Transcript The Incorporation of America

AP US: Unit 9
January 13, 2011
With help from Ms. Susan Pojer
Essential Question
Industrialization increased
the standard of living and
the opportunities of most
Americans,
but at what cost?
“The Big Four” Railroad Magnates
Charles Crocker
Collis Huntington
Mark Hopkins
Leland Stanford
In 1869 both companies reached each
other at Promontory Point in Utah.
Railroad Construction
Great advances in railroads also
improved them:
• Steel – Stronger and more durable rails
• Standard track gauge – no need to switch trains
• Westinghouse Air Brake – helped efficiency
and safety
• Pullman Palace Cars – shiny and pretty, but
not so safe
Railroads changed America:
• Unified America
• Connected farms to cities so farmers could make money
on food and urban areas had a market for finished
goods
• Stimulated movement west
– Immigrants lured by RR advertisements (to sell RR land
grants to)
– Farmers lined up on RR lines
• Connected country so farmers began to plow up the
prairie and tear down forests to sell trees
• Changed time – Standard Railroad Time
– Put in place on November 18, 1883
– Set up time zones
•
Created millionaires
Wrongdoing in Railroading
• Corruption was widespread in railroads as
people quickly tried to make profits.
• Stock Watering was used - inflating the value
of a stock with hype before selling it
• Even though they were titans in their time, it
was difficult to turn a profit.
– Pools were invented to divide the business over a
certain area and share the profits.
– More expensive short haul (vs. long haul) prices
also helped the railroads profit – hurt the farmers
though
Government Fights the Railroads
• Farmers (with help from the Grange) finally began to
complain.
• Government passed the Interstate Commerce Act of
1887
– Prohibited rebates and pools and required railroads to
openly publish their rates.
– Forbade unfair labor discrimination against shippers and
outlawed charging more for a short haul.
– Also set up the Interstate Commerce Commission (ICC)
that would enforce the new legislation.
– The problem is the ICC’s control of the railroads was
minimial, but at least it allowed the railroads a place to
disucuss their competition instead of using rate wars. This
was the first attempt by Washington to regulate business
for the good of the people.
Causes of Rapid Industrialization
1. 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 Industrialization
3. Technological innovations.
 Bessemer and open hearth


process
Refrigerated cars
Edison
o “Wizard of Menlo Park”
o 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
U. S. Patents Granted
1790s  276 patents issued.
1990s  1,119,220 patents issued.
Causes of Rapid
Industrialization
4. Unskilled & semi-skilled
labor in abundance.
5. Abundant capital.
6. New, talented group of businessmen
(entrepreneurs) and advisors.
7. Market growing as US population increased.
8. Government willing to help at all levels to stimulate
economic growth.
9. Abundant natural resources.
New Business Culture
1. Laissez Faire  the ideology of the
Industrial Age.
 Individual as a moral and economic
ideal.
 Individuals should compete freely in
the marketplace.
 The market was not man-made or
invented.
 No room for government in the market!
2. Social Darwinism
 British economist.
 Advocate of laissezfaire.
 Adapted Darwin’s
ideas from the
“Origin of Species” to
humans.
Herbert Spencer
 Notion of “Survival of
the Fittest.”
2. Social Darwinism in America
$ Individuals must have
absolute freedom to
struggle, succeed or
fail.
$ Therefore, state
intervention to reward
society and the
economy is futile!
William Graham Sumner
Yale Professor and proponent of Laissez Faire. Sociological work
said government intervention is useless
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??
New Type of Business Entities
1. Pool
1887 Interstate Commerce Act
 Interstate Commerce
Commission created.
2. Trust  John D.
Rockefeller
 Standard Oil Co.
Standard Oil Co.
New Type of Business Entities
2. Trust:
 Horizontal Integration  John D.
Rockefeller

Vertical Integration:
o Gustavus Swift  Meat-packing
o Andrew Carnegie  U. S. Steel
New Type of Business Entities
Iron & Steel Production
U. S. Corporate Mergers
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
% of Billionaires in 1900
% of Billionaires in 1918
The Protectors of Our Industries
The ‘Bosses’ of the Senate
The ‘Robber Barons’ of the Past
Cornelius [“Commodore”] Vanderbilt
Can’t I do what I want with my money?
William Vanderbilt
$ The public be
damned!
$ What do I care
about the law?
H’aint I got the
power?
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.
$ Just another part of the Protestant Ethic
$ The Anglo-Saxon race is superior.
$ Inequality is inevitable and good.
Carnegie and The Gospel of Wealth
$ Should not help the poor.
But instead should support
things that will help people
raise themselves up – like
libraries
$ Wealthy should act as
“trustees” for their “poorer
brethren.”
Andrew Carnegie
Regulating the Trusts
1877  Munn. v. IL
•
Business interests used for public good should be regulated
by state governments
1886  Wabash, St. Louis & Pacific
Railroad Company v. IL
•
states cannot directly regulate interstate commerce…anti
Munn and led to ICC
1890  Sherman Antitrust Act
•
This forbid combinations in restraint of trade – bigness, not
badness was the sin
1895  US v. E. C. Knight Co.
•
Anti-Sherman. Known as the Sugar Trust Case – federal
government cannot regulate manufacturing monopolies
Sherman Anti-Trust Act (1890)
• Benefits:
– First real government regulation of the trusts –
would lead to more
• Problems:
– This was an all talk, no show act as it was unable
to control trusts at all until 1914.
– The one thing the Sherman Anti-Trust Act was
used for was attacking and curbing the power of
labor unions that were deemed to be restricting
trade.
Relative Share of World
Manufacturing
Modern ‘Robber Barons’??
• DBQ on Westward Expansion