Reasons for the Industrial Boom 1. Wealth of Natural Resources 2. Government Support of Business 3. Increasing Number of Inventions 4. Growing Urban.

A New Industrial Age

Reasons for the Industrial Boom1. Wealth of Natural Resources2. Government Support of Business3. Increasing Number of Inventions4. Growing Urban Population

The Expansion of Industry

“Black Gold”◦ Native Americans made fuel and medicine from

crude oil long before Europeans arrived◦ 1840s: Americans use kerosene to light lamps◦ 1859: Edwin L. Drake-successfully used steam

to drill for oil Led to oil boom –Kentucky, Ohio, Illinois, Indiana, Texas Refineries rose up in Cleveland & Pittsburgh transform

oil into kerosene

Natural Resources

U.S. rich with coal and iron◦ How do we harness it’s power???

Bessemer Steel Process (Henry Bessemer & William Kelly)◦ 1850s◦ Injecting air into molten iron to remove carbon & other

impurities ◦ Used to produce 90% of nation’s steel◦ Quicker and cheaper

Natural Resources

Railroads = biggest customer of steel

Steel

Barbed wire

Transformed plains into the food producer of the nation

McCormick’s & Deere’s farm machines

Brooklyn Bridge

Skyscrapers

Christopher Sholes: invented typewriter (1867)

Alexander Graham Bell: Co-invented the telephone (1876)

Inventions That Changed Society

Typewriter & TelephoneCreated new jobs for women Clerical work (Secretary)

New machines revolutionized factory work◦ Clothing could be massed produced◦ Positives:

Freed workers from backbreaking labor Reduced workweek by 10 hours

◦ Negatives: Reduced human worker’s worth

Inventions That Changed Society

Electricity◦ 1876- Thomas Edison: established 1st research lab

& perfected incandescent light bulb

Inventions Promote Change

Funded mainly by J.P. Morgan, Jr.: business mogul, banker

Chapter 6 Section 2

The Age of Railroads

1. Identify the role of the railroads in unifying the country

2. List the positive and negative effects of railroads on the nation’s economy

3. Summarize reason’s for and outcomes of, the demand for railroad reform

I can….

Transcontinental Railroad: Rail way connecting the east with the west

As railroads spread across the country…

They gained power and influence.

They were given huge land grants by the government.

Sold for PROFIT. 1869 The transcontinental railroad was

completed

In 1860 30,000 miles of railroads

By 1890 6x that. (180,000).Like

Microsoft

and Google

Rail WorkersEast= Irish and Black

West= Chinese

Treacherous work

In 1888: 2,000 were killed and 20,000 were injured.

Chinese Railroad workers in the West

Irish Railroad workers from the East

Railroad time

Cities sprang up all along railways

Railways promoted trade and interdependence within/between cities◦ Specializing in different products

Ex: iron, coal, steel, lumber, glass

Railroads = Growth of Cities

The Pullman Company

Pullman◦ Factory and

Company town

Strict rules.◦ No drinking◦ No loitering

George Pullman: Built factory for manufacturing sleeper and other railcars

• Created town based around the factory

Cornelius Vanderbilt ◦ gained his fortune from shipping and railroad.◦ Net worth of US$105 million in 1877 ◦ Real value estimated somewhere between US$143 billion and US$178.4 billion (adjusted for the late 2000s ◦ Vanderbilt is one of the wealthiest Americans in the history of

the country.

Son: William Vanderbilt◦ Inherited $100 million from father◦ Took over father’s companies

Who controls the railroads…

Credit Mobilier Scandal◦ Owned by Pacific Union Railroad◦ Paid 3x the cost of

Abusive rail policies.◦ Fixed prices by railroad companies

The Grangers-farmers group◦ Demanded government control over the railroad industry.◦ The Granger Laws

Munn v. Illinois and the Interstate Commerce Act◦ Gave federal gov’t and states the right to regulate RR’s in

order to protect the public interest.

Railroad companies fall under financial problems◦ Lead to 1893 depression

600 banks closed 15,000 business failed 4 million people lost jobs

By 1900- 7 companies owned 2/3 of the nations RR’s.

Regulations lead to Failure

1. Identify the role of the railroads in unifying the country

2. List the positive and negative effects of railroads on the nation’s economy

3. Summarize reason’s for and outcomes of, the demand for railroad reform

I can….

Identify the key players during Industrialization

How did they positively and negatively affect our nation?

Captains of Industry….or Robber Barons??

Capitalism: economic system in which capital assets are privately owned◦ goods and services are produced for profit in a

market economy

U.S. Economy

Socialism: is an economic system characterized by social ownership of the means of production and co-operative management of the economy.

Economy

Immigrant – age 12, from Scotland

Mother mortgaged house in order for Andrew to buy his first stock

Entered steel business in 1873◦ By 1899 Carnegie Steel manufactured more steel

than all British factories combined

Andrew Carnegie

◦ Management practices◦ Make products better—cheaply◦ Vertical integration: buy out the suppliers◦ Horizontal integration: buy out competing

producers Limit competition + control of produce = $480 million

Andrew CarnegieWhy was he so successful?

Social Darwinism: some individuals flourish and pass traits onto next generation while the weak die off. (Natural selection)◦ Success and failure in business were governed by

natural law and not one had the right to intervene

Andrew Carnegie

“If you can’t beat ‘em, join ‘em.” ◦ Many industrialists merged together

Buy out all its competition=monopoly, complete control over its industry’s production, wages and prices

Example:◦ J.P. Morgan(United States Steel)

bought out Carnegie to become world’s largest business

Fewer Control More

Owner Standard Oil Company

Way to success = Join with competing companies into trusts

Controlled 90% of refining business◦ Paid employees very low wages◦ Sell oil at low price to drive out competition

Hike prices up Worth estimated $392 billion

◦ $663.4 billion in adjusted dollars

John D. Rockefeller

Carnegie donated 90% of wealth accumulated

Rockefeller donated over $500 million within his lifetime

Philanthropists

“It will be a great mistake for the

community to shoot the millionaires. For

they are the bees that make the most honey, and contribute most to

hive even after they have gorged

themselves full.” ~Andrew Carnegie

The "Andrew Carnegie Dictum":• To spend the first

third of one's life getting all the education one can.

• To spend the next third making all the money one can.

• To spend the last third giving it all away for worthwhile causes.

Sherman Antitrust Act: made it illegal to form trust that interfered with free trade between states or with other countries. (1890)

Sherman Antitrust Act