Ch. 6 – A New Industrial Age (1865 – 1920)

1. Ch. 6 – A New Industrial Age (1865 – 1920) • U.S. Becomes an Industrial Power • Immense industrial boom began after the Civil War. • Due to three major factors: • 1) wealth of natural resources • 2) government support for business • 3) growing urban population provided both cheap labor & markets for new products. • By 1920 United States was the leading industrial power in the world.

2. Bessemer Process (1850s - Present) • Cheaper and faster way to make steel. Special process burned impurities out of iron, producing a strong & durable steel. Revolutionized steel industry. • Railroads – Steel rails supported more powerful trains. Railroads became largest consumers of steel.

3. Skyscrapers - Needed steel girders to support their great weight. Steel frame allowed architects to build as high as they wanted. Saved space in crowded cities. • Bridges – Brooklyn Bridge (connecting Manhattan to New York) built w/ steel.

4. Thomas Alva Edison • Perfected theincandescent light bulb (1879). One of the most important inventions of the century. • George Westinghouse • Invented the electrical transformer. Changed high voltage electricity into low voltage use for American homes. • Impact of Electricity • Electricity helped businesses grow, powered machines, spurred invention of time saving appliances, & promoted outward expansion of cities.

5. Alexander Graham Bell • 1876 invented “speaking telegraph” – later the telephone. • Established Bell Telephone Company to sell his invention and later American Telephone & Telegraph Company (1885) to provide local and long distance service. • Telephone opened door for worldwide communications network & greatly impacted office work.

6. Christopher Sholes • Invented the typewriter in 1867. Increased productivity in offices & created new jobs for women. • Andrew Carnegie • Became the King of Steel. Carnegie born in Scotland to poor parents. Came to America & later used Bessemer Process to build steel mills in America – Carnegie Steel Company.. Worth over $500 million at the time of his retirement in 1905.

7. Carnegie &Vertical Integration • Carnegie bought mining companies, rail lines, ore ships, and pig iron plants. Had a hand in each industry critical to steel making. • Vertically Integrated his business - Controlled all steps required to turn a raw material into a finished product. • “Gospel of Wealth” • Carnegie known for his great philanthropy. Gradually gave his fortune away to charities & worthy causes. • Believed that the rich had a duty to donate their money to aid society.

8. John Rockefeller • John Rockefeller • Owned Standard Oil Company - largest oil refining business in U.S. • Used ruthless methods to get rid of competition.Price-cutting would drive others out of business, then prices were raised again.

9. Rockefeller &Horizontal Integration • Rockefeller concentrated on acquiring all other oil refineries. By 1879, he owned 90% of American oil refineries. • Horizontally Integrated his business - Expanded in one area of production only. Gave him control over production & prices. • Monopoly • Complete control over every aspect of an industry. • Standard Oil later bought barrel companies, railroads, pipelines. Had total control of market until oil struck in Texas & Louisiana.

10. New Type of Business EntitiesVertical Integration & Horizontal Integration

11. “Next!”1904 Political Cartoon of Standard Oil Company

12. Robber Barons or Captains of Industry? • Carnegie & Rockefeller considered by some to be either: • “Robber Barons” – greedy, used ruthless business practices, made their $ off of the poor or working-class American. • “Captains of Industry” – smart, used good business sense to get ahead of competitors, role models for other Americans aspiring to build a business. Andrew Carnegie John D. Rockefeller

13. Social Darwinism • Applying Charles Darwin’s “survival of the fittest” concept to society. Strongest, most intelligent people flourish, while the poor are lazy or inferior. • William Graham Sumner • Influential Social Darwinist. Believed that “millionaires were a product of natural selection”. Success or failure in business is governed by nature and no one has a right to intervene. • Laissez Faire Economics • School of thought that rejected government involvement in the economy. Free market should determine who produced goods & services. U.S. practiced laissez faire economics throughout most of the Industrial Age.

14. Sherman Antitrust Act (1890) • U.S. government concerned expanding corporations would stifle free competition. • Made it illegal to form a monopoly or “trust” that interfered with free trade. • Prosecuting companies under the Sherman act was difficult. If companies felt pressure from govnt, they would reorganize into smaller corporations.

15. Labor Unions Emerge (Late 1860s – Present) • Laborers joined together in unions to improve their standing in the workplace. Millions of Americans worked long hours in unsafe factories for little pay. Not entitled to vacations, sick leave, reimbursement for injuries on the job, ect. • Knights of Labor (1869) & American Federation of Labor (1881) • First major labor unions. • Equal pay for men & women, 8 hr. work day, compensation for on-the-job injuries. Used strikes & collective bargaining (right of unions to represent workers as a group).

16. The Gilded Age1870s – 1890s United States History

17. The “Gilded Age” (1870s – 1890s) • Nickname for Industrial Age - Coined by author Mark Twain to describe life in America during the late 1800s. • Greed and corruption were the underside of public life. Growing gap between the few rich and many poor. • Gilded = brass underneath, but coated with gold.

18. The Political Machine • Organized group that controlled the activities in a city. • Political machines had strong support from immigrants. Helped immigrants find jobs, housing, etc.. In return political bosses received votes & elected to city government.

19. Tweed Ring Scandal • Political bosses often corrupt. Over - charged city for projects, then pocketed extra money. Graft– illegal use of political influence for personal gain. • Tammany Hall, NY City’s Democratic political machine. Defrauded NYC of nearly $200 million dollars. • Political cartoonist Thomas Nast helped to bring down “Boss” William Tweed by exposing corruption in newspapers (later arrested and imprisoned).

20. Patronage System • Presidents and elected officials complained about the problem of patronage – giving out government jobs to people who helped get the candidate elected (also called the spoils system). • Patronage system led to corruption & incompetence in public service jobs.

21. President Chester Arthur • Reform of the Patronage System • Pres. Chester Arthur (1881-1885). Urged Congress to pass civil service law. • Pendleton Civil Service Act of 1883 – thousands of govnt jobs based on merit, not patronage. Candidates had to pass an exam & could not be fired for political reasons. • Result of Reforms – public service became more honest and efficient.