THE RISE OF INDUSTRIAL AMERICA: The Industrial Titans

1. THE RISE OF INDUSTRIAL AMERICA:The Industrial Titans Mr. Phipps U.S. History

2. California State Standards 11.1.4. Examine the effects of the Civil War and Reconstruction and of the industrial revolution, including demographic shifts and the emergence in the late nineteenth century of the United States as a world power. 11.2 Students analyze the relationship among the rise of industrialization, large-scale rural-to-urban migration, and massive immigration from Southern and Eastern Europe. 11.2.1. Know the effects of industrialization on living and working conditions, including the portrayal of working conditions and food safety in Upton Sinclair's The Jungle. 11.2.2. Describe the changing landscape, including the growth of cities linked by industry and trade, and the development of cities divided according to race, ethnicity, and class. 11.2.4. Analyze the effect of urban political machines and responses to them by immigrants and middle-class reformers. 11.2.5. Discuss corporate mergers that produced trusts and cartels and the economic and political policies of industrial leaders. 11.2.6. Trace the economic development of the United States and its emergence as a major industrial power, including its gains from trade and the advantages of its physical geography.

3. Era Characteristics • Strong and rapid growth of industry, mass production, mechanization, and the factory system • Consolidation of wealth and creation of an American aristocracy • Political and corporate corruption and laissez-faire/hands off approach to government involvement • Exploitation of cheap, immigrant labor • The creation of the American city and the expansion and urbanization of the West • Rapid population growth (natural and migratory) • Increased social, racial, and labor tension • The beginning of social, political, and labor reform movements

4. Vocabulary • Monopoly: Control of one one business, able to set the market price for an item • Trust: Group of owners, controlling multiple related business, able to set the market price for an item • Free Enterprise: a.k.a. “Capitalism” The idea that society benefits from free competition in the market price, yielding individual profit, a better/cheaper product, and wide availability of goods • Urbanization: The creation and construction of cities, including its infrastructure • Demographics: The study of populations--how they grow, change, move, and are characterized (by age, gender, crime, behavior, diet, customs, language, etc.) • Nativism: Expressed racism toward a group considered “un-American”

5. RAILROADS OIL STEEL

6. The Industrial Giants • The Titans • J.D. Rockefeller--Standard Oil • J.P. Morgan--Investment banking and financier • Andrew Carnegie--U.S. Steel • Cornelius Vanderbilt, Jay Gould, and Jay Fiske--Railroads

7. Mechanization and Mass Production • The U.S. GNP (measures manufacturing) grew from #4 (1860) to #1 (1894): the largest producer in of manufactured goods in the world • Full exploitation of natural resources • Use of machines, steam and electric power, for manufacturing • Encouraged by federalaid and land grants • Use of immigrants for cheap labor Carnegie’s U.S. Steel Plant and factory town, Homestead, Pennsylvania (1890s)

8. Carnegie and U.S. Steel • Based corporate model on “vertical integration”--controlling all aspects of a business (mining, transportation, refining, and sale) • Symbolized the “American Dream” • Started as a poor Scottish immigrant • Worked as a telegrapher for rail road • Used creativity, genius, and charisma to problem solve • Purchased stock and aggressively bought out competition • Use of intellect, timing, and will to achieve wealth

9. Carnegie’s Beliefs • Believed that God’s will and his unique ability made him rich • Wealth should not be inherited • Believed that the rich were socially obligated to share wealth with poor • Provided money and endowments to libraries, music centers, churches, and schools • Became a model for philanthropy and charity • Believed that competition was essential for American growth (no monopolies) • Sold U.S. Steel to J.P. Morgan, who launched the first billion dollar company

10. Bessemer Steel Process, Homestead, PA

11. Homestead Steel Plant and Smokestacks, Homestead, PA

12. Williamsburg Bridge, NYC

13. Flat Iron Building, NYC (1901). Considered to be the first modern urban skyscraper

14. Rockefeller and Standard Oil • Based corporate model on “horizontal integration”--controlling one aspect of an industry (only refining) • Bought out competition to form a monopoly of refined oil • Controlled over 90% of refining • After anti-trust laws, Standard Oil was broken up into smaller pieces (including Exxon), with Rockefeller on the Board of Directors for each • Strategic control of refining forced the market price for drilling (pre-refining), and sale (post-refining), effectively controlling the market

15. Rockefeller’s Beliefs • Believed that individual accomplishment resulted in success • Believed in eliminating competition • Less competition made a more efficient business • Laissez-faire increased the ability for a business to operate effectively • Abhorred charity, considering it a sign of weakness of spirit Frank Norris’ cartoon, The Octupus: Standard Oil

16. Pioneer Run, Titusville, PA (1859)

17. Coal Mining, Michigan

18. Coal Mining, Michigan

19. Controlling a Business: Horizontal v. Vertical

20. The Backbone of Industry: The Steel Rails Creating a Transcontinental Railroad • Increased miles of rails 35K (1865) to 200K (1900) • Subsidized by federal grants • Required relocation of Indian tribes • Contradicted laissez-faire policy; gov’t invested, promoted, funded, and advertised rail expansion • Spread American-ness • Brought prosperity to areas and towns through support services • Spread population across continent

21. A Mechanism for Manifest Destiny Major Rail Lines: The West • Union Pacific Railroad (1862) • Nebraska to California • Received bad press from Credit Mobilier Scandal • Built by Irish • Central Pacific Railroad (1869) • Utah to California • Constructed by the “Big Four”: Stanford, Huntington, Crocker, and Hill • Built by Chinese • Finished at Promontory Point

22. The Steel Road Major Rail Lines • Transcontinental Railroad: Joined at Promontory Point, UT • Northern Pacific (1893) • Chicago to Seattle • Southern Pacific (1883) • New Orleans to Los Angeles • Santa Fe (1884) • New Mexico to California • Great Northern (1884) • Minnesota to Washington

23. Creating a United States

24. 200, 000 + Miles of Track

26. Creating a Rail System • Used corporate model of consolidation and trusts • Combined rail lines • Forced industries to use the only available rail line and set the price for transportation • Gave rebates to “friendly” industries • Refused service to “unfriendly” industries

27. Rail Inventions • Steel Rails: stronger standardized rail gauge making transport safer and faster • Westinghouse air brake: increased safety • Pullman cars: luxurious travel cars • Armour Cars: refrigerated meat cars (i.e. Armour hot dogs) • Time Zones: provided consistency for delivery • Telegraph: increased communication down rail lines

28. In Sum • Carnegie and Rockefeller differed in their approach to business: Carnegie favored competition and charity; Rockefeller favored monopoly and rugged individualism • The oil, steel, and railroad industries helped each other grow and depended on each other for success • In less than 30 years, the U.S. became the leading manufacturer, transporter, and richest country in the “civilized” world