the first industrial revolution began in the 1700s when people stopped making things by hand and...
TRANSCRIPT
IndustrializationTechnology, Big Business, and the Rise of Labor
Unions1859-1914
The first Industrial Revolution
Began in the 1700s when people stopped making things by hand and began using machines
The spinning jenny, steam engines, and the cotton gin are early examples of the technology used
Steam Power
Invented by the Scottish Mechanical engineer James Watts Improved on design by
other inventors
Key Power source of the Early Industrial Revolution Replaced human,
animal, wind and water power
Allowed industries to be built anywhere.
Industrial Innovation
The Second Industrial Revolution (1865-1914) was sparked by several inventions and discoveries Bessemer Process, Steam Train, Oil, Electricity, etc.
Steel
The Bessemer Process Invented in 1859 by William
Kelly (U.S.) and Henry Bessemer (G.B.)
Used hot air to remove impurities
Produced more steel in 1 day than previously produced in a week
Improved and adapted by William Holley – significantly increased production
Why is this important?
Bessemer Advantages Allowed development of
Industrial cities Pittsburgh, PA – Gary, IN –
Cleveland, OH
Allowed railroad industry to replace iron rails Last longer and easier to make
Steel used in construction Lighter weight – can build
taller buildings (Skyscrapers)
Resists rust and corrosion Used in nails, wire, etc.
Steel Mills Bessemer process
allowed development of steel mills
Pittsburgh became production capital of U.S. Brought jobs and
prosperity
Pollution choked the city and covered it in soot
Rivers turned yellow
Oil Petroleum used by Europeans to grease wagons
& tools
Late 1850s process of refining crude to kerosene Replaced whale oil for lamps and lighting
Oil Drilling In 1859 Edwin Drake used a steam powered
drill to search for oil under ground Called Drake’s Folley (no one believed it
would work) After production topped 20 Barrels /day others
tried Similar to Gold Rush (Oil called “Black Gold”)
By 1880 25 million Barrels produced in PA alone
Oil Products
Kerosene, Waxes, Lubricants, Petroleum Jelly, etc.
Transportation Railroads
Steam Ships
Horseless Carriages
Airplanes
Steam Trains and Railroads
The locomotive was invented by Richard Trevithick in 1804
Rapidly refined and became a viable transportation by 1830s
In U.S. the Civil War led to rapid expansion of rail system in U.S.
As price of steel dropped expanded faster Steel use was faster and stronger than old iron
rails Steel cost 12 dollars a ton in 1873
Steam Trains
Locomotives rapidly improved Early trains were slow and hard to stop
George Westinghouse invents airbrakes 1868 Allowed cars and locomotive to brake
simultaneously
Granville woods improved Airbrake and developed a communication system for trains
Standard track width (gauge) was adopted No need to change trains for different tracks Improves efficiency and speed of travel
Transcontinental Railroad
First completed in 1869 at Promontory Point, UT Golden Spike driven
by Leland Stanford
Connected the country by land
Allowed rapid transportation of people and goods
The original "golden spike", on display at the Cantor Arts Museum
Affects of Rail travel
Linked small towns to large cities
Rapid western expansion/settlement
Urban growth/Job Growth
Expand other industries
National Distribution of goods
National standard time to coordinate schedules Began in 1883 by agreement of Rail owners in
U.S. and Canada Made into law with the 1918 Standard Time Act
Steam Ships
First came into use in the 1800s
Began with sailing ships hybridized to paddle ships
Screw-Propeller adopted later on
Rapid cross ocean travel First Atlantic crossing
credited to the SS Savannah May 1819
Horseless Carriages
First developed using steam by French military officer Nicholas-Joseph Cugnot (inefficient and loud)
Gasoline fueled internal combustion engine built by Nicholas A. Otto in 1876
In 1893 Charles and J.Frank Duryea built the first “car”
Suspension Bridge
Uses steel cables to suspend a roadway over gaps
First suspension bridge in the U.S. was the Brooklyn Bridge that crossed the East River in NYC At the time was longest bridge in the world
Airplanes
Invented in 1903 by Orville and Wilbur Wright First successful flight at Kitty Hawk, NC Lasted only 12 seconds but proved it was
possible
Communication
Telegraph Invented by Samuel Morse in 1837
Allowed for communication with electricity Used a series of dots and dashes called Morse
Code Led to a company called Western Union
Had 2,000 offices by 1866 Could rapidly communicate over long distances
Telegraph First commercial telegraph line completed
May 1844
The first message sent on theis line was “What hath God Wrought” The telegraph embossed paper with a series
of dots and dashes to be interpreted
Telephone Invented by Alexander
Graham Bell
First successfully demonstrated at Philadelphia Centennial Exposition in 1876 By 19000ver 1 million
installed in homes and businesses
Required operators to connect lines (created job opportunity for women)
Typewriter
Christopher Sholes developed typewriter in 1867
Sold patent to E. Remington & Sons. Produced easily legible documents Used carbon paper and strike arms to print Created another job opportunity for women
Electricity
First studied by the Greek Thales of Miletus in 600 B.C.E.
Renewed interest in the 1600s but saw little progress until 19th century Ben Franklin’s kite experiment in 1750s
proved lightning was electrical energy
In early 1800s other scientists began to experiment leading to the development of communication, lighting and other devices
Thomas Edison Opened invention business at Menlo
Park NJ 1876
Used Direct Current (DC) for electrical inventions
Held over 1,000 patents when he died in 1931
Major inventions include: Multi-message Telegraph Electric Lightbulb Phonograpn Motion Picture Machine Telegraphic Stock Ticker First Electric Power Plant Electric vote counter
Westinghouse and Tesla
A.C. Electricity
Alternating Current (AC)developed by Tesla & Westinghouse
More efficient than D.C. Could be transferred
long distances and distributed
Allowed cities to be lighted by electricity
Made electric streetcars possible
Tesla’s other inventions
Tesla Coil
Radio
Remote control
Fluorescent light
X-rays
Industrial Revolution Technology
The key to all of these inventions was Technology Technology is advancing knowledge
Innovation drives technology
Scientific experimentation drives innovation
Machines replace human work through Technology
Big Business Terms:
Corporation - a form of group ownership in which a number of people share the ownership of a business
Monopoly – complete control of a product or service
Cartel – an arrangement in which businesses making the same product agree to limit production to keep prices high
Horizontal integration – a system of consolidating many firms in the same business to lower production costs
Vertical integration – the practice of gaining control of many different businesses that make up all phases of a product’s development
Trust – a situation in which companies assign their stock to a board of trustees, who combine them into a new organization
Big Business Terms
Entrepreneur – people who invest in a product or enterprise to make profit
Protective Tariff – taxes that make imported goods cost more in order to protect local industry
Laissez-faire – policies that allow business to operate with minimal government regulation
Social Darwinism – an application of Charles Darwin’s work which held that wealth was a measure of one’s inherent value and those who had it were the most “fit”
ICC – the Interstate Commerce Commission, a government body set up to oversee railroad operations
Sherman Antitrust Act – a bill passed in 1890 which outlawed any trust that operated “in restraint of trade or commerce among the several states”
Big BusinessPeople
John D. Rockefeller – an oil tycoon who made deals with railroads to increase his profits
Andrew Carnegie – a steel tycoon who used vertical integration to increase his power
J.P. Morgan – Financier and banker dominated finance and industrial consolidation bought U.S. Steel from Carnegie
Cornelius Vanderbilt – railroad tycoon who dominated the eastern rail industry and expanded it west to Chicago
Industrialization Changes Business
Practices• Business leaders combined funds and
resources.
• Investors formed corporations that protected them from losing more than original investment.
• A corporation could operate in different regions.
The BIG Picture Businessman like
Rockefeller and Carnegie use new methods to expand business
New methods and help from the gov’t. allow business to control the U.S. Economy
1870
1880
1890
1900
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
U.S. Businesses, 1870-1900
U.S. Busi-nesses, 1870-1900
New Business Methods:
Advertising Department Stores:
1862, A.T. Stewart, N.Y.C.
Provides many different consumer goods
Shopping becomes recreational
Urban Consumers
Mail-Order Catalogs: Montgomery Ward,
Chicago Sears & Roebuck,
1890s Supply rural
consumers
New Business Methods: Rise of Corporations
Corporations fueled the rise of “Big Business” Small business could not compete! Shut down in hard
times!
Rise of Corporations
Corporation: organization owned by many people but treated by law as though it were a person. Stockholders buy stock… Raise money, spread the risk! (vs. partnership,
proprietorship)
Created Economies of Scale… Could produce goods more efficiently, which allowed to the
rise of “big business”
Produce more goods @ cheaper price, continue to operate in harsh economic times, drive out small competition!
New Business Methods
Corporations worked to maximize profits by:• paying workers low wages
• paying lower prices for raw materials
• supporting research labs
Standard Oil Factory
New Business Methods: Help from
the Gov’t Santa Clara
County v. Southern Pacific Railroad Company SCOTUS, 14th
Amendment and Corporations…
Received protection just as individuals would!
New Business Methods: “Pooling”
Competition created problems; low prices for consumers!!!
Railroad pools: associations of competing railroads “for the
purpose of a proper division of the traffic at competitive points and the maintenance of equitable rates that may be agreed upon.”
Interstate Commerce Act, 1887
New Business Methods: BIG
Business! By 1870s, competing businesses were merging
together, creating “big business”1. Mergers, Consolidation of Industry
2. Creation of Trusts
3. Holding Companies
Example of consolidation: 1870, Rockefeller’s Standard Oil Company
owned 2% of the country’s crude oil… By 1880 – it controlled 90% of U.S. crude oil!
How did it do so???
New Business practices
Monopolies: Single company
achieves control of an entire market!
Many states begin outlawing…
Trusts: Legal maneuver allowing
trustee to control several companies & run them as one.
Holding Companies: Produce no actual product. Controls several
companies, merging into one large enterprise!
VERTICAL INTEGRATION
“Carnegie Steel”
Steel Refineries
Railroad Lines
Raw Materials
Limestone Quarries
Iron Ore Fields
Coal Mines
HORIZONTAL INTEGRATION
“Standard Oil Company”
Refinery Refinery Refinery
New Business Methods: Trusts
… by creating Trusts! Stocks would be
traded in for trust certificates.
“Super-Corporation” created from many small corporations!
Standard Oil, 1882 – first TRUST!
New Business Methods:
Investment Banking J.P. Morgan
Buy large blocks of stock from companies looking to sell… (discounted)
Re-sell the stock for profit!
These investment bankers became interested in holding companies and trusts…
United States Steel, 1901
Captains of Industry?
Were the tycoons “robber barons” who swindled the poor and drove small businesses under…
or “captains of industry” who served the nation and made prices of goods cheaper?
Is Big Business Bad for Small
Businesses?
Or Is Big Business Good for the
Nation? Provides Jobs
Allows for product innovations
Financially supports universities, libraries, museums, etc.
Survival of the Fittest
Charles Darwin’s idea of evolution of species
applied to American capitalism
led to the idea of Social Darwinism
The belief that wealth was a measure of a person’s value and those who had wealth were
most “fit” to survive
Conflict with Business
Social Darwinists believed government should stay out of private business and thought it was wrong to use public funds to assist the poor.
Americans who worried about the methods of industrialists called for federal regulation of business practices.
Sherman Antitrust Act
The ICC and the Sherman Antitrust Act began a trend toward government regulation of corporate power.