1. Industrialization and Robber Barons (Website)

7/30/2019 1. Industrialization and Robber Barons (Website)

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Unit 3 Part 1Industrialization

Mr. Klein

Fall 2012


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Three Major Advancements

Railroads

Oil Drilling and Refining

Bessemer Process


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1. Railroads

Provided Cheaper Distribution for Goods

Transcontinental Railroad allowedtransport from coast to coast.

Construction of tracks and trains created: Jobs (Immigrants)

Demand for lumber and iron (later steel)


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Transcontinental Railroad


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Leland Stanford

Owned Central Pacific RR

Founded StanfordUniversity

Governor of California


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Transcontinental Railroad


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2. Oil Drilling

First commercial oil well:

Titusville, PA - 1858 Edwin Drake


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What Good is Oil?

No cars!

No gasoline engines!

Oil was refined intokerosene

Used to produce LIGHT


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John D. Rockefeller

Opened Oil Refinery inCleveland, OH

Invented process to createsafe, stable kerosene

Called businessStandard Oil


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Horizontal Integration

Definition: Buying other companies that dowhat you do to eliminate competition.

Goal is to create MONOPOLY

Ex: AT&T buys Verizon, T-Mobile, Nextel, Sprintand Cricket

Now no one else left to buy cell service from!

Have to pay whatever AT&T wants to charge


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Standard Oil Trust

States outlaw monopolies

Rockefeller lawyerSamuelDodd creates a TRUST

40 Companies give sharesto board of trustees

Get shares in Standard Oil

Trust in return

Rockefeller controls boardand thus all companies

Not illegal becausebusinesses still separate


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Oil Business Threatened

Thomas EdisonInvents Incandescent Light Bulb

Pioneers Direct Current

Nikola TeslaPioneers Alternating Current

Gives to Westinghouse


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AC vs. DC

Direct Current (Edisons Patents):

Flows one direction

Easily stored in batteries

Generated as same voltage used in houses

Need many small generating stations

Alternating Current (Teslas Patents):

Current flows two directions

Can have voltage raised and lowered(transformers)

Can travel much longer distances


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The Battle and Winner

Westinghouses GENERAL ELECTRIC CO. gets

contract to build power plants at Niagara Falls

Wh C R F


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What Comes to Rescue ForStandard Oil?

Kerosene replaced byelectricity for lighting.

Gasoline considered adangerous waste product

Internal combustionengine uses as fuel

Rockefeller powersrefineries with gasoline

Becomes popular fuel for

factories

Wh t C t R F


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What Comes to Rescue ForStandard Oil?


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Legacy of Rockefeller

USs Richest Man --

EVER!!!

$340 BILLION net worth in2012 dollars

Bill Gates a mere$136 billion

Donates Nearly HALF ofhis money to charitythrough his Foundation

3 B P


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3. Bessemer Process


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Henry Bessemer

From England

Develops New System toMake Steel

Can make in 15 minuteswhat took 2 Weeks tomake by old methods

Mass Production makelarge amounts of a product

at once


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Andrew Carnegie

From Scotland

Works for Railroad thatneeds to build bridgeacross Mississippi River

No materials strongenough!

Realizes steel is answer

Cant find enough!!

S


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Builds First Modern Steel Mill

Edgar Thomson Works Braddock, PA

225 tons of steel per day


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Growth of Carnegie Steel

Carnegie uses profits to buy 8 more mills

Produces of nations steel

Continues to look for ways to increase

profits

V i l I i


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Vertical Integration

Own all phases of aproducts manufacture

Economies of Scale:

As production

increases, cost per unitgoes down.

Profits Go UP!!

Raw Materials

Limestone QuarriesIron Ore Mines

Coal Mines

Manufacturing

Coke OvensSteel Mills

Distribution

Railroads

Ships


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Effects of Carnegie and Steel

Mass production makes steel CHEAPER Was so expensive used for jewelry and flatware

Becomes material of choice for:


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Pittsburgh - 1890


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Pittsburgh - 1910


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Legacy of Andrew Carnegie

Sold Company in 1901

for $500 million

Became US Steel

Net worth of $314 billionin todays money

Gave away 90% of $$!

Libraries, Museums,Music Hall


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Philanthropic Works

3,000 Libraries

Carnegie Tech (Now part of CMU)

$10 million pension for teachers

Numerous Foundations and Charitable

groups

Organizations for World Peace and Justice


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J. Pierpont Morgan

Banker

Financed Thomas Edison

Morganization

Consolidate inefficientindustries to reducecompetition

Railroads

US Steel


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J.P. Morgan

Net Worth $41.5 Billion(#24)

Bailed out US Governmentin 1895 and several timesduring early 1900s

Was supposed to be onTitanic!!


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Captains of IndustryOr

Robber Barons

1. Industrialization and Robber Barons (Website)

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