Intro Intro

The New Industrial Age 1876-1900The New Industrial Age 1876-1900

OverviewOverview

By 1900, America had surpassed Britain as the leading industrial power in the world.

land of opportunity, rags to riches expansion of the railroads growth of industrycorporations

ObjectivesObjectives You will be exposed to

The impact of new inventions on the expansion of American industryThe important role railroads played in the development of the US during the late nineteenth centuryHow and why large, complex business organizations developed in the US

Part I: New InventionsPart I: New Inventions

Electricity powers the Industrial AgeElectricity powers the Industrial Age

This New Industrial Age was powered by electricity, unlike the Industrial Revolution which was powered by steam

How would electricity encourage the growth of industry?

Electric engines are smaller and more portable than steam engines, so factories could be moved away from water sourcesFactories would be built close to railroads and major transit routesElectric trolleys became common in cities, encouraging cities to spread out, instead of up

Edison and the Incandescent BulbEdison and the Incandescent Bulb 1879 - Thomas Edison

invents a new, more efficient form of electrical light.

Look at the pictures on the next slide. Note any differences or similarities between his bulb and a modern bulb

BulbsBulbs

Bell and the TelephoneBell and the Telephone 1876 – Alexander

Graham Bell introduced the telephone By 1900, there were 1.5 million subscribers.

The telephone created a need for operators, mostly women. Why women?

Sholes and the TypewriterSholes and the Typewriter 1867 – Christopher Sholes

invented the typewriter. This led to a need for

women office workers 1870 women made up

about 5% of office workers

1900 they made up 75%, or about 500,000.

Oil and Steel become importantOil and Steel become important

1858 – Edwin Drake drills for oil in Penn., to refine it into kerosene. Gasoline was a by-product that was thrown away.

1890 – Gasoline is used in an internal combustion engine in an automobile

During the Civil War, William Kelly and Henry Bessemer develop a method of making steel that is much more efficient and much cheaper.

What are some important things made of steel?

Open hearth processOpen hearth process

The Wright Brothers and the AirplaneThe Wright Brothers and the Airplane Dec. 17, 1903 – Kitty Hawk,

NC - Orville & Wilbur Wright sustain flight for 59 seconds traveling 852 feet

There was little public interest at first, but by WWI (1916), airplanes were being used by militaries for scouting and combat

– Diagram follows

Wright planesWright planes

Henry Ford and the Assembly LineHenry Ford and the Assembly Line 1903 – Ford introduces the Model-T 1914 - Ford built the nation’s first true

assembly line using the principles of scientific management, or Taylorism

Eventually, tasks were broken down into smaller and simpler tasks (division of labor)

Before line production, it took 12 hours and 28 minutes to put a Model-T together; after the assembly line was in place, it took 1 hour and 33 minutes.

A-line at Ford PlantA-line at Ford Plant

1913 Model T “Tin Lizzie” $3001913 Model T “Tin Lizzie” $300

Part I ReviewPart I Review Inventors and Inventions

Thomas Edison – Light bulb

Alexander Bell– Telephone

Christopher Sholes– Typewriter

Kelly and Bessemer– Refined steel

Wright Brothers– The Airplane

Henry Ford– Assembly Line

Part II: Railroads ExpandPart II: Railroads Expand

The Influence of RailroadsThe Influence of Railroads In 1870, the railroads employed 163,000 people; by

1900, they employed over 1,000,000. Railroads affected popular culture Railroads influenced time. 1883 – Professor C. F. Dowd’s plan for 24 time

zones went into effect. In 1918, Congress made the 4 time zones in the US official. In 1966, 4 more time zones were added as well as Daylight Savings Time.

The Transcontinental RailroadThe Transcontinental Railroad

1862 & 1864 – Lincoln passes acts authorizing land grants and loans to the Union Pacific RR Co. & the Central Pacific RR Co.

The Union Pacific would begin in Omaha, Nebraska and build westward. The Central Pacific would begin in Sacramento, California and build eastward.

May 10, 1869, the two lines were joined by a golden spike at Promontory Point, Utah.

Building the RailroadsBuilding the Railroads

Union PacificMany Civil War veterans were suited for the hard workMost were Irish immigrantsPaid $40-60/monthWorked 8 hour daysMeals on the RR Co.

Central PacificNot many Civil War veterans in CaliforniaChinese that had immigrated during the Gold Rush were hiredPaid $35/monthWorked sunup to sundownBought their own meals

Railroads MapRailroads Map

The Great AdventureThe Great Adventure Riding the rails coast to coast was

and still is a truly American adventure. What would a traveler see on this journey?

Like modern airplanes, these trains had different classes:

– Zulu class: $40 gets you there on a bench– Day coach: $75 gets you a reclining seat– Pullman cars: $100+ gets you a comfy

sleeper sofa See next 2 slides for Pullman cars

Pullman Cars,built by George Pullman.Most cost more than $50000

Pullman Cars,built by George Pullman.Most cost more than $50000

A typical dinner table on a Pullman car

Is there any parallel in modern mass transit?

A typical dinner table on a Pullman car

Is there any parallel in modern mass transit?

Railroads reek of corruptionRailroads reek of corruption

Several railroads cheated the taxpayers of the US and made LOTS of money

Crédit Mobilier – This was a construction company owned by the same people that owned the Union Pacific railroad.

The government subsidized the building of the railroads. Here’s how the scam works:

Union Pacific hires Crédit Mobilier to build its railroad.Union Pacific tells the gov’t that it will cost $100 million to build, when it actually costs about $50 millionSince Union Pacific and Crédit Mobilier are owned by the same people, the extra $50 million is pocketed by the ownersThese companies also gave shares of stock to politicians in federal gov’t to ensure they kept getting subsidies. Local or state politicians were given free passes to keep their loyalty

The Grangers and Government Regulation of the Railroads

The Grangers and Government Regulation of the Railroads 1867 – Oliver Kelley organized the Grange, a social and

educational organization of farmers The Grangers argued that railroads were a public utility,

therefore they should be regulated by the government.They argued this because railroad company’s were overcharging them to transport their goods.

1887 – the Interstate Commerce Act was passed by Congress, requiring railroad rates to be “reasonable and just”, and established the ICC (Interstate Commerce Commission).

This was not effective until Teddy Roosevelt became President in 1901.

Review Part IIReview Part II Railroads expanded 10-fold by 1900 Railroads established modern time zones The Transcontinental Railroad, made of the

Union Pacific and Central Pacific Railroads, connected the east and west coasts in 1869

Pullman cars Crédit Mobilier scandal Interstate Commerce Act of 1887

Part III: Big BusinessPart III: Big Business

Andrew CarnegieAndrew Carnegie Andrew Carnegie

Born in Scotland, immigrated to the US in 1848Began working in a factory at 13, for $1.20/weekWorked his way up in the railroad business, invested in stock, and became very wealthy by the age of 241873 – Carnegie launched Carnegie Steel Corporation1901 – Carnegie sold his property and devoted himself to philanthropy

Continued…

Carnegie’s Business StrategiesCarnegie’s Business Strategies

Always tried to build a better product at lower cost

Invested heavily in technology Installed detailed accounting systems to

manage costs Promoted competition between his

assistants Developed vertical integration, meaning he

owned the mines, the trains to move the ore, and the mills. See next slide

Wrote The Gospel of Wealth, which said the wealthy should use their money to contribute to society. To die a rich man was a disgrace.

Integration Integration

How Corporations got biggerHow Corporations got bigger Companies could merge into one corporation Stockholders in several competing companies could

turn their stock over to a trust, which would issue stock in itself in return and run the competing companies as one large corporation

What would this allow them to do? Trusts would have a monopoly on a market and could

run more efficiently as one large corporation rather than a bunch of smaller companies

Rockefeller and Robber BaronsRockefeller and Robber Barons

Other industrialists abused their financial power

John D. Rockefeller founded the Standard Oil Trust in 1882.

He would undersell his competition until all of it was run out of business, then he would raise prices to 3 or 4 times the original levelHe ended up controlling 90% of the nation’s oil refineries

He and other business who worked this way were called Robber Barons.

Sherman Antitrust Act of 1890Sherman Antitrust Act of 1890

More and more people were complaining the these robber-barons were not out to improve their own businesses but to destroy others’.

An attempt by Congress to regulate trade in 1890 with the Sherman Antitrust Act.

This Act made trusts illegal, but most trusts reorganized into single corporations and the law had little effect.

“Boss” Tweed and Tamany Hall Political Machine“Boss” Tweed and Tamany Hall Political Machine

Political Machine: organized group who controls a political party’s activities in a large area

Tweed used his power as leader to overcharge the gov’t for building municipal buildings

The public found out, Tweed was tried, sent to prison, escaped once, was caught again, and died in prison in 1878

New Definition of SuccessNew Definition of Success

People generally believed in Social Darwinism, the idea that anyone could succeed, but naturally only the fittest would survive(prosper)

Horatio Alger applied social Darwinism in the 100’s of books he wrote, usually “rags to riches” stories

This idea inspired immigrants to reach the “American Dream”

Review Part IIIReview Part III

Carnegie, philanthropist, US SteelThe Gospel of Wealth

What did Carnegie promote? Mergers, Trusts, and the Sherman Antitrust Act Rockefeller, Standard Oil, Robber Baron “Boss” Tweed, Tamany Hall scandal Social Darwinism

Extra:Biltmore EstateExtra:Biltmore Estate