Unit 4 The American Industrial Age The Birth Of The Industrial Age Industrialism An economic organization built largely on mechanized industry rather than agriculture How did the US industrialize ID: 485078
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Industrialism
Unit 4 – The American Industrial AgeSlide2
The Birth Of The Industrial Age
Industrialism
–
An economic organization built largely on mechanized industry rather than agriculture.How did the US industrialize?Raw Materials Readily AvailableWater, Wood, Coal, Iron, and CopperLarge WorkforceUS population tripled between 1860-1910New Technology & InnovationNew inventionsNew transportationNew ways of doing businessSlide3
Laissez-Faire Economic System
Laissez - Faire
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An economic system that functions without government interference.Free Enterprise SystemThis type of system was possible because the US had all of the “factors of production” available:Land – All natural resourcesLabor – Large number of workersCapital – Manufactured goods that are used to make other goods and servicesMoney for investmentSlide4
Corporations
Corporations
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A company that sells shares on the stock market to raise capital.The growth of corporations helped fuel the industrial revolution.Railroads were some of the first corporations in the US.Banks also made money off of the corporations by lending money to the new corporationsEntrepreneurs – Organizes a business and takes on the risk.
Robber Barons
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Industrial Age entrepreneurs who used bribery and insider trading to gain their fortunes.Slide5
Big Oil
1870 –
John D. Rockefeller
created the Standard Oil CompanyHis goal was to dominate the oil industryLowered prices to drive his competitors out of businessNegotiated with the railroads to give them special rates1882 – Rockefeller formed the Standard Oil TrustTrust – A group of companies managed by the same board of directors.Monopoly –
Total control of an industry by a single producer
Horizontal Integration
– Combining competing companies into one corporation
Rockefeller bought stock in other oil companies and slowly bought a majority of their stock until he was a part owner – thus creating a monopoly in the oil industry.
Controlled 90% of US oil
John D. RockefellerSlide6
Why is Rockefeller in the cartoon holding the world?Slide7Slide8
The Steel Industry
New methods of developing steel were invented in the 1870s making steel cheaper to produce.
1890s –
Andrew Carnegie dominated the steel industry. Vertical Integration – acquiring companies that provide the services and equipment needed for the steel industry.Carnegie Bought: iron and coal mines, railroad companies, ore ships etc.1900 – Carnegie was producing 1/3 of the nation’s steel.Philanthropist – The use of money to benefit the community.Carnegie Hall/2000 Libraries
Rockefeller Institute of Medicine/ University of Chicago
In 1901, Carnegie sold his Carnegie Steel Company to J.P Morgan for $480 Million.
(Today that would be $13.5 Billion)Slide9Slide10
Sherman Anti-Trust Act
1890 –
Sherman Anti-Trust Act
prohibited trusts and monopolies in the United States.First time in US history that the government is stepping in on business practices.Aimed to protect competitive prices for the consumer1911 – Standard Oil was broken up into many different companiesExxonMobileChevronSohio – Later bought by BP