Industrial Development

How do you think that industrial development affected our society?

USA becomes Industrial Leader

• By 1880—United States world’s leading producer of goods

• Why?– Unlimited labor force (freedmen, poor whites,

immigrants) – abundant coal supply – iron mining– discovery oil (Edwin Drake in Titusville, PA) – development of the railroad (network to ship and

transport goods)

Public Support• Laissez-faire: “hands off” gov’t approach

• Unlimited immigration = labor no education, willing to work for little pay

• High tariffs support American industry

• Public financing of RR and businesses

Entrepreneurs and Innovations:late 1800’s see an explosion of inventions and

innovations • Telephone: Alexander G. Bell

• Light bulb: Thomas Edison

• Electric Power: Nikola Tesla (AC Power)

• Bessemer Process: Henry Bessemer, removes impurities from iron = steel!

• Typewriter invented by Christopher Sholes – creates work for women!

Entrepreneurs and Innovations

• Photography—George Eastman• Phonograph and Motion pictures—Edison,

provides entertainment• Radio—Nikola Tesla, improves

communications

• Retail and canned foods• rise of retail industry, mail order,

department stores

Entrepreneurs and Innovations

• John Rockefeller— oil• Andrew Carnegie— steel• JP Morgan— big business finance• Vanderbilt— railroads• DuPont— chemical manufacturing (first

dynamite)• Westinghouse— electric industry• Duke—tobacco

Railroads lead the way….

• “iron horse”

• Leading consumer of goods, better transportation= settlement of west

• transcontinental completed in 1869

• Standardization of time: time zones—Eastern, Central, Mountain, Pacific

Railroad Prosperity• Growth of urban

areas• Development of

Company Towns: Pullman, IL made RR cars

• Railroad scandals: gov’t land, graft, and stock fraud, and strikes

Grange and the RRs• Railroad abuses—

unfair rates, rebates, etc.

• Granger laws (eventually ruled unconstitutional by Wabash v. Illinois)

• Interstate Commerce Act: attempt to regulate business, required RRs to post rates and fees

BIG BUSINESS• Corporations develop

• Limited liability leads to public investment• Mass market selling

Advantages Disadvantages

Greater efficiency: mass production

Unfair competition: no regulations leads to monopolies

Economy of scale: reduction in cost as output increases

Corruption and bribery

Manager system:

Owner Managers Supervisors Workers

Destroyed labor union movements: sought out court orders, denied recognition

Productivity studies: to increase worker productivity

Corrupt practices: horizontal and vertical integration

Social Darwinism

• Based on Darwin’s theory of evolution• Survival of the fittest also applies to the business

world: best business will thrive• Justified the wealth of big business

• Gospel of Wealth: Andrew Carnegie, justified wealth of rich, idea is to help the poor help themselves

• Rags to riches: the American Dream• Horatio Alger—dime novels telling of adventure

and opportunity in the West

Robber Barons• Robber Baron – Captain of Industry

– B/c extreme profits made by business owners by using corrupt business practices and at the cost of the employee!

• PHILANTHROPY begins: practice of giving away large sums of money, helped improve the image of robber barons

• Big Business practices exposed, public begins to call for regulation:– Sherman Anti-Trust Act (1890) weak law, but set

precedent for future laws

Essential Questions

1. What important industrial developments impact life in the late 1800s?

2. How did businesses and industrial leaders accumulate wealth and wield political and economic power?

3. How did the captains of industry accumulate wealth and power?

Review Questions!

1. Which if the following is NOT a reason the United States was able to become an industrial leader?

a) Ample people to work

b) Development of the railroads

c) Discovery of oil in Pennsylvania

d) The gold mines

2. Philanthropy

a. helped improve the image of robber barons

b. was when churches accepted new members

c. prevented new immigrants from moving to the United States

d. regulated business

3. In the 19th Century, government attempts to regulate industry in the U.S. included the Interstate Commerce Act and the Sherman Antitrust Act. What posed the BIGGEST obstacle to enforcement of these laws?

a. The rulings of the Supreme Courtb. The business tactics of industrialistsc. The use of vertical integrationd. The theory of Social Darwinism

4. The Bessemer Process developed by Henry Bessemer

a. developed the new light bulb

b. made the production of steel cheap and easy

c. purified oil

d. was a new system of farming

5. Whose life provided the BEST evidence to support some people’s belief in Social Darwinism in the late 19th century?

a. Mary Harris Jones

b. Eugene V. Debs

c. Andrew Carnegie

d. Charles Darwin

6. The work of which American inventor had the GREATEST effect on the growth of industry?

a. George Westinghouse

b. Alexander Graham Bell

c. Christopher Sholes

d. Henry Bessemer

7. Why did George Pullman create a company town for his employees?

a. He wanted to thank workers for their dedication and hard work

b. He wanted to control his workers’ activities and lives

c. He wanted to share his wealthy with his workers

d. He wanted to eliminate long commutes for his workers

“No man, however benevolent, liberal, and wise, can use a large fortune so that it will do half as much good in the world as it would if it were divided into moderate sums and in the hands of workmen who

had earned it by industry and frugality.” – Rutherford B. Hayes

8. Which of the following people could BEST be described by Rutherford B. Hayes’s words benevolent, liberal, and a large fortune?

a. Thomas Edison

b. Eugene V. Debs

c. Charles Darwin

d. Andrew Carnegie

9. How did the railroads both benefit from and contribute to the industrialization of the United States?

a. The railroads needed government protection, and their development helped government grow

b. The railroads used new inventions and brought people to see the inventions

c. The railroads used steel and coal and delivered both to new markets

d. The railroads needed passengers, and passengers needed to get to new industries

10. This was a disadvantage of big business

a. reduced costs of production

b. faster production rates

c. destruction of labor union movements

d. inflation