Industrialization:Industrialization:

The Building of The Building of Modern Modern AmericaAmerica

IndustrializationIndustrialization The growth of The growth of industryindustry in the United States in the United States

exploded in the late 1800’s.exploded in the late 1800’s. As a result, the U.S. emerged as one the leading As a result, the U.S. emerged as one the leading

industrial nations in the 20industrial nations in the 20 thth century. century. A SIMPLE explanation of A SIMPLE explanation of WHYWHY this occurred can this occurred can

be traced to:be traced to:

1.1. Advances in Advances in technologytechnology..

2.2. Changes in HOW our economy worked.Changes in HOW our economy worked.

CorporationsCorporations

In the late 1800s, business structure began In the late 1800s, business structure began to change – organized large corporationsto change – organized large corporations

Organizers raise money by selling shares of Organizers raise money by selling shares of stock (certificates of ownership) in the stock (certificates of ownership) in the company in return for a share of the profitscompany in return for a share of the profits

Limited Liability Limited Liability – individuals who bought the – individuals who bought the stocks were not help personally responsible stocks were not help personally responsible for any debts of the companyfor any debts of the company

Changes in technologyChanges in technologyBessemer Bessemer Steel ProcessSteel Process A cheap, efficient method of producing A cheap, efficient method of producing STEELSTEEL.. Developed by a British manufacturer named Henry Developed by a British manufacturer named Henry

BessemerBessemer Involves injecting air into molten iron to remove carbon.Involves injecting air into molten iron to remove carbon. By 1880, By 1880, 9090% of steel in US produced by this method% of steel in US produced by this method New, cheap steep needed for: New, cheap steep needed for: RailroadRailroad tracks, barbed tracks, barbed

wirewire, new farm equipment, NEW type of construction: , new farm equipment, NEW type of construction: skyscrapersskyscrapers, bridges…CARS!, bridges…CARS!

Changes in technologyChanges in technologyAssembly LineAssembly Line Begins as a study by Frederick Winslow Taylor observing Begins as a study by Frederick Winslow Taylor observing

time and motion to improve efficiency in manufacturing.time and motion to improve efficiency in manufacturing. Ends as Ends as Henry Ford’s Henry Ford’s motor company perfects the method motor company perfects the method

known as the “assembly line”.known as the “assembly line”. Using this “scientific management”, cars and other Using this “scientific management”, cars and other

products are produced cheaply and quickly.products are produced cheaply and quickly. Has terrible effect on workers: fatigue, injuries, and Has terrible effect on workers: fatigue, injuries, and

boredom. Ford bumps pay to $5.00 a day and reduces boredom. Ford bumps pay to $5.00 a day and reduces hours to 8 hour day.hours to 8 hour day.

Changes in technologyChanges in technologyHarnessing of electricityHarnessing of electricity World famous American inventor Thomas World famous American inventor Thomas EdisonEdison perfects perfects

the incandescent the incandescent light bulblight bulb. It’s success necessitates . It’s success necessitates Edison’s creation a of system to safely harness and deliver Edison’s creation a of system to safely harness and deliver electricity to city homes.electricity to city homes.

The safe harnessing and delivery of electricity completely The safe harnessing and delivery of electricity completely changed the nature of business. Manufacturers could now changed the nature of business. Manufacturers could now locate their factories anywhere—not just near sources of locate their factories anywhere—not just near sources of power (like rivers).power (like rivers).

Electricity also started completely new industries devoted Electricity also started completely new industries devoted to electrical appliances such as: lamps, refrigerators, to electrical appliances such as: lamps, refrigerators, stoves, washers, dryers, etc.stoves, washers, dryers, etc.

Changes in technologyChanges in technologyTelephoneTelephone Perfected by Alexander Perfected by Alexander Graham Bell Graham Bell and Thomas Watson and Thomas Watson

in 1876.in 1876. Paved the way for a means of almost instantaneous, world-Paved the way for a means of almost instantaneous, world-

wide communication.wide communication.

AirplaneAirplane Two bi-cycle manufacturers from Dayton, Ohio (Wilber and Two bi-cycle manufacturers from Dayton, Ohio (Wilber and

Orville Orville WrightWright), create a craft that flies under its own power ), create a craft that flies under its own power for 12 seconds.for 12 seconds.

Humble in its beginning, the airplane will soon revolutionize Humble in its beginning, the airplane will soon revolutionize travel around the world.travel around the world.

Changes in our economyChanges in our economy During the late 1800’s the U.S. Government adopted a policy of During the late 1800’s the U.S. Government adopted a policy of

llaissez-faireaissez-faire capitalism capitalism.. This policy essentially meant that the This policy essentially meant that the governmentgovernment would would notnot

involve itself at all in the regulation or control of private involve itself at all in the regulation or control of private business.business.

This policy encouraged the creation of This policy encouraged the creation of monopoliesmonopolies in certain key in certain key industries. Oftentimes these industries seemed to be controlled industries. Oftentimes these industries seemed to be controlled by ultra wealthy and powerful men. Among them were:by ultra wealthy and powerful men. Among them were:

Andrew CarnegieAndrew Carnegie: : Born in Scotland to poor parents, Carnegie would eventfully Born in Scotland to poor parents, Carnegie would eventfully

become one of the wealthiest men in history. become one of the wealthiest men in history. Immigrating to America, Carnegie would make his fortune in the Immigrating to America, Carnegie would make his fortune in the

revolution of the steel industry.revolution of the steel industry. A practitioner of A practitioner of Vertical Vertical Integration Integration (buying out your (buying out your supplierssuppliers) )

and and Horizontal Horizontal IntegrationIntegration (buying out your (buying out your competitorscompetitors), ), Carnegie eventually controlled the majority of Carnegie eventually controlled the majority of steelsteel manufacturing in the U.S..manufacturing in the U.S..

His fortune was immense; his commitment to charitable causes His fortune was immense; his commitment to charitable causes equaled it.equaled it.

Changes in our economyChanges in our economyJ.P. MorganJ.P. Morgan Famous U.S. banker who advocated the use of the Famous U.S. banker who advocated the use of the

HOLDING COMPANYHOLDING COMPANY. This was a company . This was a company created to solely “created to solely “buybuy out the out the stockstock” or ownership of ” or ownership of companies in a certain industry. In effect, they companies in a certain industry. In effect, they created created monopolies.monopolies.

John D. RockefellerJohn D. Rockefeller Industrial giant whose fortunate, like Carnegie’s, Industrial giant whose fortunate, like Carnegie’s,

became world famous.became world famous. Rockefeller utilized the practice of creating Rockefeller utilized the practice of creating TRUSTSTRUSTS

to consolidate certain industries.to consolidate certain industries. A “trust” would collect the “A “trust” would collect the “stockstock” of several ” of several

companies and run those separate companies as companies and run those separate companies as one one largelarge corporation. In effect, they created corporation. In effect, they created monopolies.monopolies.

Through this technique, Rockefeller was able to Through this technique, Rockefeller was able to gain almost total control of the gain almost total control of the OILOIL industry in the industry in the U.S. (then the leading producer of oil in the world)U.S. (then the leading producer of oil in the world)

Changes in our economyChanges in our economyCornelius VanderbiltCornelius Vanderbilt This industrial “colossus” would make his fortune in This industrial “colossus” would make his fortune in

the the railroadrailroad and transportation industries. and transportation industries. Men like Vanderbilt took advantage of the nation’s Men like Vanderbilt took advantage of the nation’s

demand for cheap transportation of peoples and demand for cheap transportation of peoples and goods.goods.

They also took advantage of government They also took advantage of government corruption. During this time period, the wealth of corruption. During this time period, the wealth of the railroads was distributed to various government the railroads was distributed to various government officials and representatives to insure that the officials and representatives to insure that the railroad industry was given special land grants in railroad industry was given special land grants in the West to build their railroads as cheaply as the West to build their railroads as cheaply as possible.possible.

This wealth and the special considerations given by This wealth and the special considerations given by the government created several railroad the government created several railroad monopolies in the U.S. that kept profits high and monopolies in the U.S. that kept profits high and took advantage of poor farmers and smaller took advantage of poor farmers and smaller industries in getting their products to market.industries in getting their products to market.

What allowed these big businesses What allowed these big businesses to exist?to exist?

Emphasis on Laissez-faire Emphasis on Laissez-faire capitalismcapitalism – no government – no government regulations on business or profits, low taxesregulations on business or profits, low taxes– Gov. GAVE Gov. GAVE landland grants to grants to railroadrailroad companies companies

Post-civil war saw a huge Post-civil war saw a huge migrationmigration from from farmfarm-life to -life to citycity life, increasing the workforce – movement of blacks from life, increasing the workforce – movement of blacks from south to north to find jobs (south to north to find jobs (great migrationgreat migration))

Huge influx of Huge influx of immigrants immigrants America was a vastly large country that possessed a America was a vastly large country that possessed a

wealth of wealth of naturalnatural resources and navigable resources and navigable riversrivers for trade for trade

Impact on the U.S.Impact on the U.S. Rapid industrialization and the forces driving it were quickly transforming Rapid industrialization and the forces driving it were quickly transforming

the United States into the “the United States into the “modernmodern” nation we would recognize today.” nation we would recognize today. It did, however, come at a human cost. It did, however, come at a human cost. Lack of government regulation and overt government corruption at the Lack of government regulation and overt government corruption at the

hands of industry were creating an exploitive and abusive environment hands of industry were creating an exploitive and abusive environment that many Americans felt they were powerless to change.that many Americans felt they were powerless to change.

Was it a government “of the people” or was it a government for Was it a government “of the people” or was it a government for “Carnegie, Rockefeller, and Vanderbilt”?“Carnegie, Rockefeller, and Vanderbilt”?

A movement began during this time period to make government and “big A movement began during this time period to make government and “big business” more accountable to the public.business” more accountable to the public.

This movement would have many supporters from very diverse This movement would have many supporters from very diverse backgrounds.backgrounds.

Today, we refer to this movement as the Today, we refer to this movement as the PROGRESSIVE MOVEMENT. PROGRESSIVE MOVEMENT. It too, would have a significant and lasting impact on the “building of a It too, would have a significant and lasting impact on the “building of a

modern America”modern America”