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Chapter 4 An Industrial Nation


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Title: Chapter 4 An Industrial Nation

Chapter 4 An Industrial Nation
Section 1 Building an Industrial Empire
Conditions favoring industrial growth 1. By the
late 1800s, the US was outproducing its European
rivals 2. US natural resources were the key
factor a. Vast supplies of coal, iron ore,
oil, timber and waterpower 3. Growing number of
workers was a factor as well c. Many new
immigrants were coming to America d. Rushing to
cities, mines and factories 4. With the growing
number of people to work, it also meant more of a
market for goods and services as well 5.
Investors were then interested in investing money
in railroads, mines and factories a. They
figured they could get rich doing this b.
Formed corporations a business owned by many
investors rather than a single owner or a small
number of partners c. The investors then
purchased stocks, or shares, in the business d.
The investors then earned dividends, or payments,
that were based on the companys profits 1.
The better a company did, the more money
stockholders got back
Continue Section 1
6. All levels of government local, state and
federal, stimulated the economics growth by
providing money, land and encouragement a.
Protected private property and encouraged
individual enterprise b. Became known as a
policy of laissez faire let the people do as
they choose 1. Business should operate with
as little government regulation or
interference as possible 7. Entrepreneurs
people who organized and managed businesses and
took the financial risks a. Many flourished
during this time period b. They were called
captains of industry by some and robber barons by
others 1. Some used illegal or improper
methods to get ahead
Carnegie and Steel 1. Steel becomes a huge and
important industry from the 1870s on a.
Because it was harder and more lasting than iron,
people began to use it for everything b.
Longer bridges, taller buildings, stronger
railroad tracks, better plows, more efficient
Continue Section 1
2. Bessemer process a. Launches the steel
industry b. Done by blowing a blast of air
through molten iron burning off impurities in
the metal results in strong, high-quality,
flexible steel.
3. Andrew Carnegie a. Born in Scotland and
comes to the US at age 12 c. Takes a job in a
textile mill near Pittsburgh, then works as a
telegrapher e. By 24, hes a railroad
supervisor f. Becomes wealthy from good
investments and decides to enter the steel
business in 1872 g. Is able to bring in good
people with higher pay but he works them very
hard h. Kept workers wages low and their
hours long i. Got lots of contracts Brooklyn
Bridge, the Washington Monument and the New
York City El j. By 1900, hes producing more
steel than all of Great Britain k. In 1901, he
sells his company for almost 500 million dollars
(making his personal fortune worth 75 billion
to 279.8 billion in todays money, to a
corporation set up by J.P. Morgan (who then
combines Carnegie and the other steel companies
into US Steel which controls 3/5 of the nations
Continue Section 1
Rockefeller and Oil 1. In the early 1800s,
petroleum was seen as a bothersome and stinking
fluid that would bubble from the ground 2.
Some people would scoop it up, bottle it and sell
it as medicine 3. Others would use it to burn
for light or to lubricate the wheels of their
wagon 4. Emergence of the oil industry a. In
1859, Edwin Drake dilled his first oil well in
Titusville, PA 1. Scientists had previously
learned how to create kerosene out of
petroleum to use as lamp fuel b. This would
start the first oil boom 1. Drake would end
up bankrupt and poor until the PA legislature
decided to give him a 1500 a year
annuity. c. World market develops for oil and
its by-products 1. Kerosene, wax, lubricating
oil, paint and varnish d. Entrepreneurs
scrambled to drill wells, build storage tanks,
build pipelines and refineries places where
crude oil is processed into useful products. 5.
Rockefeller enters the business in 1863 when he
and 4 partners built a refinery in Cleveland,
Ohio a. 2 years later he bought out all but 1
partner, built a second refinery and began to
expand 6. In 1870, he formed Standard Oil of
Ohio which became one of the most powerful
corporations ever in America.
Continue Section 1
Rockefellers Business Practices 1. Considered
competition wasteful and small businesses
inefficient 2. Decided on business consolidation
uniting all companies in the same industry to
create larger and more powerful businesses 3.
Set out to eliminate and take over weaker
competitors 4. Demanded efficiency, cost cutting
and the latest technologies 5. Expanded into all
areas of the oil business a. Bought pipelines,
warehouses, storage tanks, railroad cars and more
refineries b. Owned chemical plants that made
acids used in refining built his own factory
to make oil barrels and owned timberland to
provide wood for them c. Vertical integration
Expansion into all parts of the industry, from
raw materials to the sale of finished
products 6. Marketed high-quality products at
low prices drove other competitors out of
business became almost a monopoly a. By 1879,
Standard Oil controlled 90 of the oil-refinery
business b. Set up a new form of business
organization called a trust where the
shareholders of many companies turn in their
shares of stock in exchange for new shares in
the trust a board then controls the policies of
all the companies brought together in the
trust c. Rockefeller led the board, gave him
lots of power
Continue Section 1
A New Oil Boom 1. Rockefeller retired in 1897
with a fortune of 900 million (between 392
billion and 663.4 billion in todays
dollars) 2. New uses of petroleum were
emerging a. Gasoline became a major product
with the beginnings of Henry Fords
automobiles 2. New oil discoveries were being
made a. Anthony Lucas began drilling on a hill
called Spindletop near Beaumont, Texas b. On
January 10, 1901, the well erupted with a flow
that shot 175 feet into the air and took 9 days
to bring it under control c. By the end of the
year, 440 wells were pumping oil there d. Other
wells were drilled in Texas and Oklahoma e. By
the early 1900s, oil stood toe to toe in
importance with steel in the US economy

Section 2 Linking the Nation by Rail
Movement Transportation Revolution 1. At the
end of the Civil War, the US had about 35,000
miles of track by 1916, it had exceeded 250,000
miles 2. Offered year round, dependable service,
dependable schedule could go where canals and
rivers couldnt go 3. Products from communities
could reach a national market 4. Encouraged a
revolution in industry a. Trains could carry
raw materials to factories at distant locations
and finished goods throughout the nation b.
Encouraged mass production making goods in
large quantities and mass consumption the
use of goods and services by large numbers of
Consolidating the Railroad 1. To avoid
cooperating with competing lines, railroad
companies adopted conflicting schedules, built
separate train stations, and used different
gauges the distance between the rails, could
range from 4 feet, 8.5 inches to 6 feet 2.
Trains with wheels of one gauge couldnt run on
the tracks of another gauge
Continue Section 2
3. Larger railroads took over smaller one like
Standard Oil did with other oil companies 4. As
railroads consolidated, they adopted standard
schedules, signals, equipment and gauges a.
Created a number of trunk and feeder lines b.
Trunk lines a major railroad line that linked
important cities New York City to Chicago the
most important lines c. Feeder lines smaller
railroads that fed into the trunk lines
Cornelius Vanderbilt 1. Became a millionaire in
shipping 2. 1867, took over the New York
Central Railroad, which merged with other lines
to provide a trunk line from New York City to
Buffalo 3. When he died in 1877, his company
operated over 4500 miles of track going all the
way to Chicago a. Worth 143 billion to 178.4
billion in todays money
Continued Growth 1. The volume of people and
goods traveling by rail grew steadily 2.
Stronger and faster locomotives pulled
refrigerator, dining and plush sleeping cars
Continue Section 2
Problems of Competition 1. Competition for
traffic pushed owners to offer free passes for
large shippers and low rates on heavy freight
and long hauls 2. The offered customer rebates
(or returns of part of the normal fee) a. For
companies like Standard Oil who demanded them for
being a large volume business 3. Railroads
sought to limit competition by forming pools an
arrangement where several companies agree to
divide the available business in an area among
themselves a. They would then raise prices in
the areas they controlled
4. Jay Gould and Jim Fisk (both very wealthy)
bought and sold lots of railroad companies. 5.
JP Morgan (another extremely wealthy individual)
saw the problems with competition as being
wasteful and dangerous a. He helped more than a
half dozen railroad lines out of financial
troubles and forced them to give control to his
hand picked trustees b. Consolidated railroads
to reduce competition, cut costs, set rates,
eliminated rebates and issued new stock to
raise money
Section 3 The Business of Invention
A Flurry of Inventions 1. March 10, 1876,
Alexander Graham Bell sent the first telephone
message 2. In 1878, a telephone was installed in
the White House 3. By 1915, there were 10
million telephones in the United States a. By
then, Bell had consolidated hundreds of local
telephone systems into the American Telephone
and Telegraph Company or ATT b. This gave the
nation a centralized communications system
The Wizard of Menlo Park 1. Thomas Edison worked
up to 20 hours a day in his lab in Menlo Park,
NJ 2. In 1877, he invented a machine that
recorded sound on tinfoil wrapped around a
rotating cylinder 3. Also created a motion
picture machine a. Presented the first
motion-picture show in New York City in 1896 4.
1879, he created the electric light bulb a. He
then devised a system of generating stations,
meters and overhead wires to produce and carry
electricity to homes and businesses b. JP
Morgan helped back him when he formed the Edison
Illuminating Company and built a power station
in NYC c. September 4, 1882, he threw a switch
and lighted a number of NYC buildings
Continue Section 3
5. By 1900, there were 2,774 stations powering
some 2,000,000 electric lights around the US 6.
George Westinghouse and Nicola Tesla added more
innovations to electricity 7. Electricity began
to pull trolley cars and railroads the first
subway beneath city streets and lifted elevators
to the tops of the skyscrapers
New Forms of Transportation 1. Henry Ford was a
young engineer at Edisons Detroit power
company 2. He was experimenting with a gasoline
powered engine to power a horseless carriage
Edison pushed him to keep working on it a.
Ransom E. Olds was another person working to
develop the gasoline engine 3. Ford opened the
Ford Motor Company in 1903 a. He wanted to
build a car that could be produced cheaply and
sold at a low price b. Spring of 1908, Ford
introduces the Model T for 850 a. By 1914,
sales reached 248,000 and it was selling for
490 c. Low costs were due to the design no
frills, no options, standard car, black d. The
assembly line a row of workers and machines
along which work is passed until the final
product is put together a. They could put a
whole car together in 93 minutes
Continue Section 3
4. The airplane a. 2 Ohio bicycle mechanics,
Orville and Wilbur Wright developed a heavier
than air flying machine using the gasoline
engine that was designed by the auto
makers b. On Dec. 17, 1903, they took flight at
Kitty Hawk in North Carolina at the sand dunes
for 12 seconds to a distance of 120 feet
Section 4 The Sellers
Industries and companies need to compete for
business marketing selling a product or
service. Consumers the buying public, were
bombarded with advertisements, special deals and
gimmicks. The goal was to convince consumers to
buy their products, beat the competitions and
conquer the marketplace.
Growth of Advertising 1. In 1867, businesses
spent 50 million on advertising, by 1910, they
were spending 1 billion 2. Growth of magazine
and newspaper readership helped to reach millions
of people a. In 1860, there were some 387 daily
newspapers, by 1914, there were over 2,500
daily newspapers and nearly 14,000 weekly
newspapers these reached some 73,000,000
readers (and potential consumers) 3. Before the
rise of advertising, if you wanted something, you
went in a store and asked for that item with
advertising, people were buying specific brands
because theyd heard or seen an
advertisement What are some of the ads you
recognize? How have they changed? How are ads
marketed today?
Continue Section 4
Retailing 1. Manufacturers produced huge
quantities of goods, but most consumers only need
one or a couple at a time so few sold directly
to individual consumers a. They sold to
retailers those who sold goods directly to
consumers in small quantities 2. Retailers
included door to door salespersons, push-cart
peddlers who sold items on the street and
shopkeepers a. General stores in little towns
sold a little of everything from plows to
food b. In towns and shops, there were a wide
variety of shops to choose from a. These shops
would specialize in one type of merchandise 3.
Department stores a. 1862 Alexander D.
Stewart opened Stewarts Cast Iron Palace in New
York City b. Followed by John Wanamaker in
Philly, R.H. Macy in New York City and Marshall
Field in Chicago c. Made a wide selection of
goods available in one location many used
advertisements 4. Chain stores a. Chain
store two or more stores under the same
ownership and selling the same line of products
Continue Section 4
b. The first chain store was the Great Atlantic
Pacific Tea Company (became known as the A
P) opened in 1859 and sold only tea a. As
they started more stores, they added grocery
items b. Had 67 stores by 1876 and 1,000 by
1915 c. F.W. Woolworths Five and Ten Cent
chain started in 1879 a. By 1900 had 59 stores
with yearly sales of 1,000,000 (after early
failures) d. 1916 Piggly Wiggly chain was
started in Memphis, Tennessee by Clarence
Saunders a. Self-service instead of having
clerks in each department or counter they
then brought the items to a check-out line to pay
for them 5. Mail Order a. Aaron Montgomery
Ward noticed that rural people had little chance
to shop in stores, so he started a service to
allow people to shop by mail a. In 1872, he
sent out a one sheet price list b. By 1884,
his Montgomery Ward catalog was 240 pages and
offered almost 10,000 different items b.
Richard Sears saw the same opportunities a.
Started with watches and jewelry, then expanded
Continue Section 4
b. In 1893, Sears teamed with Alvah C. Roebuck
to found Sears, Roebuck and Company in
Chicago c. Got a huge boost with the Rural
Free Delivery Service that the US Post Office
started d. By the early 1900s, they were the
worlds largest mail-order retailer,
distributing 6 million catalogs a year each with
500 pages c. Wards and Sears would eventually
add chain of department stores to supplement
the mail order business bringing together 3
retail ideas mail order, chain stores and
department stores
Section 5 Organizing Workers
Conditions in the Workplace 1. Into the 1900s,
workers still worked 10 hour days, 6 days a
week a. Skilled labor earned 12 a week b.
Unskilled labor about 6 c. Few holidays or
vacations d. Easy to replace workers (workers
exceeded jobs available) e. Few safety
standards in factories, mines and mills f.
Job-related accidents and diseases killed many,
men, women and kids g. 20 of women over 16
(5.3 million) and 1.8 million children worked for
wages h. Men earned more than women, adults
more than children and native- born more than
foreign born Protestants earned more than
Catholics and Jews whites more than
non-whites i. Blacked worked in the least
desirable jobs last hired and first fired and
earned less than almost everyone, regardless of
Continue Section 5
The Growth of Labor Unions 1. Were small and
weak during most of the 1800s difficult to
organize workers of different skills and
backgrounds 2. Rather than forming a union for
all railroad workers, they were organized by
category or department 3. Most employers
actively opposed unions 4. The Knights of
Labor a. Began as a secret society in 1869 by
garment worker Uriah Stevens b. 1879, Terence
Powderly took over, ended secrecy and opened it
to all workers c. Accepted women as well and
had 60,000 black members at its peak d. Called
for higher wages, an 8 hour day, compensation
payment, for work related injuries and the end
to child labor (Powderly also wanted to see
worker-run factories, mines and railroads) e.
Disliked strikes work stoppage in order to
force an employer to agree to worker
demands a. When a series of strikes failed,
tens of thousands of workers left the union
by 1890 membership fell from 730,000 to
100,000 b. A few years later the Knights of
Labor dissolved
Continue Section 5
5. The American Federation of Labor a. Founded
in 1896 as an alliance of national craft unions
cigar makers, carpenters, typesetters,
machinists and others b. By, the 1890s, the AFL
was the most important a. Membership went
from 140,000 in 1886 to over 2,000,000 by
1914 b. Included almost 1/3 of the nations
skilled workers c. The vast majority of
workers though still remained unorganized 6.
Women wage earners a. Very few allowed women
members b. Women worked as hard as men, under
hazardous conditions, at less pay c.
Garment-making and food-processing industries
were good organizing areas where women took the
lead in forming their own organizations d. WTUL
Womens Trade Union League a. Formed by Mary
Kenny OSullivan b. Led at one time by
President Rose Schneiderman 1. Also organized
the ILGWU International Ladies Garment
Workers Union 2. Mostly Jewish immigrants
3. Lead a strike in 1909-1910 in New York
Citys garment industry where 20,000 workers
walked off their jobs
Continue Section 5
Labor Unrest 1. Most employers fought the union
movement a. They fired those that joined
unions b. To break up strikes, they hired scabs
non-union workers who take over strikers
jobs c. Strikes many times turned violent a.
Railroad strike of 1877 happened when railroads
tried to lower workers wages a. Involved
over 80,000 workers and affected 500,000
other workers b. Affect 2/3 of the
nations railroads from WV to CA c. Last 2
weeks and left 100 dead and the President
(Hayes) to call in federal troops to battle
the workers b. 1892 Carnegie Steel Company
plant strike in Homestead, PA a. Lowered
wages for workers by nearly 20 b. Workers
walked off the job, were locked out and scabs
were hired. c. Pinkerton detectives were
hired to drive away strikers d. After a
battle, 10 workers and 3 detectives were
dead e. Governor of PA called in the state
militia f. Company reopened and strikers gave