The Expansion of American Industry:
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1 The Expansion of American Industry: United States History Week of February 23, 2015
2 Changes in Daily Life What are some inventions and innovations that have changed daily life today? 1865: no indoor lighting, ice, electricity Next 30 years: 500,000 patents issued 1900: American standard of living among highest in the world
3 New Forms of Energy Oil The late 1800s featured two new sources of energy for Americans: oil and electricity 1859: Edwin Drake used steam-powered engine to drill for oil Oil refineries sprang up throughout the country Until the invention of the internal combustion engine, however, gasoline would not be a valuable byproduct
4 New Forms of Energy Electricity The late 1800s featured two new sources of energy for Americans: oil and electricity 1882: Thomas A. Edison built a power plant in New York City Lewis Latimer patented an improved method for the filament in light bulbs George Westinghouse developed the transformer Allowed electricity transmission across great distances Investors used the ideas of Westinghouse and Edison to create Westinghouse Electric and General Electric
5 Advancements in Communications Samuel F. B. Morse developed Morse code, allowing the transmission of short messages by telegraph After Civil War, several telegraph companies joined to form Western Union Telegraph Company 1876: Alexander Graham Bell patented the talking telegraph He set up American Telephone and Telegraph company to build long-distance telephone lines 1878: first telephone switchboard, in New Haven, CT
6 Railroads Create a National Network The Transcontinental Railroad project began in 1862, extending railroad westward from the Mississippi River The federal government stepped in to help fund the project Most of the workers on the railroad were immigrants, including Irish and Chinese May 10, 1869, the railroad was finally completed By 1900: approximately 190,000 miles of railroads, greatly reducing shipping costs across country Lowered production costs Faster, more practical means of transporting goods Helped create national markets Were a model for big business Led to the growth of other industries, including steel
7 The Bessemer Process and Steel In 1856, Henry Bessemer received the first patent for the Bessemer process for making steel Bessemer process removes impurities from iron by oxidation, with air being blown through the molten iron Bessemer process allowed for mass production of steel Led to constructions such as skyscrapers and suspension bridges
8 What Exactly Is Steel, Anyway? Steel is an alloy (a mixture of metals) that is mostly iron, but that has carbon content. Other metals include manganese, chromium, tungsten, and vanadium. Steel has increased ductility, hardness, and tensile strength and iron Who makes steel now? US Steel and ArcelorMittal are two of the largest steel-producers today. Bethlehem Steel closed in 2003
9 The Men Behind Big Business: Robber Barons or Captains of Industry? Robber baron: implies that the business leaders built their fortunes by stealing from the public Drained the country of its natural resources while persuading public officials to interpret laws in their favour Ruthlessly drove competitors to ruin Paid workers meager wages working in unhealthy conditions Captain of industry: implies that the business leaders served the nation in a positive way Increased the supply of goods through factories, raised productivity, expanded markets, elevated standard of living Established libraries, universities, and museums, which still serve the public today
10 The Men Behind Big Business: Robber Barons or Captains of Industry? John D. Rockefeller: formed Standard Oil Company in 1870 By the end of his life, had given over $500 million to charities, including Rockefeller Foundation Helped to found the University of Chicago Andrew Carnegie: created Carnegie Steel Company Eventually produced more steel than all of Great Britain Later gave away more than 80% of his fortune towards education: Carnegie Mellon University in Pittsburgh
11 The Men Behind Big Business: Robber Barons or Captains of Industry? Cornelius Vanderbilt: shipping and railroads Helped found Vanderbilt University in Tennessee John Pierpoint Morgan: financier and banker Organized or underwrote securities for several American companies Arranged merger of companies to form both General Electric and United States Steel
12 Businesses on a Larger Scale Businesses had larger pools of capital, in industries that featured astronomically high startup costs Wider geographic span Broader range of operations businesses often combined multiple operations Revised roles of ownership more professional managers and managerial staff New management methods new, complex accounting systems, specialized departments, and new systems of rules
13 Businesses Of The Industrial Revolution Carnegie Steel Carnegie acquired companies operating at all steps of steel production vertical consolidation Allowed company to maintain low production costs Exhibited properties of economies of scale: unit cost of production decreased as production increased Standard Oil Trust Rockefeller expanded his business by acquiring other oil refineries, further lowering production costs horizontal consolidation Shares of all companies were conveyed to a board of trustees who managed the companies (and minimized competition) in trust for the shareholders Congress passed Sherman Antitrust Act in 1890 to limit influence of monopolies
14 What Ever Happened To Standard Oil? In Standard Oil Co. of New Jersey v. United States, the Supreme Court ruled that Standard Oil was guilty of monopolizing operations, and had to be broken into smaller entities: Standard Oil of New Jersey (SONJ) - or Esso (S.O.) renamed Exxon, now part of ExxonMobil Standard Oil of New York or Socony, merged with Vacuum renamed Mobil, now part of ExxonMobil Standard Oil of California or Socal renamed Chevron, became ChevronTexaco, but returned to Chevron Standard Oil of Indiana - or Stanolind, renamed Amoco (American Oil Co.) now part of BP Standard's Atlantic and the independent company Richfield merged to form Atlantic Richfield or ARCO, now part of BP. Atlantic operations were spun off and bought by Sunoco Standard Oil of Kentucky or Kyso was acquired by Standard Oil of California - currently Chevron Continental Oil Company or Conoco now part of ConocoPhillips Standard Oil of Ohio or Sohio, acquired by BP in The Ohio Oil Company or The Ohio, and marketed gasoline under the Marathon name. The company is now known as Marathon Oil Company, and was often a rival with the in-state Standard spinoff, Sohio
15 Industrialisation and Workers Due to poor conditions on farms and a need for labour, many people immigrated to the United States from 1860 to 1900 and found work in factories The goal with factories was to increase worker productivity and maximize output States rarely enforced ten-hour workday laws System of piecework: workers were paid for output, not time worked Often, increasing efficiency led to layoffs Division of labour in factories: people performed different, specialized jobs
16 The Work Environment and Strokes Factory employees worked by the clock under supervision of managers, in often unsafe conditions Workplace dangers: loud noise, poor lighting and ventilation, and workers were often fatigued Jacob Riis: Children of the Poor Children worked because families needed money No system of public assistance for needy Riis exposé of child labour led to new legislation
17 The Workers Strike Back Many factory workers did not earn enough to buy the goods they made, and the gulf between rich and poor widened in the 1890s Inequality drew many to socialism and the writings of Karl Marx Workers and average Americans, however, objected Workers joined labour unions to protect their interests Knights of Labor formed in Philadelphia in 1869 Pursued equal pay for equal work, eight-hour workday, end to child labour American Federation of Labor formed in 1886 as a craft union Used strikes and boycotts to persuade employers to participate in collective bargaining
18 Employers vs. The Unions Employers mostly disliked and feared unions, and took measures to stop unions Great Railroad Strike of 1877 Baltimore & Ohio Railroad announced a 10% pay cut Workers declared strikes and clashed with militias Eugene Debs proposed an industrial union for railroad workers Haymarket Riot, 1886: violence erupted during a union protest Homestead Strike, 1892: unions called a strike in response to a cut in wages at Carnegie Steel Alexander Berkman tried to assassinate Henry Frick Pullman Strike, 1894: Eugene Debs organized strike, boycott of Pullman cars Government used Sherman Antitrust Act to block strike
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