Title: Explain a cause and an effect of the growth of the steel industry'
1Warm-Up
- Explain a cause and an effect of the growth of
the steel industry.
2Causes
Effects
- RR Growth
- Bessemer Process
- Jobs
- Prosperity in Steel Towns
- Increased Pollution
3Objective
- Students will understand the arguments for and
against giant corporations.
4Warm-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)
6Objective
- Students will understand the effects of
monopolies and trusts on the free enterprise
system.
7Chapter 20 Section 2
Big Business
8Early 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.
9I. Growth of the American Steel Industry
- Growth of the RR gt growth of the steel industry
10I. 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
11Blast 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.
12Bessemer 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.
13I. 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
14II. 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.
15Child 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.
16Andrew Carnegie
- 350 millionto various charitable causes,
including education, research, and art
institutions.
17II. 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.
18II.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.
19III. 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!!!)
21IV. 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
22The 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.
23V. The Oil Industry
- 1859 Titusville, PA 1st oil strike gt oil boom
for gushers
24VI. 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
25Rockefellers Competition Reduction
- He used pressure to shut down and absorb small
businesses into his company.
26VI.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
27VII. Big Business 2 View Points
- Some Americans complained that giant corporations
were abusing the free enterprise system
28Adam 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.
29VII.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
30The
Chicago Tribune
- liberty and monopoly cannot live together.
31John 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.
32Sherman Antitrust Act
- In 1890, Congress banned trusts and monopolies.
- It was too weak to work.
- Corporations sidestepped laws that werent really
enforced.
33VII.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)
34Section 2 Review
351.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.
36B. Bessemer process
- Process of blowing hot air over the molten iron
to reduce impurities and make stronger steel
faster and easier.
37C. Andrew Carnegie
- Created the idea of vertical integration with his
company, the Carnegie Steel Company.
38D. 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
39E. Standard Oil
- Company created by Rockefeller that later became
the first trust and a monopoly.
40F. 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
412. Define
42A. Vertical Integration
- Control of all phases of an industry
43B. corporation
- Business owned by investors.
44C. Stock
45D. Dividend
- Payment to stockholders from a corporations
profits.
46E. Trust
- A group of corporations run by a single board of
directors.
47F. Monopoly
- A company that controls all or nearly all the
business of an industry.
48G. Free Enterprise System
- Ownership of businesses by private citizens.
49Comprehension
503. Name three uses for cheap steel in the 1800s.
- Rails, bridges, girders for buildings, screws,
nails
514. Why did many American businesses become
corporations?
- To enable them to raise money by selling stock in
order to build factories and buy equipment
525. 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
53Compare and Contrast.
- Make a graphic organizer that explains the
support and opposition to trusts.