The NorthImprovements in railroadrailroad systemFarms more heavily mechanized (using

fewer workers to produce more crops)Region spared from fighting during warTranscontinental railroad opened new

markets in the westEconomic growth brought new

immigrants to the regionMany found employment in the

industries of the North

The SouthCivil War ruined the economy and killed

the plantation systemMany farmers and planters sold off land

to pay debts and start overSouthern farmers returned to tobacco

and cotton productionNEW SOUTH – rebuilt railroads, new

textile and steel mills and new industries (oil and coal production)

Although, even with the changes, South still behind the North

Before the Civil War – single landowners and partnerships controlled most American business

After the Civil War – mills and factories now needed great capital (money) for investment that one person or a few partners could raise.

CORPORATIONSPurpose TypeTo raise capital for

expansionIt is a business in which

many investors own shares called stocks

In exchange for their investment, each stockholder receives a dividend, or part of the corporation’s profits

Limits investor losses If a corporation failed,

investor only lost his or her investment

Transportation IndustriesRailroads, urban

transportation, automobiles)

Building materialsSteel

EnergyCoal, oil and electricity

CommunicationsTelegraph and

telephone

What do you see?

What do you think the cartoon is saying about these men?

MONOPOLYPurpose

Company or small group of companies that has complete control over a particular field of business

A monopoly often allowed a company to raise prices to almost any level it desired

OUTCOME: federal legislation required

TRUSTPurpose TypeGroup of corporations in

the same or related fields agree to combine under a single board of trustees that control the actions of all the member corporations

Shareholders in the corporations received dividends from the trust but lost any say in its operation

Standard Oil Trust

Who were the industrial leaders?Andrew Carnegie – Steel

J.P. Morgan – Finance

John D. Rockefeller – Oil

Cornelius Vanderbilt - Railroads

LAISSEZ-FAIRE

Noninterference in businessGovernment should not interfere with

the economic workings of a nationFREE-ENTERPRISE SYTEM – private

individuals make the economic decisionsGovernment inference with business is

minimal during this time

SOCIAL DARWINISMLaissez-faire capitalists found justification in

their beliefs in Social DarwinismBased on Charles Darwin's theory of evolutionSocial Darwinists held that life was a struggle

for the “survival of the fittest”Unregulated business competition would see

weak businesses fail and healthy businesses thrive

Government action would regulate business practices would interfere with the process of natural selection

Also, any government programs to aid the poor or workers would also violate natural “laws”

ROBBER BARONS OR PHILANTHROPISTS?

Those who gained their riches at the expense of the poor and the working class

Lavish lifestyles of the wealthy at this time fed criticism

Many spent freely to show off their wealth

Public criticism and sense of social responsibility led the wealthy to use a part of their wealth to aid society.

Govt Policy towards BusinessExpanding industries industries and growing foreignforeign

trade benefited USGovernment policies were designed to aid the

growth growth of businessLoansLoans and land land grants to large railroad

companies were givenHighHigh tariffs that discouraged foreign

competitionTight limits on amount of money in circulationcirculationFew limits on immigration immigration = more workers= more workers

SHERMAN ANTITRUST ACTWhy:

Most corporations and trusts had eliminated most competitioncompetition and set up monopoliesmonopolies

Public ProtestWhat it did:

Prohibited monopolies. It prevented any business structure that “restrained trade”

Outcome:Corporations formed holdingholding companies

rather than trusts trusts to get around the act

Clayton Anti-Trust ActExpanded the Sherman Anti-Trust Act

It outlawed price-fixing

Exempted unions from the Sherman Anti-Trust Act(will make sense next class)

URBAN AREASDepartment stores –offered customers

wide variety of goodsRURAL AREAS

mail-order catalogs – saved customers trip to the store

NEW INVENTIONSBessemer Process – made making steel

easier and steel strongerTelephone – Alexander Graham Bellelectric light bulb – Thomas EdisonAirplane: Wright Brothers (1900s)Assembly Line manufacturing – Henry Ford