The Industrial Revolution

1850-1900

Questions?

• Which products were introduced to the consumers of the United States after the Civil War that helped re-start the US economy?

• How do you market a new product?

• Who were the important business leaders of the Industrial Revolution, and how did they run their businesses?

Questions?

• How should businesses be regulated?

• What were the conditions like in the factories that produced these new products, and how were workers treated?

• How did workers and owners balance power in the workplace?

New Products of the Industrial Revolution

Patents• License to make, use, or sell an invention

1790-1860 36,000 issued

1860-1890 500,000 issued

• Drilling for Oil

• Needed for factories to run efficiently

• Drilling was quicker. cheaper, and created a much larger supply than digging ditches or melting animal fat

• By 1900, there were 1.5 million telephones in use all over the country, and Western Union Telegraph was sending roughly 63 million messages.

Thomas A. Edison

• Setup research lab

• Created a system for producing and distributing electrical power

Edison

• Perfected the light bulb

Edison

• Developed the phonograph

Edison

• Developed the motion

picture camera

Edison Films

• Annie Oakley• Buffalo Dance• Sioux Ghost Dance• Coney Island – Shooting the Chutes• Grandma and the Bad Boys• Herald Square• Congress of Nations - Magic• Men Boxing

George Westinghouse

• Made electricity safer and less expensive (AC Current)

• More effective air brakes for trains

•Developed a way to transmit it long

distances (Transformers)

Other Inventions• Electric sewing

machine

• Cameras

• Refrigerator

Meanwhile on the farm…

• Mechanical Reapers

• Sod busting plows

• Mechanized tractors

The Bessemer Process

• In 1856, Henry Bessemer receives a patent on a process that made steel production easier and less expensive.

• The Bessemer process made possible the mass production of steel.

•The Brooklyn Bridge,

designed with steel

cables suspended from high

towers, was made

possible by mass

production.

Elevators

• It took another innovation to

begin the transformation of

cities

Early SkyscrapersStrong steel plus

elevators mean that America’s teeming cities can now grow upwards!

The Railroads• On May 10, 1869, the Transcontinental Railroad, extending from coast to coast, was finished with the hammering of a golden spike at Promontory Point, Utah.

Industrial Revolution

Business LeadersBusiness Practices

Business Regulations

1. Business Leaders

• Generally classified as either a

“Robber Baron”

or a

“Captain of Industry”

I. Robber Barons

•Business leaders who made their fortunes by taking advantage of the public

•They drained natural resources and charged high prices

• 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.

• Adhered to a policy of “Social Darwinism”, as it applied to business practices

Social Darwinismor, Laissez-Faire

• Based on Darwin’s Based on Darwin’s Theory of Theory of EvolutionEvolution (1859) regarding natural (1859) regarding natural selection and the selection and the survival of the fittestsurvival of the fittest

• Businessmen are justified in using Businessmen are justified in using anyany means necessary to become rich means necessary to become rich and powerful, and the government and powerful, and the government should stay out!should stay out!

•Three business practices exemplified the philosophy of Social Darwinism–Monopolies–Cartels–Trusts

•Monopoly (Vertical Consolidation) One company completely controls a product or a service, from the means of production, to manufacturing, to transportation, and sales

• Monopoly

(Horizontal Consolidation)

One company buys out each of their competitors, and therefore owns every outlet for a certain product

•Cartel – a loose association of businesses in a similar field or that make the same product and agree to limit supply to drive up prices

• Trust

Multiple company’s selling the same product agreed that rather than compete with each other over prices and profits, they would agree to set their prices, and then split the profits evenly

II. Captains of Industry

• Still practiced the theory of Social Darwinism to a certain extent to increase their fortunes, but:–They increased the supply of

goods by building factories.–They raised productivity and

expanded markets, further lowering prices

• They created jobs at decent wages and in safe factories that enabled

many Americans to buy new goods and raise their standard of living.

• They also funded museums, libraries,

and universities, many of which still

serve the public today.

Carnegie Hall

III. A Compromise?“The Gospel of Wealth”

•Philosophy that states a person should be able to make as much money as they can, BUT they should also use their wealth to improve society.

• While big business urged the federal government to adopt a Laissez-Faire attitude, many consumers and workers called for a “Social Welfare” policy to be enforced

Social Welfare

• It is the government’s responsibility to control big businesses in order guarantee quality products at fair prices for consumers, and fair pay and decent hours for workers

Laborers

• Between 1860 and 1900, almost 14 million immigrants came to the United States

• Each needed a job, and without knowing the language, having a permanent residence, no wealth, or having the initial skills to succeed in the American economy, most worked in factories doing simple, repetitive tasks

Laborers

• After the Civil War ended, more than 8 million people left the agricultural business and headed to the cities looking for jobs

• Without the technical skills needed for higher paying jobs, they competed for the same factory jobs as immigrants

Laborers

• The rising costs of living in the cities, the increased desire for new goods, and the low paying salaries caused many families to employ everyone, including their children.

• By 1900, nearly 20% of all children between the ages of 10 and 16 worked in a factory, with most starting around the age of 13 (though as young as 6).

Owners

• Factory owners needed laborers to work in their factories. The growing supply and demand for new products created the potential for unlimited profits.

• Since there were millions of potential workers all vying for the same jobs, owners could offer low wages, long hours, and poor conditions, knowing that someone would be willing to take the job.

Owners

• Owners saved millions of dollars in worker costs, adding to their profits.

• Strict rules applied, and even stricter overseers were employed to keep workers on task.

Government Regulation of Big Business

• Gibbons v. Ogden (1824)–Asserted that Congress, not the

states, has the power to regulate commerce (even interstate commerce), and that Federal law takes precedence over state laws

Government Regulation of Big Business

• Interstate Commerce Act (1887)–Based on the railroad monopolies, the

Supreme Court ruled in favor of:• Just and reasonable rate changes• Prohibiting special rates or rebates for

individual shippers• Prohibiting preference rates for particular

localities, shippers, or products

Government Regulation of Big Business

• Sherman Anti-Trust Act (1890)–Dissolved trusts by making it

illegal for businesses to associate in any combination in the form of a trust or otherwise that is in the restraint of trade or commerce among states

Government Regulation of Big Business

• Keating-Owen Child Labor Act (1916)– By 1900, approx. 2 million children were

working in mills, mines, fields, factories, stores, on city streets in the United States

• This act banned the sale of products from any factory, shop, or cannery that employed children under the age of 14

• … from any mine employing children under the age 16

• …from any facility employing children under the age of 16 at night, or for more than 8 hours a day

• The bill was eventually ruled unconstitutional, but was finally passed into law as part of the Fair Labor Standards Act (1938).