The Rise of Industrial America

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The Rise of Industrial America

• 1865-1900

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Industrial Growth 1865-1900
Causes
US has wealth of natural resources Explosion of inventions better business and manufacturing efficiency Growing urban population provides workers and markets RR establish new markets - spur business growth
Industrial Growth
Effects
Big business emerges Business consolidates under monopolies and trusts Workers endure harsh conditions Labor unions develop Major strikes by industrial workers violence
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Important individuals in the late 1800s
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Growth of Big Business Causes

• Technological boom
• Heavy investment in technology
• RR encourage expansion of business
• Social Darwinism favorable public opinion

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Railroads Create National Network

• After the Civil War rail tracks started to follow
  a standard tracks and signals.
• The key event to the rail expansion was the
  Transcontinental Railroad Railway that traveled
  from coast to coast.
• Railroads adopted time zones in 1883.

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Thomas Edison

• Menlo Park Laboratory
• Electricity
• Electric Light Bulb
• General Electric
• Power Plants
• Grammaphone
• Prolific Inventor

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The Bessemer Process

• Process allowed for the mass production of steel.
  
• Steel became cheaper and more available.
• With steel in greater supply new building
  projects were undertaken.
• The Brooklyn Bridge became the symbol of the new
  era of American technological innovations.

Henry Bessemer
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Growth of Big Business Methods

• Vertical integration (Carnegie Steel)
• Horizontal consolidation integration (Standard
  Oil)
• Trusts
• Economies of Scale
• Monopolistic tendencies

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The Big Business Model

• Businesses in the late 1800s transformed into a
  completely new form because of many factors
• Larger Pool of Capital (Money) businesses needed
  large amounts of money to run. Turned to private
  investors.
• Wider Geographic Span railroads allowed
  businesses to have operations throughout the
  country.
• Broader Range of Operations Became responsible
  for all stages of operation.
• Revised Role of Ownership Owning and management
  became two different things.
• New Methods of Managements Specialized
  departments (HR, Accounting, Security, Benefits)
  were created to manage such large companies.

What it takes to run a large company.
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Rockefeller Carnegie

• John D. Rockefeller Formed Standard Oil Company
  in 1870 and soon became one of the worlds
  richest men.
• Business tactics were questionable.
• By the end of his life he gave 500 million in
  charity to help fund social well being.
• Andrew Carnegie Became the main supplier of
  steel in U.S. in late 1800s.
• Believed in Gospel of Wealth
• Gave away 80 of fortune to education alone.

He was no Santa Clause
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Which one?

• Captains of Industry

• Robber Barons

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Horizontal Consolidation
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Vertical Integration
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Growth of Big Business Features

• Large pools of capital
• Wider Geographic reach
• Changed role of ownership - professional
  managers
• New administrative techniques
• Oligopoly
• Robber Barons or Captains of Industry ---
  Industrial Statesmen?

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Corporate Structure
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Growth of Big Business Government Relations

• Government
• Friendly to big business
• Minimal interference (laissez-faire hands off)
• Sherman Antitrust Act (1890) - first used against
  labor unions NOT big business. (Would later
  change)

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Bosses of the Senate
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Growth of Big Business Effects I

• US becomes industrial power internationally
• Many jobs available for immigrants failed
  farmers
• Better business efficiency
• Higher productivity

• Business cycles Boom and Bust
• Social class of super rich is created
• Income gap grows wider
• Labor Unions increased presence

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Growth of Big Business Effects II

• Increased number of workers decreased wages
  (generally)
• Families work
• Increased mechanization less need for human
  labor

• No insurance or benefits for most industrial
  workers
• Child labor
• Poor conditions bad health of workers

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Boom and Bust Cycles
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Gradual Shift to Industrialized Labor
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Child Labor
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Child Labor 1870-1930
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Major Labor Strikes of the Late 19th century
(1870s-1890s)
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Social Darwinism

• Big businessmen began to adopt Social
  Darwinism.
• An extension of Darwins natural selection
  process.
• Social Darwinists argued that society should
  interfere with competition as little as possible.
• Believed government should stay out of businesses
  who were most fit to succeed and become rich.
• Believed society would benefit from the success
  of the fit by weeding out the unfit.

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