the rise of big business in the gilded age. what do you see?
TRANSCRIPT
GILD – TO GIVE AN OFTEN DECEPTIVELY ATTRACTIVE OR IMPROVED
APPEARANCE TO. TO COVER WITH OR AS IF WITH A THIN LAYER OF GOLD.
1870-1900
T
erm coined by author Mark Twain to describe an era
of fabulous wealth, which masked problems such as
corruption and poverty
MANIFEST DESTINY
The United States had to grow in order to
achieve it.
We had to Industrialize.
Three things you need in order to Industrialize:
Land - Natural Resources opening of West led to increase of available resources-RR shipped resources
Labor - workers needed met by population growth; between 1860-1890, pop. doubles
Loot (Capital $)- manufactured goods (or $ for investment) used to make other goods and services
Loot (Capital $)- manufactured goods (or $ for investment) used to make other goods and services
raw materials to factories
manufactured goods & produce to markets
P
rovide jobs: steel, lumber, miners, laborers
C
ities grow & communication improves
The Railroad BoomBenefits:
IMPROVEMENTS:C
onsolidation: Combining separate railroad companies into
larger ones; Large railroad companies often forced smaller
ones out of business
A
standard gauge of width for the railroad track (4 ft, 8.5
in.)was adopted, allowing for faster shipment of goods and
reduced prices.
R
ESULT: Lower costs (no more loading and unloading goods
on to different trains).
CONNECTING LINES / TIME ZONES
S
ystem that divided U.S. into 4 time zones:
E
astern, Central, Mountain, and Pacific
-
Adopted by Congress in 1919
Railroad Technology
Air brakes, George Westinghouse
– Janney car couplers, invented by Eli H. Janney
– Refrigerated cars, Gustavus Swift
– Pullman sleeping car, developed by George M. Pullman
RAILROAD BARONS
James Hill : Great Northern Line; built w/out gov’t assistance; gave seed, helped farmers buy equipment, special cattle to ranchers
MinnesotaWashington
Cornelius Vanderbilt: Rich + powerful; steamship lines, bought and consolidated railroads : used ruthless tactics to acquire track from N.Y. to Chicago
New York Central RR
RAILROAD ABUSES
R
ate Wars –competition; caused r.r to cut fares
R
ebates – Secret discounts to large customers
P
ools several r.r. would divide up business in an area and fix prices
(high)
L
aws passed but not enforced
POSITIVES: G
rowth of Industry
• Steel• Lumber• Miners• Railroad workers (build and operate)• Opened every corner to settlement
and growth (new businesses and towns)
R
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ESSENTIAL QUESTION: HOW DID RAILROAD EXPANSION AFFECT THE UNITED STATES ECONOMY?
U
sing the graphic organizer, explain the
effects of railroad
expansion on industry in
the United States.
WHAT FACTORS CAUSED THE GROWTH OF
INDUSTRY?
Land - Natural Resources opening of West led to increase of available resources-RR shipped resources
Labor – The population growth met needs for work force; between 1860-1890, pop. doubles
Loot (Capital $)- (or $ for investment) used to make other goods and services
Loot (Capital $)- (or $ for investment) used to make other goods and services
NEW WAYS OF DOING BUSINESS
F
ormation of Corporations- businesses owned by
investors who buy portions of a company through
shares of stock, in hopes of earning dividends ($$$).
Investors (shareholders) have little risk. Few laws
limited corporations.
V
ertical Integration- Controlling all
aspects of production, from raw
materials to finished product
(Carnegie)
H
orizontal Integration- Purchase of
competing companies in the same
industry (Rockefeller)
A NEW INDUSTRYC
AUSE:
1
850s: researchers found that they could burn petroleum to produce heat
and smoke free light
E
FFECTS:
O
il became valuable
• led to growth of new industry (Oil had to be refined before use)
1
859- Edwin Drake drilled first oil well in Titusville, PA
JOHN D. ROCKEFELLERLed oil industry with his Standard Oil
Company*Competition was wasteful~ Created monopoly
*Developed trust: a legal body created to hold stock in several companies* Set high prices*secret deals w/ r.r.*Standard Oil Company~ by 1880,
trust controlled 95% of oil industry
ANDREW CARNEGIE
• Controlled steel industry after creation of Bessemer steel process
• Wanted to make cheapest and best product using vertical integration
• U.S. Steel
ROBBER BARONS OR PHILANTHROPISTS? YOU DECIDE.
Philanthropists:Both men donated large sums of money
to community: charities, hospitals, universities, and libraries (Dunkirk Free Library was one!)
Robber Barons:
Definition: Business leaders who became wealthy through dishonest methods.
Both were ruthless businessmen who worked their way from the bottom up.
J
.P. Morgan: biggest banker in U.S.• Leader in business• Bought shares of stock in several businesses during
panic of 1893~ as large stockholder, won seats on board of directors
• Used $$ to buy railroads• Eventually bought into steel industry (head of U.S.
Steel)