Industrialization and Big Business

1. Industrialization and Big Business APUSH Ms. Weston 1/11/07

2. The Railroad Boom Between 1865-1900 Largely supported by the government Through loans, land-grants Criticism of this, but land not really worth much until railroads built there. TRANSCONTINENTAL RAILROAD�joined Pacific Union Railroad from West and Union Pacific Railroad from East in 1869. Both largely built by Chinese and Irish immigrants Dangerous work!

3. Reasons for Railroad Growth Steel rail�popularized by Vanderbilt Stronger, safer, more economical Standard gauge of track width Westinghouse air brake Pullman Palace Cars

4. Impact of the Railroad United nation physically Created an enormous domestic market for American and international goods Encouraged further industrialization By opening up markets and transporting raw materials Stimulated mining and agriculture in the West Encouraged people to move to cities Encouraged immigrants to move West Destroyed land, led to extinction of buffalo Development of standardized time zones Created millionaires

5. Corruption in Railroads Credit Mobilier Scandal Speculation�Jay Gould Stock-watering: Inflating price of stock beyond what railway was actually worth Bribed judges and legislatures Gave rebates to recruit business Charged unfair rates Decreased competition through �pools��agreement to share business in an area and share profits.

6. Government Regulation of the Railroads Came slowly because of popular belief in laissez-faire and free competition After Panic of 1870s, people especially farmers began asking for government interference. Wabash cases: Said only federal government could regulate interstate commerce.

7. Government Regulation of the Railroads ctnd. Interstate Commerce Act (1887) Passed despite Cleveland�s opposition Prohibited rebates and pools and required railroads to publish rates openly. Created Interstate Commerce Commission�MOST IMPORTANT Largely ineffective IMPORTANCE: Showed government increasingly getting involved in regulating business.

8. US as Manufacturing Superpower Why? Liquid capital�first millionaires with money to invest! Amazing natural resources�iron ore, coal Massive immigration meant cheap and plentiful labor American inventiveness Cash register, stock ticker, typewriter, refrigerator car Graham Bell: Telephone Edison: Light bulb

9. Emergence of Trusts Goal: To combine businesses and decrease competition Vertical integration: One business buys all businesses involved in the creation of their product. Horizontal Integration: One business buys all businesses that produce the same product Most wealthy industrialists used some form of large-scale business combinations to grow their businesses and make their fortunes.

10. Steel is King! Used for skyscrapers and railroads Scarce before 1870. After this became more common Bessemer Process Abundance of fuel and iron ore Labor supply to create it. Steel key to so much of US industrial development

11. Andrew Carnegie: Steel Baron Scottish immigrant, went from rags to riches Tough businessman, very effective organizer Bought out by JP Morgan, donated most of his wealth to philanthropic causes. Believed was moral responsibility of rich to help the poor.

12. John Rockefeller: Oil Baron Oil in high demand with development of automobile in 1900. Rockefeller organized Standard Oil Company�huge oil trust. Ruthless business practices, destroyed competition. Owned 95% of oil industry Still, did turn out a better produced at a cheaper price.

13. The Gospel of Wealth Idea that God had given the rich their money. Some took this to believe rich should share their wealth with poor. Others used it as a justification of their wealth.

14. Social Darwinism Loosely based on ideas of Charles Darwin William Sumner and Herbert Spencer applied evolutionary ideas to society. Idea of �survival of fittest� Rich were the strongest Poor were poor because they were lazy, or weak

15. Russell Conwell �Acres of Diamonds� I say that you ought to get rich, and it is our duty to get rich. How many of my pious brethren say to me, �Do you, a Christian minister, spend your time going up and down the country advising young people to get rich, to get money?� �Yes, of course I do.� They say, �Isn�t that awful! Why don�t you preach the gospel instead of preaching about man�s making money?� �Because to make money honestly is to preach the gospel.� That is the reason. The men who get rich may be the most honest men you find in the community. �Oh,� but says some young man here to-night, � I have been told all my life that if a person has money he is very dishonest and dishonorable and mean and contemptible.� My friend, that is the reason why you have none, because you have that idea of people.

16. Government Begins to Attack Trusts Sherman Anti-Trust Act (1890) Forbade combinations that restrained trade Law very ineffective�difficult to enforce, lots of loopholes Actually used to stop workers from organizing into unions. Still, important step in government regulating business and private greed.