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THE AGE OF INDUSTRY

THE AGE OF INDUSTRY. 1865 TO 1900. AN INTRODUCTION. BETWEEN 1865 & 1900 AMERICA WAS TRANSFORMED. A RURAL NATION BECOMES URBAN AND INDUSTRIAL SYMBOL OF THE AGE- THE BROOKLYN BRIDGE. STEEL WAS THE FOUNDATION. MORE…. MANY NEW INVENTIONS NEW FORMS OF BUSINESS ORGANIZATION

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THE AGE OF INDUSTRY

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  1. THE AGE OF INDUSTRY 1865 TO 1900

  2. AN INTRODUCTION • BETWEEN 1865 & 1900 AMERICA WAS TRANSFORMED. • A RURAL NATION BECOMES URBAN AND INDUSTRIAL • SYMBOL OF THE AGE- THE BROOKLYN BRIDGE. • STEEL WAS THE FOUNDATION

  3. MORE… • MANY NEW INVENTIONS • NEW FORMS OF BUSINESS ORGANIZATION • BIRTH OF THE ROBBER BARONS • HORRIBLE WORKING CONDITIONS

  4. THE TIES THAT BIND. • 1844 SAMUEL MORSE INVENT THE TELEGRAPH BY 1860 EAST & WEST ARE CONNECTED. • 1866 WESTERN UNION & AMERICAN TELEGRAPH MERGE.

  5. MORE... • 1858- CYRUS FIELDS - ATLANTIC CABLE. 1866 STRONGER CABLE.

  6. THE TELEPHONE- 1876 • ALEXANDER GRAHAM BELL • 1877 FIRST LONG DISTANCE BOSTON TO NEW YORK • BELL TELEPHONE COMPANY 1877 • 1885 AMERICAN TELEPHONE & TELEGRAPH COMBINE

  7. RAILROAD TRANSPORTATION • SINGLE MOST IMPORTANT TIE TO INDUSTRIAL EXPANSION. • 1860- 30,000 MILES OF TRACK IN AMERICA. • NO BRIDGES OVER THE MISSISSIPPI • NO STANDARD GAGE.

  8. RAILROAD CONSOLIDATION • 1866 CORNELIUS VANDERBILT CREATES NEW YORK CENTRAL • BY 1877 VANDERBILT CONTROLS 4,500 MILES OF TRACK. • IN 1886 RAILROADS ADOPT A STANDARD GAGE. • VANDERBILT INTRODUCES STEEL RAILS & AIR BRAKES

  9. MORE… • 1883- AMERICAN RAILROAD ASSOCIATION DIVIDES NATION INTO 4 TIME ZONES. • EASTERN, CENTRAL, MOUNTAIN, AND PACIFIC.

  10. PERSISTENT PROBLEMS • FINANCING RAILROAD CONSTRUCTION • BONDS AND STOCK CERTIFICATES- BUT FEW ACTUAL ASSETS. • CUTTHROAT COMPETITION (E.G. BETWEEN ATLANTA & ST. LOUIS 20 DIFFERENT CARRIERS.

  11. MORE… • RATE WARS LEAD TO REBATES • POOLING AGREEMENTS NOT TO COMPETE. • LONG HAUL / SHORT HAULABUSES.

  12. SOME INVENTIONS OF THE PERIOD. • BETWEEN 1880 &1890 21,000 NEW PATIENTS PER YEAR. • BELL’S TELEPHONE ESTABLISHES A WHOLE NEW INDUSTRY • LEVI STRAUSS - DEVELOPES BLUE JEANS.

  13. STEEL PRODUCTION • 1859 HENRY BESSEMER AND WILLIAM KELLY FIND NEW METHOD OF STEEL PRODUCTION. • BESSEMER PROCESS - BLAST FURNACE • 1867- U.S. PRODUCED 2000 TONS PER YEAR.

  14. MORE… • BY 1900 WE PRODUCE 7 MILLION TONS PER YEAR. • STEEL BECOMES THE BACKBONE OF THE INDUSTRIAL REVOLUTION. • SKY SCRAPERS BEGIN TO APPEAR. • (20 STORIES HIGH) LUIS SULLIVAN

  15. INVENTIONS START MORE INDUSTRY • GUSTAVUS SWIFT & PHILIP ARMOUR - MEATBACKING INDUSTRY • GEORGE PULLMAN 1864 - INVENTS THE SLEEPING CAR. • GEORGE WESTINGHOUSE 1868 INVENTS AIR BRAKES

  16. MORE… • CHRISTOPHER SHOLES- 1875 THE TYPEWRITER. THE THE REMINGTON FIRE ARMS COMPANY. • 1852 ELISHU OTIS - INVENTS THE ELEVATOR. PERFECTED BY FRANK SPRAGUE.

  17. THOMAS ALVA EDISON - 1847 TO 1931 • “THE WIZARD OF MENLO PARK.” • HELD OVER 1000 PATIENTS • IMPROVED TELEGRAPH, TICKER TAPE FOR STOCK MARKET • PHONOGRAPH 1877 • 1879 INCANDESCENT ELECTRIC LAMP

  18. MORE ON EDISON... • VITASOPE ( MOTION PICTURE DEVICE) • STOREAGE BATTERY, ELECTRIC MOTOR, ELECTRIC LOCOMOTIVE • 1877 FOUNDED EDISON GENERAL ELECTRIC. LATER BECAME GENERAL ELECTRIC CORP.

  19. BUSINESS PHILOSOPHY • BY 1900 THERE WERE 4000 MILLIONAIRES • RICH PRACTICES CONSPICUOUS CONSUMPTION

  20. ANDREW CARNEGIE’S “GOSPEL OF WEALTH” • “I HAVE A RIGHT TO MAKE MONEY & A RESPONSIBILITY TO SPEND IT PROPERLY.” • RICH ARE GOD’S STEWARTS ON EARTH. • WEALTHY MUST USE MONEY TO IMPROVE SOCIETY.

  21. SOCIAL DARWINISM • HERBERT SPENCER OF ENGLAND APPLIES DARWINISM TO SOCIETY. • WEALTHY ARE PRODUCTS OF “NATURAL SELECTION.” • WILLIAM GRAHAM SUMNER (YALE COLLEGE) AMERICAN PROPONENT.

  22. LAISSEZ- FAIRE ECONOMICS • REJECTS GOVERNMENT INVOLEMENT IN THE ECONOMY • MARKET MECHANISM OF SUPPLY & DEMAND IS BEST WAY TO MAKE CHOICES. • COMPETITION WILL PROTECT CONSUMERS • ACCEPTED GENERALLY BY RICH AND POOR

  23. HORATIO ALGER.

  24. HORATIO ALGER STORIES • DIME NOVELS TELL STORY OF YOUNG MAN WHO MAKES GOOD THROUGH HARD WORK & DETERMINATION. “LUCK & PUCK.” • “RAGGED DICK” • “THE ERRAND BOY: HOW PHIL WON SUCCESS” • SUPPORTS THE AMERICAN DREAM.

  25. NEW WAYS OF DOING BUSINESS • SIZE IS HALLMARK OF THE TIME. • GNP GROSS NATIONAL PRODUCT GROWS. IN 1860 = $1.8 BILLION. BY 1890 = $10 BILLION. • AIM OF BUSINESS INCREASE PROFITS, CUT COSTS & REDUCE COMPETITION

  26. ADVANTAGES OF CORPORATIONS • LIMITED LIABILITY • POOL CAPITAL • LEGAL STATUS OF “PERSON” UNDER THE 14TH AMENDMENT • IMMORTAL • PROFESSIONAL MANAGEMENT

  27. CORPORATIONS DOMINATE MOST KEY INDUSTRIES. • IRON, STEEL, COAL, RAILROADS, COPPER, ELECTRICITY, TELEPHONE, TEXTILES, BANKING & CHEMICALS.

  28. CARNEGIE AND ROCKEFELLER • CARNEGIE DEVELOPS A VERTICAL MONOPOLY IN STEEL • CONTROLS ALL ASPECT OF STEEL PRODUCTION AND SALES • HE IS MODEL FOR HORATIO ALGER STORIES. • FIRST TO ADOPT BESSEMER PROCESS.

  29. JOHN D. ROCKEFELLER • 1859- TITUSVILLE FIRST OIL WELL. OIL USED TO MAKE KEROSENE FOR LAMPS. • ROCKEFELLER SEE REFINING AND TRANSPORTING OIL AS THE KEY. ESTABLISHES A HORIZONTAL MONOPOLY • CONTROL ONE KEY STEP IN PRODUCTION PROCESS • FORMS STANDARD OIL OF OHIO IN 1870

  30. MORE ON ROCKEFELLER… • FORCES RAILROADS TO GIVE HIM REBATES. • ON HIS SHIPMENTS • ALSO ON HIS COMPETITORS SHIPMENTS. • BY 1879 STANDARD OIL CONTROL 90 % OF REFINING CAPACITY.

  31. COMPARES STANDARD OIL TO A ROSE • BOTH REQUIRE EARLY SACRIFICE • SLOGAN: “LET US PREY!”

  32. TRUSTS AND MONOPOLIES • INTERLOCKING DIRECTORATES • HOLDING COMPANIES • CONSUMERS AND WORKERS ARE HARMED BY MONOPOLIES.

  33. J.P. Morgan • Banking • U.S. Steel

  34. Govt Regulation and “New South” • Munn v. Illinois • Wabash case • Interstate Commerce Act • Sherman Antitrust Act • “New South” • Made gains in textiles • Tobacco Trust • Crop-lien system (sharecropping)

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