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T1/3/12; T12/21-W12/22/10

T1/3/12; T12/21-W12/22/10. Ch. 18.1 – Industrialization & Labor Strife (Part 1; pp. 503-515 ) Q: What impact did industrialization have on the U.S. in the late 19 th Century?. I. Factors in Industrialization. 6 main features to modern industrialization

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T1/3/12; T12/21-W12/22/10

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  1. T1/3/12; T12/21-W12/22/10 Ch. 18.1 – Industrialization & Labor Strife (Part 1; pp. 503-515) Q: What impact did industrialization have on the U.S. in the late 19th Century?

  2. I. Factors in Industrialization • 6 main features to modern industrialization • new cheap energy source – coal (WV, PA, KY) • spread of technology & impact on factories • need for cheap labor • desire for competition among companies • rapid deflation • failure of money supply to keep pace – devalued money and restricted credit

  3. II. Railroad Building A. Corporate Model • provided earliest industrial model • other business would use RR as examples 1. Issued Stocks • RR’s were very expensive • stocks depended on success of company 2. Use of Technology • esp. telegraph to coordinate RR movement 3. Created Organizational Hierarchies • efficiency, departments & hierarchy – greater organization • created time zones; similar gauge sizes

  4. Railroad & Manufacturing

  5. B. Early RR Leaders 1. Jay Gould – RR’s • classic early industrial leader • “robber baron” vs. “captain of industry” • ruthless in business practices • elimination of competition – good or bad?

  6. B. Early RR Leaders (cont.) 2. Cornelius Vanderbilt – RR’s • shipping – “The Commodore” • moved into RRs during C.W. • great consolidation in RR business • about 7 companies by 1900 • RR companies racked up heavy debts • RR’s greatly hurt by Panic of 1893

  7. III. Other Business Leaders A. J. Pierpont Morgan – finance • investment banking • J.P. Morgan (now w/ J.P. Morgan/Chase Bank) & Morgan Stanley today)

  8. III. Other Business Leaders (cont.) B. Andrew Carnegie – steel • immigrant – “rags to riches” example • educated himself, hard working, industrious • began in telegraph moved to steel in 1870s • Carnegie Steel - model of large corporations • 1st billion dollar comp • vertical integration – control most, if not all, aspects of production • great philanthropist as well

  9. III. Other Business Leaders (cont.) C. John D. Rockefeller – oil • Standard Oil Co. established in 1870 • kept up w/ latest innovations • horizontal integration (90% by 1879) • horizontal – control most, if not all, competitors in a business • both horizontal & vertical methods were effective in consolidating corporate power • created Standard Oil Trust in 1882 • trusts & holding companies

  10. IV. Early Regulation Laws A. Interstate Commerce Act • passed in 1887 by Sen. Shelby M. Cullom (IL) • created ICC to oversee RR practices going through more than one state • relatively weak & ineffective until Hepburn Act of 1906

  11. IV. Early Regulation Laws (cont.) B. Sherman Anti-Trust Act - 1890 • Standard Oil Trust’s example • Became model for other industries (charts p. 511) • Sen. John Sherman (OH) passed new law • outlawed trusts and other contracts that restrained trade • vague wording of trust and restraint of trade • often used to break up unions • similar weakness to ICC (until Progressive Era)

  12. V. Major Inventors • electricity • refrigerated cars (GustavasSwift) • new technological advances (Bessemer process, bottle making, canning, etc.) • sewing machines – now mass-produced – Singer Sewing Machine Co. – 1860s • telephone – Alexander Graham Bell – 1876 • great optimism about power of inventions • allowed for more “free time” • often eliminated skilled labor

  13. V. Major Inventors (cont.) • Thomas Alva Edison – many big inventions • stock-quotation printer – 1868 (1st big invention) • phonograph – 1877 • light bulb – 1879 • movie camera & film, microphone • Edison Plant in Menlo Park, NJ (“Wizard of MP”) • research (R&D departments) • collaboration of science & business • Edison Illuminating Co. – 1882 (ConEd– NYC) • later merged w/ competitors to form GE • worked collaboratively w/ Westinghouse

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