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INDUSTRIAL REVOLUTION

INDUSTRIAL REVOLUTION. Economic Boom Railroads Finance & J.P. Morgan Steel & Carnegie Oil & Rockefeller. What factors contributed to US growth after the Civil War?. Transportation Revolution: Trains, ships Communication Rev.: telegraph, phone Labor: immigrants

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INDUSTRIAL REVOLUTION

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  1. INDUSTRIAL REVOLUTION Economic Boom Railroads Finance & J.P. Morgan Steel & Carnegie Oil & Rockefeller

  2. What factors contributed to US growth after the Civil War? • Transportation Revolution: Trains, ships • Communication Rev.: telegraph, phone • Labor: immigrants • Natural Recourses: coal, iron, oil, timber, • Capital: stocks and bonds, government • Culture: entrepreneurial spirit, hard work • Legal protection, inventions, • 1865-1914: 4% growth, 8 fold increase

  3. THE RAILROADS • Trains changed pace of life for first time • First big business: complex management • Growth: 1865 65,000 miles; 1900 193,000 • More than all of Europe & Russia • Huge Capital: Stocks, Bonds, gov • Standardization, Four Trunk Routs • Transcontinental Railroad 1869 • Overproduction, Price Wars, Rebates, Pools (Cartels)

  4. Central Pacific Railroad

  5. Financial Institutions • J. P. Morgan: NY & London • Money flowed in from Europe • Stocks and Bonds • He hated “ruinous competition” • Morganization, Panic of 1893, he took • Over companies, picked board, cut costs & • debt, stopped rebates, imposed order

  6. J. P. Morgan

  7. Preconditions for Big Business Capital • Transportation • Communication • Manufacturing technology • Legal Protection • Energy Source

  8. How is Big Business different fromantebellum partnerships? • Separation of owner and operator • Impersonal • Immortal • Diverse activities • Complex Management • Great Concentration of wealth & power

  9. How did Big Business grow and why do they have an advantage? • Economies of Scale: produces each unit • at lower cost • Vertical Integration: Carnegie • Horizontal Integration: Rockefeller

  10. Carnegie Steel • Andrew Carnegie • Pennsylvania Railroad • J. Edgar Thomas Steel Works • Vertical Integration: he bought coal & iron • Mines, ships, trains, (ran plants full speed). • Sold Carnegie Steel for $480 million • Philanthropy: Gospel of Wealth

  11. Bessemer Process

  12. Andrew Carnegie

  13. Standard Oil • John D. Rockefeller • Horizontal Integration: He bought out all • The other oil refining companies. • The Trust: Board of Trustees held stock • Of all other companies, loose conglomeration • The Corporation 1889: true merger, • Central management ran whole thing

  14. John D. Rockefeller

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