Chapter 3

Make 2 Lists:

1 – name the top 3 inventions/innovations of your lifetime

2 – name the top 3 inventions/innovations of all time

Analyze the data and photograph on the cards and then graph the data onto the appropriate graph on your handouts.

Where it says to read sections of your textbook and answer questions – ignore that!

• Was industrialism good for industrialists? For workers?

• Was industrialism good for the economy? For the environment?

• Overall, was the rise of industry good for America? Why or why not?

US Becomes an Industrial

Power

Oil Production

Abundance of Natural Resources

Large, Available Workforce

Free Enterprise

New Inventions

NATURAL REASOURCES AND A LARGE LABOR FORCE ALLOWED THE US TO INDUSTRIALIZE RAPIDLY

How did the US become an industrial society after the Civil

War?

1st Industrial Revolution reached US early 1800s

Civil War – 1861 – Most people lived on farms

After the war, industry expanded

People left farms to work in mines and factories

Second Industrial Revolution

Increase in technology

Due to advances in electrification after 1890

Late 1800’s the US was the world’s biggest industrial nation

GNP – Gross National Product – total value of all goods and services that a country produces during a year – growing fast!

What does a country need in order to successfully achieve

industrialization?

GUIDING QUESTION Why was the United States successful at industrialization?

Natural Resources Timber, coal, iron, copper, and petroleum were available in large quantities in the United States. Manufacturers were spared the expense of obtaining these resources from outside the United States.

What are Natural Resources?

Which were abundant in the United States in the late 19th Century and early 20th Century?

How did an abundance of Natural Resources contribute to economic growth in the United States?

Abundance of raw materials

Natural resources including: timber, coal, iron and copper

Could get these cheaply

Located in the West

Industrialization impacted by settling the West and the Railroad

New resources: petroleum because it could be kerosene

Where was kerosene used?

Lanterns and stoves

W. Pennsylvania – oil – Edwin Drake

Economy expanded as more people began drilling for oil

Where was oil found in the United States?

How did oil production affect the US economy?

GUIDING QUESTION Why was the United States successful at industrialization?

Human Resources Rapid population growth after the Civil War vastly increased the industrial labor pool and boosted demand for factory-made goods. Growth stemmed higher life expectancy and increased immigration.

Why did the US have a large workforce?

What caused the population to increase?

Human Resources were just as important

1860-1910 the population tripled

With more people there was more demand for products that factories made

Population growth – where did the people come from?

Large families and immigration

More children survived

Conditions in China and Europe convinced people to immigrate due to religious persecution and oppressive governments

What were some of the inventions from this time period that spurred economic growth?

How did these inventions cause the economy to grow?

Alexander Graham Bell

Telephone

Revolutionized personal communication

Bell Telephone Company

American Telephone and Telegraph Company - ATT

Thomas Edison

Curious from an early age

First invented the phonograph and then the electric generator and then the light bulb

Invented and improved several devices such as affordable light bulb the battery,the dictaphone and motion picture

Society transformed with the use of electricity

1882 began supplying electric to New York City

Invented the air brake system

Applied this to trains

Trains could now travel more smoothly

All cars’ brakes would be applied at the same time instead of on each car

Alternating current – distributed electricity

Hydroelectric power of Niagara Falls to light streets of Buffalo, New York

Changed how people lived

Refrigeration keeps food lasting longer

Textile industry depended on Northrop automatic loom to make clothes faster

Clothes had standard sizes and moved from small tailor shops to big factories

Telegraph with Europe in 1866 – instant communication

Main Idea: Laissez-faire economics promoted industrialization, but tariffs protected American companies from competition.

What does Laissez-faire mean?

How did free enterprise encourage the development of industry?

Can you foresee any problems?

Laissez-faire – let people do as they do

Government should only protect property rights and maintain peace – otherwise should let the economy be.

IF government does get involved it increases cost

Supply and Demand

Let people compete and prices will decrease and more wealth for everyone – better products

Support low taxes and limited government debt to make sure private individuals make the most of the decisions about how the nation’s money is spent.

Entrepreneurs – business owners

In the late 1800s many people invested in factories and railroads to make money

In late 1800s the government was practicing laissez-faire in some ways

Kept taxes and spending down

Did not impose costly regulations on industry

In other ways the government went beyond:

Introduced policies intended to promote business

South and North had different views of economy

North wanted high tariffs to protect their manufactures from foreign competitors

Southerners opposed tariffs to promote trade and keep cost of imported goals low

Morrill Tariff- during Civil War when south succeeded the Congress passed this

Increased tariff rates

Late 1800s the US was the largest free trade areas in the world

No tariffs between states and there were few regulations on commerce of immigration

Therefore the economy exploded

US goes from industrial nation to complex industrial society

Modern convinces

1865 = “horse and buggy era” Lit homes with candles or oil

Icebox for fresh foods

Letters to communicate

1900 – modern technology Electric lights

Refrigerator

Telegraph and telephone

Investors were willing to finance or fund the development of new products

Without this many investors would never have reached the market

Capitalism – economic system in which factories, equipment and other production are privately owned – not owned or controlled by government

Capitalists invested money and hoped to reap rewards if new business was profitable

Edison – received generous financial support from capitalists

J.P. Morgan – wealthy banker, backed Edison

Edison Electric Company

1880 – gave Edison $150,000

Edison gave them the rights to his lighting inventions for 5 years

Investors made inventors get patents

Patent – give inventor sole rights to make or sell an invention

1790 – government starts issuing patents

1860 – only 36,000 issued

Between 1860-1900 – number goes to more than 600,000

Edison holds record with 1,093

Samuel F. B. Morse – 1837 – telegraph

Dot and dash system

Morse Code

Telegraph lines followed railway lines

Western Union Telegraph Company dominated the industry by 1870

Telephone – 1876

“Mr. Watson – come here – I want to see you”

Car

Plane

High tariffs were not always good

Other countries raised their tariffs and it cost more to sell American goods

As time progressed to the mid 1900s companies thought they had grown enough and were strong enough to compete in free trade without tariffs.

Use your notes to identify what you think was the most important cause of American industrialization. Then write a sentence or two identifying your choice and defending its importance.

Why was the United States successful at industrialization?

What invention from this period has had the most impact on your daily life?

How did laissez-faire economics promote industrialization?

Industrialization changed nearly every aspect of American life. Consider whether these changes have been generally positive or generally negative. Write a paragraph in which you express your thoughts and feelings about the pros and cons of widespread industrialization.

What economic policies allowed industries to expand after the Civil War?

Laissez-faire policies allowed industries to grow rapidly because there was no government interference or regulation to discourage entrepreneurs from starting businesses

What was the significance of the Transcontinental Railroad?

Stimulated the economy through increased trade and the “multiplier effect.” (See page 190)

New business models lead to the development of big businesses

Sole proprietorship

Partnership

Corporation

New business practices also contribute to the rise of big businesses

Economies of Scale

Stock

Horizontal and Vertical Integration

Monopoly

Advertising and Retail Stores

"Robber Barons": that was what U.S. political and economic commentator Matthew Josephson (1934) called the economic princes of his own day. Today we call them "billionaires." Our capitalist economy--any capitalist economy--throws up such enormous concentrations of wealth: those lucky enough to be in the right place at the right time, driven and smart enough to see particular economic opportunities and seize them, foresighted enough to have gathered a large share of the equity of a highly-profitable enterprise into their hands, and well-connected enough to fend off political attempts to curb their wealth (or well-connected enough to make political favors the foundation of their wealth).

Matthew Josephson called them "Robber Barons". He wanted readers to think back to their European history classes, back to thugs with spears on horses who did nothing save fight each other and loot merchant caravans that passed under the walls of their castles. He judged that their wealth was in no sense of their own creation, but was like a tax levied upon the productive workers and craftsmen of the American economy. Many others agreed: President Theodore Roosevelt--the Republican Roosevelt, president in the first decade of this century--spoke of the "malefactors of great wealth" and embraced a public, political role for the government in "anti-trust": controlling, curbing, and breaking up large private concentrations of economic power. ~J. Bradford DeLong, University of California at Berkeley

Do Robber Barons exist in today’s society? If so, who are they?

He made his fortune by squeezing out efficiencies that made Standard Oil synonymous with monopoly -- and significantly lowered fuel prices for everyday consumers. The government broke up Standard Oil in 1911, but Rockefeller's hand can still be seen in spinoff companies such as Exxon Mobil (XOM) and ConocoPhillips (COP), which have benefited from the infrastructure and research-and-development advances inherited from their parent. Rockefeller retired at the beginning of the 20th century and for the next four decades devoted himself to philanthropy. More than 70 years after his death, he remains one of Wall Street's great figures.

Andrew Carnegie loved efficiency. His steel mills were always on the leading edge of technology. Carnegie also had an excellent sense of business timing, snapping up steel assets in every market downturn. Like Rockefeller, Carnegie spent his golden years giving away the fortune he spent most of his life amassing. Though less well-known than some of his contemporaries, Carnegie built a legacy as a strong and moralistic leader.