Sources of Industrial Growth Industrial Technology
Revolutionizing of iron and steel production
Bessemer Process
Iron production soared in 1870’s-1880’s
40,000 miles of RR track added
Emergence of steel industry in PA and OH
Iron ore was abundant there
Pittsburgh, a steel town!
Sources of Industrial Growth Airplane and Automobile
Creation of gasoline was key
Henry Ford: produced his first car in 1896
Wright Brothers first to fly in 1903
Kitty Hawk, NC
By 1904, they could fly 23 miles and took passengers with them
Lucky Lindy popularized commercial flying in late 1920s
Sources of Industrial Growth Research and Development
Business leaders sponsored their own research
General Electric: created first corporate lab-1900
Bell Telephones, DuPont, GE, Eastman Kodak and others
Budgeting hundreds of thousands of dollar$ for research by their own scientists and engineers
Led to government decline in support for this
Higher education transformed: p. 475
Sources of Industrial Growth Science of Production
Scientific Management
“Taylorism”—Frederick Winslow Taylor
Urged workers to subdivide tasks
Led to employers diminished independence on any one worker
Should allow for production at greater speed
Emergence of mass production and moving assembly line: Ford cut time and money!
Sources of Industrial Growth Railroad Expansion
Main cause of industrial expansion in late 19th C
Led to economic activity: farming, lumber, agriculture: Chicago became livestock hub
Time zones created in 1883 for RR’s
Vanderbilt and Huntington are two major RR men
Oligopoly????
See map on p. 477 for RR lines
Sources of Industrial Growth The Corporation
Emerged as major political force after Civil War
Limited Liability: risking only the amount of the investment
Can have nothing to do with company but still be involved
Allowed individuals to gain large amounts of capital and create many big projects out of it
Sources of Industrial Growth Corporation Con’t.
Andrew Carnegie: steel
Controlled the processing of steel from mine to market
Vertical integration
US Steel Corp. formed by Carnegie and JP Morgan
Controlled 2/3 of nation’s steel production
Horizontal integration; bought out competition
Sources of Industrial Growth Corporation Con’t.
Gustavus Swift: meat packing
Isaac Singer: Singer sewing
New managerial techniques: read about on p. 478
Sources of Industrial Growth Consolidating Corporate America
Horizontal Integration: combining of a number of firms into a single corporation
Ex. consolidation of many different RR lines into one company
Vertical Integration: taking over of all different businesses in which a company relied for its primary function
Ex. Carnegie Steel
Sources of Industrial Growth Consolidating Con’t.
Standard Oil: combo of horizontal and vertical
Read about it on page 479
Sources of Industrial Growth The Trust
Trust: A group of separate companies that are placed under the control of a single managing board (trustees)
State laws prohibited one company from owning the stock of another, feared this would restrain “free trade”
Trusts were a way to get around the law
An Example: Standard Oil Co. had a board of 9 trustees, headed by
Rockefeller Eventually Standard Oil had 40 companies in its “trust” The companies had not officially merged & therefore not
broken any laws.
Sources of Industrial Growth By 1900: 1% of corporations controlled over 33% of
manufacturing
Robber Barons or Captains of Industry?????