The Incorporation of America

1. The Incorporation of America

2. Essential Question Industrialization increased the standard of living and the opportunities of most Americans, but at what cost?

3. Causes of Rapid Industrialization • Steam Revolution of the 1830s-1850s. • The Railroad fueled 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.

4. Causes of Rapid Industrialization • Technological innovations.* Bessemer and open hearth process * Refrigerated cars * Edison “Wizard of Menlo Park” light bulb, phonograph, motion pictures.

6. Thomas Alva Edison “Wizard of Menlo Park”

7. The Light Bulb

8. The Phonograph (1877)

9. The Ediphone or Dictaphone

10. The Motion Picture Camera

11. Alexander Graham Bell Telephone (1876)

12. Alternate Current George Westinghouse

13. Alternate Current Westinghouse Lamp ad

14. The Airplane Wilbur Wright Orville Wright Kitty Hawk, NC – December 7, 1903

15. Model T Automobile Henry FordI want to pay my workers so that they can afford my product!

16. “Model T” Prices & Sales

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

18. 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.

21. Iron & Steel Production

23. NEW INDUSTRIES • Railroad • Marketing • Sewing Machine • Vacuums • Typewriters • Automobile • Salt • Coal • Agricultural • Oil • Mining • Sugar • Steel • Meatpacking • Beef/Cattle • Construction • Telegraph • Telephone

24. New Business Culture • Laissez Faire the ideology of the Industrial Age. • Individuals should compete freely in the marketplace. • Own their own business and use their skills to better our culture and make profit for themselves. • No room for government in the market. • Government should allow for natural competition for the betterment of our society.

25. 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

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

27. New Business Culture:“The American Dream?” • Protestant (Puritan) “Work Ethic”*Horatio Alger [100+ novels] Is the idea of the “self-made man” a MYTH??

28. New Type of Business Entities • Pool • Trust John D. Rockefeller *Standard Oil Co.

29. FORMATION Organized by associates and legalized through state charter OWNERSHIP Stockholders, according to number of shares CONTROL AND MANAGEMENT Through Board of Directors, elected by the stockholders (usually one vote per share of stock held) NET PROFITS AND LOSSES Dividends: to stockholders = profits Lose: only the amount invested by stockholders according to number of shares LIMITED LIABILITY CORPORATION

30. Conglomerate A group of unrelated business owned by a single corporation. Still used today by companies that merge. Pool Competing companies that agree to fix prices and divide regions among members so that only one company  operates in each area. Outlawed today. Trust (Monopoly) Companies in related fields agree to combine under the direction of a single board of trustees, which meant that shareholders had no say. Outlawed today. Holding Company A company that buys controlling amounts of stock in related companies, thus becoming the majority shareholder, and holding considerable say over each company's business operations. Outlawed today. BUSINESS ORGANIZATIONS

31. New Type of Business Entities • Trust:*Horizontal Integration John D. Rockefeller *Vertical Integration:A. Gustavus Swift  Meat-packing B. Andrew Carnegie  U. S. Steel

32. New Type of Business Entities

33. Standard Oil Co.

34. U. S. Corporate Mergers

35. Industrial Consolidation:Iron & Steel Firms

36. Carnegie Picture ANDREW CARNEGIE • Captain of Industry • Monopolized the steel industry • Rags to riches story---came from Scotland very poor. • Used scientific ideas (Bessemer Process) to develop a better way to produce steel and sell a quality a product for an inexpensive price. • Used Horizontal integration.

37. Cartoon Rockefeller JOHN ROCKEFELLER • Captain of Industry • Came from a wealthy family • Bought a substitute during the Civil War. • Formed the first modern corporations in the oil industry Standard Oil • Was the first billionaire in the U.S. by 1900. • Used Vertical Integration and Horizontal Integration to gain a monopoly in the oil business.

38. CONRELIUS VANDERBILT • Formed a steamship company in 1829 • Dominated shipping along the Atlantic • 1849 established steamship that carried people from New York to San Francisco in Gold Rush days • After Civil War Vanderbilt bought most railroad lines from New York to Chicago • Worth over $100 million

39. New Financial Businessman The Broker:*J. Pierpont Morgan

40. Wall Street – 1867 & 1900

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

42. The Reorganization of Work The Assembly Line

43. “The Protectors of Our Industries”

44. The “Robber Barons” of the Past

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

46. 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. Russell H. Conwell

47. “Robber Barons” Business leaders built their fortunes by stealing from the public. They drained the country of its natural resources. They persuaded public officials to interpret laws in their favor. They ruthlessly drove their competitors to ruin. They paid their workers meager wages and forced them to toil under dangerous and unhealthful conditions. “Captains of Industry” The business leaders served their nation in a positive way. They increased the supply of goods by building factories. They raised productivity and expanded markets. They created jobs that enabled many Americans to buy new goods and raise their standard of living. They also created museums, libraries, and universities, many of which still serve the public today. CAPTAINS OF INDUSTRY OR ROBBER BARONS

48. “On Wealth” • The Anglo-Saxon race is superior. • “Gospel of Wealth” (1901). • Inequality is inevitable and good. • Wealthy should act as “trustees” for their “poorer brethren.” Andrew Carnegie

49. Cartoon Carnegie ANDREW CARNEGIE • Philanthropist • Gave millions to colleges and libraries. • It was the sacred duty of the wealthy to give back to society who has given to him. • Stressed education as a means to better one’s self. • Carnegie Hall

50. Rockefeller JOHN ROCKEFELLER • Philanthropist • Gave millions of his money to hospitals and colleges. • University of Chicago • Spellman College • National Parks • United Nations • Williamsburg • Cancer Research