Industrialization

Features of Late 19th-Century Industrialization

• Exploitation of coal deposits for cheap energy

• Technological innovation and factory system

• Large supply of compliant labor (which immigrants?)

• Competition lowered prices and costs, and led to monopolies

• Lower prices increased consumers’ purchasing power

Cleveland Standard Oil plant in 1899

Bessemer Process

• Steel = iron + carbon• Problem: too much

carbon leads to impurities

• Process blows hot air through mixture to remove impurities

• Bessemer Process Link

Andrew Carnegie

• Fantastically wealthy entrepreneur gave hope to the “American Dream”

• Immigrated from Scotland at age 12; rose from a bobbin boy to incredible wealth as head of Carnegie Steel

• Innovation and detailed cost analysis: “Watch the costs, and the profits will take care of themselves”

• Created vertical integration: control all production processes from raw materials to finished product

• 1900: Carnegie Steel was largest industrial company in world; eventually bought out by JP Morgan

• Towards end of life, gave away nearly all his money: public libraries across the US and other charities

1909 cartoon satirizing Carnegie’s change of heart about wealth in America

J.P. Morgan

• Son of a wealthy banker; educated in Europe; rose within father’s bank

• 1861: sold defective rifles to gov’t at massive profit; sued successfully for payment once scam discovered

• Acquired ownership of railroads, and finally created US Steel through merger with Carnegie Steel

• At height, directed 340 companies, controlled 100 corporations worth more than $22 billion

• Made many charitable contributions, but left massive fortune to his son

• Holdings were divided into 3 pieces in 1933 by gov’t

John D. Rockefeller

• Believed his purpose was to make as much money as possible, and then use it to improve mankind

• Built Standard Oil, and controlled large majority of US petroleum industry, through purchasing or outcompeting rival companies

• Frequent target of “muckrakers,” journalists who exposed defects of industrializing America

• Broken up into Exxon, Mobile, Amoco, and Chevron

• In last 40 years of life, donated most of fortune to charity, especially for medical research and treatment

• Gave dimes to children he met in public

• When asked how much money was enough money, he replied “Just a little bit more.”

Thomas Edison

• “The Wizard of Menlo Park” was one of most prolific inventors in history

• Went deaf at age of 12

• Joined innovation with modern production techniques

• Invented or improved light bulb, phonograph, film, microphone, movie camera, storage battery, and 1,000 other devices

• Favored DC rather than AC; created campaign of electrocution to prove danger of AC; AC won out, due to cheaper cost and longer transmission distances

• Edison Electric Light merged to become General Electric

1890: Sherman Anti-Trust Act

• Prevent conspiracy in restraint of trade or commerce

• Not really used until 1900s

• Used by Teddy Roosevelt to attack Standard Oil, JP Morgan, AT&T, tobacco monopolies and railroads

• Today, government must approve mergers and aquisitions