The Second Industrial Revolution

1. The Second Industrial Revolution Section 1 Chapter 19

2. Focus Questions • What developments occurred in the steel, oil, and electric-power industries during the Second Industrial Revolution? • What changes occurred in the way that businesses were organized? • Why did some Americans oppose monopolies, and what actions did they take against them?

3. An Age of Steel • Technology advances were important to the Second Industrial Revolution (this was the period of rapid growth in the U.S. manufacturing in the late 1800s) • By the mid-1890s the U.S. had become the industrial leader of the world • Some of the most important advances took place in the steel industry

4. An Age of Steel • In the 1850s, Henry Bessemer found a quick, cheap way to make steel by blasting hot air through melted iron to quickly remove waste materials • The Bessemer Process took only 10 to 20 minutes to convert several tons of iron into steel

5. An Age of Steel • The steel rails were at first used for railroad but eventually it will be used for building tall buildings and bridges • Air breaks on trains allowed them to carry heavier loads and travel faster • George Pullman designed elegant passenger and sleeping cars that made long-distance trips more comfortable • Railroads had a major impact on the development of the country’s economy

6. An Age of Steel • Cities that had major rail lines grew a great deal (Chicago and Kansas City) • As rail travel and shipping increased, railroad and their related industries employed more and more people

7. New Sources of Power • The use of petroleum was another breakthrough in the late 1800s • Edwin L. Drake proved that it was possible to pump crude oil from the ground (oil became big business) • The late 1800s became a time when oil will be used to power machinery • In 18767 German engineer Nikolaus A. Otto invented an engine powered by gasoline, another fuel made from oil • By the 1900s American manufacturers were building thousands of cars

8. New Sources of Power • Orville and Wilbur Wright were bicycle makers and built a light weight airplane with small gas-powered engine • They first piloted flight on December 17, 1903 in Kitty Hawk, North Carolina and patented the airplane in 1906

9. New Sources of Power • Thomas Alva Edison investigated the practical uses of electricity • He was awarded more than 1,000 patents • Edison and his team of inventors invented the light bulb in 1879 • He also helped provide electricity to cities

10. New Sources of Power • By 1866 a telegraph wire was laid on the floor of the Atlantic Ocean connecting the U.S. and Great Britain • Alexander Graham Bell invented the telephone in 1876 • By the mid-1890s major cities had telephone lines through out the city

11. Free Enterprise and Big Business • As the economy grew the federal government favored free enterprise– government did not interfere with business • The late 1800s the policy continued in the form of laissez-faire capitalism (little or no governmental control of the market economy • Laissez faire is French for “allow to do” • The government provided protective tariffs and land grants for railroad companies

12. Free Enterprise and Big Business • Entrepreneurs– people who start new business had a lot of freedom and many opportunities • Many entrepreneurs formed their business as corporations • Corporations sell shares of ownership (stock) to a number of individuals known as a stockholder • Stockholders get a share of the company profits • Corporations must be approved by a charter from the state

13. Free Enterprise and Big Business • The stockholders choose a board of directors who then choose the main leaders of the corporation • Stockholders are not personally responsible for the debts of the business (stockholders are only out the money they invested) • By 1900, more than 100 million shares a year were being sold on the New York Stock Exchange

14. Business Leaders • Entrepreneurs and business leaders were some of the most respected members of American society • Politicians praised prosperous businessman as examples of American hard work, talent, and success • Andrew Carnegie– was one of the most admired business leaders of the late 1800s • He borrowed money and invested in iron mills and the bridge building business • In 1873 Carnegie focused his efforts on steel production • By 1901 Carnegie’s mills were producing more steel than all of Great Britain’s steel mills combined

15. Business Leaders • He used vertical integration– owning the businesses involved in each step of a manufacturing process (iron ore mines, the coal fields, and railroads needed to support the steel mills) • John D. Rockefeller was a powerful businessman who made his wealth in the oil field (Standard Oil Company) • Rockefeller also used vertical integration to become the country’s largest oil refiner • Rockefeller got lower railroad costs and even convinced some railroad companies not to do business with this competitors

16. Business Leaders • Rockefeller also used horizontal integration which is owning all the business in a certain field • By 1880 he controlled 90 percent of the oil-refining business

17. Business Leaders • Rockefeller had a monopoly on oil and formed a trust– grouping together of a number of companies under one board of directors • Rockefeller could drive up prices with these practices

18. Social Darwinism and Philanthropy • Many people who favored free enterprise also believed in social Darwinism • It was loosely based on Charles Darwin’s theory of natural selection • Darwin believed that species evolved by adapting to their environments over long periods of time

19. Social Darwinism and Philanthropy • Social Darwinism said that “survival of the fittest” also determined who would succeed in human society • Some argued that government regulation of business hurt the “natural” economic order • It was a poor person’s responsibility to work for a better life

20. Social Darwinism and Philanthropy • Some felt the wealthy had the duty to aid the poor • Some practiced philanthropy-- giving money to the needy • Andrew Carnegie gave $350 million to charities during his lifetime

21. The Antitrust Movement • Critics of big business said that unfair business practices were responsible for the successes of many large companies • Large companies would often drive small companies out of business • Trusts would match each other’s prices on goods to avoid competition

22. The Antitrust Movement • Many wanted government to control monopolies and trusts • People who favored trusts felt that the trusts were more efficient and gave the consumer dependable products and services • Many in Congress were sympathetic to big business but voters wanted change

23. The Antitrust Movement • In 1890 the Sherman Antitrust Act was passed and it outlawed monopolies and trusts that restrained trade • The act unfortunately did not clearly define what a trust was in legal terms • The law was difficult to enforce and corporations and trusts continued to grow

24. Focus Questions • What developments occurred in the steel, oil, and electric-power industries during the Second Industrial Revolution? • What changes occurred in the way that businesses were organized? • Why did some Americans oppose monopolies, and what actions did they take against them?