Transcript Chapter Introduction Section 1: The Rise of Industry Section 2: The Railroads Section 3: Big Business Section 4: Unions Visual Summary.

Chapter Introduction
Section 1: The Rise of Industry
Section 2: The Railroads
Section 3: Big Business
Section 4: Unions
Visual Summary
Did Industry Improve
Society?
Many factors promoted
industrialization, including cheap
labor, new inventions and
technology, and plentiful raw
materials. Railroads rapidly
expanded, while government
policies encouraged economic
growth.
• What changes in lifestyle do you
think occurred because of
industrialization?
• How do you think
industrialization changed
American politics?
The Rise of Industry
What economic policies
allowed industries to
expand after the Civil War?
The Railroads
How did the railroads
encourage the settlement
of the Plains and the West?
Big Business
Why did captains of
industry such as Andrew
Carnegie expand their
businesses through new
ways of organization?
Unions
Why did workers form
unions?
Big Ideas
Government and Society The United States
government adopted a policy of laissez-faire
economics, allowing business to expand.
Content Vocabulary
• gross national
product
• entrepreneur
• laissez-faire
Academic Vocabulary
• resource
• practice
People and Events to Identify
• Edwin Drake
• Alexander Graham Bell
• Thomas Alva Edison
• Morrill Tariff
Do you agree with the idea of laissezfair economics or government?
A. Agree
B. Disagree
A. A
B. B
0%
B
A
0%
The United States Industrializes
Natural resources and a large labor
force allowed the United States to
industrialize rapidly.
The United States Industrializes (cont.)
• By the late 1800s, the United States was the
world’s leading industrial nation.
– By 1914, the nation’s gross national
product was eight times greater than it
had been in 1865 when the Civil War
came to an end.
• An abundance of raw materials was one
reason for the nation’s industrial success.
The United States Industrializes (cont.)
• At the same time, people began using
petroleum.
– In 1859 Edwin Drake drilled the first oil
well near Titusville, Pennsylvania.
Natural Resource Sites of the United States, c.1890
The United States Industrializes (cont.)
• The human resources available to American
industry were as important as natural
resources in enabling the nation to
industrialize rapidly.
– Population growth stemmed from two
causes—large families and a flood of
immigrants.
Where were many of the natural
resources located?
A. The Northeast
B. The South
C. The West
D. The Southwest
0%
A
A.
B.
C.
0%
D.
B
A
B
C
0%
D
C
0%
D
New Inventions
During the late 1800s, inventions such
as the telephone and the lightbulb
spurred economic development.
New Inventions (cont.)
• In 1876 a Scottish immigrant named
Alexander Graham Bell succeeded in
creating the first telephone.
• Thomas Alva Edison invented or improved
the following:
– Phonograph
– Motion picture
– Electric generator
– Dictaphone
– Lightbulb
– Battery
American Inventions, 1865–1895
New Inventions (cont.)
• Edison also supplied electric power to New
York City.
• George Westinghouse invented an air-brake
system for railroads and an alternating current
system to distribute electricity using
transformers and generators.
American Inventions, 1865–1895
New Inventions (cont.)
• Other inventions during the late 1800s:
– Ice machine
– Refrigerated railroad car
– Northrop automatic loom
– Power-driven sewing machine and cloth
cutter
Who laid the first telegraph cable
across the Atlantic Ocean?
A. Thaddeus Lowe
B. Nikola Tesla
C. Thomas Watson
D. Cyrus Field
0%
A
A.
B.
C.
0%
D.
B
A
B
C
0%
D
C
0%
D
Free Enterprise
Laissez-faire economics promoted
industrialization, but tariffs protected
American companies from competition.
Free Enterprise (cont.)
• Another important reason the United States
was able to industrialize rapidly was its free
enterprise system.
– In many ways, the U.S. practiced laissezfaire economics in the late 1800s.
– In other ways, the government went
beyond laissez-faire and introduced
policies intended to promote business.
Free Enterprise (cont.)
• The profit motive attracted many
entrepreneurs from New England and
Europe.
• After the Southern states seceded, the
Republican-controlled Congress passed the
Morrill Tariff, which greatly increased tariff
rates.
– High tariffs contradicted laissez-faire ideas
and hurt American companies trying to sell
goods abroad.
Free Enterprise (cont.)
– Later, in the early 1900s, after American
companies had become large and
efficient, business leaders began to push
for free trade.
Which part of the country supported
low tariffs to promote trade and to
keep the cost of imported goods low?
A. The North
B. The South
A. A
B. B
0%
B
A
0%
Big Ideas
Science and Technology The growth of railroads
encouraged development of the Plains and Western
regions.
Content Vocabulary
• time zone
• land grant
Academic Vocabulary
• integrate
• investor
People and Events to Identify
• Pacific Railway Act
• Grenville Dodge
• Leland Stanford
• Cornelius Vanderbilt
• Jay Gould
• Crédit Mobilier
• James J. Hill
Are there any recent inventions that
have made your life easier?
A. Yes
B. No
A. A
B. B
0%
B
A
0%
Linking the Nation
After the Civil War, the rapid
construction of railroads accelerated
the nation’s industrialization and linked
the country together.
Linking the Nation (cont.)
• The railroad boom began in 1862, when
President Abraham Lincoln signed the Pacific
Railway Act.
– This act offered two companies land along its
right-of-way in order to speed progress.
• Under the direction of engineer Grenville
Dodge, the Union Pacific began pushing
westward from Omaha, Nebraska,
in 1865.
The Transcontinental Railroad Connects the Nation
Linking the Nation (cont.)
• The Central Pacific Railroad began as the
dream of engineer Theodore Judah.
– He sold stock to four Sacramento
merchants, including Leland Stanford.
• Workers completed the Transcontinental
Railroad in only four years, despite the
physical challenges.
– On May 10, 1869, five gold and sliver
spikes were hammered into the rails at
Promontory Summit, Utah.
Linking the Nation (cont.)
• By linking the nation, railroads increased the
markets for many products, spurring
American industrial growth.
• Railroads also stimulated the economy by
spending huge amounts of money on steel,
coal, timber, and other materials.
• One of the most successful railroad
consolidators was Cornelius Vanderbilt.
Federal Land Grants to Railroads, 1870
Linking the Nation (cont.)
• To make rail service safer and more reliable,
the American Railway Association divided
the country into four time zones in 1883.
• The nationwide rail network also helped
unite Americans in different regions.
All of the following made railway
operations efficient EXCEPT
A. The booming oil industry
B. New locomotive technology
0%
D
A
0%
C
D. Integrated railroad systems
A. A
B. B
C.0% C0%
D. D
B
C. The invention of air brakes
Robber Barons
The government helped finance
railroad construction by providing land
grants, but this system also led to
corruption.
Robber Barons (cont.)
• To encourage railroad construction across
the Great Plains, the federal government
gave land grants to many railroad
companies.
• Corruption in the railroad industry became
public in 1872 when the Crédit Mobilier
scandal erupted.
– This scandal created the impression that
all railroad entrepreneurs were “robber
barons.”
Robber Barons (cont.)
– Jay Gould was the most notoriously
corrupt railroad owner
– However, James J. Hill, who built and
operated the Great Northern Railroad, was
an honest businessman.
Who was punished after the Crédit
Mobilier scandal went public?
A. James Garfield
D. All of the above
B
E. None of the above
A
0%
0%
E
C. James G. Blaine
D
B. Schuyler Colfax
C
A. A
B. B
C. C
D. D
0%
0%
0%
E. E
Big Ideas
Economics and Society Business people such as
Andrew Carnegie developed new ways to expand
business.
Content Vocabulary
• corporation
• horizontal integration
• stock
• monopoly
• economies of
scale
• trust
• pool
• vertical integration
• holding company
Academic Vocabulary
• distribution
• consumer
People and Events to Identify
• Andrew Carnegie
• John D. Rockefeller
Does advertising influence your
decision when buying a product?
A. Yes
B. No
A. A
B. B
0%
B
A
0%
The Rise of Big Business
Corporations could produce goods
more efficiently, which allowed the rise
of big business.
The Rise of Big Business (cont.)
• By 1900, big businesses dominated the
economy, operating vast complexes of
factories, warehouses, and distribution
facilities.
• Big business would not have been possible
without the corporation.
– The people who own the corporation are
called stockholders because they own
shares of ownership called stock.
The Rise of Big Business (cont.)
– With the money raised from the sale of
stock, corporations could invest in new
technologies, hire large workforces, and
purchase many machines.
– This enabled them to achieve economies
of scale.
Types of Business Organizations
The Rise of Big Business (cont.)
• Big businesses had high fixed costs and low
operating costs, which gave them several
advantages:
– They could produce more goods cheaply and
efficiently.
– They could continue to operate in poor
economic times by cutting prices to increase
sales rather than shutting down.
The Rise of Big Business (cont.)
– They could also negotiate rebates from
railroads, further lowering their operating
costs.
Which of the following is a cost that occurs
when running a company, such as paying
wages and shipping costs and buying raw
materials and supplies?
A. Fixed cost
A. A
B. B
A
0%
0%
B
B. Operating cost
Consolidating Industry
Business leaders devised new and
larger forms of business organizations
and new ways to promote their
products.
Consolidating Industry (cont.)
• Many companies did not like the intense
competition that had been forced on them.
• To stop prices from falling, many companies
organized pools to keep prices at a certain
level.
– However, companies that formed pools
had no legal protection and could not
enforce their agreements in court.
Consolidating Industry (cont.)
• The remarkable life of Andrew Carnegie
illustrates many of the factors that led to the
rise of big business in the U.S.
– Born poor, he eventually opened a steel
company in Pittsburgh in 1875.
– To make his company more efficient, he
began the vertical integration of the steel
industry.
The Rise of the Steel Industry
Consolidating Industry (cont.)
• Successful business leaders also pushed for
horizontal integration.
– A famous industrialist who achieved
almost complete horizontal integration of
his industry is John D. Rockefeller.
– By 1880, the company controlled about
90% of the oil-refining industry in the U.S.
The Rise of the Steel Industry
Consolidating Industry (cont.)
– Standard Oil came close to being a
monopoly, but international competition
forced the company to keep its prices low.
• In 1882, Standard Oil formed the first trust,
a new way of merging businesses that did
not violate laws against monopolies.
Consolidating Industry (cont.)
• Beginning in 1889, the state of New Jersey
further accelerated the rise of big business
with a new general incorporation law.
– Many companies immediately used the
law to create a new organization, the
holding company.
• Another increase in the size of corporations
began in the mid-1890s, when investment
bankers began to help put new holding
companies together.
Consolidating Industry (cont.)
– Perhaps the most successful investment
banker of the era was J.P. Morgan.
– U.S. Steel was the first billion-dollar
company in American history.
Consolidating Industry (cont.)
• The creation of giant manufacturing
companies in the U.S. forced retailers to
expand in size as well.
– N.W. Ayer and Son, the first advertising
company, began creating large illustrated
ads instead of relying on the old small print
line ads previously used in newspapers.
The following type of store first appeared
during the mid to late 1800s EXCEPT
A. The department store
B. Chain stores
C. Mail-order catalogues
D. Malls
0%
A
A.
B.
C.
0%
D.
B
A
B
C
0%
D
C
0%
D
Big Ideas
Struggles for Rights Unions grew and labor unrest
intensified as workers fought for more rights.
Content Vocabulary
• deflation
• lockout
• trade union
• arbitration
• industrial union
• injunction
• blacklist
• closed shop
Academic Vocabulary
• restraint
• constitute
People and Events to Identify
• Marxism
• Knights of Labor
• American Federation of Labor
• Samuel Gompers
Do you feel that you would join a
union if aspects of your job were
unfair?
A. Yes
B. No
A. A
B. B
0%
B
A
0%
Working in the United States
Low wages, long hours, and difficult
working conditions caused resentment
among workers and led to efforts to
organize unions.
Working in the United States (cont.)
• Life for workers in industrial America was
difficult.
– Deflation added to tensions between
workers and employers.
• There were two basic types of industrial
workers in the U.S. in the 1800s—craft
workers and common laborers.
– In the 1830s, as industrialization began to
spread, craft workers began to form trade
unions.
Working in the United States (cont.)
• Employers generally viewed unions as
conspiracies that interfered with property
rights.
– Business leaders particularly opposed
industrial unions.
Why Did Workers Want to Organize?
Working in the United States (cont.)
• Companies used several techniques to stop
workers from forming unions:
– They required workers to take oaths or
sign contracts promising not to join a
union.
– They hired detectives to identify union
organizers.
– Workers who tried to organize a union or
strike were fired and placed on a blacklist.
Working in the United States (cont.)
• When workers formed a union, companies
used “lockouts” to break it.
• Unions also suffered from the perception that
they were un-American.
– In the 1800s, the ideas of Karl Marx, called
Marxism, became very influential in
Europe.
Working in the United States, 1870–1900
Machinists, iron molders, stonecutters,
shoemakers, and printers fall under which
type of worker?
A. Craft worker
B. Common laborer
A. A
B. B
0%
B
A
0%
Struggling to Organize
Workers began to form unions to fight
for better wages and working
conditions but had few successes.
Struggling to Organize (cont.)
• In July 1877, the Baltimore and Ohio
Railroad announced it was cutting wages for
the third time.
– This decision led to a strike involving
80,000 railroad workers and 12 bloody
days of fighting before police, state
militias, and federal troops could restore
order.
Strikes and Labor Unrest, 1870–1900
Struggling to Organize (cont.)
• The Knights of Labor opposed strikes,
preferring to use boycotts to pressure
employers.
– They also supported arbitration.
• Nearly 700,000 people joined the Knights,
but in the spring of 1886 an event known as
the Haymarket Riot undermined their
reputation.
Struggling to Organize (cont.)
• In the summer of 1892, a strike at a steel mill
owned by Andrew Carnegie in Homestead,
Pennsylvania, led to the death of several
people.
Comparing Major Strikes
Struggling to Organize (cont.)
• During the Pullman Strike, a federal court
issued an injunction directing the union to
halt the boycott.
– In the case In re Debs, the Supreme Court
upheld the right to issue such an
injunction.
– This gave business a powerful tool for
dealing with labor unrest.
The Knights of Labor called for the
following actions EXCEPT
A. An 8-hour work day
B. Equal pay for women
C. Higher wages
D. The abolition of
child labor
0%
A
A.
B.
0%
C.
D.
B
A
B
0%
C
D
C
0%
D
New Unions Emerge
The AFL fought for skilled workers;
new unions tried to organize unskilled
workers.
New Unions Emerge (cont.)
• New types of unions emerged that tried to
reach out to workers.
• The American Federation of Labor (AFL)
was the dominant union of the late 1800s.
– Samuel Gompers was the first president
of the AFL, a position he held until 1924.
New Unions Emerge (cont.)
• The AFL had three main goals:
– It tried to convince companies to recognize
unions and to agree to collective
bargaining.
– It pushed for closed shops.
– It promoted an 8-hour workday.
New Unions Emerge (cont.)
• In 1905, a group of labor radicals, many of
them socialists, created the Industrial
Workers of the World (IWW).
• By 1900, women made up more than 18% of
the labor force.
– The type of jobs women did outside the
home reflected society’s ideas about what
constituted “women’s work.”
New Unions Emerge (cont.)
• One of the most famous labor leaders of the
era was Mary Harris Jones.
• In 1900 Jewish and Italian immigrants who
worked in the clothing business in New York
City founded the International Ladies’ Garment
Workers Union.
• In 1903, Mary Kenney O’Sullivan, Leonora
O’Reilly, Jane Addams, and Lillian Wald
established the Women’s Trade Union League
(WTUL), the first national association dedicated
to promoting women’s labor issues.
Which of the following unions wanted to organize all
workers according to industry, without making
distinctions between skilled and unskilled workers?
A. American Federation
of Labor
0%
0%
D
0%
A
B
C
D
C
D. International Ladies’
Garment Workers Union
0%
A
C. Industrial Workers
of the World
A.
B.
C.
D.
B
B. Women’s Trade
Union League
Causes of Industrialization
• Abundant natural resources
• Cheap immigrant labor force
• High tariffs reduce the import
of foreign goods
• National transportation and
communication networks
Causes of the Growth of Big Business
• Little or no government
intervention
• Development of pools, trusts,
holding companies, and
monopolies
• Small businesses could not compete
with economies of scale of larger businesses
• Practices of some big businesses sometimes limited
competition
Effects on the Workplace
• Rural migration and immigration
created large, concentrated
workforce
• Low wages, long hours, and
dangerous working conditions
were common in large-scale
industries
• First large unions formed but
had little bargaining power
against larger companies
Chapter Transparencies Menu
Why It Matters
Cause-and-Effect Transparency
Unit Time Line Transparency
Select a transparency to view.
gross national product
the total value of goods and services
produced by a country during a year
laissez-faire
policy that government should
interfere as little as possible in the
nation’s economy
entrepreneur
one who organizes, manages, and
assumes the risks of a business or
enterprise
resource
material used in the production
process, such as money, people,
land, wood, or steel
practice
to do something repeatedly so it
becomes the standard
time zone
a geographical region in which the
same standard time is kept
land grant
a grant of land by the federal
government especially for roads,
railroads, or agricultural colleges
integrate
to combine two previously separate
things
investor
one who puts money into a company
in order to gain a future financial
reward
corporation
an organization that is authorized by
law to carry on an activity but treated
as though it were a single person
stock
money or capital invested or available
for investment or trading
economies of scale
the reduction in the cost of a good
brought about especially by increased
production at a given facility
pool
a group sharing in some activity; for
example, among railroad owners who
made secret agreements and set
rates among themselves
vertical integration
the combining of companies that
supply equipment and services
needed for a particular industry
horizontal integration
combining of many firms engaged in
the same type of business into one
corporation
monopoly
total control of a type of industry by
one person or one company
trust
a combination of firms or corporations
formed by a legal agreement,
especially to reduce competition
holding company
a company whose primary business
is owning a controlling share of stock
in other companies
distribution
the act or process of being given out
or disbursed to clients, customers, or
members of a group
consumer
a person who buys what is produced
by an economy
deflation
a decline in the volume of available
money or credit that results in lower
prices, and, therefore, increases the
buying power of money
trade union
an organization of workers with the
same trade or skill
industrial union
an organization of common laborers
and craft workers in a particular
industry
blacklist
a list of persons who are disapproved
of or are to be punished or boycotted
lockout
a company tool to fight union
demands by refusing to allow
employees to enter its facilities to
work
arbitration
settling a dispute by agreeing to
accept the decision of an impartial
outsider
injunction
a court order whereby one is required
to do or to refrain from doing a
specified act
closed shop
an agreement in which a company
agrees to hire only union members
restraint
the act of limiting, restricting, or
keeping under control
constitute
to be composed of, made up of, or
formed from
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