Chapter 19: The Growth of Industry

1. Chapter 19: The Growth of Industry “What do I care about law? Ain't I got the power?” Cornelius Vanderbilt

2. Section 1: Railroads lead the way • The first transcontinental railroad was completed in 1869. Several others were built shortly after • By 1890 there were five major rail lines, with hundreds of smaller lines branching off them • Small railroad companies combined into larger corporations. This is called consolidation

3. Railroad Expansion • Suddenly there were a handful of powerful people at the top of the industry. They were called Railroad Barons. • Barons like Cornelius Vanderbilt made a large fortune owning railroads. There were no laws regulating business, and Railroad Barons took advantage of the average worker while making an obscene amount of money.

4. Railroads and the Economy • Railroads allowed raw materials from the west to be transported to the east. • The steel industry boomed because of railroads demand for steel tracks. • The coal industry boomed due to fuel demands, and the lumber industry was successful as well.

5. Railroads and the Economy ctd • Railroads developed a Standard Gauge – which created the same sized track for all railroads. • Large railroads offered discounts called Rebates to their biggest customers • Barons agreed to pools- which were deals between barons so railroads would all agree to higher rates. With no competition Barons could set the price to whatever they wanted

6. Railroads Change America • Railroads allowed industry to expand to the west. (Mining, Farming, Ranching, etc…. REMEMBER?!) • Most importantly the west was starting to become populated due to an easier path to the West Coast

7. Section 2: Inventions “Anything that won't sell, I don't want to invent. Its sale is proof of utility, and utility is success.” Thomas Edison

8. The Telegraph • Samuel Morse invented the Telegraph in 1844. There were thousands of telegraph lines by 1860. • Trained operators used Morse code to communicate. • The telegram was also used by businesses across the country to communicate to one another

9. Bell and the Telephone • Alexander Graham Bell came to America from Scotland to help hearing impaired people to speak. • He also experimented with sending voices through electrical wires. By 1876, he created a device that would send the sound of your voice electronically through wires

10. Bell and the Telephone ctd • This device he named the telephone. • He formed the Bell telephone company in 1877. By 1890 he had sold thousands of telephones to businesses across the country. Eventually the technology became available to the public.

11. Invention Boom • Between 1860 and 1890, the United States government granted more than 400,000 patents- or owning the rights for new inventions. • Many helped businesses. • ex: Christopher Sholes’s Typewriter (1868), and William Burroughs's Adding Machine (1888).

12. Invention Boom • In 1888 George Eastman invented a small box camera (Kodak). • In 1899 John Thurman developed a vacuum cleaner which simplified housework.

13. Thomas Edison • He had trouble in school. He was considered dull by teachers, had bad hearing, and stopped attending eventually. • He was home taught and loved science. He worked at a railroad yard and set up a lab in a freight car. His first invention was a gadget that sent electronic telegraph signals. Designed so he could sleep on the job.

14. Edison • He went into the invention business in his 20’s. • In 1879 he developed the first workable light bulb. He then built (designed) the first central electric power plant in 1882 and illuminated 85 buildings in NYC!

15. George Westinghouse • In 1885 George Westinghouse took Edison’s light bulb further. • He built transformers that could send electricity further and more cheaply over longer distances.

16. Henry Ford and the automobile • While engineering in Detroit, Michigan, Henry Ford experimented building an engine that ran on gasoline. • In 1903 he established an auto making company and began making cars.

17. Automobiles • In 1906 Ford decided he wanted to make an easy to make, inexpensive car that the public could buy. • The Model T was the first car available to the public. During the next 18 years, Ford sold 15 million Model T’s.

18. 1926 Model T

19. Assembly Line • Ford Pioneered a new, fast way to make cars. On The Assembly Line each worker had one specific task that was performed again and again. • Mass Production of goods was the idea of creating large amounts of supplies very quickly. It also made it so products could be sold more quickly

20. Chain Stores • In 1863, with new discoveries in transportation and communication, mail delivery became popular. • Ordinary people were able to use catalogs to order items from companies.

21. Chain Stores • Merchants could sell goods across the country as easily as selling them across town. • Chain stores such as Montgomery Ward, Sears, and Woolworths appeared all over the country and competed with local merchants for business.

22. Montgomery Ward

23. Section 3: An Age of Big Business “Do you know the only thing that gives me pleasure? It's to see my dividends coming in.” John D. Rockefeller

24. Section 3: An Age of Big Business • In Western Pennsylvania, oil was discovered in the 1850’s beneath the ground. Shortly it was discovered oil could be burned to produce heat, light, and to lubricate machinery. • The discovery led to a multimillion dollar petroleum industry

25. Factors of Production • There were three main factors that led the United States from an agriculture society to an industrial one. • Land • Labor • Capitol

26. Land • Transportation advances made it possible for many Americans to move west and tap the natural resources of the country. • Land means not the land itself but all natural resources available. • Natural resources stimulated industry • Ex: Lumber, Coal, Oil

27. Labor • Large amounts of workers were needed to turn natural resources into goods. • Between 1860 and 1900, the population of the United States nearly doubled

28. Capital • Capital = money • It also means the equipment, buildings, machinery, and tools used in production. • The more capital you have the more powerful your business is

29. Corporations • Corporations are companies that sell parts of themselves to the public. The parts are called Stocks or shares of the company. • The people who invest in the company by buying stock are called its shareholders.

30. Corporations • Shareholders earn dividends which are cash payments from the corporations profits. • If the stock rises, the shareholders make money by then selling the stock they bought for more money than they bought it for.

31. Corporations • If a company fails, the shareholders lose their investment, and lose money. • In the late 1800’s hundreds of thousands of people shared company profits by buying and selling profits at markets known as stock exchanges

32. Banks • The growth of corporations helped fuel American Industry after the civil war. • Businesses needed money to start out and at times would take out loans. • Banks would make profits because of the interest on the loan.

33. The Oil Business • John D. Rockefeller made his fortune from oil. • In 1870 when he was 26 he set up his own oil refinery in Cleveland. • The Standard Oil Company set out to dominate the oil industry

34. The Oil Business • Rockefeller eventually acquired the oil refineries in Cleveland and other cities. • Rockefeller used Horizontal integration- combining competing firms into one corporation, to build his empire. • Standard Oil produced their own tank cars, pipelines, and barrels made from forests that the company bought. Standard Oil became the largest corporation of the time period.

35. Standard Oil Trust • Rockefeller lowered his prices to drive rivals out of business • He formed a Trust in 1882, which is a group of companies merged by the same board of directors. • Rockefeller had created a Monopoly, or had total control of the entire oil industry.

36. The Steel Business • The Bessemer Process and the open-hearth process were two new, cheap methods to produce steel that changed the industry • The leading steel maker was Andrew Carnegie.

37. Carnegie • Carnegie used Vertical Integration- acquiring companies that provided the equipment and services he needed. • In 1901 Carnegie sold his company to banker J. Pierpont Morgan. He combined it with other businesses to make Americas first billion dollar industry.

38. Philanthropists • Philanthropy- the use of money to benefit the community. • Rockefeller established the University of Chicago and the Rockefeller’s Institute for Medical Research in NYC. • Carnegie built Carnegie hall, a music hall in NYC. He donated $350 million to various projects.

39. Corporate Dominance • States started making Mergers,or the combining of companies easier. • By 1900 1/3 of all American manufacturing was controlled by less than 1% of the countries corporations • These giant corporations helped the economy, but without competition consumers were victims of high prices.

40. Sherman Antitrust Act • The act was passed in 1890 an sought to prohibit trusts and monopolies. • Unfortunately, it did not clearly define a trust or monopoly, and big businesses were able to get around the law.

41. Section 4: Industrial Workers “We must learn to live together as brothers or we are going to perish together as fools.” Martin Luther King Jr.

42. Section 4: Industrial Workers • Workers paid a price for economic progress. • As mass production spread, the workday became less personal. • Many worked 10 to 12 hours a day, six days a week. • Many lost their jobs when the business wasn’t doing well, or replaced by immigrants willing to work for less pay

43. Accidents Were Common • Steel workers suffered burns from hot spills. • Coal miners died in cave-ins and from the effects of dust and gas. • Garment workers worked in Sweatshops. Sweatshops were overcrowded, had poor lighting, and were fire hazards.

44. Women in the Workplace • Most women had domestic jobs, but the industrial era allowed women to join the workforce, especially the textile industry. • By 1900 over 1 million women worked in industry • Women generally received half the pay of men for the same work

45. Child Labor • Thousands of children under 16 years old worked in factories. • Child labor laws were passed, stated children had to be at least 12 to work. • These were ignored by businesses, and did not apply to farmers

46. Knights of Labor • Labor Unions are workers that organized into groups to demand better pay and work. • One of the first groups, the Knights of Labor became a national organization in the 1880’s. It had more than 700,000 members by 1886. • A number of strikes turned public opinion against the union, and it fell apart in the 1890’s.

47. American Federation of Labor • A group of national trade unions formed the American Federation of Labor in 1881 (AFL) • Led by Samuel Gompers, the organization pressed for better hours, pay, and working conditions. • They practiced Collective Bargaining, which allowed unions to negotiate with management. • Had more than 1.6 million members by 1904.

48. Unions • Economic conditions were hard in the late 1800’s/early 1900’s/ • Workers would strike regularly • Companies would hire Strikebreakers or people that would replace the striking workers

49. Unions • Anti-labor feeling grew when striking workers and police clashed in Chicago in 1886. • Several were killed in the Haymaker Riot.

50. Unions • Workers went on strike in Carnegie’s steel plants in Homestead, PA. • Carnegie replaced the workers with non labor workers, then hired 300 men to protect them • Violence broke out that left 10 people dead.