IndustrializatioIndustrialization & “Big n & “Big

Business”Business”

IndustrializationIndustrialization First began in US First began in US

during the during the early early 1800s1800s

Accelerated during Accelerated during the Civil Warthe Civil War

By 1900, US had By 1900, US had become the world’s become the world’s leading industrial leading industrial powerpower

Natural ResourcesNatural Resources US had plentiful US had plentiful

natural resources:natural resources: WaterWater TimberTimber CoalCoal Iron Iron CopperCopper OilOil Large workforce, Large workforce,

thanks to thanks to immigrationimmigration

Laissez-faireLaissez-faire Approach Approach by Governmentby Government

US government US government supported the “supported the “free free enterpriseenterprise” system –” system –capitalism capitalism

Kept taxes lowKept taxes low Minimal regulation of Minimal regulation of

businessesbusinesses Made no effort to control Made no effort to control

wageswages or or pricesprices Did, however, enact high Did, however, enact high

tariffs to protect US tariffs to protect US industries from industries from European competitionEuropean competition

SteelSteel Used for building Used for building

railroads, heavy railroads, heavy machinery, and machinery, and skyscrapers and skyscrapers and other buildingsother buildings

Stronger, lighter, Stronger, lighter, more durable, and more durable, and more flexible than more flexible than ironiron

BessemerBessemer Process Process Developed by Sir Developed by Sir

Henry Bessemer, Henry Bessemer, put into put into mainstream use in mainstream use in US by Andrew US by Andrew CarnegieCarnegie

New process for New process for making steel more making steel more efficiently and efficiently and cheaply, while also cheaply, while also producing steel of a producing steel of a superior qualitysuperior quality

Andrew CarnegieAndrew Carnegie 1835 – 19191835 – 1919 Scottish immigrantScottish immigrant Started from poverty, Started from poverty,

worked his way up through worked his way up through telegraph and railroad telegraph and railroad companies until he companies until he eventually made a fortune eventually made a fortune investing in his own steel investing in his own steel companycompany

In 1901, Carnegie sold his In 1901, Carnegie sold his steel company for $230 steel company for $230 million and began pursuing million and began pursuing philanthropic interests.philanthropic interests.

By the time of his death, he By the time of his death, he had given away nearly had given away nearly $450 million!$450 million!

U.S. SteelU.S. Steel Created in 1901 Created in 1901

when J.P. Morgan when J.P. Morgan bought out bought out Carnegie and Carnegie and several other large several other large steel steel manufacturers to manufacturers to create the world’s create the world’s first billion-dollar first billion-dollar companycompany

OilOil First major US oil well First major US oil well

was drilled in was drilled in Pennsylvania by Edwin Pennsylvania by Edwin L. Drake in 1858L. Drake in 1858

Richest oil finds of 19Richest oil finds of 19thth century would come in century would come in Texas and OklahomaTexas and Oklahoma

Used at first for Used at first for making kerosene for making kerosene for lighting, but later used lighting, but later used to power and lubricate to power and lubricate machinerymachinery

John D. John D. RockefellerRockefeller

1839 – 19371839 – 1937 Became rich off his Became rich off his

near-monopoly in the near-monopoly in the American oil industryAmerican oil industry

First billionaire in US; First billionaire in US; was worth $1.4 billion was worth $1.4 billion when he died (That’s when he died (That’s about $600 billion in about $600 billion in today’s dollars) – He today’s dollars) – He held a little over 1% of held a little over 1% of the total wealth of the the total wealth of the US!US!

Standard Oil Standard Oil CompanyCompany

Created in 1870 by Created in 1870 by Rockefeller and several Rockefeller and several partnerspartners

Volume pricing allowed Volume pricing allowed Standard Oil to bankrupt Standard Oil to bankrupt any competitors who any competitors who refused to sell outrefused to sell out

Became so powerful a Became so powerful a monopoly that it was monopoly that it was ordered broken up by ordered broken up by the Supreme Court in the Supreme Court in 19111911

RailroadsRailroads Railroads became Railroads became

the lifeline of all the lifeline of all American American agricultural and agricultural and industrial productionindustrial production

Moved natural Moved natural resources to the resources to the factories, farm factories, farm goods to market, goods to market, and manufactured and manufactured goods to distributorsgoods to distributors

Cornelius VanderbiltCornelius Vanderbilt 1794 – 18771794 – 1877 ““The Commodore”The Commodore” Dropped out of school to Dropped out of school to

operate a ferry business operate a ferry business which grew into a huge which grew into a huge fortune in the shipping and fortune in the shipping and railroad industriesrailroad industries

Founded Vanderbilt University Founded Vanderbilt University with a $1 million donation, the with a $1 million donation, the largest in US history at that largest in US history at that timetime

One of his grandsons built One of his grandsons built Biltmore House in AshevilleBiltmore House in Asheville, , NCNC

ElectricityElectricity Vital to new industrial Vital to new industrial

growth, the ability to growth, the ability to use electrical power use electrical power to create light and run to create light and run machinery allowed machinery allowed factories to run 24 factories to run 24 hours a dayhours a day

Electricity also opened Electricity also opened up new avenues of up new avenues of entertainmententertainment

Thomas EdisonThomas Edison 1847 – 19311847 – 1931 ““The Wizard of Menlo Park”The Wizard of Menlo Park” Holder of over 1000 patentsHolder of over 1000 patents Developed the phonograph, Developed the phonograph,

the light bulb, and motion the light bulb, and motion picture camerapicture camera

Founder of Edison General Founder of Edison General Electric Company, which Electric Company, which later became General later became General Electric (GE)Electric (GE)

A better developer of ideas A better developer of ideas than marketer, many of his than marketer, many of his inventions would make inventions would make other people richother people rich

George George WestinghouseWestinghouse

1846 – 19141846 – 1914 Inventor, who developed Inventor, who developed

the air brake and rotary the air brake and rotary steam engine for the steam engine for the railroadsrailroads

Made his fortune in Made his fortune in electricity by backing electricity by backing Nikola Tesla’s Nikola Tesla’s alternating current (ACalternating current (AC) ) method of electrical method of electrical distribution over Edison’s distribution over Edison’s direct current (DC) methoddirect current (DC) method

Westinghouse Electric Westinghouse Electric CompanyCompany

Founded in 1886Founded in 1886 Became first Became first

commercially commercially successful electric successful electric power company power company

Also continued to Also continued to develop devices that develop devices that used electricity, like used electricity, like kitchen appliances kitchen appliances and lighting fixturesand lighting fixtures

Banking & FinanceBanking & Finance Larger and more Larger and more

powerful banking powerful banking firms were needed to firms were needed to loan money to these loan money to these new mega-new mega-corporationscorporations

Small banks began to Small banks began to merge, just as small merge, just as small corporations had corporations had merged into merged into monopolies like US monopolies like US Steel and Standard OilSteel and Standard Oil

J.P. MorganJ.P. Morgan 1837 – 19131837 – 1913 Financed the merger of steel Financed the merger of steel

companies into the giant US companies into the giant US Steel; also financed the Steel; also financed the merger of electric operators merger of electric operators into General Electricinto General Electric

Key stakeholder in several Key stakeholder in several other corporations, including other corporations, including International Harvester, International Harvester, AT&T, and numerous AT&T, and numerous railroadsrailroads

Was scheduled to sail on the Was scheduled to sail on the Titanic, but cancelled his Titanic, but cancelled his reservation at the last reservation at the last minuteminute

Tactics of “Big Tactics of “Big Business”Business” MonopoliesMonopolies: control of an : control of an

entire market or good by a entire market or good by a single corporationsingle corporation

TrustsTrusts: combination of : combination of independent corporations independent corporations under one group of managersunder one group of managers

Holding companiesHolding companies: : ownership of multiple ownership of multiple companies by a single companies by a single controlling company which controlling company which doesn’t actually produce doesn’t actually produce anything itselfanything itself

Interlocking DirectoratesInterlocking Directorates: : when the directors of one when the directors of one company serve on the board company serve on the board of directors of multiple other of directors of multiple other related companiesrelated companies

IntegrationIntegrationVerticalVertical Company buys all of the Company buys all of the

different businesses on different businesses on which it depends for its which it depends for its operationsoperations

Controls all of its Controls all of its suppliers from the suppliers from the natural resources on upnatural resources on up

Controls all of the Controls all of the companies which companies which transport and distribute transport and distribute its productsits products

HorizontalHorizontal Company buys out all Company buys out all

of its competitors to of its competitors to create a larger more create a larger more efficient corporationefficient corporation

Ultimate form of Ultimate form of horizontal integration horizontal integration is the creation of a is the creation of a monopolymonopoly

Other Key Other Key InventionsInventions

Alexander Graham Alexander Graham Bell’s Bell’s TelephoneTelephone

Elisha Otis’ Elisha Otis’ ElevatorElevator Thaddeus Lowe’s Thaddeus Lowe’s

Ice MachineIce Machine Gustavus Swift’s Gustavus Swift’s

Refrigerated Refrigerated Railroad CarRailroad Car

Standardization of Standardization of clothing & shoe clothing & shoe sizessizes