

Ford Motor Corp (cars)

Entrepreneurs!

1873 -1934

Entrepreneurs! George Eastman In 1888 he manufactures the

first camera designed specifically for roll film

Mass produces photography equipment and film

Donates over $75 million to establish schools.

1854 -1932

Industrial Empires - Steel1870s: Carnegie dominates steel thanks to1. Vertical Integration: company controls every

stage of the industrial process (from mining to transportation): reduced costs and under-price the competition monopoly

2. the Bessemer steel process high-quality steel3. cost-analysis cut back costs, higher profitsBy 1900, Carnegie Steel was producing more steel

than all of Britain Overall result: More steel produced and at lower

cost ($65/ton in 1875 vs. $11.50/ton in 1900)

Industrial Empires - Oil Standard Oil Trust controlled 90%

of oil refinery business by 1881 Horizontal Integration: competitors

bought by single company Trusts: various companies run by

a board of trustees (former competitors brought under a single corporate umbrella)

Monopoly

Steel: 77,000 tons in 1870 to more than 1 million tons in 1879

Railroad: from 10,000 miles of track in 1850 to nearly 200,000 miles by 1900 –

Opened up a huge internal market, promoting farming, commerce, and closure of the frontier

Railroad companies were the first “modern” corporations – sought capital through stock issuances.

Advances in Uses of Steel :The Railroad Industry

Transcontinental Railroad During the Civil War,

Congress authorized land grants and loans to build transcontinental RR

Union Pacific and Central Pacific employed thousands of new immigrants: Irish Chinese

Early Stages of Railroads

How did Railroads Change America?

Railroads changed American life in many ways: Travel shorter. Mail faster. New jobs. Local stores profited from train

traffic. Sales not limited to local markets. Unfamiliar items appeared locally. Settlers moved to new locations. The nation together. Transportation cost decreased.

Problems of the Railroad Era

Too many railroads were built.

Over-expansion frequently ended in bankruptcies.

Failures spread economic disaster to workers, businesses, and farmers.

Railroads resorted to discriminatory practices

Inventions change Americans’ lives.

Inventions enhanced productivity and improved the standard of living for most Americans:

New telegraph technology connected the United States with Britain by cable in 1866.

Alexander Graham Bell patented the telephone in 1876 creation of the Bell Telephone Co. (later, AT&T)

Telephones were rapidly adopted, rising from 55,000 in 1880 to 1.5 million in 1900.

Invention & Innovation•Thomas Edison invented• the phonograph (1877),• light bulb (1879), •the first power plant (1882) created General Electric by 1892 with J.P. Morgan•Singer Sewing Machine Company first mass produced sewing machines in the 1860s

Automobiles and Planes

The automobile industry grew in steps.1876 – invention of the gasoline-powered engine.1893 – The US built its first motorcar.- 1908 – Henry Ford first to implement the

moving assembly line in manufacturing, making cars more affordable.

Wilbur and Wright invented an airplane powered by a gas engine in 1903.

Automobiles and Planes

Questioning Methods of Big Business.Businesses criticized for earning fortunes through unfair

business practices.Used size and strength to drive smaller competitors

out of businessPowerful trusts sold goods below market value until

smaller competitors went out of business, then raised prices.

Concerns when a trust gained a monopoly, or total ownership of a product or service

Antitrust Movement Trusts came under attack/scrutiny in 1880s Congress passed the Sherman Antitrust Act in

1890, which prohibited any “contract, combination, in the form of trust or otherwise, or conspiracy in restraint of trade or commerce.”

Supreme Court rules in United States v. E. C. Knight Co. (1895) that the act applies to commerce, not manufacturing

Laissez-Faire Capitalism Businesses were

booming!

Social Darwinism: survival of the fittest

Gospel of Wealth: Protestant work ethic, hard work and material success are signs of God’s favor

Philanthropy charitable aid or donations for humankind well-being

The Impact of Industrialization

By 1890s, the richest 10% of U.S. population controlled nine-tenths of the nation’s wealth

Widening gap between rich and poor

“Self-made men” or rags to riches

Horatio Alger, Jr. novel portrays young man who becomes rich through hard work