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Chapter 14 Big Business

Chapter 14 Big Business. Essential Question. How did the changes in technology and business impact the economic, political, and social life of the United States?. Causes of Industrial Growth. Steam Revolution of the 1830s-1850s 2. The Railroad fueled the growing US economy:

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Chapter 14 Big Business

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  1. Chapter 14 Big Business

  2. Essential Question How did the changes in technology and business impact the economic, political, and social life of the United States?

  3. Causes of Industrial Growth • Steam Revolution of the 1830s-1850s 2. The Railroadfueled the growing US economy: • First big business in the US. • A magnet for financial investment. • The key to opening the West. • Aided the development of other industries. • Reason for standardized time zones (1918)

  4. New Inventions • Edwin L. Drake  drill for oil

  5. Thomas Alva Edison • Incandescent light bulb  Phonograph • Motion pictures “Wizard of Menlo Park”

  6. The Light Bulb (1879)

  7. The Phonograph (1877)

  8. The Ediphone or Dictaphone

  9. The Motion Picture Camera

  10. Alexander Graham Bell Telephone (1876)

  11. George Eastman Personal/Portable Camera

  12. George Westinghouse Alternating Current

  13. The Wright Brothers Wilbur Wright Orville Wright Kitty Hawk, NC – December 7, 1903

  14. Henry Ford Model T – “Tin Lizzie”I want to pay my workers so that they can afford my product!

  15. “Model T” Prices & Sales

  16. U. S. Patents Granted 1790s  276 patents issued. 1990s  1,119,220 patents issued.

  17. Causes of Rapid Industrialization • Unskilled & semi-skilled labor in abundance. • Abundant capital. • New, talented group of businessmen [entrepreneurs] and advisors. • Market growing as US population increased. • Government willing to help at all levels to stimulate economic growth. • Abundant natural resources.

  18. Causes of Big Business • Laissez Faire the ideology of the Industrial Age. • Individual as a moral and economic ideal. • Individuals should compete freely in the marketplace. • The market was not man-made or invented. • No room for government in the market!

  19. 2.Social Darwinism • British economist. • Advocate of laissez-faire. • Adapted Darwin’s ideas from the “Origin of Species” to humans. • Notion of “Survival of the Fittest.” Herbert Spencer (English Philosopher)

  20. 2.Social Darwinism • Individuals must have absolute freedom to struggle, succeed or fail. • Therefore, state intervention to reward society and the economy is futile! William Graham SumnerYale University (1906)

  21. 3. Protestant (Puritan) “Work Ethic” • Horatio Alger [100+ novels]  Rags to Richesstories • Is the idea of the “self-made man” a MYTH??

  22. 4. New Type of Business Entities • Congress Supervises Railroad  Interstate Commerce Commission established in 1887  Attempts to regulate railroads is blocked by Supreme Court • Trust/Monopoly  Formed to monopolize business, restrain trade, or to fix prices

  23. Famous Monopolists John D. Rockefeller 1. Ran Standard Oil 2.Worth $663.4 billion dollars in 2007

  24. Standard Oil Co.

  25. “What a funny little government!”

  26. Famous Monopolists  Andrew Carnegie • Brought Bessemer Process to U.S.A • Made steel stronger by removing impurities 3. Created largest steelcompany in U.S. 4. Worth $298.3 billion in 2007 dollars

  27. Iron & Steel Production

  28. Famous Monopolists • J. P. Morgan 1. Controlled most of the nation’s banks 2. “Banker’s Banker” 3. Bought Carnegie Steel Corporation from Carnegie for $500 million • Renamed U.S. Steel Corporation • First billion dollar company in the world in 1901 ($1.2 billion)

  29. Morgan’s Overpowering Influence on Economy

  30. Famous Monopolists Cornelius “Commodore” Vanderbilt 1. Controlled most of the nation’s railroads

  31. Cornelius [“Commodore”] Vanderbilt Can’t I do what I want with my money?

  32. Millionaires Club • JEKYLL ISLAND • Georgia • Private getaway for millionaires of late 1800s & early 1900s

  33. 5. Types of Monopolies & Trusts • Horizontal Integration  Company controls all the factories that produce a certain produce  Rockefeller made this famous • Vertical Integration •  Company buys out and controls all of • the steps of production •  Eliminates “middle-man” •  Carnegie made this famous

  34. New Type of Business Entities

  35. Wall Street – 1867 & 1900

  36. 6. The Reorganization of Work Frederick W. Taylor The Principles of Scientific Management(1911)

  37. The Reorganization of Work Created the Assembly Line

  38. % of Billionaires in 1900

  39. % of Billionaires in 1918

  40. The Protectors of Our Industries

  41. The ‘Bosses’ of the Senate

  42. The ‘Robber Barons’ of the Past

  43. 7. The Gospel of Wealth:Religion in the Era of Industrialization • Wealth no longer looked upon as bad. • Viewed as a sign of God’s approval. • Christian duty to accumulate wealth. • Should not help the poor (they are lazy) Russell H. Conwell

  44. 8. Carnegie’s “Gospel of Wealth” (1901) • The Anglo-Saxon race is superior. • Inequality is inevitable and good. • Wealthy should give their fortunes to charities to help others • Called Philanthropy Andrew Carnegie donated 90% of his wealth.

  45. 9. Regulating the Trusts 1877 Munn. v. Illinois 1. States CAN regulate railroad rates 1886 Wabash v. Illinois 2. States CAN’Tregulate interstate commerce 1890  Sherman AntitrustAct 3. Made it illegal to form a trust/monopoly 4. Never defined what a trust is 5. Used to break up labor unions first

  46. Relative Share of World Manufacturing

  47. Susan M. Pojer: Horace Greeley HS, NY Doc Wells: Hickory Ridge H.S, NC Chris Balga: Hickory Ridge H.S, NC Sources

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