17b industrial growth
TRANSCRIPT
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Life in the 1860sLife in the 1860s No indoor electric lights No refrigeration No indoor plumbing Kerosene or wood to heat
Wood stoves to cook with Horse and buggy In 1860, most mail from the
East Coast took ten days toreach the Midwest and three
weeks to get to the WestCoast. A letter from Europe to a
person on the frontier couldtake several months to reachits destination.
Life in the 1900sLife in the 1900s US Govt issued 500,000
patentselectricity Refrigerated railroad cars Sewer systems and sanitation Increased productivity made
live easier and comfortable. Power stations, electricity for
lamps, fans, printing presses,appliances, typewriters, etc.
New York to San Francisco to
10 days using railroad. 1.5 million telephones in useall over the country
Western Union Telegraphwas sending thousands ofmessages daily throughout
the country.
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Natural ResourcesCapital
(gold, silver and banking)
US Government supportDesire: Creative inventors and
industrialists
Transportation SystemLabor force (immigrants)
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Oil
Mining
Sugar
Steel
Meatpacking
Beef/Cattle
Construction
Telegraph
Telephone
Railroad
Marketing
Sewing Machine
Vacuums
Typewriters
Automobile
Salt
Coal
Agricultural
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Immigrants from Europe
Old New New New
Immigrants provided the laborforce for industrial expansion of
the US.
They also became the customerswho in return bought the items
produced.
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0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
1871-
1880
1881-
1890
1891-
1900
1901-
1910
1911-
1920
Old Ne
1,593,000181,18802,753,00926,000
1,110,0001,847,0001,069,0005,780,000540,0002,928,000
Chart: Rise of Immigrants
OldOld = Englandand Germany
NewNew= Southern Europe: Italy, Russia, Poland
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Pullman Cars
What helped the railroad industry prosper?Bessemer Process
Westinghouse Air Brakes
Steel Rails
Standard Gauge
What helped the railroad industry prosper?Bessemer Process
Westinghouse Air Brakes
Steel Rails
Standard Gauge
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ExpansionofRailroads1869, 30,000 milesoftrack1900, 200,000 milesoftrackDistribution System to the marketplaceSymbol ofgrowth
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In 1856 Henry Bessemer deviseda way
of converting iron into steel on alargescale.
His invention involved blowing airthrough molten iron in a converter, orfurnace, in order to burn off the excess
carbon.His invention revolutionized the
Industrial Age.
New Uses for Steel
Steel used in railroads, barbed wire,farm machines
Changes construction: BrooklynBridge; steel-framed skyscrapers
In 1856 Henry Bessemer deviseda way
of converting iron into steel on alargescale.
His invention involved blowing airthrough molten iron in a converter, orfurnace, in order to burn off the excess
carbon.His invention revolutionized the
Industrial Age.
New Uses for Steel
Steel used in railroads, barbed wire,farm machines
Changes construction: BrooklynBridge; steel-framed skyscrapers
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BETWEEN 1860 TO 1900BETWEEN 1860 TO 1900Elevator---1852
BessemerProcess---1852
Sewing Machine---1853
Dynamite---1867
Typewriter---1868
Levi Blue Jeans/Basketball---1873
Telephone---1876
Phonograph---1878
Light bulb and cash register---1879
Zipper---1883
Gasoline automobile and skyscraper---1885New YorkCity---first city to have electricity--1890
Radio---1895
Subway---1897
X-ray---1900
Between1800 to
1900, US Govt.
issued 500,000patents
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With theBessemer Process
&Carnegie steel,Skyscrapersrevolutionized the
buildingindustry..
Major cityskylines would bedotted with this
new type ofbuilding as the
1900s begin.
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Thomas Alva EdisonThomas Alva Edison
Wizard of Menlo ParkWizard of Menlo Park
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Edison Inventions helped to shape modern societyEdison Inventions helped to shape modern societyMore than 1,000 inventions patented
Light bulbPhonograph
Incandescent electric lampStarter for automobiles that eliminated hand crank
BatteriesPerfected stock ticker
New York City first city to powered by electricityThe motion picture camera & projector
First used hello as phone greetingHelped Alexander G. Bell with the telephone
Edison Inventions helped to shape modern societyEdison Inventions helped to shape modern societyMore than 1,000 inventions patented
Light bulbPhonograph
Incandescent electric lampStarter for automobiles that eliminated hand crank
BatteriesPerfected stock ticker
New York City first city to powered by electricityThe motion picture camera & projector
First used hello as phone greetingHelped Alexander G. Bell with the telephone
Wizard of Menlo ParkWizard of Menlo Park
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Alexander Graham BellAlexander Graham Bell
Telephone (1876)Telephone (1876)
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The AirplaneThe Airplane
Wilbur Wright Orville WrightWilbur Wright Orville Wright
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Model T AutomobileModel T Automobile
Henry FordHenry Ford
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BETWEEN1860TO1900Specialty stores----sold single line of goods
Department stores---combined specialty stores
Chain stores---stores with branches in cities
Mail catalog stores
New ways to advertise
Montgomery Wards, J.C.Montgomery Wards, J.C.Penney, Macys, Sears &Penney, Macys, Sears &
Roebuck, and WoolworthsRoebuck, and Woolworths
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An economic belief supported bythe U.S. that opposes the
government regulating business.
In the late 1800s businesses operated withoutmuch government regulation. This is known as
laissezlaissez--fairefaire economics.
Laissez-faire means allow to beallow to be or thegovernment stays out of a personsgovernment stays out of a persons
businessbusiness.
Laissez faire supports our economic system of
capitalismcapitalism
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1. Laissez Faire-> the ideology of the Industrial Age.
a. Individuals should compete freely in themarketplace.
b. Own their own business &use their skills to betterour culture &make profit for themselves.
c. The market was not man-made or invented&no
room for government in the market.d. Government shouldallow for natural competition
for the betterment of our society.
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Economic system characterized
by private property ownershipIndividuals & companies compete for their own
economic gain (ProfitProfit)
Capitalists determine the prices of goods &services.
Production & distribution are privately orcorporately owned.
Reinvestment of profits
Supports laissez faire & the free enterprisefree enterprise
system
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1790s 276 patents issued. 1990s 1,119,220 patents issued.
Gave an inventor the right to make and sellaninvention.
1790s 276 patents issued. 1990s 1,119,220 patents issued.
Gave an inventor the right to make and sellaninvention.
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Economic system based on
cooperation rather thancompetition
Many Americans opposed capitalism and
believed a socialistic economysocialistic economy would better suitthe US because some capitalists were corrupt.
Believes in government ownershipgovernment ownership of businessand capital (money, natural resources)
Government controls production, sets wages,prices and distributes the goods. No profit or
competition.
Opposite oflaissez fairelaissez faire and capitalismcapitalism
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MORRILL TARIFF ACT, 1862MORRILL TARIFF ACT, 1862To protect & encourage American industry, Congress
passed this tariff after the South seceded from the Union.
NATIONAL BANKING SYSTEM, 1863NATIONAL BANKING SYSTEM, 1863To stimulate the economy & set up a banking system,
Congress passed this act which was a significant steptowards a unified, national banking system until replacedby the Federal Reserve in 1913.
MORRILL ACT, 1862MORRILL ACT, 1862To promote education, Congress provided grants of publiclands to the states for support of education. Land-grant
colleges
LAND GRANTS TO RAILROADSLAND GRANTS TO RAILROADSUS Govt. donated land to railroad companies to encourage
growth of this mode of transportation. US Govt. donatedapprox. 160 million acres of land.
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Corporation:Corporation: form ofbusinessconsisting ofa groupof
people authorized by law toact asasingle personand withthe ability tosell sharesofstockto raise capital
Shareholdersor stockholdersShareholdersor stockholders:: investors whoinvesttheir money intoacorporation who each receive ashare of
ownershipinproportion to the amount they invested
ifthe corporation makesaprofit---thaninvestorgetsadividenddividend or ashare ofthe profit.
Limited liability:Limited liability: Important aspect ofacorporationislimited liability. Shareholders have the right toparticipatein the profits, through dividendsand/or the appreciationof
stock,but are not held liable for the company's debts.
Risk is spread over theRisk is spread over the shareholdersshareholders so if theso if thecompany goes bankrupt, the loss is not socompany goes bankrupt, the loss is not so
devastatingdevastating
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FORMATION Individual or person decides tooperate a business
OWNERSHIP IndividualIndividual
CONTROLANDMANAGEMENT
By owner or persons delegated by
the proprietor
NETPROFITSLOSSES
Profits to ownerLosses absorbed by owner
UNLIMITED LIABILITY
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FORMATION By agreement between associates(partners)
OWNERSHIPJointly by two or more individuals;Jointly by two or more individuals;
or by terms of partnershipor by terms of partnershipagreementagreement
CONTROLANDMANAGEMENT
By partners or persons they
delegate
NETPROFITSLOSSES
Shared according to partnership
agreement
UNLIMITED LIABILITY
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FORMATION Organized by associates andlegalized through state charter
OWNERSHIP Stockholders, according to numberof shares
CONTROLANDMANAGEMENT
Through Board of Directors, elected
by the stockholders (usually one
vote per share of stock held)
NETPROFITSANDLOSSES
Dividends: to stockholders = profitsLose: only the amount invested by
stockholders according to number ofshares
LIMITED LIABILITYLIMITED LIABILITY
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Conglomerate A group of unrelated business owned by a
single corporation. Stillused today bycompanies thatmerge.
PoolCompeting companies thatagree to fix pricesCompeting companies thatagree to fix prices
and divide regions amongmembers sothatand divide regions amongmembers sothatonly one companyonly one company operates ineach area.operates ineach area.
Outlawed today.Outlawed today.
Trust(Monopoly)(Monopoly)
Companies inrelated fields agree to combineunderthe directionof a single board of
trustees, which meantthatshareholders had
no say. Outlawed today.
HoldingCompany
A company thatbuys controllingamounts ofA company thatbuys controllingamounts ofstock inrelated companies, thus becomingthestock inrelated companies, thus becomingthemajority shareholder, and holding considerablemajority shareholder, and holding considerablesay overeach company's business operations.say overeach company's business operations.
Outlawed today.Outlawed today.
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BIGGER IS BETTER
A trust or monopolytrust or monopoly
controls an entireindustry
make product cheaper
lower prices to customer
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Coke fields
purchasedby
Carnegie
Coke fields
Iron ore deposits
purchasedby
Carnegie
purchasedby
Carnegie
Coke fields
Iron ore deposits
Steel mills
purchasedby
Carnegie
purchasedby
Carnegie
purchasedby
Carnegie
Coke fields
Iron ore deposits
Steel mills
Ships
purchasedby
Carnegie
purchasedby
Carnegie
purchasedby
Carnegie
purchasedby
Carnegie
Coke fields
Iron ore deposits
Steel mills
Ships
Railroads
purchasedby
Carnegie
purchasedby
Carnegie
purchasedby
Carnegie
purchasedby
Carnegie
purchasedby
Carnegie
VerticalIntegrationVerticalIntegration
You controlallphases ofproductionfrom the rawmaterialtothe finished product
HorizontalIntegrationHorizontalIntegrationBuy outyourcompetitionuntil
you have controlof a single areaof industry
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Advantages Vertical IntegrationAdvantages Vertical IntegrationAdvantages Vertical IntegrationAdvantages Vertical Integration
You are always in control of supply of theYou are always in control of supply of theproducts you needproducts you need
In control of labor cost, land/resourcesIn control of labor cost, land/resources Always in control of the costAlways in control of the cost
Schedule your production of autosSchedule your production of autosbecause you are in control of all factorsbecause you are in control of all factors
You are always in control of supply of theYou are always in control of supply of theproducts you needproducts you need
In control of labor cost, land/resourcesIn control of labor cost, land/resources Always in control of the costAlways in control of the cost
Schedule your production of autosSchedule your production of autosbecause you are in control of all factorsbecause you are in control of all factors
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Horizontal Integration
Horizontal Integration
Horizontal Integration
Horizontal Integration
Examples
Standard Oil
Carnegie Steel
Swift & Company: meat producers
United Fruit Company: bananas
Dole Pineapple
Examples
Standard Oil
Carnegie Steel
Swift & Company: meat producers
United Fruit Company: bananas
Dole Pineapple
Horizontal IntegrationBuy out your competitionuntil you have control of a
single area of industry
Horizontal IntegrationBuy out your competitionuntil you have control of a
single area of industry
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Modern Day Examples ofModern Day Examples ofH
orizontal IntegrationH
orizontal Integration
Modern Day Examples ofModern Day Examples ofH
orizontal IntegrationH
orizontal IntegrationMicrosoftMicrosoft
PG & EPG & E
ComcastComcast
StarbucksStarbucks
MicrosoftMicrosoft
PG & EPG & E
ComcastComcast
StarbucksStarbucks