The Expansion of American Industry

Chapter 6 Coach Armstrong

U.S. History: 1877 to Present

The Expansion of American History

Section 1: A Technological RevolutionSection 2: The Growth of Big BusinessSection 3: Industrialization and WorkersSection 4: The Great Strikes

6.1: A Technological Revolution

Changes in Daily LifeNew Forms of EnergyAdvances in CommunicationRailroads Create a National NetworkThe Bessemer Process

Changes in Daily LifeWhat time do you go to bed at night?What time do you wake up when you don’t have to come to school in the morning?Imagine having no A/C during the hot Alabama summers.Imagine having no ice or refrigerator. Average Response time for a text message is 5 min. Average response time for an email is 24 hours.

Changes in Daily Life

Changes in Daily LifeInvesting in Technology

What is a patent?Patents are licenses that give an inventor the exclusive right to make, use, or sell an invention for a set period of time.

Between 1790 to and 1860 the Patent and Trademark Office issued 36,000 patentsBetween 1860 and 1890 they issued 500,000Business Leaders from Europe and America began investing heavily in these new inventions.New inventions and financial backing led to increased industrial productivity.

Productivity is the amount of goods and services created in a given period of time.

New Forms of EnergyBeverly Hillbillies Theme SongDrake Strikes Oil

In 1859 Edwin Drake struck oil by drilling in Titusville, PN.Drakes method of drilling using steam engines led to oil becoming a major industry.

Edison, A Master of InventionElectricity Is Improved

Lewis Latimer- patented an improved method for producing the filament in light bulbsGeorge Westinghouse- Alternating Current v. Direct Current, and transformers.

New Forms of EnergyElectricity’s Impact on Business and Daily Life

Ready-made clothing industry. RefrigeratorNot everyone could get electricity.

Advances in Communications

The TelegraphSamuel F.B. Morse- didn’t invent the telegraph, but he perfected it.

Frist message in Morse Code sent in 1844. “What hath God wrought!”

Western Union Telegraph Company formed after the Civil War.

Advances in Communication

The TelephoneAlexander Graham Bell patented the “talking telegraph” on March 7th, 1876.In 1885, Bell and a group of partners founded the American Telegraph and Telephone Company to build long distance telephone lines.

Railroads Create a National Network

The Transcontinental RailroadRailroad DevelopmentsRailroads and Time ZonesRailroads and Industry

The Transcontinental Railroad

Transcontinental Railroad- a railway that extends from coast to coast.Project began in 1862.Funded by the federal govt. because private investors could not see the point in building railways beyond settled areas. Funded through huge loans and land grants to two private companies.

The Central PacificThe Union Pacific

The Transcontinental Railroad

The Central PacificWent east from Sacramento, CA.Constructed by workers from China brought to the United States by the railroad company.Had to make their way through the Sierra Nevada Mountains.

The Union PacificWent west from Omaha, NE. Constructed mainly by immigrants from Ireland. Rails laid at up of 6 miles per day.

Finished when the two railways met at Promontory Summit in present day Utah. Last spike was made of gold and driven by Central Pacific President Leland Stanford on May 10, 1869.

Railroad Developments In 1870 trains were often noisy, dirty, and uncomfortable for travelers. Despite the problems train travel expanded and improved.

Steel rails replaced iron rails.Track gauges and signals became standardized. In 1869 George Westinghouse developed more effective air brakes.In 1887 Granville Woods patented a telegraph system for communication with moving trains.

Towns began to pop up along the rails.

Railroads and Time Zones

Scheduling was a nightmare, because most towns set their times according to solar time. Time differences created confusion, so in 1883 the railroads adopted a national system of time zones to improve scheduling.

Railroads and IndustryThe railroads revolutionized business and industry in the United States by:

Providing a faster more practical means of transporting goods.Lowering the costs of production.Creating national markets.Providing a model for big business.Stimulating of other industries.

The Bessemer ProcessSteel is produced by melting iron, adding carbon, and removing impurities. The Bessemer Process made it easier to remove the impurities, and making it easier and cheaper to produce steel. The Bessemer Process made possible the mass production, or production in great amounts, of steel.Led to a new age of building.

The Brooklyn BridgeDesigned by John Roebling to connect Brooklyn and Manhattan.

6.2: The Growth of Big Business

Robber Barons or Captains of Industry?Social DarwinismBusiness on a Larger ScaleGaining a Competitive Edge

Robber Barons or Captains of Industry?

Robber BaronsImplies that business leaders built their fortune by stealing from the public.Drained natural resources.Persuaded public officials to interpret laws in their favor.Treated their workers poorly.

Captains of Industry

Implies that the business leaders served their nation in a positive way.Increased the supply of goods.Created jobs and raised the standard of living. Established museums, libraries, and universities that still serve the public today.

John D. RockefellerFormed the Standard Oil Company in 1870.Used questionable methods in business.By the end of his life he had given over $500 million to establish or improve charities. Helped found the University of Chicago and the Rockefeller Foundation.

Carnegie’s “Gospel of Wealth”

“Gospel of Wealth” People should be free to make as much money as they can. After they make it, however, they should give it away.

Gave away nearly $350 million before he died in 1919. Also had questionable business practices.

Social DarwinismCarnegie suggested that the wealthy were somehow the most valuable group in society.The concept of Social Darwinism extended Charles Darwin’s theory of evolution to society. What is the overall idea of Darwin’s theory?

Survival of the fittest.

Social Darwinism says that those who are most fit will rise to the top and become rich and that government should not interfere.

Business on a Larger Scale

Businesses grew to include greater sums of money, more workers, and more products.Characteristics that set big business apart from earlier forms of business in the United States.

Larger pools of capital.Wider geographic span.Broader range of operations.Revised role of ownership.New methods of managements.

Gaining a Competitive Edge

New Market Structures Carnegie Steel The Standard Oil TrustThe Government Response

New Market StructuresOligopoly

An industry that is dominated by only a few large, profitable firms.Example: breakfast cereal, cars, and household appliances.

MonopolyComplete control of a product or service.Only way to achieve is to buy out competitors, or drive them out of business.

CartelA loose association of businesses that make the same product. I know what your thinking…

Carnegie SteelVertical Consolidation- gaining control of the many different businesses that make up all phases of a product’s development. (Look at diagram on page 241)Economies of Scale- as production increases, the cost of each item produced is lower.

The Standard Oil TrustHorizontal Consolidation- bringing together many firms in the same business. (see diagram on page 241)Trust- companies would agree to turn over control of their company to a board of trustees who would in turn give them a piece of the profits. 40 companies eventually joined the trust. The government responded by passing the Sherman Antitrust Act in 1890.

However it proved ineffective for nearly 15 years.

6.3: Industrialization and Workers

The Growing Work ForceFactory WorkWorking Families

The Growing Work Force14 million people immigrated to the U.S. between 1860 and 1900 in hopes of finding a job.8-9 million Americans moved from their farms to the cities for the same reason.

Factory WorkIn 1860 most workers worked 12 hour days, six days a week.PieceworkSweatshopsFrederick Winslow Taylor

Time and motion studiesScientific management

Division of LaborSeparation of worker and ownerWork environment was ruled by the clock and usually unsafe.

Working FamiliesChildren had to work in order to help keep food on the table for their families.Families in need of help had to look to private charity, not the govt. Many people in the country felt that the govt. offering relief would encourage idleness.

6.4: The Great StrikesGulf Between the Rich and PoorThe Rise of Labor UnionsRailroad Workers OrganizeStrikes Rock the Nation

Gulf Between the Rich and Poor

In 1890 9% of Americans held 75% of the wealth.Poor workers throughout the U.S. became drawn to socialism

Public vs. Private ownership of business

Most Americans were opposed to the idea of socialism.

The Rise of Labor UnionsKnights of Labor

Open to all laborers both skilled and unskilled.Even African Americans.Led by Terrance Powderly.Faded out of existence by the 1890’s.

American Federation of LaborLed by Samuel Gompers.Craft union.Focused on wages and working conditions.Relied on strikes, collective bargaining, and closed shops.

The Rise of Labor UnionsThe Wobblies

International Workers of the WorldOpposed to the tactics of the AFL.Much more radical in their approach.

Employer ReactionsForbidding meetingsFired union organizers.“yellow dog” contractsRefused collective bargainingRefused to recognize unions as employee representatives.

Railroad Workers Organize

The Great Railroad Strike of 1877Wage cutsDouble headersLayoffsStrike got so bad President Rutherford B. Hayes sent in troops.New era in govt. dealings with business owners, and unions.

Eugene v. Debs and the American Railway Union

Strikes Rock the NationHaymarket, 1886

Anarchists set off a bomb.Blamed on Knights of Labor

Homestead, 1892Carnegie in EuropeFrick cut wagesPinkerton Police

Pullman, 1894Town held to high standards.Cut wages, but left food and rent prices the same.Disrupted mail delivery across the country, and President Cleveland sent in troops to break the strike.

Set the tone for 30 years.