2d Industrial Revolution and the Growth of Big Business Georgia Performance Standards: SSUSH11a-d

2d Industrial Revolution and 2d Industrial Revolution and the Growth of Big Businessthe Growth of Big Business

Georgia Performance Standards:

SSUSH11a-d

SSUSH11 The student will describe the economic, social, and geographic impact of the growth of big business and technological innovations after Reconstruction.

a. Explain the impact of the railroads on other industries, such as steel, and on the organization of big business.

b. Describe the impact of the railroads in the development of the West; include the transcontinental railroad, and the use of Chinese labor.

c. Identify John D. Rockefeller and the Standard Oil Company and the rise of trusts and monopolies

d. Describe the inventions of Thomas Edison; include the electric light bulb, motion pictures, and the phonograph, and their impact on American life

Growth of RailroadsGrowth of Railroads

Railroad Growth in the U.S.

0

50,000

100,000

150,000

200,000

250,000

300,000

Year

Mile

s of

Tra

ck

Miles of Track 2,808 9,021 30,000 52,922 93,267 163,597 193,346 254,037 226,696 214,387 170,000

1840 1850 1860 1870 1880 1890 1900 1916 1945 1963 1995

Growth of RailroadsGrowth of Railroads

• Need:– Faster mode of transportation

• Results:– Creation of a national market– Standardized

“American” culture– Helps lead to:

• Urbanization• Industrialization, • Organized Labor• Immigration

1850

1860

1870

1880

1890

1900

1910

1920

0500,000

1,000,0001,500,0002,000,0002,500,000

Years

Railway Workers in the U.S.

Railroads and the WestRailroads and the West

Railroads and the WestRailroads and the West

• Government involvement in settlement:

– Morrill Act (1862)• Public land used or sold to found colleges• Examples: UGA, Ft. Valley, Auburn, AL A&M

– Homestead Act (1862)• People could gain property after living on it

and farming for 5 years

Railroads and the WestRailroads and the West

• “Railheads”– Cities on a rail line

that served to move cattle eastward

• Cattle Drives

• Ranching– “open range”– Introduction of

barbed wire

Transcontinental RailroadTranscontinental Railroad

• Prior:– Routes to California

• Overland by wagon train (2 months)• Water, via Panama/Nicaragua (2-6 months)• Water, via Cape Horn (6-10 months)

• Pacific Railroad Acts– Central Pacific – from Sacramento CA east– Union Pacific – from Council Bluffs IA west

Transcontinental RailroadTranscontinental Railroad

• Problems:– Weather– Geography– Supplies

• Had to be shipped to San Francisco

CaliforniaIowa

Transcontinental RailroadTranscontinental Railroad

• Meeting:– Promontory, Utah– May 10, 1869

Transcontinental Railroad meeting at Promontory Summit, Utah

Chinese Labor and RailroadsChinese Labor and Railroads

• Early labor:– Miners

• Viewed as unreliable, expensive

• Move to Chinese immigrants– Cheap

• Economic conditions in China were poor

– By 1868, 12,000 were employed by the Central Pacific Railroad (80% of their workforce)

Chinese LaborChinese Labor

• Harsh treatment– Paid less– Discriminated

against due to ethnicity

Reaction to Chinese LaborersThe Mongolian invasion has begun at last in good earnest…the first The Mongolian invasion has begun at last in good earnest…the first detachment of Chinese laborers…numbering 250 men, arrived… detachment of Chinese laborers…numbering 250 men, arrived… carrying their baggage on poles…in true Oriental fashion. Most of carrying their baggage on poles…in true Oriental fashion. Most of these men were employed in the construction of the Pacific these men were employed in the construction of the Pacific Railroad….Railroad…. - - Harper’s Weekly, 22 January, 1870Harper’s Weekly, 22 January, 1870

Rise of Trusts/MonopoliesRise of Trusts/Monopolies

• Cause:– Rise of urban centers (cities)– Rise of industrialization/mass

production– Transportation improvements

• Two Major Corporations:– Standard Oil– U.S. Steel

Monopoly: control over all or almost all trade or production of a good

Trusts: a large corporation or combination with a monopoly of some service or commodity.

Big Business

• A pejorative (negative) term used to describe the political and economic power of a corporation that influences prices of goods– Wal-Mart– Exxon– Home Depot– Now it’s your turn.

Monopoly

• Monopoly– One company has exclusive control over their

entire industry – Wipe out all of the competition– Two Methods:

• Vertical Integration• Horizontal Integration

Vertical Integration• One company controls all

means of production and distribution from beginning to end– Middleman is eliminated– Costs less for company to

create a product• Lower prices• Consumers go with cheaper

prices• Competition eliminated

Assembly and Manufacturing

End Product

Distribution

Raw Materials

One Company Owns all

Phases of Production

From TopTo Bottom

Vertical Integration

Horizontal Integration

• Buy out the competition– If companies refuse to sell, lower prices to

undercut the competition– Consumers flock to lower prices– Competition goes bankrupt or is forced to sell

Small Business

Small Business

Small Business

Small Business

Small Business

Small Business

Small Business

Small Business

Small Business

Small Business

Small Business

Small Business

To Form a Giant

Company(Trust)

Purchased by one Company

Horizontal Integration

Steel IndustrySteel Industry

• Needed to build railroads, buildings

• Mass production, perfected by Carnegie, allowed U.S. steel production to skyrocket

U.S. SteelU.S. Steel

• Formed in 1901– World’s first billion dollar company– Produced 67% of U.S. steel in that year

Robber Baron • Negative - a business leader

that builds wealth by lying, cheating and stealing– Robs from consumers– Abuses employees and

workers – Drives competitors out of

business (And enjoys it!)– Drains the country of natural

resources– Bribes government officials

Captain of Industry • Positive - a business leader

that positively contributes to the country – Creates jobs– Increases availability of goods– Expands markets– Helps the economy– A philanthropists – donates

money or goods to a charity• Creates museums, libraries,

universities

Andrew Carnegie (1835-1919)Andrew Carnegie (1835-1919)

• “Rags to riches”– Born poor in

Scotland– Became rich in U.S.

due to investments– Worked his way to

the top– Gave away most of

his fortune

OIL INDUSTRY

• Oil company founded in Cleveland, Ohio by John D. Rockefeller

• Successful, yet ruthless– By 1890, it controlled 88% of all refined oil– By 1904, it controlled 91% of U.S. oil production

Standard Oil CompanyStandard Oil Company

DID YOU KNOW: Today, descendants of Standard Oil Company still exist. Do you recognize any of these logos of just a small portion of the successors to Standard Oil?

John D. Rockefeller (1839-1937)John D. Rockefeller (1839-1937)

• Founder of Standard Oil

• Famous businessman and philanthropist

• Richest man in the world at his death– Worth $1,400,000,000 at

his death, approx. $663,000,000,000 today

Thomas Edison (1847-1931)Thomas Edison (1847-1931)

• American Inventor

• Held over 1,000 patents

Edison’s InventionsEdison’s Inventions

• Electric Light Bulb– Improvement,1879

• Motion Pictures– Kinetograph/Kinetoscope,

1891

• Phonograph– 1878

Light bulb used by Thomas Edison in his first

demonstration in 1879

Other Inventions of the TimeOther Inventions of the Time

• Cash Register (1879)– James Ritty

• Popcorn Machine (1885)– Charles Cretors

• Thermostat (1883)– Warren Johnson

• Dishwasher (1886)– Josephine Cochrane

Other Inventions of the TimeOther Inventions of the Time

• Photographic Film / Roll Film (1885)– George Eastman

• Zipper (1891)– Whitcomb Judson

• Air Conditioning (1902)– Willis Carrier

• Electric Washing Machine (1908)– Alva Fisher

• Electric Chair (1881)– Alfred Southwick /

Harold Brown

• Skyscraper (1885)– William Jenney– Used steel frame

construction– Chicago, Home

Insurance Company Building

Other Inventions of the TimeOther Inventions of the Time

Other Inventions of the TimeOther Inventions of the Time

• Adding Machine [Comptometer] (1887)– Dorr Felt

• Wireless Radio (1893)– Guglielmo Marconi

Other Inventions of the TimeOther Inventions of the Time

• Assembly Line– Developed by Henry Ford & Ford Motor Co.– Developed from 1908-1915

1 2 3 4

Alexander Graham Bell (1847-1922)Alexander Graham Bell (1847-1922)

• Invented the telephone (1876)

Inventions of the TimeInventions of the Time

• Impact on American life