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Explain a cause and an effect of the growth of the steel industry'

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Title: Explain a cause and an effect of the growth of the steel industry'


1
Warm-Up
  • Explain a cause and an effect of the growth of
    the steel industry.

2
Causes
Effects
  • RR Growth
  • Bessemer Process
  • Jobs
  • Prosperity in Steel Towns
  • Increased Pollution

3
Objective
  • Students will understand the arguments for and
    against giant corporations.

4
Warm-Up
  • Why do monopolies go against the free enterprise
    system?

5
  • Monopolies and trusts reduce competition.
  • Without competition companies will not reduce
    their prices or make better products.
  • Small businesses and new companies have little
    chance of success if a monopoly/trust exists.
  • Monopolies/trusts lead provide to much political
    influence (gtcorruption)

6
Objective
  • Students will understand the effects of
    monopolies and trusts on the free enterprise
    system.

7
Chapter 20 Section 2
Big Business
8
Early Industrial Plant
  • As the Industrial Revolution spread to the United
    States, plants such as this textile factory
    appeared. Soon the production of exports outpaced
    import of goods, and by the late 1800s America
    emerged as the worlds largest industrial power.

9
I. Growth of the American Steel Industry
  • Growth of the RR gt growth of the steel industry

10
I. A. A New Way to Make Steel
  • Bessemer Process a method developed in the
    1850s to make strong steel at a lower cost.
  • Steel led to the development of sky scrapers

11
Blast Furnace
  • In order to turn crude iron ore into usable pig
    iron, its impurities must be removed. A blast
    furnace accomplishes this by forcing extremely
    hot air through a mixture of ore, coke, and
    limestone, called the charge. Carts called skips
    dump the charge into the top of the furnace,
    where it filters down through bell-shaped
    containers called hoppers. Once in the furnace,
    the charge is subjected to air blasts that may be
    as hot as 870 C (1600 F). (The furnace must be
    lined with a layer of firebrick, called the
    refractory, in order to sustain these
    temperatures.) Melted metal collects in the
    bottom of the furnace. The waste metal, called
    slag, floats on top of the molten pig iron. Both
    of these substances are drained, or tapped,
    periodically for further processing.

12
Bessemer Steel Production
  • In order to convert molten pig iron (crude iron)
    into steel with a Bessemer furnace, air must be
    blown through it to burn away impurities.

13
I. B. Steel Mills Spring Up
  • Steel mills sprang up throughout the Midwest
  • Pittsburgh became the steel making capitol of the
    nation ( lt coal mines transportation)
  • Steel Mills brought jobs, prosperity pollution

14
II. Andrew Carnegie
  • Scottish immigrant gt textile mill as a child gt
    telegraph operator gt Pennsylvania RR gtSaw
    Bessemer process in England gt built steel mill in
    Homestead, PA.
  • His connections with the RR industry led to his
    success.

15
Child Labor in Textile Factory
  • During the Industrial Revolution, children were
    employed in factories and worked long hours.
  • This photo by noted American photographer Lewis
    Hine shows young boys working at a spinning
    machine.
  • Hines photographs led to the passing of the
    first child-labor laws.

16
Andrew Carnegie
  • 350 millionto various charitable causes,
    including education, research, and art
    institutions.

17
II. A. Controlling the Steel Industry
  • Carnegie used his money to buy out rivals
  • Vertical Integration- He bought iron mines,
    railroad and steamship lines, and warehouses
  • he controlled all steps from raw materials to
    distributing finished products
  • 1892- combined into Carnegie Steel Company, which
    produced more than all of Great Britain by 1900.

18
II.B. The Gospel of Wealth
  • Wealth, passing through the hands of the few,
    can be made a much more powerful force for the
    elevation of our race than if it had been
    distributed in small sums to the people
    themselves.
  • Carnegie spread his wealth out to charities,
    libraries around the country.

19
III. Rise of Corporations
  • Late 1800s gt big factories which shut down small
    ones
  • Corporation business owned by investors
  • Stock shares in the profit
  • A board of directors ran the company and
    stockholder's were immune from corporate debt

20
  • No corporate debt!!! less risk (than private
    business!!!)

21
IV. Banks and Industry
  • J. Pierpont Morgan - I like a little
    competition but I like combination more.
  • He used his banking skills to get seats on boards
    of directors to buy major corporations including
    steel and RR
  • After buying the Carnegie Steel Company and
    combining it with others he creating the 1st
    Billion business the United States Steel
    Company

22
The Role of Banks in Industry
  • Banks played a huge role in the development of
    industry because they bought stocks and provided
    loans for businesses to get started.

23
V. The Oil Industry
  • 1859 Titusville, PA 1st oil strike gt oil boom
    for gushers

24
VI. A. Rockefeller and Standard Oil
  • Rockefeller didnt rush for a gusher
  • At 23, he invested in his first oil refinery, and
    then destroyed others gt Standard Oil Company
  • He got rebates gt more profit

25
Rockefellers Competition Reduction
  • He used pressure to shut down and absorb small
    businesses into his company.

26
VI.B. Creating a Trust
  • 1882 Standard Oil Trust is formed and becomes a
    (95) monopoly
  • Trust a group of corporations run by a single
    board of directors
  • Stock holders trusted Rockefellers board to
    manage all the companies which had once been
    rivals

27
VII. Big Business 2 View Points
  • Some Americans complained that giant corporations
    were abusing the free enterprise system

28
Adam Smith
  • The Wealth of Nations, argued that private
    competition free from regulation produces and
    distributes wealth better than government-regulate
    d markets.
  • Since 1776, his argument has justified capitalism
    and discouraged government intervention in trade
    and exchange.

29
VII.A. Opposition to Trusts
  • Trusts/Monopolies eliminate competition.
  • No competition no reason for low prices or
    improvements of products
  • New companies had little chance of success
  • Workers were treated poorly.
  • Big Business had big political power

30
The
Chicago Tribune
  • liberty and monopoly cannot live together.

31
John Reagan, Congressman from Texas
  • There were no beggars till Vanderbilts
    andMorgansshaped the actions of Congress and
    molded the purposes of government. Then the few
    became fabulously wealthy and the many wretchedly
    poor.

32
Sherman Antitrust Act
  • In 1890, Congress banned trusts and monopolies.
  • It was too weak to work.
  • Corporations sidestepped laws that werent really
    enforced.

33
VII.B. Support for Trusts
  • Defenders claimed that it brought
  • lower production costs
  • Lower prices
  • Higher wages
  • Better Quality of Life (best world by in 1900)

34
Section 2 Review
35
1.A. John D. Rockefeller
  • Created oil refineries and then combined them
    into the Standard Oil Company.
  • This company later became a monopoly as the
    Standard Oil Trust.

36
B. Bessemer process
  • Process of blowing hot air over the molten iron
    to reduce impurities and make stronger steel
    faster and easier.

37
C. Andrew Carnegie
  • Created the idea of vertical integration with his
    company, the Carnegie Steel Company.

38
D. J. Pierpont Morgan
  • Banker genius
  • Used banking tactics to buy stocks and get onto
    board of directors
  • He would then consolidate companies to make them
    more powerful

39
E. Standard Oil
  • Company created by Rockefeller that later became
    the first trust and a monopoly.

40
F. Sherman Anti-Trust Act
  • 1890- law that made it illegal to have trusts and
    monopolies
  • It was weak and innefective because it was not
    enforced

41
2. Define
42
A. Vertical Integration
  • Control of all phases of an industry

43
B. corporation
  • Business owned by investors.

44
C. Stock
  • Shares in a business.

45
D. Dividend
  • Payment to stockholders from a corporations
    profits.

46
E. Trust
  • A group of corporations run by a single board of
    directors.

47
F. Monopoly
  • A company that controls all or nearly all the
    business of an industry.

48
G. Free Enterprise System
  • Ownership of businesses by private citizens.

49
Comprehension
50
3. Name three uses for cheap steel in the 1800s.
  • Rails, bridges, girders for buildings, screws,
    nails

51
4. Why did many American businesses become
corporations?
  • To enable them to raise money by selling stock in
    order to build factories and buy equipment

52
5. Why did some Americans think that big business
threatened the free enterprise system?
  • It prevented competition of newer companies.
  • No Competition no reason for low prices or
    better products
  • Workers felt mistreated.
  • Corporations had too much political power

53
Compare and Contrast.
  • Make a graphic organizer that explains the
    support and opposition to trusts.
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