American History 2Chapter 14 Presentation

Chapter 14

14.1 The Rise of Industry14.2 The Railroads14.3 Big Business14.4 Unions

Thomas Edison

14.1 The Rise of Industry

• Natural Resources• Workforce• Free Enterprise• Technology

Chapter Standards

ACOS:• 1.) Explain the transition of the

United States from an agrarian society to an industrial nation prior to World War I.

AHSGE Standard V:• 1. Identify and evaluate the events

that led to the settlement of the West.• 2. Evaluate the concepts,

developments, and consequences of industrialization and urbanization.

Natural Resources

• America had plenty of natural resources including water, timber, coal, iron, and copper.

• Railroads brought settlers and miners to the West.

• They used the railroads to send resources back to the East.

Natural Resources• Petroleum was a new

resource in high demand.– It was used to make

kerosene.– Kerosene was used in

lanterns and in stoves.– Edwin Drake drilled the first

oil well in Pennsylvania in 1859.

Edwin Drake

Workforce• America had a large

workforce to contribute to industrial growth.

• These workers also created greater demand for products.

• Population growth was a result of two factors: bigger families and immigration.

Ellis Island Immigrants

Free Enterprise• America’s economic system

contributed to industrial growth.

• Government decisions have a direct and indirect impact on the economy.

• For example, measurements taken of Union soldiers during the Civil War led to the development of ready-made clothes.

Free Enterprise

• American’s supported the idea of laissez-faire.• This means government should have a “hands-

off” policy towards the economy.

Free Enterprise

• Entrepreneurs are rewarded for success in a free enterprise system.

• Entrepreneurs are people who take risks to start businesses to make profits.

Free Enterprise• Supply and demand regulate

prices and wages when a laissez-faire policy is implemented.

• A laissez-faire policy supports government interference in the economy only to protect property rights and maintain peace.

Free Enterprise• The profit motive, or hope to

make money, attracted people of high ability and ambition into business.

• A nation's gross national product is the total value of all goods and services it produces during a year.

Technology

• Alexander Graham Bell invented the telephone in 1876.–Alexander Graham Bell spoke the

first words on a telephone: “Come here, Watson, I want you.”– In 1877 Bell created the Bell

Telephone Company.

Technology

–Today, that company is called the American Telephone and Telegraph Company (AT&T).

Technology

• Thomas Edison invented the phonograph (sound writer), like a record player.

• Thomas Edison established his laboratory at Menlo Park, New Jersey.

Technology

• Edison also perfected the light bulb around 1880 using a bamboo filament.– He also formed a power

company in New York in 1882.– It and other Edison companies

merged to create the Edison General Electric Company in 1889.

– The company is called GE today.– Edison used direct current

electricity.

Technology

• George Westinghouse discovered alternating current.– It was cheaper to produce.– It could travel further and be

boosted at a transformer.

Technology

• Thaddeus Lowe invented the ice machine, forerunner of the refrigerator.

Technology• Gustavus Swift created the

refrigerated railroad car which could ship meat and other goods.

Technology

• In 1889, the first electric sewing machine was invented.

• Cyrus Field laid the transatlantic telegraph in 1866.

• Radio would also be developed during this era.

14.2 The Railroads

• The Transcontinental Railroad

• The Railroad Industry• The Credit Mobilier

Scandal • The Great Northern

Chapter Standards

ACOS:• 1.) Explain the transition of the

United States from an agrarian society to an industrial nation prior to World War I.

AHSGE Standard V:• 1. Identify and evaluate the events

that led to the settlement of the West.• 2. Evaluate the concepts,

developments, and consequences of industrialization and urbanization.

The Transcontinental Railroad

• President Lincoln signed the Pacific Railway Act in 1862.

• Two railroad companies were hired to build a railroad to connect the east and west coasts.

The Transcontinental Railroad• The Union Pacific Company worked

westward from Omaha, Nebraska.– Grenville Dodge engineered the

project for Union Pacific.– They hired veterans, immigrants,

miners, farmers, ex-convicts, and others.

– They shipped their supplies from the Missouri River.

The Transcontinental Railroad

• The Central Pacific Company worked eastward from Sacramento, California.– They could not find enough American workers.– They hired 10,000 Chinese workers.– They shipped their supplies around South America or

across the Isthmus of Panama.• Both companies raced to lay the most track.

The Railroad Industry• The railroad industry helped

other markets grow. • Cornelius Vanderbilt linked

smaller railroad tracks together and made a lot of money.

• He began the first direct rail service from New York City to Chicago.

The Railroad Industry• The American Railway

Association created four time zones.– Local times had depended on

the sun.– Different times created

confusion and danger.– These time zones are still in

effect today.

The Railroad Industry

• The government tried to encourage railroad development by offering land grants.– Companies received land around

the track they laid.– They would resell the land for

profit.• Some people took unfair advantage

of these grants.

The Railroad Industry

• People who loot an industry and give nothing back are called robber barons.

• Jay Gould practiced “insider trading” to his advantage.

• Companies often bribed congressmen to offer more land grants.

The Credit Mobilier Scandal • The Union Pacific Company hired an

outside company—Credit Mobilier—to actually build the tracks.

• Credit Mobilier overcharged for their services.

• Most of the money became the profit of the investors.

• When they needed more money, they bribed congressmen for support.

The Credit Mobilier Scandal

• The congressmen bought stock in Credit Mobilier at a “discounted” price.

• The corruption was eventually investigated.• Even a future U.S. president was involved (James

Garfield).• Despite scandals like this one, some people earned

profits fairly and effectively.

The Great Northern

• The Great Northern Railroad did not receive federal support.

• It was run by James J. Hill.• Hill was not a robber baron. • The Great Northern became the most

successful transcontinental railroad.• It was also the only one that was not

forced to file for bankruptcy.

14.3 Big Business

• Economics• Andrew Carnegie• Monopolies and Trusts• Business

Chapter StandardsACOS:• 1.) Explain the transition of the

United States from an agrarian society to an industrial nation prior to World War I.

AHSGE Standard V:• 1. Identify and evaluate the events

that led to the settlement of the West.• 2. Evaluate the concepts,

developments, and consequences of industrialization and urbanization.

Economics• Corporations began to form.• A corporation is an organization

owned by many people but treated by the law as if it were one person.

• Corporations became bigger and achieved economies of scale.

• Economies of scale refers to the reduction of costs as a result of increased production at a given facility.

Economics

• Economies of scale result in reduced costs and prices.

Economics• All businesses have fixed costs and

operating costs.– Fixed costs are costs the

company has to pay no matter what.–Operating costs are costs that

occur when running a company,– These costs can change

depending on production.

Economics

• Smaller corporations with high operating costs find it hard to compete with larger ones.• Many are forced out of

business by the larger corporations.

Andrew Carnegie

• Carnegie was poor but became successful.

• He invested in companies that supported the railroad industry.

Andrew Carnegie

• Carnegie also used the Bessemer Process.– Sir Henry Bessemer invented a new process for

making high quality steel efficiently and cheaply.– Carnegie opened a steel company in Pittsburgh.

Andrew Carnegie

• Carnegie began the vertical integration of the steel industry.– A vertically integrated

company owns all the different businesses it uses for operation.

– It saved the company money.

Andrew Carnegie

• He also supported horizontal integration.– This is the combining many

firms engaged in the same type of business into one large corporation.

– John D. Rockefeller used horizontal integration also.

John D. Rockefeller

Click the mouse button or press the Space Bar to display the answer.

Click the mouse button or press the Space Bar to display the answer.

Monopolies and Trusts

• Rockefeller’s Standard Oil Company controlled 90% of American oil refining industry.

• Rockefeller created a monopoly.• A monopoly happens when a

company achieves control of an entire market.

• Monopolies are now illegal.

Monopolies and Trusts

• Standard Oil then created the first trust.– A trust is a legal concept that

allows a person to manage another’s property.

– A trustee is the person who manages the money.

• This allowed Rockefeller to control the other companies without actually owning them.

Business• The advertising industry grew as the business industry

grew.• Department stores offered many services in a fancy

environment.• Chain stores offered lower prices without the elaborate

service and decor.• Rural people shopped from mail order catalogues like

Montgomery Ward and Sears, Roebuck.

Read about this moment in history

on page 450.

You’re the Historian!Investigating Standard Oil

• Read pages 452-453.• On a separate sheet of paper,

write the question and answer to the three questions under “Understanding the Issue.”

16.4 Unions

• Working in the United States

• Early Unions• The Struggle to Organize• The American Federation

of Labor• Working Women

Chapter StandardsACOS:• 1.) Explain the transition of the

United States from an agrarian society to an industrial nation prior to World War I.

AHSGE Standard V:• 1. Identify and evaluate the events

that led to the settlement of the West.• 2. Evaluate the concepts,

developments, and consequences of industrialization and urbanization.

Working in the United States• Working conditions were poor.– Long hours– Poor environment– Dangerous machinery– Low wages

• Industrialism increased the standard of living.

• Deflation during the late 1800s caused prices to fall.

• Wages were also cut.

Early Unions

• There were two types of industrial workers:– Craft workers had special skills and training.

(ex: machinists, iron molders, carpenters)– Common laborers had few skills and

received lower wages.

• Craft workers began to form trade unions—unions limited to people with specific skills.

• Employers typically hated unions.

Early Unions

• Industrial unions united craft and common workers in a particular industry.

• Employers tried to undermine the unions by:– Making employees sign oaths not

to join a union.– Firing workers who joined unions. – Hiring strikebreakers to replace

workers on strike.

Early Unions

• Employers also organized lockouts.

• A lockout is a technique for breaking a union in which the company refused to allow the workers on the property and refused to pay them.

Early Unions

• Employers thought unions promoted communism.

• Karl Marx, the founder of communism, argued, “The basic force shaping capitalism is the class struggle between workers and owners.”

• Increased immigration increased fears of political unrest.

The Struggle to Organize

• Railroad workers went on strike and blocked the tracks in the Great Railroad Strike of 1877.– Violence erupted following the

strike.– President Hayes ordered the

army to stop the violence.– Peace was restored.

The Struggle to Organize

• The first nationwide industrial union was the Knights of Labor.– It pushed for better working conditions and

wages.– They used boycotts, arbitration, and eventually

strikes.– The Haymarket Riot undermined the Knights

when police arrested one of their members for bombing police at a protest meeting.

The Struggle to Organize

• The Pullman Strike nearly crippled the economy.– Railroad workers created the

American Railway Union (ARU) in 1893.

– Eugene V. Debs led the ARU.– The Pullman Company was part

of the union.– Three workers were fired for

protesting cut wages.

The Struggle to Organize

– The union organized a strike.–Railroad managers attached the

U.S. Mail cars to their Pullman cars.–When mail delivery was

disrupted, President Cleveland issued an injunction ordering the union to stop the boycott.

The American Federation of Labor

• The AFL was first led by Samuel Gompers.

• It rejected socialism.• The AFL fought for

higher wages and better working conditions.

Working Women

• The number of women in the work force increased after the Civil War.

• Women were paid less than men.• Most unions excluded women.• The Women’s Trade Union

League (WTUL) was the first national association promoting women’s labor issues.

Test Tomorrow!