Transcript The Incorporation of America
Essential Question
Industrialization increased the standard of living and the opportunities of most Americans, but at what cost?
Causes of Rapid 1.
Industrialization Steam Revolution of the 1830s-1850s.
2.
The Railroad fueled the growing US economy: * First big business in the US.
* A magnet for financial investment.
* The key to opening the West.
* Aided the development of other industries.
Causes of Rapid 3.
Industrialization Technological innovations.
* Bessemer and open hearth process * Refrigerated cars * Edison
“
Wizard of Menlo Park
”
light bulb, phonograph, motion pictures.
Thomas Alva Edison
“
Wizard of Menlo Park
”
The Light Bulb
The Phonograph (1877)
The Ediphone or Dictaphone
The Motion Picture Camera
Alexander Graham Bell Telephone (1876)
Alternate Current
George Westinghouse
Alternate Current
Westinghouse Lamp ad
The Airplane
Wilbur Wright Orville Wright Kitty Hawk, NC – December 7, 1903
Model T Automobile
Henry Ford
I want to pay my workers so that they can afford my product!
“
Model T
”
Prices & Sales
U. S. Patents Granted
1790s
276 patents issued.
1990s
1,119,220 patents issued.
Causes of Rapid Industrialization
4.
5.
6.
7.
8.
9.
Unskilled & semi-skilled labor in abundance.
Abundant capital.
New, talented group of businessmen [ entrepreneurs ] and advisors.
Market growing as US population increased.
Government willing to help at all levels to stimulate economic growth.
Abundant natural resources.
Iron & Steel Production
•Oil •Mining •Sugar •Steel •Meatpacking •Beef/Cattle •Construction •Telegraph •Telephone •Railroad •Marketing •Sewing Machine •Vacuums •Typewriters •Automobile •Salt •Coal •Agricultural
1.
New Business Culture
Laissez Faire
the ideology of the Industrial Age.
No room for government in the market.
2.
Social Darwinism
Herbert Spencer
× × × ×
British economist.
Advocate of laissez-faire.
Adapted Darwin
’
s ideas from the
“
Origin of Species
”
to humans.
Notion of
“
Survival of the Fittest.
”
2.
Social Darwinism in America
$
Individuals must have absolute freedom to struggle, succeed or fail.
William Graham Sumner Folkways (1906)
$
Therefore, state intervention to reward society and the economy is futile!
New Business Culture:
“
The American Dream?
”
3.
Protestant (Puritan)
“
Work Ethic
”
* Horatio Alger [100+ novels] Is the idea of the
“
self-made man
”
a MYTH??
1.
New Type of Business
Pool
Entities
2.
Trust *
John D. Rockefeller Standard Oil Co.
FORMATION Organized by associates and legalized through state charter OWNERSHIP Stockholders, according to number of shares CONTROL AND MANAGEMENT Through Board of Directors, elected by the stockholders (usually one vote per share of stock held) NET PROFITS AND LOSSES Dividends: to stockholders = profits Lose: only the amount invested by stockholders according to number of shares LIMITED LIABILITY
Conglomerate Pool Trust (Monopoly) Holding Company A group of unrelated business owned by a single corporation. Still used today by companies that merge.
Competing companies that agree to fix prices and divide regions among members so that only one company operates in each area. Outlawed today.
Companies in related fields agree to combine under the direction of a single board of trustees, which meant that shareholders had no say. Outlawed today.
A company that buys controlling amounts of stock in related companies, thus becoming the majority shareholder, and holding considerable say over each company's business operations. Outlawed today.
2.
New Type of Business Entities
Trust: * * Horizontal Integration Vertical Integration : A. Gustavus Swift
John D.
Rockefeller Meat-packing B. Andrew Carnegie
U. S. Steel
New Type of Business Entities
Standard Oil Co.
U. S. Corporate Mergers
Industrial Consolidation: Iron & Steel Firms
Captain of Industry
•Monopolized the steel industry •Rags to riches story---came from
Scotland very poor.
•Used scientific ideas (
Bessemer Process ) to develop a better way to produce steel and sell a quality a product for an inexpensive price.
•Used
Horizontal integration .
Carnegie Picture
Captain of Industry
•Came from a wealthy family •Bought a substitute during the Civil
War.
•Formed the first modern corporations
in the oil industry
Standard Oil
•Was the
first billionaire
1900.
in the U.S. by
•Used
Vertical Integration and Horizontal Integration to gain a monopoly in the oil business.
•Formed a steamship company in 1829 •Dominated shipping along the Atlantic •1849 established steamship that carried people from New York to San Francisco in Gold Rush days •After Civil War Vanderbilt bought most railroad lines from New York to Chicago • Worth over $100 million
New Financial
*
Businessman
The Broker: J. Pierpont Morgan
Wall Street – 1867 & 1900
The Reorganization of Work
Frederick W. Taylor The Principles of Scientific Management (1911)
The Reorganization of Work
The Assembly Line
“
The Protectors of Our Industries
”
The
“
Robber Barons
”
the Past of
Cornelius [
“
Commodore
”
] Vanderbilt
Can
’
t I do what I want with my money?
$ $ $ $
The Gospel of Wealth:
Religion in the Era of Industrialization Wealth no longer looked upon as bad.
Viewed as a sign of God
’
s approval.
Christian duty to accumulate wealth.
Should not help the poor.
Russell H. Conwell
“Robber Barons”
Business leaders built their fortunes by stealing from the public. They drained the country of its natural resources.
They persuaded public officials to interpret laws in their favor. They ruthlessly drove their competitors to ruin. They paid their workers meager wages and forced them to toil under dangerous and unhealthful conditions.
“Captains of Industry”
The business leaders served their nation in a positive way.
They increased the supply of goods by building factories.
They raised productivity and expanded markets.
They created jobs that enabled many Americans to buy new goods and raise their standard of living.
They also created museums, libraries, and universities, many of which still serve the public today.
“
On Wealth
” $ $ $ $
The Anglo-Saxon race is superior.
“
Gospel of Wealth
”
(1901).
Inequality is inevitable and good.
Wealthy should act as
“
trustees
”
for their
“
poorer brethren.
”
Andrew Carnegie
Philanthropist
•Gave millions to colleges
and libraries.
•It was the sacred duty of
the wealthy to give back to society who has given to him.
•Stressed education as a
means to better one
’
s self .
Cartoon Carnegie
•Carnegie Hall
Philanthropist
•Gave millions of his
money to hospitals and colleges.
•University of Chicago •Spellman College •National Parks •United Nations •Williamsburg •Cancer Research
Rockefeller
•Philanthropist donated $1 million to Vanderbilt University
BIGGER IS BETTER
A
trust or monopoly
controls an entire industry •make product cheaper •lower prices for customer
The Problem w/ Monopolies
• Artificially high prices • Highly unstable economy – Panics of 1837; 93 • Threatened ability of individual • Threat to the wage earning husband • Class resentment • Gap b/w rich and poor widening
Wealth Concentration Held by Top 1% of Households