the rise of industrial america: the industrial titans mr. phipps u.s. history
TRANSCRIPT
THE RISE OF INDUSTRIAL
AMERICA:The Industrial Titans
Mr. Phipps
U.S. History
California State Standards
11.1.4. Examine the effects of the Civil War and Reconstruction and of the industrial revolution, including demographic shifts and the emergence in the late nineteenth century of the United States as a world power.
11.2 Students analyze the relationship among the rise of industrialization, large-scale rural-to-urban migration, and massive immigration from Southern and Eastern Europe.
11.2.1. Know the effects of industrialization on living and working conditions, including the portrayal of working conditions and food safety in Upton Sinclair's The Jungle.
11.2.2. Describe the changing landscape, including the growth of cities linked by industry and trade, and the development of cities divided according to race, ethnicity, and class.
11.2.4. Analyze the effect of urban political machines and responses to them by immigrants and middle-class reformers.
11.2.5. Discuss corporate mergers that produced trusts and cartels and the economic and political policies of industrial leaders.
11.2.6. Trace the economic development of the United States and its emergence as a major industrial power, including its gains from trade and the advantages of its
physical geography.
Era Characteristics Strong and rapid growth of industry, mass production,
mechanization, and the factory system Consolidation of wealth and creation of an American
aristocracy Political and corporate corruption and laissez-faire/hands
off approach to government involvement Exploitation of cheap, immigrant labor The creation of the American city and the expansion and
urbanization of the West Rapid population growth (natural and migratory) Increased social, racial, and labor tension The beginning of social, political, and labor reform
movements
Vocabulary
Monopoly: Control of one one business, able to set the market price for an item
Trust: Group of owners, controlling multiple related business, able to set the market price for an item
Free Enterprise: a.k.a. “Capitalism” The idea that society benefits from free competition in the market price, yielding individual profit, a better/cheaper product, and wide availability of goods
Urbanization: The creation and construction of cities, including its infrastructure
Demographics: The study of populations--how they grow, change, move, and are characterized (by age, gender, crime, behavior, diet, customs, language, etc.)
Nativism: Expressed racism toward a group considered “un-American”
STEELOIL
RAILROADS
The Industrial Giants
The Titans J.D. Rockefeller--
Standard Oil J.P. Morgan--
Investment banking and financier
Andrew Carnegie--U.S. Steel
Cornelius Vanderbilt, Jay Gould, and Jay Fiske--Railroads
Mechanization and Mass Production
The U.S. GNP (measures manufacturing) grew from #4 (1860) to #1 (1894): the largest producer in of manufactured goods in the world
Full exploitation of natural resources
Use of machines, steam and electric power, for manufacturing
Encouraged by federal aid and land grants
Use of immigrants for cheap labor Carnegie’s U.S. Steel Plant and factory
town, Homestead, Pennsylvania (1890s)
Carnegie and U.S. Steel Based corporate model on
“vertical integration”--controlling all aspects of a business (mining, transportation, refining, and sale)
Symbolized the “American Dream” Started as a poor Scottish
immigrant Worked as a telegrapher for rail
road Used creativity, genius, and
charisma to problem solve Purchased stock and aggressively
bought out competition Use of intellect, timing, and will to
achieve wealth
Carnegie’s Beliefs Believed that God’s will and his
unique ability made him rich Wealth should not be inherited Believed that the rich were socially
obligated to share wealth with poor Provided money and endowments to
libraries, music centers, churches, and schools
Became a model for philanthropy and charity
Believed that competition was essential for American growth (no monopolies)
Sold U.S. Steel to J.P. Morgan, who launched the first billion dollar company
Bessemer Steel Process, Homestead, PA
Homestead Steel Plant and Smokestacks, Homestead, PA
Williamsburg Bridge, NYC
Flat Iron Building, NYC (1901).
Considered to be the first modern
urban skyscraper
Rockefeller and Standard Oil Based corporate model on
“horizontal integration”--controlling one aspect of an industry (only refining)
Bought out competition to form a monopoly of refined oil
Controlled over 90% of refining After anti-trust laws, Standard Oil was
broken up into smaller pieces (including Exxon), with Rockefeller on the Board of Directors for each
Strategic control of refining forced the market price for drilling (pre-refining), and sale (post-refining), effectively controlling the market
Rockefeller’s Beliefs Believed that individual
accomplishment resulted in success
Believed in eliminating competition Less competition made a
more efficient business Laissez-faire increased the
ability for a business to operate effectively
Abhorred charity, considering it a sign of weakness of spirit Frank Norris’ cartoon, The Octupus: Standard Oil
Pioneer Run, Titusville, PA (1859)
Coal Mining, Michigan
Coal Mining, Michigan
Controlling a Business: Horizontal v. Vertical
OIL RETAIL AND SALE
OIL BARRELING AND TRANSPORTING
OIL REFINING
OIL DRILLING
CONTROL OF INDUSTRY
10 20 30 40 50 60 70 80 90
CONTROL OF MARKET (SHARES)
VERTICAL INTEGRATION
HORIZONTAL INTEGRATION
The Backbone of Industry: The Steel RailsCreating a Transcontinental
Railroad Increased miles of rails 35K
(1865) to 200K (1900) Subsidized by federal grants Required relocation of Indian
tribes Contradicted laissez-faire
policy; gov’t invested, promoted, funded, and advertised rail expansion
Spread American-ness Brought prosperity to areas
and towns through support services
Spread population across continent
A Mechanism for Manifest Destiny
Major Rail Lines: The West Union Pacific Railroad (1862)
Nebraska to California Received bad press from
Credit Mobilier Scandal Built by Irish
Central Pacific Railroad (1869) Utah to California Constructed by the “Big
Four”: Stanford, Huntington, Crocker, and Hill
Built by Chinese Finished at Promontory Point
The Steel Road
Major Rail Lines Transcontinental Railroad:
Joined at Promontory Point, UT Northern Pacific (1893)
Chicago to Seattle
Southern Pacific (1883) New Orleans to Los Angeles
Santa Fe (1884) New Mexico to California
Great Northern (1884) Minnesota to Washington
Creating a United States
200, 000 + Miles of Track
Creating a Rail System
Used corporate model of consolidation and trusts
Combined rail lines Forced industries to use the
only available rail line and set the price for transportation
Gave rebates to “friendly” industries
Refused service to “unfriendly” industries
Rail Inventions Steel Rails: stronger
standardized rail gauge making transport safer and faster
Westinghouse air brake: increased safety
Pullman cars: luxurious travel cars
Armour Cars: refrigerated meat cars (i.e. Armour hot dogs)
Time Zones: provided consistency for delivery
Telegraph: increased communication down rail lines
In Sum
Carnegie and Rockefeller differed in their approach to business: Carnegie favored competition and charity; Rockefeller favored monopoly and rugged individualism
The oil, steel, and railroad industries helped each other grow and depended on each other for success
In less than 30 years, the U.S. became the leading manufacturer, transporter, and richest country in the “civilized” world