1. industrialization and robber barons (website)
TRANSCRIPT
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Unit 3 Part 1Industrialization
Mr. Klein
Fall 2012
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Three Major Advancements
Railroads
Oil Drilling and Refining
Bessemer Process
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1. Railroads
Provided Cheaper Distribution for Goods
Transcontinental Railroad allowedtransport from coast to coast.
Construction of tracks and trains created: Jobs (Immigrants)
Demand for lumber and iron (later steel)
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Transcontinental Railroad
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Leland Stanford
Owned Central Pacific RR
Founded StanfordUniversity
Governor of California
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Transcontinental Railroad
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2. Oil Drilling
First commercial oil well:
Titusville, PA - 1858 Edwin Drake
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What Good is Oil?
No cars!
No gasoline engines!
Oil was refined intokerosene
Used to produce LIGHT
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John D. Rockefeller
Opened Oil Refinery inCleveland, OH
Invented process to createsafe, stable kerosene
Called businessStandard Oil
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Horizontal Integration
Definition: Buying other companies that dowhat you do to eliminate competition.
Goal is to create MONOPOLY
Ex: AT&T buys Verizon, T-Mobile, Nextel, Sprintand Cricket
Now no one else left to buy cell service from!
Have to pay whatever AT&T wants to charge
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Standard Oil Trust
States outlaw monopolies
Rockefeller lawyerSamuelDodd creates a TRUST
40 Companies give sharesto board of trustees
Get shares in Standard Oil
Trust in return
Rockefeller controls boardand thus all companies
Not illegal becausebusinesses still separate
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Oil Business Threatened
Thomas EdisonInvents Incandescent Light Bulb
Pioneers Direct Current
Nikola TeslaPioneers Alternating Current
Gives to Westinghouse
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AC vs. DC
Direct Current (Edisons Patents):
Flows one direction
Easily stored in batteries
Generated as same voltage used in houses
Need many small generating stations
Alternating Current (Teslas Patents):
Current flows two directions
Can have voltage raised and lowered(transformers)
Can travel much longer distances
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The Battle and Winner
Westinghouses GENERAL ELECTRIC CO. gets
contract to build power plants at Niagara Falls
Wh C R F
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What Comes to Rescue ForStandard Oil?
Kerosene replaced byelectricity for lighting.
Gasoline considered adangerous waste product
Internal combustionengine uses as fuel
Rockefeller powersrefineries with gasoline
Becomes popular fuel for
factories
Wh t C t R F
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What Comes to Rescue ForStandard Oil?
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Legacy of Rockefeller
USs Richest Man --
EVER!!!
$340 BILLION net worth in2012 dollars
Bill Gates a mere$136 billion
Donates Nearly HALF ofhis money to charitythrough his Foundation
3 B P
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3. Bessemer Process
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Henry Bessemer
From England
Develops New System toMake Steel
Can make in 15 minuteswhat took 2 Weeks tomake by old methods
Mass Production makelarge amounts of a product
at once
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Andrew Carnegie
From Scotland
Works for Railroad thatneeds to build bridgeacross Mississippi River
No materials strongenough!
Realizes steel is answer
Cant find enough!!
S
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Builds First Modern Steel Mill
Edgar Thomson Works Braddock, PA
225 tons of steel per day
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Growth of Carnegie Steel
Carnegie uses profits to buy 8 more mills
Produces of nations steel
Continues to look for ways to increase
profits
V i l I i
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Vertical Integration
Own all phases of aproducts manufacture
Economies of Scale:
As production
increases, cost per unitgoes down.
Profits Go UP!!
Raw Materials
Limestone QuarriesIron Ore Mines
Coal Mines
Manufacturing
Coke OvensSteel Mills
Distribution
Railroads
Ships
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Effects of Carnegie and Steel
Mass production makes steel CHEAPER Was so expensive used for jewelry and flatware
Becomes material of choice for:
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Pittsburgh - 1890
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Pittsburgh - 1910
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Legacy of Andrew Carnegie
Sold Company in 1901
for $500 million
Became US Steel
Net worth of $314 billionin todays money
Gave away 90% of $$!
Libraries, Museums,Music Hall
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Philanthropic Works
3,000 Libraries
Carnegie Tech (Now part of CMU)
$10 million pension for teachers
Numerous Foundations and Charitable
groups
Organizations for World Peace and Justice
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J. Pierpont Morgan
Banker
Financed Thomas Edison
Morganization
Consolidate inefficientindustries to reducecompetition
Railroads
US Steel
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J.P. Morgan
Net Worth $41.5 Billion(#24)
Bailed out US Governmentin 1895 and several timesduring early 1900s
Was supposed to be onTitanic!!
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Captains of IndustryOr
Robber Barons