The Incorporation of America
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Transcript of The Incorporation of America
Essential QuestionIndustrialization
increased the standard of living and the opportunities of most Americans, but
at what cost?
Causes of Rapid Industrialization
1. Steam Revolution of the 1830s-1850s.
2. The Railroad fueled the growing US economy: * First big business in the US. * A magnet for financial investment. * The key to opening the West. * Aided the development of other
industries.
Causes of Rapid Industrialization
3. Technological innovations.
* Bessemer and open hearth process
* Refrigerated cars
* Edison “Wizard of Menlo Park” light bulb, phonograph, motion pictures.
Thomas Alva Edison
“Wizard of Menlo Park”
The Light Bulb
The Phonograph (1877)
The Ediphone or Dictaphone
The Motion Picture Camera
Alexander Graham Bell
Telephone (1876)
Alternate Current
George Westinghouse
Alternate Current
Westinghouse Lamp ad
The Airplane
Wilbur Wright Orville Wright
Kitty Hawk, NC – December 7, 1903
Model T Automobile
Henry FordI want to pay my workers so that
they can afford my product!
“Model T” Prices & Sales
U. S. Patents Granted
1790s 276 patents issued.1990s 1,119,220 patents issued.
4. Unskilled & semi-skilled labor in abundance.
5. Abundant capital.6. New, talented group of businessmen
[entrepreneurs] and advisors.7. Market growing as US population
increased.8. Government willing to help at all
levels to stimulate economic growth.9. Abundant natural resources.
Causes of Rapid Industrialization
Iron & Steel Production
• Oil • Mining • Sugar • Steel• Meatpacking• Beef/Cattle • Construction• Telegraph• Telephone
• Railroad• Marketing• Sewing Machine• Vacuums• Typewriters• Automobile • Salt• Coal• Agricultural
New Business Culture1. Laissez Faire the ideology of the
Industrial Age.Þ Individuals should compete freely in
the marketplace.Þ Own their own business and use
their skills to better our culture and make profit for themselves.
Þ No room for government in the market.
Þ Government should allow for natural competition for the betterment of our society.
2. Social Darwinism× British
economist.× Advocate of
laissez-faire.× Adapted
Darwin’s ideas from the “Origin of Species” to humans.
× Notion of “Survival of the Fittest.”
Herbert Spencer
2. Social Darwinism in America
William Graham Sumner
Folkways (1906)
$ Individuals must have absolute freedom to struggle, succeed or fail.
$ Therefore, state intervention to reward society and the economy is futile!
New Business Culture:“The American Dream?”3. Protestant (Puritan) “Work
Ethic” * Horatio Alger [100+ novels]
Is the idea of the “self-made man” a MYTH??
New Type of Business Entities1. Pool
2. Trust John D. Rockefeller
* Standard Oil Co.
FORMATION Organized by associates and legalized through state charter
OWNERSHIP Stockholders, according to number of shares
CONTROL AND MANAGEMENT
Through Board of Directors, elected by the stockholders (usually one vote
per share of stock held)
NET PROFITSAND LOSSES
Dividends: to stockholders = profitsLose: only the amount invested by
stockholders according to number of shares
LIMITED LIABILITY
Conglomerate
A group of unrelated business owned by a single corporation. Still used today by
companies that merge.
PoolCompeting companies that agree to fix
prices and divide regions among members so that only one company
operates in each area. Outlawed today.
Trust(Monopoly)
Companies in related fields agree to combine under the direction of a single
board of trustees, which meant that shareholders had no say. Outlawed
today.
Holding Company
A company that buys controlling amounts of stock in related companies, thus
becoming the majority shareholder, and holding considerable say over each
company's business operations. Outlawed today.
New Type of Business Entities2. Trust:
* Horizontal Integration John D. Rockefeller * Vertical Integration:
A. Gustavus Swift Meat-packingB. Andrew Carnegie U. S.
Steel
New Type of Business Entities
Standard Oil Co.
U. S. Corporate Mergers
Industrial Consolidation:
Iron & Steel Firms
Captain of Industry
• Monopolized the steel industry• Rags to riches story---came
from Scotland very poor.• Used scientific ideas (Bessemer
Process) to develop a better way to produce steel and sell a
quality a product for an inexpensive price.
• Used Horizontal integration.Carnegie Picture
Captain of Industry• Came from a wealthy family
• Bought a substitute during the Civil War.
• Formed the first modern corporations in the oil industry Standard Oil
• Was the first billionaire in the U.S. by 1900.
• Used Vertical Integration and Horizontal Integration to gain a monopoly in the oil business.
• Formed a steamship company in 1829
• Dominated shipping along the Atlantic
• 1849 established steamship that carried people from New York to San
Francisco in Gold Rush days
• After Civil War Vanderbilt bought most railroad lines from New York to
Chicago
• Worth over $100 million
New Financial Businessman
The Broker: * J. Pierpont Morgan
Wall Street – 1867 & 1900
The Reorganization of Work
Frederick W. TaylorThe Principles of Scientific Management
(1911)
The Reorganization of Work
The Assembly Line
“The Protectors of Our Industries”
The “Robber Barons” of the Past
Cornelius [“Commodore”] Vanderbilt
Can’t I do what I want with my money?
The Gospel of Wealth:
Religion in the Era of Industrialization
Russell H. Conwell
$ Wealth no longer looked upon as bad.
$ Viewed as a sign of God’s approval.
$ Christian duty to accumulate wealth.
$ Should not help the poor.
“Robber Barons” Business leaders built their
fortunes by stealing from the public.
They drained the country of its natural resources.
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.
“Captains of Industry”
The business leaders served their nation in a positive way.
They increased the supply of goods by building factories.
They raised productivity and expanded markets.
They created jobs that enabled many Americans to buy new goods and raise their standard of living.
They also created museums, libraries, and universities, many of which still serve the public today.
“On Wealth”
Andrew Carnegie
$ The Anglo-Saxon race is superior.
$ “Gospel of Wealth” (1901).
$ Inequality is inevitable and good.
$ Wealthy should act as “trustees” for their “poorer brethren.”
Philanthropist• Gave millions to
colleges and libraries.• It was the sacred duty
of the wealthy to give back to society who has
given to him.• Stressed education as a
means to better one’s self.
• Carnegie HallCartoon Carnegie
Philanthropist•Gave millions of his money to hospitals and colleges.•University of Chicago•Spellman College•National Parks•United Nations•Williamsburg•Cancer Research
Rockefeller
•Philanthropistdonated $1 million
to Vanderbilt University
BIGGER IS BETTERA trust or monopoly controls an entire
industry•make product cheaper
• lower prices for customer
The Problem w/ Monopolies
• Artificially high prices
• Highly unstable economy– Panics of 1837; 93
• Threatened ability of individual
• Threat to the wage-earning husband
• Class resentment• Gap b/w rich and
poor widening
Wealth Concentration Held by
Top 1% of Households