An Industrial Giant. When the Civil War began, the industrial output of the US was below that of Europe. By the end of the 1800’s, it was the world’s.

An Industrial Giant

• When the Civil War began, the industrial output of the US was below that of Europe. By the end of the 1800’s, it was the world’s largest

• American manufacturing flourished for many reasonsNew natural resources were steadily discovered and exploitedNew opportunities attracted the brightest and hardest working

populationThe growth of the country increased market sizesTariffs protected American companies from foreign competitionAmerican industry attracted foreign capital

• The era also produced the “Robber Barons” – businessmen who acquired wealth through corruption, stock manipulation, and cutthroat competition

• Labor was provided by an increasing stream of immigrants seeking opportunity

RR- Robber Barons

• Rapid advances in technology created new machines, processes, and power sources

• Agriculture saw a huge increase in labor-saving machines

• Improvements in milling grain resulted in packaged breakfast cereals

• Canning improved housekeeping• The cigarette-rolling machine created an

industry• George Eastman developed mass-

produced roll photographic film and a cheap efficient camera

• The typewriter revolutionized office work

• Railroads were the most significant element in American economic development in the late 19th century

• The skeleton of the railroad systems were already laid – the latter 1800’s would be spent on integrating the systems

• High fixed (operating) costs required railroads to carry as much traffic as possible – this resulted in the construction of feeder lines (feeding the trunk)

• Rich businessmen such as Cornelius Vanderbilt and Jay Gould put together railroad lines to create railroad networks

• Railroads were also integrated with those in the South• Integration required standardization – standard track gauge

became 4 feet 8 1/2 inches (two horses behinds)• Braking, signaling, and coupling also were standardized

I think I can! I think

I can! I think I can!

• Fixed rates for cargo were created though concessions were made to avoid hauling empty cars

• Railroads promoted regional economic growth in areas with sparse populations

• To settle new regions, land was sold cheaply. Travelers were offered reduced rates

• Agents traveled Europe to recruit more settlers

Screw this

• Technology advanced economic development• Air brakes invented 1869 by George Westinghouse allowing larger and faster

trains• The sleeping car was invented by George Pullman• The demand for larger engines to pull heavier trains resulted in

advancements in steel production• Close ties developed between railroads and telegraph offices dominated by

Western Union• Standard schedules resulted in the establishment of the time zones used

today

I’m taking a

break

• Transformation of iron manufacturing impacted nation almost as much as railroads

• Biggest change in ways to mass-produce steel

• Bessemer process - stream of air directed into molten iron caused carbon and other impurities to burn off. Other ingredients added to create steel

• Vast growth in steel output due to huge supplies of iron ore and coal deposits

• Mesabi region – iron ore so concentrated that it could be mined with steam shovels like gravel

• Pittsburgh, surrounded by coal fields, became center of steel production

• Oil industry expanded faster than steel

• 1859 - First successful oil well drilled in PA

• Most important product was kerosene to fuel lamps

• By 1870’s, refiners learned how to “crack” petroleum which increased percentage of kerosene produced

• By-products such as naphtha, rhigolene, and cymogene began appearing on the market

Hey Jed! They say Beverly

Hills is the place you ought to be

• 1876 - Telephone invented by Alexander Graham Bell

• By 1900 800,000 telephones in use in US (double that of Europe)

• ATT dominated the business

Can you hear me now?

• Western Union attempted to compete with device made by Thomas Edison

• Edison eventually took out over 1,000 patents – most important discovery was electric light bulb

• Factories began substituting steam power for electricity – electric motors smaller & safer

• Competition between lines kept freight rates low • Competitive pressures eventually cut into profits causing

railroads to offer rebates and other enticements• Railroads charged higher prices on lines where there was

no competition• It often cost more to ship goods short distances than long

• Few benefited from cutthroat competition

• Low prices = bankrupt railroads during economic downturn

• Reorganization brought railroads under control of powerful bankers such as J P Morgan

• Railroad networks became “centralized” and opposed competitive practices What are you

frickin’ looking at? Mind your own

business!

• Industry was competitive but hurt by variances in demand

• Andrew CarnegieCapitalized on technological

improvementsEngaged in ruthless business

tacticsSold out to JP Morgan – creation

of US Steel – world’s first billion dollar corporation

Became philanthropist

I used my money to

build lots of libraries

• Production fluctuated – output often surged ahead of need

• Cleveland became fastest-growing oil refining center due to NY central RR and Erie Canal

• In 1870 Standard Oil founded by John D. Rockefeller

• Used technology and ruthless business tactics to take control of most of the industry

I’m rich and you’re not

• Standard Oil used RR rebates and underpricing competitors to force out small independents

• Since kerosene was sold in stores, SO established its own stores and sold goods at lower prices to drive out stores selling competitors’ kerosene

• SO also used spies and bribery to hurt competitors and influence government

• RockefellerExcellent manager – knew organization not oilCompeted ruthlessly but ready to ally with competitors to

peacefully control marketEstablished new business concept- the trust (stocks of SO and

other Rockefeller entities supervised by nine trustees)SO not a corporationCompetition disappeared – profits skyrocketed

• Monopolies tended to form due to costs in duplication of equipment and loss of service efficiency (China)

• Utility industry depended on patents – Bell and Edison fought great battles in court over competing inventions

• Edison and the Thomson-Houston Electric Company merged to create General Electric in 1892

• GE and Westinghouse dominated the electricity market

• The latter 1800’s saw the development of urban department stores

• John Wanamaker and Marshall Field dominated

Assignment

• Students will form groups: 4 students per group• Groups will produce a newspaper/newsmagazine covering the

information in pages 490-500. Each student is responsible for two articles

• Three grades will be assessed: a group grade based on the whole product and two individual grades based on the students’ byline articles

Assignment

• Newspapers should appear as they would in the late nineteenth century

• Articles should be written as if the events were occurring• Articles can appear as news articles, interviews, editorials, or

letters to the editors• The group grade can be raised through the addition of ads,

letters, etc.• Students are responsible for all information contained in this

project for testing purposes

Assignment

• Articles will include:

1. American Ambivalence to Big Business

2. Reformers: George, Bellamy, and Lloyd

3. Reformers: The Marxists

4. Railroad Regulation

5. The Sherman Anti-Trust Act

6. The Labor Union Movement

7. The American Federation of Labor

8. Labor Militancy Rebuffed

The Homestead Strike