2d Industrial Revolution and the Growth of Big Business

1. 2d Industrial Revolution and the Growth of Big Business Georgia Performance Standards: SSUSH11a-d

2. SSUSH11 The student will describe the economic, social, and geographic impact of the growth of big business and technological innovations after Reconstruction. a. Explain the impact of the railroads on other industries, such as steel, and on the organization of big business. b. Describe the impact of the railroads in the development of the West; include the transcontinental railroad, and the use of Chinese labor. c. Identify John D. Rockefeller and the Standard Oil Company and the rise of trusts and monopolies d. Describe the inventions of Thomas Edison; include the electric light bulb, motion pictures, and the phonograph, and their impact on American life

8. Growth of Railroads

9. Pre-Civil War Railroad Expansion

10. Pre-Civil War Railroad Expansion

11. Pre-Civil War Railroad Expansion

13. Growth of Railroads • Need: • Faster mode of transportation • Results: • Creation of a national market • Standardized “American” culture • Helps lead to: • Urbanization • Industrialization, • Organized Labor • Immigration

14. Railroads and the West The "West"

15. Railroads and the West • Government involvement in settlement: • Morrill Act (1862) • Public land used or sold to found colleges • Examples: UGA, Ft. Valley, Auburn, AL A&M • Homestead Act (1862) • People could gain property after living on it and farming for 5 years

16. Railroads and the West • “Railheads” • Cities on a rail line that served to move cattle eastward • Cattle Drives • Ranching • “open range” • Introduction of barbed wire

19. Transcontinental Railroad • Prior: • Routes to California • Overland by wagon train (2 months) • Water, via Panama/Nicaragua (2-6 months) • Water, via Cape Horn (6-10 months) • Pacific Railroad Acts • Central Pacific – from Sacramento CA east • Union Pacific – from Council Bluffs IA west

20. Transcontinental Railroad • Problems: • Weather • Geography • Supplies • Had to be shipped to San Francisco California Iowa

23. Transcontinental Railroad • Meeting: • Promontory, Utah • May 10, 1869

24. Transcontinental Railroad meeting at Promontory Summit, Utah

25. Chinese Labor and Railroads • Early labor: • Miners • Viewed as unreliable, expensive • Move to Chinese immigrants • Cheap • Economic conditions in China were poor • By 1868, 12,000 were employed by the Central Pacific Railroad (80% of their workforce)

26. Chinese Labor • Harsh treatment • Paid less • Discriminated against due to ethnicity

27. Reaction to Chinese Laborers The Mongolian invasion has begun at last in good earnest…the first detachment of Chinese laborers…numbering 250 men, arrived… carrying their baggage on poles…in true Oriental fashion. Most of these men were employed in the construction of the Pacific Railroad…. - Harper’s Weekly, 22 January, 1870

35. Monopoly: control over all or almost all trade or production of a good Trusts: a large corporation or combination with a monopoly of some service or commodity. Rise of Trusts/Monopolies • Cause: • Rise of urban centers (cities) • Rise of industrialization/mass production • Transportation improvements • Two Major Corporations: • Standard Oil • U.S. Steel

36. Big Business • A pejorative (negative) term used to describe the political and economic power of a corporation that influences prices of goods • Wal-Mart • Exxon • Home Depot • Now it’s your turn.

38. Monopoly • Monopoly • One company has exclusive control over their entire industry • Wipe out all of the competition • Two Methods: • Vertical Integration • Horizontal Integration

39. Vertical Integration • One company controls all means of production and distribution from beginning to end • Middleman is eliminated • Costs less for company to create a product • Lower prices • Consumers go with cheaper prices • Competition eliminated

40. Vertical Integration One Company Owns all Phases of Production From Top To Bottom Raw Materials Assembly and Manufacturing End Product Distribution

41. Horizontal Integration • Buy out the competition • If companies refuse to sell, lower prices to undercut the competition • Consumers flock to lower prices • Competition goes bankrupt or is forced to sell

43. Horizontal Integration To Form a Giant Company (Trust) Small Business Small Business Small Business Purchased by one Company Small Business Small Business Small Business Small Business Small Business Small Business Small Business Small Business Small Business

46. Steel Industry • Needed to build railroads, buildings • Mass production, perfected by Carnegie, allowed U.S. steel production to skyrocket

47. U.S. Steel • Formed in 1901 • World’s first billion dollar company • Produced 67% of U.S. steel in that year

48. Robber Baron • Negative - a business leader that builds wealth by lying, cheating and stealing • Robs from consumers • Abuses employees and workers • Drives competitors out of business (And enjoys it!) • Drains the country of natural resources • Bribes government officials

50. Captain of Industry • Positive - a business leader that positively contributes to the country • Creates jobs • Increases availability of goods • Expands markets • Helps the economy • A philanthropists – donates money or goods to a charity • Creates museums, libraries, universities