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Unit 3: Birth of Modern America

Unit 3: Birth of Modern America. Chapter 9. Industrialization. I. Introduction to Industrialization. Industrial Revolution 1. Definition: the movement from small-scale manufacturing to the production of heavy industry, using machines to replace human laborers

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Unit 3: Birth of Modern America

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  1. Unit 3: Birth of Modern America

  2. Chapter 9 Industrialization

  3. I. Introduction to Industrialization • Industrial Revolution 1. Definition: the movement from small-scale manufacturing to the production of heavy industry, using machines to replace human laborers 2. In the US, this occurred 1865-1901 3. By end of 1800s, US was the most industrialized nation in the world

  4. II. Rise of Industry B. Factors that contributed to rapid industrialization 1. Natural Resources a. Western Minerals (access to these thanks to settlement of West!), iron, coal, timber, copper, water power, etc. b. Could be obtained cheaply c. Little need for imports

  5. 2. Innovations in transportation and communication - Infrastructure a. Telegraph, Telephone: allowed biz to be conducted quickly across long distance b. Roads, Canals, RRs: allowed mass distribution of raw materials, farm produce and products of manufacture

  6. 3. New Energy Sources a. Steam Engine - drove textile mill spindles, sewing etc. Steam came from burning coal b. Petroleum power 1) initially in demand as Kerosene, for lanterns and stoves (replacing whale oil), and machine lubrication 2) oil fields opened from PA to TX 3) Internal Combustion Engine (late 1800s): used gasoline refined from oil to run cars and the 1st airplane 4) growth of oil industry led to expansion of the economy

  7. c. Electricity: 1) Used initially for communication across long distances: telegraph, telephone 2) Edison’s electric light bulb 3) drove machinery in factories 4) by 1900: powered streetcars and subway trains 5) by 1920: electric refrigerators

  8. 4. Economic Stimuli a. Lots of investment Capital ($) – from Europe, Americans, Western minerals b. Increased immigration (20m btwn1870-1910) + high birth rate and large families ( thanks to advances in medical technology, better nutrition, infrastructure = lower infant mortality rate) = A Population boom that stimulated the economy by providing industry with… 1) Large workforce/cheap labor 2) created demand (lots of customers!) for consumer goods produced by factories

  9. c. New ways of selling/organizing 1)1st dept store: Macy’s in NY • lots of products in huge, elegantbuilding • Made shopping glamorous 2) 1st chain store: A & P • a group of similar stores owned by the same company • Focused on thrift & low prices instead of elaborate service or decor Macy’s NY A & P

  10. 3) 1st mail order catalog: Ward’s • Attractive to rural shoppers who lived far from chain or dept stores • Used enticing illustrations and descriptions to advertise items for sale 4) advertising/packaging to attract consumers • Lots of new products forced retailers to look for new ways to market and sell goods

  11. 5. New Technologies- you name it, somebody invented it! a. Textile Industry: 1) Factory System = Samuel Slater • - built the 1st successful water-powered textile mill in America 2) Sewing Machine = Elias Howe & Isaac Singer (competed for patent) - switch from home-made to machine- made clothes - sold on installment plan (a form of credit)

  12. Rise of the Sewing Machine Industry

  13. b. Railroads: 1) Standardized Gauges = John Stevens - width btwn rails = 56 ½ “ contributes to completion of Transcontinental RR 2) Air Brakes = George Westinghouse - more precise stopping of trains 3) Sleeping Car = George Pullman - comfortable, luxurious travel

  14. Pullman Car • Beveled mirrors, ornate carvings, and polished brass were the hallmarks of travel in a Pullman parlor car, such as the one depicted here from 1893. • First-class passengers enjoyed plush swivel seats and could eat their meals in equaling lavish dining cars. • The wealthiest owned their own luxuriously appointed private cars.

  15. c. Steel: 1) Bessemer Process = Henry Bessemer, (William Kelly) • - mass production of steel: heat iron ore to liquid state, blast w/ hot air to burn out impurities, end product = steel • - Iron RR tracks replaced by steel tracks • - Birth of Skyscrapers

  16. Bessemer Process

  17. 2) Elevator = Elisha Otis • - Skyscrapers made practical 3) Suspension Bridge = John Roebling - uses steel cables - London Bridge 1st - Brooklyn Bridge 1st in US 4) Trolley Car = Frank Sprague - early mass transit - runs on steel cables Thomas Edison

  18. d. Oil: - Oil Well & Pump = Edwin Drake • - launched an oil boom nationwide • - cheap source of fuel for autos (future)

  19. e. Thomas Edison 1) Light Bulb - uses a dynamo (primitive electric generator) - factories can be built away from natural source of power - can work longer hrs 2) Menlo Park Research Lab - model for current research labs

  20. f. Business Industry: 1)Telegraph = Samuel Morse - Morse code - allows biz to communicate quickly across long distances 2)Telephone = Alexander Graham Bell - communication revolution - allows biz to communicate quickly across long distances 3) Transatlantic Cable = Cyrus Fields - uses telegraph to send impulses - communicate with Europe 4) Typewriter = Christopher Sholes 5) Cash Register = James Ritty

  21. g. Food Industry 1) Mechanical Reaper = Cyrus McCormick - harvest grain quickly using machines 2) Steel Plow = John Deere 3) Evaporated Milk = Gail Borden 4) Food Preservation (w/o canning) = HJ Heinz 5) Refrigerated RR Car = Gustavus Swift - can ship slaughtered meat across long distances safely - leads to growth of meatpacking industry in Chicago

  22. 6) Dried Flake Cereal = John Kellogg - More cereal = CW Post - leads to cereal wars and use of gimmicks to sell products

  23. h. Miscellaneous Inventions 1) Kodak Camera = George Eastman 2) Airplane = Orville & Wilbur Wright - revolution in transportation - revolution in warfare First flight at Kitty Hawk, NC on December 17, 1903

  24. 6. A Business-Friendly Government a. Mini Economics Lesson: Economic Systems - every society must answer three basic economic questions to determine how to use its limited resources: What to make? How much to make? Who to make it for?

  25. Traditional Economy a. Decisions made by: head of family or tribe b. Survival drives economic decisions c. Prices and Wages undetermined as very little surplus or trade d. Found in developing countries, mostly in rural areas e. Also known as a subsistence economy f. Most goods & services produced & consumed by the family/for family

  26. Market Economy • Decisions made by Individual or Privately owned businesses • Desire for Profit drives economic decisions • Prices and Wages determined by the laws of supply and demand • This type of economy is found in the USA! • It is also known as Free Enterprise and Capitalism • Competition is valued to provide consumers with the best quality product at the best possible price • Gov’t role in a market economy: to provide some services and impose certain regulations

  27. 3. Command Economy • Decisions made by the Government • Social goals drive economic decisions • Prices and Wages determined by the Gov’t • Found in countries like Cuba and North Korea today + the former USSR • Also known as COMMUNISM – gov’t owns, operates all major farms, factories, utilities, stores • Production doesn’t necessarily reflect consumer demand

  28. D. Mixed Economy – Combo of Market and Command Economy • Gov’t owns/operates somebasic industries while allowing private enterprise in other parts of economy • Decisions driven by Profit and Social Goals • Prices and Wages determined by Supply and Demand and the Gov’t • Found in many European countries (UK, France etc) • Also known as Socialism • characterized by HIGH TAXES (to pay for the many social svcs like housing, health care, child care, pensions) • Belief that wealth should be distributed more equally through entitlements

  29. Mixed Economy (Socialism) Government Private Enterprise Laws of Supply & Demand Determine price & production Determine price & production Operates some businesses Owns somebusinesses

  30. b. Biz-Friendly Gov’t was Republican Dominated 1) supported many Laissez-Faire principles • 2) supported the free enterprise system by letting privately owned business firms operate with minimal gov’t control 3) became known as Party of Big Business

  31. c. Biz-Friendly Gov’t largely supported Laissez-Faire Capitalism: policy that the gov’t should interfere as little as possible in the nation’s economy Laissez-Faire Principles 1) role of gov’t : protect private property + keep the peace • 2) prices and wages determined by the laws of supply & demand – not the gov’t 3) gov’t should limit costly regulations that lead to increased prices • - regulation: gov’t imposed rule or law 4) gov’t should keep taxes and spending low 5) gov’t should keep debt to minimum: (if gov’t borrows from banks, then $ not available for individuals for their own use)

  32. d. Costs and Benefits of Laissez-Faire • 1) Benefits: • Free market makes the most of efficient use of resources (without government interventions, how resources are used is decided by the way people choose to spend their money, thus increasing efficiency overall) • Avoids people becoming reliant on the gov’t (because individuals are forced to become more productive or make better decisions in order to do well financially) • Encourages creativity and growth (the need for people to be economically self-reliant will give added incentive to come up with creative ideas and processes that wind up benefiting everyone) • Competition determines which industries succeed or fail – and society prospers if the economy is left in the hands of those who can compete

  33. d. Costs and Benefits of Laissez-Faire • 1) Costs: • If a person falls on hard times under laissez-faire there is no government programs ensuring a minimum standard of living • Firms may ignore issues such as pollution, unsafe working conditions, without regulations from gov’t • Firms may form monopolies where they can effect the market price and cause a welfare loss for consumers • Businesses that may be essential (like the financial giants) may fail causing commerce to be affected.

  34. e. Gov’t intervention that promoted growth of business and industry (against Laissez-Faire principles) 1) Protective Tariffs tariff: tax on imported goods - due to fear that new US industries could not compete with established European industries 2) Subsidies in land and money (land grants to RRs etc) subsidy: monetary assistance granted by a gov’t to a person or group in support of an enterprise thought to be in the public interest

  35. 3) provided a system of laws to protect competition, property and enforce contracts – this encouraged entrepreneurship • entrepreneur: one who organizes, manages, and assumes the risks of a business or enterprise • 4) established a system of patents which encouraged new inventions • patent: an official document that gives a person or company the right to be the only one that makes or sells a product for a certain period of time

  36. III. Railroads • Linking the Nation 1. Pacific Railway Act (1862) – authorized construction of Transcontinental RR 2. 1st Transcontinental RR – completed 1869 by 2 RR companies a. Central Pacific: built from CA east using many Chinese laborers b. Union Pacific: built from Omaha, NE west using Irish immigrants, ex-cons, veterans

  37. Transcontinental RR

  38. B. RRs contribution to Industrial Growth 1. Development of a National Market a. TC RRs increased market for many products by linking the nation (along with canals, telegraphs and telephones – now biz can be done quickly across long distances) b. Manufacturers could sell the same goods throughout the country (recall the news ways of selling goods + role advertising) c. United Americans from different regions

  39. 2. RRs Impact on the Economy a. stimulated economy by spending lots of $ on steel, coal, timber etc. b. shipping raw materials and finished goods became less expensive

  40. 3. Challenges to creating a National RR System a. problem: lots of unconnected RR lines - solution: RR consolidation. Large RRs take over small – eventually 7 main systems with terminals in major cities with branches into the country - Cornelius Vanderbilt: successful RR consolidator. Merged NY RRs and opened the 1st service from NYC to Chicago Consolidate: unite

  41. Railroad Consolidation

  42. b. problem: scheduling and passenger safety issues because clocks set by sun’s position in the sky at high noon (ex. at 12:00 noon in Chicago, already 12:50 in DC). 2 trains on same track could collide from scheduling errors caused by time variations - solution: Time Zones - made rail travel safer and more reliable

  43. Time Zones

  44. C. Land Grant System 1. Land Grants given to RRs by gov’t to encourage RR construction 2. RR companies able to cover their construction costs by selling land to settlers, real estate agencies & other biz

  45. Gov’t Land Grants to RRs

  46. D. Robber Barons 1. Some RR entrepreneurs engaged in corrupt practices that led to the acquisition of great wealth. They were called Robber Barons Robber Barons:a wealthy person who tries to get land, businesses, or more money in a way that is dishonest or wrong - often used ruthless tactics to drive out the competition - often exploited workers and kept wages low to enrich themselves - sometimes bribed public officials

  47. 2. Credit Mobilier Scandal – 1872 a. Stockholders from Union Pacific RR set up Credit Mobilier – a construction co. b. Credit Mobilier overcharged Union Pacific c. Since same investors controlled both, Union Pacific RR paid bills d. Investors made millions, RR almost bankrupt 3. More corruption: RR investors realized they could make more money selling land than operating a RR - bribed Congressmen to vote for more land grants to RRs

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