THE INDUSTRIAL AGE
1865-1914
Railroads Lead the Way! Essential Question
How did railroad expansion affect the United States economy?
Railroad Expansion Railroad expansion is accompanied
by consolidationLarge companies buy smaller companies
or drive them out of businessMakes large companies more efficientMakes industrial processes more uniform
Railroads Stimulate the Economy
Railroads brought major changes to American industry and American life
Connect east and west coast Railroads stimulate
Steel IndustryLumber IndustryCoal Industry
Competing for Customers Large railroads offered rebates to their
biggest customersSmaller railroads are forced out of businessRaised freight rates for farmers and
customers shipping small amounts of goods Railroad industry business leaders
formed poolsCombining resources to raise prices
Laissez-faire: Government hands off the economy!!!!
Answer the Essential Question How did railroad expansion affect the
United States economy? ~ Railroad expansion allowed a few powerful individuals to build great fortunes~ It benefited coal, iron and steel industries~ Opened up the entire United States to economic growth
Making Connections How did industrialists and their
companies build their fortunes? ~ By consolidating small companies into large companies~ Offering rebates to companies shipping large amounts of goods
Making Connections Do you think owners of small farms
supported the rebates given by railroad companies?~ No, because the rebates were given only to large customers and freight rates increased for small farmers.
Inventions Essential Questions
How did the inventions of the late 1800s revolutionize society?
Inventions By 1920, Americans in cities drove cars
through streets lit with electric lights. They went to department stores where they bought everything from kitchen sinks to shoes. Americans also could do their shopping by mail – or pick up the telephone and order groceries from the local store. The automobile, the electric light and the telephone were invented after 1870.
Inventions Within a generation, they became part of
everyday life for millions of people. These new inventions helped people communicate more quickly over long distances. Improvements in communication helped unify the country and promoted economic growth.
Inventions Telegraph (1844) – Samuel Morse
Operators sent messages in morse codeOffers instant communicationConnects United States and Europe
Inventions Telephone (1876) – Alexander Graham
BellBusinesses are first to use phonesInstant communicationEventually telephones become common in
homes
Inventions Electric Light Bulb (1879) – Thomas
Edison “The Wizard of Menlo Park”Electric Power PlantFactories, trolleys, streetlights, and lamps
are powered by electricity
Inventions Engine Powered Aircraft (1903) – “The
Wright Brothers” Oliver and Wilbur“Broke the bonds of Earth and see the world
in a new way”Attracted attention of United States military
in 1911
Inventions Wright Brothers
Henry Ford’s Automobile 1903 – Henry Ford established his own auto
making company in Detroit, Michigan and began designing cars
1908 – Model T is introducedImmensely popularAffordable and easy to keep in repair
Assembly Line revolutionized industry Mass production decreased manufacturing
costs so products could be sold more cheaply
Model T
Assembly Line
Answer the Essential Question How did the inventions of the late 1800s
revolutionize society?
An Age of Big Business Essential Question
How did Americans build fortunes in the oil and steel industry?
Foundations of Growth New technology and abundant natural
resources led to economic growth 1859 – Edwin L. Drake strikes oil by
digging a well in Titusville, PA Led to creation of multimillion-dollar
petroleum industry
Factors of Production Change from an agricultural to
industrial economy is possible due to the “factors of production”Land – includes all natural resourcesLabor – Rapid population growth
provides more workersCapital – Manufactured goods used to
make other goods and services○ Examples: machines, buildings, tools,
MONEY
Raising Capital Companies want to expand and to do
so, need to raise capitalBecame corporations by selling shares,
or stock, of its business to the publicPeople who invest in the corporation by
buying stock are its shareholders, or partial owners
Railroads were the first to form corporations
The Oil Business John D. Rockefeller’s Standard Oil
Company controlled the oil industry Rockefeller created a monopoly by driving
his competition out of businessLowered pricesPressured customers not to deal with rival
companiesConvinced railroads to give him special rates
Used “horizontal integration” to help Standard Oil grow wealthy and powerfulCombined competing companies into one
corporation
Standard Oil
The Steel Business New processes for making steel
created an important industryBessemer ProcessOpen hearth process
Pittsburgh, PA; Cleveland; Chicago, Detroit became important hubs in steel production
Andrew Carnegie 1890 – Andrew Carnegie dominates
the steel industry Company becomes powerful through
“vertical integration”Acquiring companies that provided
equipment and services needed By 1900, Carnegie Steel Company is
producing 1/3 of the nation’s steel
Answer the Essential Question How did Americans build fortunes in
the oil and steel industries?○ Formed corporations○ Used methods of vertical and horizontal
integration○ Formed trusts and monopolies
Attitudes Toward Business Industrialization and the changes
associated with it caused American attitudes toward business to alter in the late 1800s.
Attitudes Toward Business ***The tremendous wealth some
entrepreneurs gained during the late 1800s, as well as the cut-throat business methods they used, led some Americans to rethink their ideas on the meaning of business success. New philosophies tried to explain and justify both the accumulation of wealth and the practices used to achieve it.***
Attitudes Toward Business Two ways people viewed business in the
19th century: Laissez Faire
○ What is it?Hands off the economy!
Social DarwinismWhat is it?
○ Survival of the fittest, only the strong survive (leads to monopolies)
How is Social Darwinism applied to business competition?○ Big businesses will conquer smaller, weaker businesses
Attitudes Toward Business Robber Barons vs. Philanthropists?
The philosophies described above and the growing gulf between the rich and poor led some Americans to criticize the laissez-faire policies and those who profited from them. Instead of viewing wealthy entrepreneurs as Horatio Alger heroes, critics condemned them as robber barons – steal from the poor and keep the money
Attitudes Toward Business Philanthropist: Person who gives their
wealth back to the community. Example: Rockefeller Library,
Carnegie Hall
Attitudes Toward Business WHAT DO YOU THINK? WERE THE
ENTREPRENUERS ROBBER BARONS OR PHILANTHROPISTS? WRITE ONE PARAGRAPH ANSWERING THIS QUESTION AND EXPLAIN YOUR ANSWER USING SPECIFIC EXAMPLES AND DETAILS.
Corporations Grow Larger Many Americans admired the
efficiencies of large business Others argued that a lack of
competition hurt consumersNo reason to improveNo reason to keep prices low
1890 – Sherman Antitrust ActProhibited monopolies and poolsRarely enforced, ineffective
Sherman Antitrust Act Did the Sherman Antitrust Act support
competition?
Labor Organizations (Unions) Business growth in the late 1800s
brought generally higher wages to American workers. Yet periodic unemployment and poor working conditions remained a fact of life for workers. In addition, employers held enormous power over the lives of their workers and could lower wages and fire employees at will.
Labor Organizations To improve conditions, increasing
numbers of American workers formed labor unions beginning in the late 1820s. As working conditions changed with industrialization, many more workers became interested in unions.
What is collective bargaining? Negotiating between union workers
and owners
Labor Organizations Knights of Labor Founder: Terrence Powderly Characteristics
Skilled/unskilled workers, women and African Americans
Reforms:○ 8 hour work day○ End child labor○ Equal opportunities for women
Labor Organizations American Federation of Labor (AFL) Founder: Samuel Gompers Characteristics
Collection of unions and skilled workers in similar trades
Reforms:○ Higher wages○ Better working hours○ Better working conditions
Labor Organizations International Ladies’ Garment Workers
Union (ILGWU) Founder: Samuel Gompers Characteristics
Workers in cloth manufacturing industrySweat shopsWorked with AFL
Triangle Shirtwaist Factory Fire
Labor Conflict If collective bargaining failed, labor
unions often used strikes, or work stoppages, to achieve their aims. Strikes sometimes ended in union victories; often, however, they led to violence as business owners sought state and even federal support to end walkouts.
Labor Conflict Conflict
Great Railroad Strike What happened?
Pay cutsTroops sent in to end strike
Who won?Union
Labor Conflict Conflict
Hay Market Riot What happened?
Labor rally held by Chicago anarchistsFirst time violence is used
Who won?No clear cut winner
Labor Conflict Conflict
Homestead Strike What happened?
strike at Carnegie Steel plant to protest a wage cut
Who won?Management – 75% of workers lose jobs
Labor Conflict Conflict?
Pullman Strike What happened?
Government called in by management to put down strike
Who won?Management
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