Technology & Big Business

1. Technology & Big Business Chapter 13 How did industrialization and technology affect the economy & society? How did big business shape the American economy in the late 1800’s-early 1900’s? How did the rise of labor unions shape relations among workers, big business and government?

2. Industry Booms • The Civil War helped to encourage businesses to make products quicker and better • Railroads expanded allowing products to travel further and faster • Immigration provided workers by the thousands • Inventors and entrepreneurs raced to climb the ladder of success

3. Natural Resources • Coal mines- fueled steam locomotives, ships, and factories • Forests – provided lumber for construction • Rivers- allowed for transportation of goods to market • Oil- in 1859 the first oil well was drilled leading the way to oil, kerosene, and gasoline fueled machines

4. Governmental Encouragement • The Government encouraged the growth of big business • Government gave Railroad companies millions of acres of land to link the east and west coast • Passed Protective Tariffs to encourage Americans to buy American goods • Encouraged Laissez-Faire, which allowed business to operate with minimal governmental control

5. Inventions • Thomas Edison invented the light bulb in 1880, and established plans for central power plants to light cities • Samuel Morse perfected telegraph techology in 1844 • Alexander Graham Bell patented the telephone in 1876 • Henry Bessemer developed the Bessemer process in 1850’s to create steel

6. Impact on Society and Economy • Train Schedules forced towns to work around them. In 1884 divided the world into 24 time zones, which are still used today • Other Transportation methods such as street cars, subways, cars, and planes set the pace for travelers • The increase in productivity and the access to transportation allowed the United States to grow as an economic giant.

7. Pollution • Industry waste was starting to make an impact on the land, and air • Mines were ruining the landscape • Improper farming techniques were causing dust storms on the planes • Congress set aside lands that eventually became the National Park Service • 1872 Yellowstone Park was created

8. Corporations • Prior to industrialization businesses were family owned and operated • After industrialization corporations grew, several people shared ownership. • Increased profits and decreased production costs by paying low salaries • Some supported research labs where inventors could work to create new forms of technology to further the corporation

9. Monopoly • Some corporations tried control the entire market for their product or service • Buy out competitors • Drop prices so low their competitors would go out of business trying to keep up • Once they were the only company left they could set their own prices • Cartels were often used to secure prices • Other Businessmen worked together in order to set prices

10. Horizontal & Vertical Integration • Many businessmen used Horizontal Integration to make money • Create a Giant Company to lower production costs • Consolidate many firms into the same business • Some states had laws against Horizontal Integration methods so Trusts were created • Stock is assigned to a board of trustees who then make a new organization • Trustees run the organization and make a salary • Allowing for horizontal integration • Vertical integration occurred when businessmen would gain control of business that made up all the stages of production. This allowed for reduce costs and higher prices.

11. Robber Barons/ Captains of Industry • Businessmen who headed monopolies, cartels, and trusts • Andrew Carnegie- Steel • John D. Rockefeller- Oil • Cornelius Vanderbilt- Railroads • J.P. Morgan- Banker • These men also became important philanthropists funding universities, libraries, museums, etc.

12. Social Darwinism • Yale Professor William Graham Sumner applied Charles Darwin's theory of natural selection to American Capitalism • He said that people’s wealth was the measure of one’s inherent value. • The wealthy were the most fit of society • Supporters of Laissez- faire used this argument to tell government to stay out of business, and it was natural selection.

13. Government Imposes • Interstate Commerce commission (ICC)- • First federal body set up to monitor American business operations • Oversaw railroad operations • Could only regulate railroads that crossed state lines • Could not make laws or control transactions but could require records to be sent to Congress • 1890 Sherman Antitrust Act- • Outlawed any trust that restrained trade among several states • Rarely enforced

14. Hardship on Workers • Long Work days- 12hr days 6 days a week • Sweatshops: Poorly lit, over heated, dirty work conditions • Accidents were common: unsafe equipment led to injuries and often death • Child labor was a common practice

15. Company Towns • Laborers especially miners worked in small isolated areas • Businesses owned the houses in these towns which were rented to workers • The stores in town were also owned by the businesses they operated on credit but charged high interest • Most of the money earned by the worker went back to the business • Workers could not quit until their debts were paid. This system was called wage slavery

16. Labor Unions • Collective Bargaining began to be used in the 1820’s which was a negotiating group who bargained for better hours and more pay • Strikes were the most common way to let employers know their demands • 1886 Samuel Gompers formed the American Federation of Labor (AFL) • Skilled workers union • Focused on wages, hours, & working conditions

17. Strikes