The Age of Innovation and Industry - PowerPoint Presentation

Slide1

The Age of Innovation and Industry

Was the rise of industry good for the United States?Slide2

Thomas Edison

Inventor

Phonograph

Automated telegraph systemIncandescent light bulb**watch video**Slide3

New Inventions and Technologies

The United States evolved from a largely agricultural nation into a complex industrial society.Slide4

Americans Invest in New Technology

Capitalism

: an economic system in which factories, equipment, and other means of production are privately owned rather than being controlled by government.

Investors are those who are willing to finance, or fund, the development of new products.

Provided funds to build railroads and factories and furnish them with machinery and supplies

Put money into new technology and scientific research

In return, they hoped to reap rewards if the new business proved profitableSlide5

Americans Invest in New Technology

Edison received financial support from a group of capitalists led by the wealthy banker, J.P. Morgan

Formed the Edison Electric Light Company

1880 – group provided Edison with $150,000Edison gave the company the rights to his lighting inventions for a 5-year periodSlide6

Americans Invest in New Technology

Investors protected their investments by making sure inventors acquired patents.

A patent gives an inventor the sole legal right to make or sell an invention for a specified period of time.

Edison holds the record for patents issued to one person, with 1,093 in all.Slide7

Innovations and Industry Graphs

Analyze the data and poster below. Plot the data on the appropriate graph in your notebook.Slide8

Revolutionary Changes in Communication and Transportation

Samuel F. B. Morse created the first practical telegraph by 1837

Created Morse code

Telegraph lines mainly followed railroad tracksRailroads relied on the telegraph to keep track of their trains

Newspapers used it to gather information and send stories to local newspapers

By 1870, the Western Union Telegraph Company dominated the industry

By 1900, nearly 1 million miles of telegraph wires were carrying more than 60 million messages a year.Slide9

Revolutionary Changes in Communication and Transportation

Alexander Graham Bell invented the telephone on March 10, 1876

Attracted lots of financial support

1877 – founded the Bell Telephone CompanyBy 1893, more than 250,000 phones were in useBy 1920, 13 million phones in useSlide10

Revolutionary Changes in Communication and Transportation

First automobile came to the United States from Europe in the 1890’s

The first airplane was invented by Orville and Wilbur Wright in 1903.

First flight was at Kitty Hawk, North CarolinaSlide11

“Rock Oil” Provides a New Source of Fuel

Pre-Civil War - lamps burned whale oil which was very expensive.

Mid-1800’s – a Canadian scientist discovered how to refine crude oil into a lamp oil called kerosene

1858 – Edwin Drake used techniques for drilling salt wells to strike oil in Titusville, Pennsylvania

Countless more wells were drilled in Pennsylvania and 13 other states.

Supplied fuel for lamps, lubricating oils for machinery, and later, gasoline for automobilesSlide12

The Bessemer Process Revolutionizes Steelmaking

Prior to 1855, iron was the main metal used in construction

Iron is brittle and fairly soft

Steel was preferred because it was harder, stronger, and lighter than iron.The process for making steel was time-consuming and expensive

1855 – Henry Bessemer, a British inventor, patented a new method of making steel.

The Bessemer process involved blowing air through the iron to remove impurities

Produced steel far more cheaply and quickly than in the past.Slide13

The Bessemer Process Revolutionizes Steelmaking

Andrew Carnegie invested heavily in steel production in the U.S.

1873 – formed the Carnegie Steel Company

Later built the largest and most modern steel mill of its time near Pittsburgh, PennsylvaniaRailroads switched to steel rails

Builders began using steel to construct longer bridges and taller buildings.

1883 – Brooklyn Bridge (longest suspension bridge in the world at that time)

1885 – world’s first skyscraper built in downtown Chicago (10 stories tall)Slide14

Electricity Lights up America

Edison’s light bulb gave birth to the electric power industry.

Huge impact on America:

Allowed businesses to stay open longerFactories could run through the nightAmericans could work and read at night

Could plug in electric refrigerators and other appliances

Electricity was costly at first, and power companies mainly built power stations in cities.

Rural areas had to wait decades longer for electric lines to reach them.Slide15

Processing Questions – 7 minutes

Answer the following questions in the space next to the “New Inventions and Technologies” graph.

Restate the question in your answer and use complete sentences.

How did capitalists (investors) in the late 1800’s help fuel the development of new technologies?

How did the invention of the telegraph and telephone revolutionize communications?

Which invention do you think had the greatest impact on America in the 1800s: oil drilling, the Bessemer process, or electricity? Give at least two reasons to justify your choice.Slide16

An Explosion of Industrial Growth

The growth of technology helped fuel the expansion of American industry in the late 1800’s. Markets expanded to sell their goods nationwide. To meet the needs of a growing national market, companies developed new ways of operating.Slide17

New Ways to Manage Work

They had to create systems of mass production that would enable them to supply a much larger market.

Interchangeable parts in factory machines

Specialized machinery that could produce identical parts for quick assembly into finished products.Could hire unskilled workers to run machines and supervisors to manage day-to-day operations.

Assembly line productionSlide18

New Ways to Manage Work

Frederick W. Taylor, writes

The Principles of Scientific Management

Used scientific techniques to analyze work tasks and find ways to work faster and reduce wasted motionSpeed boosted productivity, which increased profitsHenry Ford

Pioneered the moving assembly line to mass-produce automobiles

Workers stood in one place all day, while a conveyor belt brought the work to them. Slide19

New Ways to Manage Work

Increased productivity resulted in cheaper goods.

A factory could operate with fewer workers.

Those who remained performed the same dull task all day long, but at a faster pace.Many assembly-line workers felt as though they had become machinesOften protested for better working conditions.Slide20

New Ways to Finance and Organize Businesses

Factors of production

: land, labor, and capital

Land was abundant (the west!!!)Labor was plentiful thanks to a steady stream of immigrants into the country during this period.Capital was hard to come by.

Any asset that can be used to produce an income.

Money, buildings, tools, machinery

Small business owners did not have the capital they needed to expand.

Formed corporations.Slide21

New Ways to Finance and Organize Businesses

Corporation

: a company that is recognized by law as existing independently from its owners.

Own propertyBorrow moneySue or be sued

Investors could not be held liable for a corporation’s debt.

Investors could buy stock and therefore become partial owners of the company.

Wealthy capitalists controlled corporations by buying huge amounts of stock.

Owners did not run the daily operations. Corporations hired managers, accountants, engineers, and others to keep production going.Slide22

New Ways to Finance and Organize Businesses

Competition among corporations provided consumers with a wide choice of new products.

Companies slashed prices to compete

Profits fell and company debts roseMany companies went bankrupt.

Capitalists decided to limit competition in order to stay in business.

They would buy or bankrupt competitors

John D. Rockefeller, Standard Oil

By 1882 – Standard Oil was a monopoly

It controlled 90% of the nation’s oil production.

Raised its prices and reaped great profits

They would form trusts

A set of companies that are managed by a small group known as trustees

Trustees have the power to prevent companies in the trust from competing with each other.Slide23

Innovations and Industry Graphs

Analyze the data and poster below. Plot the data on the appropriate graph in your notebook.Slide24

Processing Questions – 7 minutes

Answer the following questions in the space next to the “An Explosion of Industrial Growth” graph.

Restate the question in your answer and use complete sentences.

How did Frederick W. Taylor’s studies impact industry in the early 1900’s?

Why were corporations formed, and how are they run?

How do monopolies and trusts differ?Slide25

Big Business and the Government

Trusts and monopolies concentrated capital – and power – in the hands of a few

people. With

less competition, companies grew larger and more profitable. Americans began to refer to these industrial giants as “big business.” Big business was impersonal, extremely profit-driven, and responsive mainly to investors.Slide26

Businesses Grow Larger and More PowerfulSlide27

Businesses Grow Larger and More Powerful

Horizontal Integration

: called for joining together as many firms from the same industry as possible.

Example: John D. Rockefeller’s Standard OilVertical Integration: involved taking control of each step in the production and distribution of a product.

Example: Andrew Carnegie’s Steel CompanySlide28

The Government Leaves Business Alone

Lawmakers were unwilling to stop big business practices.

Limiting competition, raising prices

Believed in laissez-faireHeld that the market, through supply and demand, would regulate itself if government did not interfere.“leave it alone”Slide29

The Government Leaves Business Alone

Social Darwinism

: held that the best-run businesses led by the most capable people would survive and prosper.

Based on Charles Darwin’s theory of evolutionHerbert Spencer coined the phrase “survival of the fittest”Discouraged government regulation of business practices

Argued that government should leave businesses alone to succeed or fail on their own.Slide30

The Government Leaves Business Alone

Reality Check – the government did not leave business alone, they helped them.

Gave the railroads hundreds of millions of dollars worth of land

Sold natural resources such as forests and minerals at very low prices to companies there were prepared to exploit them.Imposed protective tariffs on foreign goods to make them more expensive than American-made goods.

Some businesses bribed legislators to pass laws favoring their companies in return for cash payments.

1904 – “Our political leaders are hired, by bribery…to conduct the government of city, state, and nation, not for the common good, but for the special interests of private business.” -Lincoln Steffens, journalist

By 1900, the U.S. had the strongest industrial economy in the world.Slide31

Government Takes Some Action to Limit Business

1887 – Interstates Commerce Act

Prohibited unfair practices by railroads, such as charging higher rates for shorter routes.

Interstate Commerce Commission was established to enforce the act.This was a landmark measure, since it was the first time that Congress stepped in to regulate business in America.

1890 – Sherman Anti-Trust Act

Marked a significant change in the attitude of Congress toward the abuses of big business.

Outlawed trusts, monopolies, and other forms of business that restricted trade.

“Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the states is declared to be illegal. Every person who shall engage in any combination or conspiracy declared to be illegal shall be deemed guilty of a felony.”Slide32

Government Takes Some Action to Limit Business

Government only made feeble attempts to enforce the law.

Law was written by lawyers who favored laissez-faire

Congress left the courts to clarify the law – but the courts were not impartial, or unbiased

Often interpreted the law in favor of big business

United States v. E.C. Knight Co.

1895 – the Supreme Court blocked government efforts to break up a sugar trust that controlled most of the nation’s sugar manufacturing

Ruled that the Sherman Act only applied to trade, not manufacturing.Slide33

Innovations and Industry Graph

Analyze the data and poster below. Plot the data on the appropriate graph in your notebook.Slide34

Processing Questions – 7 minutes

Answer the following questions in the space next to the “An Explosion of Industrial Growth” graph.

Restate the question in your answer and use complete sentences.

How were the new big businesses of this time different from traditional companies?

How did horizontal and vertical integration lead to larger companies?

Why did the government adopt a laissez-faire policy toward business during this time?Slide35

The Gilded Age

In 1873, Mark

Twain coauthored a book about rich industrialists and corrupt politicians called

The Gilded Age. Something that is gilded looks like gold, but only on the outside. The title described

American society in this

period well. Industrialists

made great fortunes and led glittering lives but the period was marked by political corruption and social unrest.Slide36

From Industrialists to Philanthropists

The growth of three industries fueled a rapid expansion of the American economy.

1870 – 1900:

Steel production rose from 77,000 tons to more than 11 millions tons.Oil production swelled from around 5 million barrels annually to more than 63 million barrels.

Railroad track expanded from 53,000 to around 200,000 miles.

The owners of these industries became towering figures in America.Slide37

Andrew Carnegie

Rags-to-riches story.

Immigrated from Scotland in 1848 when he was 12

Worked in a Pennsylvania cotton mill earning $1.20 a weekHis thrift and shrewd investments gave him a $50,000 annual income by the time he was 30

Owned Carnegie Steel Company

1889 – Carnegie earned $25 million

published an article titled “Wealth”

Declared that rich people had a duty to use their surplus wealth for “the improvement of mankind”

“A man who dies rich dies disgraced.”Slide38

Andrew Carnegie

Used his fortune to benefit society

1911 – established the Carnegie Foundation

Charitable foundation offered grants of money to promote the advancement of knowledge.Focused on education, especially librariesBuilt more than 2,500 free public libraries

Supported cultural institutions and promoted international peaceSlide39

John D. Rockefeller

Started his career with one oil refinery and built it into a huge corporation, Standard Oil

Monopolistic approach to business

Brought him lots

of wealth, and a terrible reputation

Stood out for his ruthless tactics

Would undercut his competitors by making deals with railroads, which agreed to ship his oil at discount prices. This allowed him to cut his prices.

“You can’t compete with the Standard…If you refuse to sell, it will end in your being crushed.” - RockefellerSlide40

John D. Rockefeller

Became a philanthropist like Carnegie.

Philanthropist: a person who gives money to support worthy causes.

Used his fortune to help establish the University of Chicago in 1892Started several charitable organizations including the Rockefeller FoundationSupported medical research, education, and the arts.Slide41

Cornelius Vanderbilt

1810, at age 16, he started a ferry business in New York Harbor

Later built up a fleet of steamships

By upgrading ships and cutting shipping rates, he prospered.Set up a route from New York to San Francisco in time to carry many 49ers to the goldfields.

1862 – sold his steamer business and invested in railroad stock.

Soon owned several rail lines

Opened the first direct service from New York City to ChicagoSlide42

Cornelius Vanderbilt

Never believed he had a duty to use his wealth to benefit society.

1873 – donated $1 million to found Vanderbilt University in Nashville, TennesseeSlide43

J.P. Morgan

Born into one of the most prominent banking families in the world

In 1901, he bought out Andrew Carnegie!!!

Merged Carnegie Steel with other large steel companies into an enormous holding company called the United States Steel Company.

U.S. Steel was worth $1.4 billion, the first billion-dollar company in American history.

May recognize his name from one of the largest banks in the U.S.

J.P. Morgan Chase (CHASE BANK)Slide44

J.P. Morgan

Began collecting art at the age of 19.

Served as president and donated extensively from his personal art collection to the Metropolitan Museum of Art

Was a trustee of the American Museum of Natural History for 44 yearsOften the museum’s lead donorFrequently giving under condition of anonymity

Episcopal Church

Served as treasurer and senior warden at St. George’s Episcopal Church

Underwrote the salaries of score of Manhattan clergymen

Contributed heavily to the construction of Manhattan’s Cathedral of St. John the Divine.

$500,000 in 1892 aloneSlide45

Robber Barons or Captains of Industry?

Critics called the business giants robber barons for

the

way they gained their wealth and the lordly style in which they lived.Prospered for mostly negative reasonsRuthlessly drove rivals out of business

Raised prices by limiting competition

Robbed the nation of its natural resources

Bribed officials to ensure their success

Kept wages low

Imposed harsh working conditionsSlide46

Robber Barons or Captains of Industry?

Supporters call the business giants Captains of Industry who, despite some shady dealings, helped usher in our modern economy.

Prospered for mostly positive reasons

Worked hard and took advantage of new technologyFound new ways to finance and organize businesses for greater efficiency and productivity

Created jobs for millions of Americans

The growing middle class profited from the up-surge in business

Living standards climbed with the rising economySlide47

Robber Barons or Captains of Industry?

The greatest income inequality in American history occurred during the gilded age.

The industrial expansion of the late 1800s helped give rise to a vibrant economy and consumer society.

Americans had access to an unprecedented abundance of goods and servicesBy the early 1900s, economic growth had helped make the U.S. one of the most powerful nations in the world.Slide48

Innovations and Industry Graph

Analyze the data and poster below. Plot the data on the appropriate graph in your notebook.Slide49

Processing Questions – 7 minutes

Answer the following questions in the space next to the “An Explosion of Industrial Growth” graph.

Restate the question in your answer and use complete sentences.

Do you think the term Gilded Age was appropriate for America at the time? Support your opinion with at least two examples.

Why do some historians call industrialists robber barons? Which industrialists from this lecture do you think would be considered robber barons, and why?

Why do some historians call industrialists captains of industry? Which industrialists from this lecture do you think would be considered captains of industry and why?