Intro

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Intro
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The New Industrial Age 1876-1900
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Overview

• 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 industry
• corporations

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Objectives

• You will be exposed to
• The impact of new inventions on the expansion of
  American industry
• The important role railroads played in the
  development of the US during the late nineteenth
  century
• How and why large, complex business organizations
  developed in the US

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Part I New Inventions
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Electricity 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 sources
• Factories would be built close to railroads and
  major transit routes
• Electric trolleys became common in cities,
  encouraging cities to spread out, instead of up

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Edison 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

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Bulbs
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Bell 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?

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Sholes 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.

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Oil 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?

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Open hearth process
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The 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

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Wright planes
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Henry Ford and the Assembly Line

• 1903 Ford introduces the Model-T
• 1914 - Ford built the nations 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.

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A-line at Ford Plant
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1913 Model T Tin Lizzie 300
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Part 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

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Part II Railroads Expand
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The 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. Dowds 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.

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The 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.

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Building the Railroads

• Union Pacific
• Many Civil War veterans were suited for the hard
  work
• Most were Irish immigrants
• Paid 40-60/month
• Worked 8 hour days
• Meals on the RR Co.

• Central Pacific
• Not many Civil War veterans in California
• Chinese that had immigrated during the Gold Rush
  were hired
• Paid 35/month
• Worked sunup to sundown
• Bought their own meals

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Railroads Map
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The 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

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Pullman Cars,built by George Pullman.Most cost
more than 50000
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A typical dinner table on a Pullman carIs there
any parallel in modern mass transit?
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Railroads 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.
• Heres how the scam works
• Union Pacific hires Crédit Mobilier to build its
  railroad.
• Union Pacific tells the govt that it will cost
  100 million to build, when it actually costs
  about 50 million
• Since Union Pacific and Crédit Mobilier are owned
  by the same people, the extra 50 million is
  pocketed by the owners
• These companies also gave shares of stock to
  politicians in federal govt to ensure they kept
  getting subsidies.
• Local or state politicians were given free passes
  to keep their loyalty

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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 companys 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.

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Review 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

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Part III Big Business
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Andrew Carnegie

• Andrew Carnegie
• Born in Scotland, immigrated to the US in 1848
• Began working in a factory at 13, for 1.20/week
• Worked his way up in the railroad business,
  invested in stock, and became very wealthy by the
  age of 24
• 1873 Carnegie launched Carnegie Steel
  Corporation
• 1901 Carnegie sold his property and devoted
  himself to philanthropy
• Continued

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Carnegies 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.

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Integration
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How 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

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Rockefeller 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 level
• He ended up controlling 90 of the nations oil
  refineries
• He and other business who worked this way were
  called Robber Barons.

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Sherman 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.

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Boss Tweed and Tamany Hall Political Machine

• Political Machine organized group who controls a
  political partys activities in a large area
• Tweed used his power as leader to overcharge the
  govt 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

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New 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
  100s of books he wrote, usually rags to riches
  stories
• This idea inspired immigrants to reach the
  American Dream

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Review Part III

• Carnegie, philanthropist, US Steel
• The 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

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ExtraBiltmore Estate
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