industrialization & “big business”. industrialization first began in us during the early...
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IndustrializationIndustrialization First began in US First began in US
during the during the early early 1800s1800s
Accelerated during Accelerated during the Civil Warthe Civil War
By 1900, US had By 1900, US had become the world’s become the world’s leading industrial leading industrial powerpower
Natural ResourcesNatural Resources US had plentiful US had plentiful
natural resources:natural resources: WaterWater TimberTimber CoalCoal Iron Iron CopperCopper OilOil Large workforce, Large workforce,
thanks to thanks to immigrationimmigration
Laissez-faireLaissez-faire Approach Approach by Governmentby Government
US government US government supported the “supported the “free free enterpriseenterprise” system –” system –capitalism capitalism
Kept taxes lowKept taxes low Minimal regulation of Minimal regulation of
businessesbusinesses Made no effort to control Made no effort to control
wageswages or or pricesprices Did, however, enact high Did, however, enact high
tariffs to protect US tariffs to protect US industries from industries from European competitionEuropean competition
SteelSteel Used for building Used for building
railroads, heavy railroads, heavy machinery, and machinery, and skyscrapers and skyscrapers and other buildingsother buildings
Stronger, lighter, Stronger, lighter, more durable, and more durable, and more flexible than more flexible than ironiron
BessemerBessemer Process Process Developed by Sir Developed by Sir
Henry Bessemer, Henry Bessemer, put into put into mainstream use in mainstream use in US by Andrew US by Andrew CarnegieCarnegie
New process for New process for making steel more making steel more efficiently and efficiently and cheaply, while also cheaply, while also producing steel of a producing steel of a superior qualitysuperior quality
Andrew CarnegieAndrew Carnegie 1835 – 19191835 – 1919 Scottish immigrantScottish immigrant Started from poverty, Started from poverty,
worked his way up through worked his way up through telegraph and railroad telegraph and railroad companies until he companies until he eventually made a fortune eventually made a fortune investing in his own steel investing in his own steel companycompany
In 1901, Carnegie sold his In 1901, Carnegie sold his steel company for $230 steel company for $230 million and began pursuing million and began pursuing philanthropic interests.philanthropic interests.
By the time of his death, he By the time of his death, he had given away nearly had given away nearly $450 million!$450 million!
U.S. SteelU.S. Steel Created in 1901 Created in 1901
when J.P. Morgan when J.P. Morgan bought out bought out Carnegie and Carnegie and several other large several other large steel steel manufacturers to manufacturers to create the world’s create the world’s first billion-dollar first billion-dollar companycompany
OilOil First major US oil well First major US oil well
was drilled in was drilled in Pennsylvania by Edwin Pennsylvania by Edwin L. Drake in 1858L. Drake in 1858
Richest oil finds of 19Richest oil finds of 19thth century would come in century would come in Texas and OklahomaTexas and Oklahoma
Used at first for Used at first for making kerosene for making kerosene for lighting, but later used lighting, but later used to power and lubricate to power and lubricate machinerymachinery
John D. John D. RockefellerRockefeller
1839 – 19371839 – 1937 Became rich off his Became rich off his
near-monopoly in the near-monopoly in the American oil industryAmerican oil industry
First billionaire in US; First billionaire in US; was worth $1.4 billion was worth $1.4 billion when he died (That’s when he died (That’s about $600 billion in about $600 billion in today’s dollars) – He today’s dollars) – He held a little over 1% of held a little over 1% of the total wealth of the the total wealth of the US!US!
Standard Oil Standard Oil CompanyCompany
Created in 1870 by Created in 1870 by Rockefeller and several Rockefeller and several partnerspartners
Volume pricing allowed Volume pricing allowed Standard Oil to bankrupt Standard Oil to bankrupt any competitors who any competitors who refused to sell outrefused to sell out
Became so powerful a Became so powerful a monopoly that it was monopoly that it was ordered broken up by ordered broken up by the Supreme Court in the Supreme Court in 19111911
RailroadsRailroads Railroads became Railroads became
the lifeline of all the lifeline of all American American agricultural and agricultural and industrial productionindustrial production
Moved natural Moved natural resources to the resources to the factories, farm factories, farm goods to market, goods to market, and manufactured and manufactured goods to distributorsgoods to distributors
Cornelius VanderbiltCornelius Vanderbilt 1794 – 18771794 – 1877 ““The Commodore”The Commodore” Dropped out of school to Dropped out of school to
operate a ferry business operate a ferry business which grew into a huge which grew into a huge fortune in the shipping and fortune in the shipping and railroad industriesrailroad industries
Founded Vanderbilt University Founded Vanderbilt University with a $1 million donation, the with a $1 million donation, the largest in US history at that largest in US history at that timetime
One of his grandsons built One of his grandsons built Biltmore House in AshevilleBiltmore House in Asheville, , NCNC
ElectricityElectricity Vital to new industrial Vital to new industrial
growth, the ability to growth, the ability to use electrical power use electrical power to create light and run to create light and run machinery allowed machinery allowed factories to run 24 factories to run 24 hours a dayhours a day
Electricity also opened Electricity also opened up new avenues of up new avenues of entertainmententertainment
Thomas EdisonThomas Edison 1847 – 19311847 – 1931 ““The Wizard of Menlo Park”The Wizard of Menlo Park” Holder of over 1000 patentsHolder of over 1000 patents Developed the phonograph, Developed the phonograph,
the light bulb, and motion the light bulb, and motion picture camerapicture camera
Founder of Edison General Founder of Edison General Electric Company, which Electric Company, which later became General later became General Electric (GE)Electric (GE)
A better developer of ideas A better developer of ideas than marketer, many of his than marketer, many of his inventions would make inventions would make other people richother people rich
George George WestinghouseWestinghouse
1846 – 19141846 – 1914 Inventor, who developed Inventor, who developed
the air brake and rotary the air brake and rotary steam engine for the steam engine for the railroadsrailroads
Made his fortune in Made his fortune in electricity by backing electricity by backing Nikola Tesla’s Nikola Tesla’s alternating current (ACalternating current (AC) ) method of electrical method of electrical distribution over Edison’s distribution over Edison’s direct current (DC) methoddirect current (DC) method
Westinghouse Electric Westinghouse Electric CompanyCompany
Founded in 1886Founded in 1886 Became first Became first
commercially commercially successful electric successful electric power company power company
Also continued to Also continued to develop devices that develop devices that used electricity, like used electricity, like kitchen appliances kitchen appliances and lighting fixturesand lighting fixtures
Banking & FinanceBanking & Finance Larger and more Larger and more
powerful banking powerful banking firms were needed to firms were needed to loan money to these loan money to these new mega-new mega-corporationscorporations
Small banks began to Small banks began to merge, just as small merge, just as small corporations had corporations had merged into merged into monopolies like US monopolies like US Steel and Standard OilSteel and Standard Oil
J.P. MorganJ.P. Morgan 1837 – 19131837 – 1913 Financed the merger of steel Financed the merger of steel
companies into the giant US companies into the giant US Steel; also financed the Steel; also financed the merger of electric operators merger of electric operators into General Electricinto General Electric
Key stakeholder in several Key stakeholder in several other corporations, including other corporations, including International Harvester, International Harvester, AT&T, and numerous AT&T, and numerous railroadsrailroads
Was scheduled to sail on the Was scheduled to sail on the Titanic, but cancelled his Titanic, but cancelled his reservation at the last reservation at the last minuteminute
Tactics of “Big Tactics of “Big Business”Business” MonopoliesMonopolies: control of an : control of an
entire market or good by a entire market or good by a single corporationsingle corporation
TrustsTrusts: combination of : combination of independent corporations independent corporations under one group of managersunder one group of managers
Holding companiesHolding companies: : ownership of multiple ownership of multiple companies by a single companies by a single controlling company which controlling company which doesn’t actually produce doesn’t actually produce anything itselfanything itself
Interlocking DirectoratesInterlocking Directorates: : when the directors of one when the directors of one company serve on the board company serve on the board of directors of multiple other of directors of multiple other related companiesrelated companies
IntegrationIntegrationVerticalVertical Company buys all of the Company buys all of the
different businesses on different businesses on which it depends for its which it depends for its operationsoperations
Controls all of its Controls all of its suppliers from the suppliers from the natural resources on upnatural resources on up
Controls all of the Controls all of the companies which companies which transport and distribute transport and distribute its productsits products
HorizontalHorizontal Company buys out all Company buys out all
of its competitors to of its competitors to create a larger more create a larger more efficient corporationefficient corporation
Ultimate form of Ultimate form of horizontal integration horizontal integration is the creation of a is the creation of a monopolymonopoly
Other Key Other Key InventionsInventions
Alexander Graham Alexander Graham Bell’s Bell’s TelephoneTelephone
Elisha Otis’ Elisha Otis’ ElevatorElevator Thaddeus Lowe’s Thaddeus Lowe’s
Ice MachineIce Machine Gustavus Swift’s Gustavus Swift’s
Refrigerated Refrigerated Railroad CarRailroad Car
Standardization of Standardization of clothing & shoe clothing & shoe sizessizes
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