The Growth of US Industry 1865 to 1900

A. At the time of the Civil War, the US was still largely an agricultural country

B. By the early 1900s, the United States was the world’s leading industrial Power

Factors Leading to Industrialization A) Abundant natural resources (water, timber,

coal, iron, copper, oil)

B) Large Workforce (1860-1910 the population of the US tripled – roughly 20 million immigrants came to the US between 1870 and 1910).

C) Favorable Government Polices -- laissez-faire & high tariffs

INVENTORS AND INVENTIONS 1. 1876 – Invented the

telephone

2. By 1915 nine million phones were in use in the USA

3. Telephones made US industries efficient and competitive by allowing suppliers, producers and sellers to better communicate

Alexander Graham Bell

INVENTORS AND INVENTIONS Turned electricity from a scientific

curiosity into a practical source of power

1876 – opened invention factory in NJ (1st light bulb, phonograph, motion picture projector)

1882 -- 1st electrical power station and distribution system in NYC

By 1900 electricity was more efficiently powering factories and household items

Thomas Edison

INVENTORS AND INVENTIONS 1. Pioneer in the

automobile industry

2. Improved upon the assembly-line process, which made automobiles affordable to the middle class after WWI

Henry Ford

INVENTORS AND INVENTIONS 1. First successful

flight at Kitty Hawk, North Carolina

The Wright Brothers

INDUSTRIAL LEADERS 1. At the time of the

Civil War, the nation’s railroads ran on iron rails that wore out quickly

2. RR owners knew steel would last longer, but it was expensive

Andrew Carnegie

INDUSTRIAL LEADERS 3. In 1872 Andrew Carnegie, a Scottish

immigrant who built iron bridges for railroads, went to England to study a less expensive process to make steel – the Bessemer Process

4. Carnegie was so impressed by the process that he decided to bring it back with him to the USA.

5. “The day of iron has passed,” he announced, “Steel is king”.

INDUSTRIAL LEADERS 6. Carnegie was right. By the 1880s, steel

was replacing iron in rails, locomotives and bridges. Steel nails, needles and knives became common household items

INDUSTRIAL LEADERS 7. Many companies competed fiercely to

supply steel

8. In order to keep costs low Carnegie took various steps. The one we will focus on is “Vertical Integration”.

CARNEGIE & VERTICAL INTEGRATION

Instead of paying companies for coal, lime and iron, Carnegie’s company BOUGHT coal mines, limestone quarries and iron ore fields.

INDUSTRIAL LEADERS 1. Rockefeller invested in his

first oil refinery in 1862

2. To reduce competition, he did everything he could to drive his rivals out of business. Those companies he could not destroy, he bought

3. Rockefeller took Carnegie’s idea of vertical integration a step further with horizontal integration

John D. Rockefeller

INDUSTRIAL LEADERS JP Morgan….finance

Cornelius Vanderbilt…railroads

CORPORATIONS Big businesses such as railroads needed lots of capital.

After the Civil War, more and more businesses became corporations:

1) the businesses are able to raise a lot of cash (selling stock to stock holders)

2) stockholders have limited liability – if the company fails, stock holders only lose their investments

By the 1880s, thousands of corporations were doing business across the USA

INDUSTRIAL LEADERS A. By 1880, Rockefeller controlled 95% of the

nation’s oil refining

B. To prevent horizontal integration, many states passed laws that prevented one company from owning stock in another

C. In 1882 Standard Oil formed the first TRUST.

ROCKEFELLER’S OIL TRUST In trusts, stockholders of one

company act as trustees of another company.

Though they technically don’t OWN the company, they can control it, making their company bigger and more powerful

Trusts were unpopular with lots of American people because they feared monopolies

Trusts were popular with businessmen: Other businesses such as railroads, meatpacking, sugar, whiskey and tobacco all created trusts

How successful was organized labor in improving the conditions of workers from 1865 to 1900? Analyze the factors that contributed to the level of success achieved?

(2000 DBQ)