Chapter 20INDUSTRIALIZATION

Vocabulary 1-1 Patent- Government documents giving an inventor the exclusive right to make and sell an invention for a specific number of years.

Business Cycle The pattern of good and bad economic times. Boom and bust.

Bessemer Steel Process Technique that used one-seventh of the coal that the older process used to manufacture steel.

Thomas Edison Inventor of the electric light bulb and other inventions.

Alexander Graham Bell Inventor of the telephone

One American’s Story Before the Civil War started, people lit their homes with oil lamps with kerosene.

Then a chemist reported that kerosene could be made more cheaply from the oily liquid called petroleum, but people did not know how to get large amounts of it.

Edwin Drake noticed that petroleum oozed to the surface in Pennsylvania so he began to drill into the ground. He struck oil and it launched the oil industry. This was one of many new industries that developed in the late 1800’s.

Factory Growth

Factory production expanded in the United States and new factories began to pop up in other regions.

Several factors encouraged factory growth: 1)Lots of natural resources: forests, water, minerals like coal, iron, copper, silver and gold.

2)Growing population: population doubled from 1860-1900 and this led to a demand for more goods

3)Improved transportation: steamboats, canals, and railroads made it possible to ship items long distances

4)High immigration: about 14 million people immigrated to the United States between 1860-1900

Factory Growth 5)New Inventions: New machines and improved processes helped industry produce goods more efficiently.

6)Investment capital: Wealthy people would let businesses borrow money. Businesses used this capital (money) to build factories and buy equipment.

7)Government assistance. State and federal governments used tariffs and subsidies (money to build or buy a specific good) to help businesses grow.

The Business Cycle American industry did not grow at a steady pace; it experienced ups and downs.

This pattern of good and bad times is called the business cycle. During good times, called booms, people buy more, and some invest in business. Businesses grow.

During bad times, called busts, spending and investing decrease. Industries lay off workers and make fewer goods. Some businesses may close and this low economic activity is a depression.

Steel: The Backbone of Industry Before 1850, steel was very expensive to manufacture because it required huge amounts of coal. William Kelly and Henry Bessemer independently developed a new process for making steel. It used less than one-seventh of the coal that the older process used. This new technique was called the Bessemer steel process.

Edison and Electricity Another industry that grew during this time was the electric-power industry.

The inventor who found the most ways to use electricity was Thomas Edison.

Edison’s most famous invention was practical electric lighting for home use.

Electric lighting quickly replaced gaslights. By the late 1800’s, Edison’s factory produced about a million light bulbs a year.

Bell and the Telephone In 1835, Samuel Morse developed the telegraph. It allowed people to use electrical impulses to send messages over long distances.

The next step was the telephone, invented by Alexander Graham Bell. Bell and his assistant, Thomas Watson, tried to invent a device to transmit human speech using electricity.

After years of experiments, Bell finally succeeded and showed his telephone at the Centennial Exhibition in 1876. The Centennial Exhibition was a fair in Philadelphia to celebrate America’s 100th birthday.

Inventions Change Industry The telephone industry grew rapidly. Within four years of Bell showing off his telephone more than 50,000 telephones had been sold.

The invention of the switchboard allowed more and more people to connect into a telephone network. Women commonly worked in the new job of switchboard operator.

The typewriter and sewing machine were also big inventions that sparked big industries, but the one that would have a larger impact on American life was the railroad industry.

2) How many more patents were issued from 1900-1909 than from 1860-1869?

3) Was this a time of increasing or decreasing inventiveness?

Vocabulary 1-2 Transcontinental railroad- Railroad that spanned the entire continent.

Standard Time A system that divided the United States into four time zones instead of using “solar time” for each region.

Deciding to Span the Continent Americans had talked about building a transcontinental railroad for years. It would encourage people to settle the West and develop its economy.

Two companies were put in charge of building the transcontinental railroad, the Central Pacific and the Union Pacific.

To build a railroad this large it took huge sums of money and the government lent these two companies millions. The government also gave them land so they could sell it to make more money.

Building the Railroad The Central Pacific faced a labor shortage because most men preferred to try and strike it rich as miners.

Desperate for workers, they overcame a widespread prejudice against the Chinese and hired them.

The Chinese proved to be hard workers and got sick less often because they drank tea instead of unboiled water.

The Union Pacific hired workers from a variety of backgrounds. The majority of workers were freed African Americans, former Civil War soldiers, and Irish immigrants.

Native Americans also helped build the railroads across the deserts of Nevada and Utah.

Railroad Time The railroads changed America in a surprising way: they altered time. Before railroads, each community determined its own time, based on calculations about the sun’s travels. This was called “solar time” To solve this problem, the railroad companies set up standard time. Standard time was a system that divided the United States into four time zones.

Economic and Social Changes The railroads changed people’s lives in many other important ways.

1)Linked the economies of the West and East. 2)Helped people settle the West. 3)Weakened the Native American hold on the West. 4)Gave people more control of the environment. People used to setup cities near rivers, but now cities like Denver could be established because of the rails.

1-3 Vocabulary Andrew Carnegie- Built U.S. steel industry

Assembly Line A series of workers and machines in a factory where identical items are assembled.

Capitalism An economic system in which a country's trade and industry are controlled by private owners for profit, rather than by the state.

John D. Rockefeller Founder of the Standard Oil Trust

Trusts A legal body created to hold stock in many companies, often within an industry

Corporation A business owned by investors who buy part of it through shares of stock

Monopoly Business that gains control of an industry by eliminating other competitors

Philanthropist A person who gives large sums of money to charities

Entrepreneur A person who organizes or operates a business.

Robber Baron A business leader who became wealthy through dishonest methods

Shareholder An investor who buys part of a company through shares of stock

Gilded Age Late 1800s era of fabulous wealth

The Growth of Corporations Before the late 1800s most businesses were owned by one person or a few partners.

Then advances in technology made business owners want to buy new equipment. They needed more money to do this.

One way to raise money was to turn their businesses into corporations which allowed investors to buy parts of the company through shares of stock.

The business then took that money and bought the new equipment.

Growth of Corporations Continued

A corporations has many advantages over a privately owned business:

1)Selling stock means a corporation can raise large amounts of money.

2)A corporation has a special legal status and can continue even after its founders die.

3)Banks are more likely to lend a corporation money.

4)Investors do not have to pay off the corporation’s debts.

Few laws regulated corporations in the late 1800s and it led to the growth of a few giant corporations that dominated American industry.

The Oil and Steel Industries Two men dominated these industries. John D. Rockefeller led the oil industry, and Andrew Carnegie controlled the steel industry.

Rockefeller decided that the best way to make money was to put his competitors out of business. He made secret deals with railroads to carry his oil and built his own pipelines to carry oil.

Rockefeller’s most famous move to end competition was to develop the trust. A trust is able to hold stock in many different companies in the same industry.

The trust eventually controlled 95 percent of the industry and Rockefeller was able to set a high price for his oil because he had no competition.

The Oil and Steel Companies Continued

In contrast to Rockefeller controlling the entire industry, Andrew Carnegie tried to make the best and cheapest product.

Carnegie tried to control all the processes related to the manufacture of steel.

He bought mines that supplied iron ore, and the ships and railroads that carried that ore to his mills.

Carnegie sold his company to J.P. Morgan, the nation’s most prominent banker.

Both Carnegie and Rockefeller were multimillionaires and were also philanthropists. They gave large amounts of money to charities.

The Gilded Age The rags-to-riches stories of people like Rockefeller and Carnegie inspired many Americans to believe they too could grow rich.

Many stories like this hid an important truth that most people who made millions had not been raised in poverty. Many belonged to upper class families that had money and connections.

For the rich, this time of fabulous wealth was named the Gilded Age.

To gild is to coat an object with gold and these decorations were popular during this period.

But the name had a deeper meaning. Just as gold plated items can disguise an object of lesser value, so did the wealth of a few people mask society’s problems, including corrupt politics and widespread poverty.

1-4 Vocabulary Socialism- System in which the state controls the economy

Sweatshop Places where workers labored long hours under poor conditions for low wages.

Workers Face Hardships Business owners of the late 1800s wanted to keep their profits high, so they ran their factories as cheaply as possible.

Some cut costs by requiring workers to buy their own tools or refused to buy safety equipment that led to thousands of workers being killed every year.

If a factory became too crowded, the owner rarely built a larger one. Instead they sent the work to be done by smaller businesses called sweatshops.

In the 1880s the average weekly wage was less than $10. This barely paid a family’s expenses.

Child labor was also very common during this time period.

Unions Unions became popular in the late 1800s because of poor working conditions and lack of jobs during economic depressions.

Unions fought for fair wages and better working conditions and it scared many business leaders. They blamed the labor movement on socialists and anarchists.

Several strikes took place throughout the country and many mobs clashed with local police and militias. Nothing changed right away, but these strikes brought attention to terrible working conditions.

The best thing that came from these early unions was that memberships grew and more people began to join unions to receive better wages and working conditions.