Aim: What factors contributed to the growth of big business?

Do Now Read pages 431-434.

Answer the questions on the note sheet.

Look at the HW board for your assignment.

Objective

• By the end of this lesson, you, 8 th Grade student, will be able to: List the elements that contributed to the growth of American business.

Let’s Discuss

• • • Today, Mr. Levine is going to give you $100 million dollars to help you establish and start your very own….Chicken Raising Business.

However, Mr. Levine is desperate to find out what you are spending his money on for your business.

For the discussion, I ask you, “What would you spend your money on in order for your business to grow and become successful?”

Introduction

• • • • • In the years following the Civil War, the growth of the US economy was staggering.

Industrialization, which began in the 1820s and 1830s, went into high gear after the Civil War.

The number and size of big businesses increased as a result of industrialization.

Certain industries became important, so much so, that the period following the Civil War until 1900 became known as “The Era of Big Business.” Although the economy and importance of business grew, certain problems emerged causing many Americans to seek solutions and reforms.

1. Background to Industrial Growth • • • Many factors helped to contribute to the growth of the United States.

Some of these factors had been present in the early 1800s.

While other factors came with the new social and economic changes coming after the Civil War.

1.1 Natural Resources

• • Abundant natural resources aided the growth of big business after the Civil War.

One of the most important natural resources was coal, which was used to power steam engines.

1) Which states had large deposits of coal found in their areas? (Red Team)

• • •

A second important resource was oil.

Oil was used to lubricate machines and used as a fuel for lamps.

In 1865, two million barrels of oil were produced.

Edwin Drake

First Oil Well-Titusville, PA

• The third most important resource was iron ore.

• With the development and building of the Soo Canals, iron ore could easily be shipped through the Great Lakes.

Iron & Steel Production

The Big Three Resources

Coal

• Used to power steam engines in factories.

• Large deposits found in Pennsylvania, West Virginia, Ohio.

• Mixed with iron to form steel.

Oil

• Lubricate machines and as a fuel for lamps.

• Edwin Drake drills first well in Pennsylvania.

• 1865-2,000,000 barrels of oil produced in US.

Iron Ore

• Used to make steel.

• Large deposits found in Minnesota and Michigan.

• Building of canals enable iron ore to be shipped without problems.

1.2 Labor Supply

• •

An increasing labor supply was also important in the growth of big business after 1860.

Between 1860 and 1900, the workforce grew rapidly.

• Three groups of people who helped the American labor force to grow after 1865.

a) Farmers gave up living on their farms and began to work in factories.

b) Slaves were now looking for work after the Civil War c) Fourteen million new immigrants entered the United States.

• What role did immigration play in the growth of Big Business? (Red Team) • Workers not only provided not only a labor supply but a large group of consumers-people who buy and use food, clothing or any article a producer makes.

Labor Supply

Labor Force

1.3 The Importance of New Inventions • • • New inventions were also important to the growth of big business.

Henry Bessemer and William Kelly discovered a new way to make steel from iron ore.

This process made it possible to make more steel at less cost and the steel industry grew rapidly.

Henry Bessemer

Bessemer Process

William Kelly

Kelly’s Steel Convertor

• • • • • Other inventors helped to improve communications.

1867: Christopher Sholes develops the typewriter and by 1873, the Remington Company produced typewriters on a large-scale.

1876: Alexander Graham Bell invents the telephone. By the 1890s, the American Telephone and Telegraph Company had installed 500,000 phones.

Thomas Edison: made major improvements on the telegraph. Telegraph lines reached every part of the United States soon after.

Edison: also develops the first practical electric light bulb, a dynamo to generate electricity and power plant. Edison is credited as the person who used electricity as a source of power.

• • How did inventions helped to increase industrialization? (White Team) Who were the important inventors of the late 1800s? (White Team)

Christopher Sholes

First Typewriter

Alexander Graham Bell

First Telephone

Thomas Edison

The Lightbulb

The First Phonograph (Record Player)

Blueprint of the Phonograph

The First Motion Picture Camera

Eyewitness To History

• • • • "I'm not a scientist. I'm an inventor." Alfred O. Tate was Edison's associate and private secretary. He offers insight into the personality of America's greatest inventor: "Edison certainly at times employed methods that might be regarded as unorthodox, but it would be wrong to assume that he was not abreast of science. He not only subscribed to but read all the scientific journals. He had a thoroughly modern scientific library which constantly was augmented and which did not remain unread. No one but himself could know to what extent he drew upon science and theory. He must have employed theory, because no forward step can be taken in experimentation unless the mind is projected ahead of it. Science may be described as 'systemized knowledge.' It has many branches, but in those which Edison pursued he unquestionably was familiar with all 'systemized knowledge' associated with them, and demonstrated at times his ability to project it. His meaning was clear. If his work would sell, if the public would buy and pay their silver dollars for it, then he would know that it was useful. And that was his vocation - the production of new and useful inventions. He was a utilitarian inventor, and money was the only barometer that could be employed to indicate success."

Alternate Current

George Westinghouse

Alternate Current

Westinghouse Lamp ad

The Airplane

Wilbur Wright Orville Wright Kitty Hawk, NC – December 7, 1903

1.4 The Free Enterprise System

• Also important to the growth of big business is the development of the free enterprise system.

• During the 1800s, economic activity was closely monitored. In Europe, the town was the center of business activity and set their own tariffs and prices. As a result, producers made only what they could sell locally and as a result, they kept little in stock. In this limited market, there was little risk and chance of great profit.

• • • • •

In the United States, the government has regulated business activity only when it is necessary to protect the public interest or keep the national economy in balance.

In a free enterprise system, individuals and private business decide what products to make, how many to produce, and what prices to charge.

In a free enterprise system, these business can sell their goods in markets all over the state, country and world as well in local markets.

In a free enterprise system, conditions such as supply and demand also play a role. Supply and demand means if there is a product with little demand for it, prices go down and vice versa.

In a free enterprise system, there are many risks involved for those involved. One such group are called entrepreneurs.

• When does the government regulate business activity? (Blue Team)

Leland Stanford-Railroad Entrepreneur

1.

Causes of Rapid 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.

3.

Technological innovations.

   Bessemer and open hearth process Refrigerated cars Edison o “Wizard of Menlo Park” o light bulb, phonograph, motion pictures.

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.

What Do You Know?

• The growth of our economic and business systems after 1865 was (were) due primarily to: a) New inventions and patents.

b) Increasing the output of businesses so that the United States would be the largest industrial nation by 1900.

c) Improving manufacturing, agriculture and transportation systems.

d) All of the above.