Notes 10-17

10. The growth of big

business was both a

cause and an effect of

increased immigration

and the use of natural

resources.

a. Big BUSINESS encouraged the US government to continue an open immigration policy so that their workforce would be PLENTIFUL and cheap.

b. IMMIGRANTS were attracted to jobs created by Big Business and enabled the businesses to grow bigger because the immigrant workers worked for low WAGES which helped the businesses make a greater PROFIT.

c. Big business was also caused by the availability

of NATURAL resources (land), new

INVENTIONS and technologies, CAPITAL for

investment, and the role of entrepreneurs.

d. Men like Andrew Carnegie (STEEL industry)

and John D. Rockefeller (OIL industry)

developed business practices that allowed

them to create monopolies, which kept

WAGES LOW and kept labor unions from

being effective.

11. Andrew Carnegie was important in building up the steel industry.

a. Steel was stronger than IRON but

was more expensive to make.

Henry BESSEMER created a

cheaper process for making steel so

it could be mass produced.

Basically this process turned iron

into steel.

b. Steel is melted iron plus CARBON.

Henry Bessemer

c. In order to produce it at a lower price, he CONTROLLED all the steps of the steel-making process. He bought the mines and RAILROADS / SHIPS to deliver the resources. Other mills couldn’t COMPETE with his prices, so he consolidated, or JOINED, these smaller mills with his and formed the Carnegie Steel Company. After making his fortune, Carnegie started giving it away (to charities).

d. Steel was used to make

BUILDINGS, AUTOS, and

trains.

12. Cornelius Vanderbilt was one of the most important men in the railroad industry.

a. The RR industry became the US’s first

large CORPORATION, or business

owned by investors.

b. It allowed people to INVEST, or buy stock

(which were shares of a business), with

the hopes of making a profit ($$).

Does this look familiar?

It’s the Biltmore

House…Vanderbilt’s

Mansion!

13. John D. Rockefeller was the main leader in the oil industry.

a. Oil was also called “BLACK GOLD.”

(remember the Beverly Hillbillies??)

b. He, like Carnegie, owned all aspects of

the oil industry. He owned FORESTS to

make lumber, factories to make

BARRELS for the oil, SHIPS AND

RAILROADS to DELIVER materials.

c. He CONSOLIDATED smaller refineries

with his because they couldn’t compete

with his prices.

d. His company was called STANDARD Oil

Company

14. As automobiles became popular, the oil and steel industries benefited.

a. Oil industry increased with the need for

GASOLINE, tires, and motor oil.

b. Steel industry grew since steel was

needed to create CAR FRAMES.

15. These leaders in big business eventually had a monopoly, or complete control, of their industries.

a. With a monopoly, there is

little or no

COMPETITION, so

bigger businesses can

set PRICES for their

products.

b. When companies are

joined to limit competition

in an industry, they form

a TRUST.

16. As industries grew, the US shifted from an agrarian economy based on agriculture to an industrial economy based on manufacturing. People moved from the farms (rural areas) to the city (urban areas).

American living in cities and on farms

Date Cities Farms

1880 28% 72%

1910 45% 55%

1940 56% 44%

1970 75% 25%

a. Farmers produced more crops due to the MECHANIZATION of farming.

b. As a result, the prices for crops that they could get for their crops FELL (due to supply and demand).

c. Unable to pay their mortgages on land and equipment because of low profits, many famers LOST their farms to FORCLOSURE and moved to the cities in search of jobs in industry.

d. In the late 1800s, many African American

SHARECROPPERS and tenant farmers

left the South for cities in the Midwest

and the Northeast in search of jobs in

FACTORIES to escape Jim Crow.

e. By 1920, the MAJORITY of people in the

US lived in the CITIES.

f. While many people lived in the

city and worked in factories,

some still lived on FARMS OR

RANCHES. In order to get their

supplies, they used MAIL

ORDER catalog businesses

such as Montgomery Ward and

Sears & Roebuck.

17. As industries grew, more factories were built in or near cities, so cities grew rapidly at this time.

a. These industries created many JOBS for people.

b. Many of the WORKERS (laborers) were IMMIGRANTS from all over the world who came to America to make a better life for themselves.

c. They played a vital role in the economy, although they were not APPRECIATED for their contributions.

d. The increasing number of immigrants

added to a growing URBANIZATION.

e. Instead of building outward, the cities built

UPWARD by creating taller buildings.

– William Jenney built the first SKYSCRAPER

in 1885.

– ELEVATORS, invented by Otis in 1852 (or

1861, depending on the source used!)

helped people get up the higher buildings

f. Underground transportation

was created in the form of

SUBWAYS in Boston in

1877.