INDUSTRIAL REVOLUTION

1
INDUSTRIAL REVOLUTION

• Economic Boom
• Railroads
• Finance J.P. Morgan
• Steel Carnegie
• Oil Rockefeller

2
What factors contributed to US growth after the
Civil War?

• Transportation Revolution Trains, ships
• Communication Rev. telegraph, phone
• Labor immigrants
• Natural Recourses coal, iron, oil, timber,
• Capital stocks and bonds, government
• Culture entrepreneurial spirit, hard work
• Legal protection, inventions,
• 1865-1914 4 growth, 8 fold increase

3
THE RAILROADS

• Trains changed pace of life for first time
• First big business complex management
• Growth 1865 65,000 miles 1900 193,000
• More than all of Europe Russia
• Huge Capital Stocks, Bonds, gov
• Standardization, Four Trunk Routs
• Transcontinental Railroad 1869
• Overproduction, Price Wars, Rebates, Pools
  (Cartels)

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Central Pacific Railroad
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Financial Institutions

• J. P. Morgan NY London
• Money flowed in from Europe
• Stocks and Bonds
• He hated ruinous competition
• Morganization, Panic of 1893, he took
• Over companies, picked board, cut costs
• debt, stopped rebates, imposed order

6
J. P. Morgan
7
Preconditions for Big Business

• Capital
• Transportation
• Communication
• Manufacturing technology
• Legal Protection
• Energy Source

8
How is Big Business different fromantebellum
partnerships?

• Separation of owner and operator
• Impersonal
• Immortal
• Diverse activities
• Complex Management
• Great Concentration of wealth power

9
How did Big Business grow and why do they have an
advantage?

• Economies of Scale produces each unit
• at lower cost
• Vertical Integration Carnegie
• Horizontal Integration Rockefeller

10
Carnegie Steel

• Andrew Carnegie
• Pennsylvania Railroad
• J. Edgar Thomas Steel Works
• Vertical Integration he bought coal iron
• Mines, ships, trains, (ran plants full speed).
• Sold Carnegie Steel for 480 million
• Philanthropy Gospel of Wealth

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Bessemer Process
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Andrew Carnegie
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Standard Oil

• John D. Rockefeller
• Horizontal Integration He bought out all
• The other oil refining companies.
• The Trust Board of Trustees held stock
• Of all other companies, loose conglomeration
• The Corporation 1889 true merger,
• Central management ran whole thing

14
John D. Rockefeller