Industrialization Presentation
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1 Industrialization Presentation 2) I can identify, explain, and compare the first and second Industrial Revolutions in the U.S. 3) I can define Industrial Revolution Rapid economic growth primarily driven by advances in technology. It mainly involves advances in machinery, transportation, communication and how these resources are used. First and Second Industrial Revolution FIRST INDUSTRIAL REVOLUTION SECOND INDUSTRIAL REVOLUTION When Where Great Britain U.S., Germany, Japan Resources Coal, Iron Oil, Electric, Steel Machinery Steam Engine and Locomotive Internal Combustion Engine Transportation Labor Railroads Each worker created a separate part of a product, increasing efficiency Automobile, Aircraft, Trams, Electric Trains Mass production, specialization of labor Natural Resources The U.S. was loaded with valuable natural resources: Fertile soil Lumber Coal, iron, oil Free Enterprise In free enterprise, or capitalism, is where tools, factories, and means of production are privately owned. Capitalism is centered on individuals seeking their own interests. 1
2 Laissez-faire Government Refers to a hands-off approach to government control of the economy. High tariffs on imported products protected American manufacturing. Federal land grants encouraged the construction of railroads and westward expansion. Legacy of the First Industrial Revolution The first Industrial Revolution began in Britain characterized by steam power and mass production. The U.S. followed Britain s economic development: Northeast became center of manufacturing. Railroads and steamboats linked the country together. Economic Stimulus of the Civil War Wartime supplies led to huge manufacturing profits. The end of slavery united the economies of the North and South. During the war, Northern congressmen passed laws favoring Northern industry. 2) I can recognize and recount how the development of steel, oil, transportation, communication, and business practices affected the U.S. economy. 3) I can identify significant inventors of the Industrial Revolution. 4) I can recall and explain the changes that occurred as the U.S. shifted from an agrarian to an industrial society. Railroad Railroad construction provided stimulus to the steel, iron, and coal industries. Railroads brought settlers west and kept a connection to major markets in the Northeast. Railroad schedules created a need for time zones. Steel The Bessemer process reduced the cost of making steel by 80%. Cheaper steel led to the cost-effective construction of railroads, steamships, bridges, and skyscrapers. 2
3 Oil Refined petroleum was used for lighting and machine lubrication. Kerosene was used to provide lights in millions of homes. Later, gasoline becomes widely used with the automobile industry. Electricity Thomas Edison: invented the electric light bulb in Later, electric motors began to power factories and public transportation systems. Communications Samuel Morse: invented telegraph to transmit an alphabetic code over long distance. Cyrus Field: laid transatlantic cable to transmit telegraphs from the U.S. to Europe. Alexander Graham Bell: invented telephone to communicate over long distance with speech. 2) I can recognize and recount how the development of steel, oil, transportation, communication, and business practices affected the U.S. economy. Corporations Corporations are businesses registered in states and acknowledged as a person. Corporations remove liability and risk from its owners. Stocks are shares of ownership in a corporation. Shareholders are paid dividends. Economies of Scale Larger businesses build larger facilities. Specialization of labor. 3
4 Cheaper Sources of Supply Larger businesses use their size to obtain bargaining power to get discounts on raw materials. Some companies would come to own their sources of raw materials. More Efficient Management Specialized departments managed by experts. Cost-accounting to make informed business decisions. New marketing techniques such as using brand names. Monopolies A monopoly has complete control over a good or service. Vertical Integration Refers to control of all stages of production and distribution of a good or service. Companies owned all of the these: Sources of raw materials. Manufacturing facilities. Transportation systems. Andrew Carnegie steel. Horizontal Integration One owner controls all companies and facilities at one stage of production of a product. John Rockefeller oil. Dangers of Monopolies No incentive to improve products. Can raise prices at any time with consumers having no alternative. 4
5 economic causes, course, and consequences of the second Industrial Revolution. 2) I can recognize and recount how the development of steel, oil, transportation, communication, and business practices affected the U.S. economy. Pooling Agreement Agreements to fix prices or divide up markets by region. Used by railroad companies. Trust Shares of existing companies are given to a trust. The trust s board of directors control all of the companies under a single operation. Shareholders within the trust benefit with profit from the entire trust than a single company. Can result in a monopoly. Holding Company A company that holds a controlling number of shares in other companies. Similar to a trust. Interstate Commerce Act (1887) First instance of government regulation on business. Stopped railroads from entering pooling agreements and providing rebates. Established a regulatory agency over the railroad industry. Sherman Antitrust Act (1890) Prohibited all trusts or combinations of companies that limited or restricted trade. Weakly enforced, but showed Congress could regulate business. 5
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