industrialization. the rise of industry natural resources an abundance of raw materials was one...
TRANSCRIPT
Industrialization
The Rise of Industry
• Natural Resources• an abundance of raw materials was one
reason for the nations industrial success• timber, coal, iron and copper
• Petroleum was in high demand because it could be turned into kerosene
Rise of Industry
• Oil would be the 1st industry • Edwin Drake would
drill the 1st oil well in Titusville, Pennsylvania in 1859
Rise of Industry• Between 1860 and 1910 population in U.S.
tripled• Population growth stemmed from: large
families and immigration• 1. better living conditions• 2. social and economic conditions in Europe and
China convinced many to search for a better life• 3. escape oppressive governments and religious
persecution• Between 1870 and 1910 more than 17
million arrived in U.S.
Alexander Graham Bell1876 invites the telephone
New Inventions
New Inventions
• Thomas Alva Edison• by the time he died he held 1,000 patents• 1877 invented the phonograph• 2 years later perfected the electric generator
and light bulb
• http://www.history.co.uk/shows/the-men-who-built-america/videos
• George Westinghouse • an air brake system for railroads • the Alternating Current (AC) system
New Inventions
Rise of Industry
• Thaddeus Lowe invented the ice machine
• Gustavus Swift hired an engineer to develop a refrigerated railroad car
The Northrop automatic loom allowed cloth to be made at a much faster rate
Rise of Industry
Rise of Industry Cyrus Field laid a
telegraph cable across the Atlantic Ocean in 1886
Rise of Industry• Another reason U.S. able to industrialized
rapidly was its free enterprise system• Americans embraced the idea of laissez-faire
• meaning " let people do as they choose ”• relies on supply and demand
• Entrepreneurs - were attracted by the prospect of making money in manufacturing and transportation
• Congress passed the Morrill Tariff which greatly increased tariff rates
• other countries began to increase their tariffs on trade - which would hurt American trade
The RailroadsThe Transcontinental Railroad
railroad boom began in 1862, when President Lincoln signed the Pacific Railroad Act
• 2 railroad corporations competed with one another and raced to obtain as much land and money as possible
• The Union Pacific• engineer Grenville Dodge• pushed westward from Omaha, Nebraska in 1865
• The Central Pacific• engineer Theodore Judah• hired workers from China
Railroad Completed in 4 yrs• Central pacific laid 688 miles of track• Union Pacific laid 1,086 miles of track• May 19, 1869 - Promontory Summit, Utah Railroads linked nation and increased
markets spurring American industrial growth
• huge spending amount of money on steel, coal, timber, and other materials
Railroad• 7 railroad systems• Cornelius Vanderbuilt - most
successful railroad consolidator
• American Railway Association divided country into four time zones in 1883• help with scheduling and
prevent trains colliding with one another
Railroads Government gave land grants to many
railroad companies• railroads then sold the land to settlers,
real estate companies, and other businesses to raise money to build the railroad
• bribery and corruption would consume railroad entrepreneurs• Jay Gould most notorious corrupt railroad
owner
Railroads
• Railroad industry corruption became public in 1872
• Credit Mobilier scandal• construction company set up stockholders of
the Union Pacific Railroad• Credit Mobilier overcharged Union Pacific
http://www.history.co.uk/shows/the-men-who-built-america/videos/the-men-who-built-america-cornelius-vanderbil
Big Business
• 1900 - vast complexes of factories, warehouses, and distribution facilities
• Corporation ran big business• Stockholders – owners of corporation• Called this because they own shares of
ownership called stocks
Big Business
• Money raised went to new technologies to increase efficiency• could achieve economies of scale
• Business has two kinds of costs - fixed and operating costs• fixed - costs a company has to pay whether
or not it is operating• operating - costs that occur when running a
company
Consolidating Industry
• There was much competition between business and competitive prices cut into profits
• Pools were organized to keep prices at a certain level• did not last long because they were not
legally supported by Legislature• competition left only a few larger and highly
efficient corporations
Consolidating Industry• Andrew Carnegie
• invested in companies that served the railroad industry
• Opened steel company in Pittsburgh in 1875
• used the vertical integration to help save money and enabled many companies to become even bigger
Consolidating Industry• John D Rockefeller
• Used horizontal integration
• Standard Oil - company he started
• By 1880 the company controlled about 90% of the oil refining industry in the U.S.
• this would be classified as a monopoly
New Business Organizations• Monopolies - charge whatever for its
products• Many states made it illegal for one
company to own stock in another company • 1882 Standard Oil formed 1st trust
• new way of merging businesses that did not violate such laws
• holding company - it owns the stock of companies that do produce goods
• Manages the companies it owns, effectively merging them into one large enterprise
New Business Organizations• Most famous and
successful investment banker - J.P. Morgan
• Formed the United States Steel Company
New Business Organizations• With all these new
products retailers were trying to find new ways to attract consumers
• N. W. Ayer and Son - 1st advertising company
• Created large illustrations ads
• Department stores - chain stores - issue mail - catalogs order
Unions• Work was difficult
• perform dull, repetitive tasks in unhealthy and dangerous working conditions
• Division between income• 1900 average industrial worker made 22 cents
per/hr and worked 59 hours a week• Deflation between 1865-1897 caused prices to
fall, which increased the buying power of workers wages
• 2 types of industrial workers• craft workers and common laborers
• craft workers formed trade unions
Unions• Employers often had to negotiate with trade unions
because they represented whose skills they needed• Business leaders opposed industrial unions• Companies tried to stop workers from forming unions
• workers who tried to organize unions were put on a black list
• workers who formed union, companies used "lock outs”
• if a union called a strike, employers would hire replacements
• unions could be broke because there were no laws giving workers the right to form unions
Unions
• Panic of 1873 – recession - companies to cut wages
• Railroads cut wages in 1877• workers walked off job and blocked the
tracks
• Gun battles between state militia and strikers
• Took federal troops 12 days, 100 dead, $10 million in damage
Unions
• Knights of Labor founded 1869• Leader Terrence Powderly
• opposed strikes preferred boycotts• called for 8 hr workdays, equal pay for
women, abolition of child labor, creation of worker-owned factories
Unions
• Haymarket Riot –Chicago – 1886• supports of 8 hr workdays called for
nationwide strike on May 1st
• members marched across city• May 3, police intervened to stop fight at
McCormick Harvesting Machine Company• turned violent killing 4
Strikes
• Homestead Strike – 1892• Homestead, Pennsylvania• workers belonged to a craft union• manager proposed to cut wages when
workers contracts were to expire and blocked workers from entering the mill
• state militia ordered to protect replacement workers.
• Strike collapsed after 4 months
Strikes• The Pullman Strike
• Pullman Palace Car Company• owner of the company required workers to live in the
town he built and buy goods from the company stores
• cut wages which made it difficult to afford living there • strike began• boycott tied up railroads and threatened the
economy • to break strike, railroad managers arranged for U.S.
mail cars to be attached to Pullman cars• if strikers refused to handle the Pullman cars would be
interfering with U.S. mail, a violation of federal law• federal court issued an injunction