Aim: Economic Changes & Developments

Aim: Economic Changes & Developments

Do-Now : Do you like the game Monopoly?Why/Why not?

Do-Now : Do you like the game Monopoly?Why/Why not?

Post-Civil War EconomyPost-Civil War Economy

War Stimulated North’s economy and destroyed the south’s

War Stimulated North’s economy and destroyed the south’s

Key Economic issuesKey Economic issues

North- Continued rapid

development, new interest in overseas

- Crucial to economy, Transcont.- develops west

- Farms began to mechanize to increase production- Urban Areas

North- Continued rapid

development, new interest in overseas

- Crucial to economy, Transcont.- develops west

- Farms began to mechanize to increase production- Urban Areas

Industries

Railroads

Land Use

&

Ag.

South- Began slow, (textile &

Steel), Urban areas needed much work

-Destroyed, needed building, roads & bridges too

- Slave based plant. system ends, land destroyed, poor whites & blacks compete. (sharecropping & tenant farming)

Growth of CorporationsGrowth of Corporations

New Technology & Business expansion lead to corporations. Why?

Corporation- A business where many investors own shares/stocks.

Investors Then receive a dividend- Benefits of losses with failed business- Speeds up industry growth

New Technology & Business expansion lead to corporations. Why?

Corporation- A business where many investors own shares/stocks.

Investors Then receive a dividend- Benefits of losses with failed business- Speeds up industry growth

Other forms of organizationsOther forms of organizations

Monopoly- A company or small group of companies that has complete control over a particular field of business (ex. Pizza chain)

Some monopolies are okayConglomerate- A corporation that owns

a group of unrelated companies(clearchannel & GE)

Monopoly- A company or small group of companies that has complete control over a particular field of business (ex. Pizza chain)

Some monopolies are okayConglomerate- A corporation that owns

a group of unrelated companies(clearchannel & GE)

ContinuedContinued

Merger- Process by which one company aquires legal control of another

Pools- When Companies work together to fix prices. (RR’s 1800s)

Trusts- When a group of corporation is controlled by board. Shareholders lose say in company. - Limit competition

Trusts and pools were outlawed.Holding company- Get around Trusts. Buys

company’s stock rather than direct take over

Merger- Process by which one company aquires legal control of another

Pools- When Companies work together to fix prices. (RR’s 1800s)

Trusts- When a group of corporation is controlled by board. Shareholders lose say in company. - Limit competition

Trusts and pools were outlawed.Holding company- Get around Trusts. Buys

company’s stock rather than direct take over

Innovation & EntrepreneursInnovation &

Entrepreneurs

Rural Areas- Mail order Catalogs. Spread products (vacuum, light bulb, telephone, electric iron)

Department stores- Variety under one roof.

Rural Areas- Mail order Catalogs. Spread products (vacuum, light bulb, telephone, electric iron)

Department stores- Variety under one roof.

EntrepreneursEntrepreneurs

People who take responsibility for the organization and operation of a new business venture.

Risk large sums of $ to make great profits.

People who take responsibility for the organization and operation of a new business venture.

Risk large sums of $ to make great profits.

EntrepreneursEntrepreneursAndrew Carnegie- Originally bad investor.

Sought to control all aspects of steelmaking. Became worlds largest steelmakerSold for 1/4 bil. Duty to society- $ to charity and built free

public libraries.

Andrew Carnegie- Originally bad investor. Sought to control all aspects of steelmaking.

Became worlds largest steelmakerSold for 1/4 bil. Duty to society- $ to charity and built free

public libraries.

EntrepreneursEntrepreneurs John D. Rockefeller

Standard Oil- 1882 controlled over 90% of U.S. oil refining

1882- Standard Oil Trust Why?Believed competition was wasteful

Donated to charity

John D. RockefellerStandard Oil- 1882 controlled over 90% of U.S.

oil refining1882- Standard Oil Trust Why?

Believed competition was wastefulDonated to charity

EntrepreneursEntrepreneurs J. Pierpont MorganBanker- Made loans to new businesses. Took control of bankrupt railroads, reorganized

and made profitsBought Carnegie Steel in 1901, created U.S.

Steel corporation world’s largest.

J. Pierpont MorganBanker- Made loans to new businesses. Took control of bankrupt railroads, reorganized

and made profitsBought Carnegie Steel in 1901, created U.S.

Steel corporation world’s largest.

Henry FordHenry Ford

1913- Assembly LineLowered Cost of ProductionSped up rate of productionPaid Workers Higher Wages- Set standard

1913- Assembly LineLowered Cost of ProductionSped up rate of productionPaid Workers Higher Wages- Set standard

Old School Thought of Business

Old School Thought of Business

Puritan work ethic?Poor boys become rich through hard

work and luckIf not??

Puritan work ethic?Poor boys become rich through hard

work and luckIf not??

Late 1800’s Late 1800’s

Rethinking Business MentalityDue to cut-throat business tactics

Rethinking Business MentalityDue to cut-throat business tactics

New PhilosophiesNew Philosophies

Laissez Faire (Lazy Fair)

Free Enterprise System- Up to the individual

Laissez Faire (Lazy Fair)

Free Enterprise System- Up to the individual

Social DarwinismSocial Darwinism

Businesses live or die by natural selection

Weak Businesses fail -Healthy survive

Businesses live or die by natural selection

Weak Businesses fail -Healthy survive

What would Government interference

do?

Interfere with Natural

selection

Robber Barons or Philanthropists?

Robber Barons or Philanthropists?

Growing gulf between rich and poor

Robber Barons- Those who gained their wealth by ruthless methods in their dealings with competitors at the expense of the poor and working class

What do you think?

Growing gulf between rich and poor

Robber Barons- Those who gained their wealth by ruthless methods in their dealings with competitors at the expense of the poor and working class

What do you think?

“Gilded Age”“Gilded Age”Rich spend freely showing off their

wealthWhat is this called?

Conspicuous Consumption

Rich spend freely showing off their wealth

What is this called?Conspicuous Consumption

Government PoliciesToward Business

Government PoliciesToward Business

Generally - Laissez FaireExpansion and growth justified itBusiness leaders make financial

contributionsLoans & land grants aid expansion, high

foreign tariffs

Generally - Laissez FaireExpansion and growth justified itBusiness leaders make financial

contributionsLoans & land grants aid expansion, high

foreign tariffs

Steps Toward Regulation Steps Toward Regulation

- Periodic economic downturns- Growing Criticism of practices- Increasing political presusre for

change- Limited impact of government, but

set the course for future.

- Periodic economic downturns- Growing Criticism of practices- Increasing political presusre for

change- Limited impact of government, but

set the course for future.

Railroad ProblemRailroad Problem

Due to greedy railroad owners, some states passed regulation laws

Railroads sued to have them overturned

Due to greedy railroad owners, some states passed regulation laws

Railroads sued to have them overturned

Munn v. IllinoisMunn v. Illinois

1877- States could regulate railroadStates had power to police private

property “affected with a public interest”

Question of interstate?Overturned by 1886- Wabash case

saying only Fed. Government could regulate interstate trade

1877- States could regulate railroadStates had power to police private

property “affected with a public interest”

Question of interstate?Overturned by 1886- Wabash case

saying only Fed. Government could regulate interstate trade

Interstate Commerce Commission

Interstate Commerce Commission

1887- Interstate CommerceSet Precedent

1887- Interstate CommerceSet Precedent

Sherman Antitrust ActSherman Antitrust Act

1890 Any business combination/trust is illegal if it is “in restraint of trade or commerce”

U.S. v. E.C. Knight Co.- 1895- Many Businesses exempt.

Holding CompaniesPrecedent Set

1890 Any business combination/trust is illegal if it is “in restraint of trade or commerce”

U.S. v. E.C. Knight Co.- 1895- Many Businesses exempt.

Holding CompaniesPrecedent Set

“Eight Hours For Work, Eight Hours for Sleep, Eight Hours for What we will”

“Eight Hours For Work, Eight Hours for Sleep, Eight Hours for What we will”

Cooperation & Association- Labor Unions

Collective Bargaining?Benefits? Individual vs. Group

Cooperation & Association- Labor Unions

Collective Bargaining?Benefits? Individual vs. Group

Knights of LaborKnights of Labor1869- Terrence Powderly

Broad Reforms- Child Labor, Workday, Women

1869- Terrence PowderlyBroad Reforms- Child Labor,

Workday, Women

AFLAFL1886- specific, immediate goals-

hours, working conditions, wagesBread-and-butter unionismSamuel GompersNO- Women, immigrants, African Americans

1886- specific, immediate goals- hours, working conditions, wages

Bread-and-butter unionismSamuel GompersNO- Women, immigrants, African Americans

International Ladies’ Garment Workers Union

International Ladies’ Garment Workers Union

Represents laborers in sweatshopsRepresents laborers in sweatshops

Triangle Shirtwaist Company

Triangle Shirtwaist Company

New York City- March 1911150- Young Immigrant women

New York City- March 1911150- Young Immigrant women

Labor ConflictsLabor Conflicts

Great Railway StrikeHaymarket RiotHomestead StrikePullman StrikeLawerence Textile Strike

Great Railway StrikeHaymarket RiotHomestead StrikePullman StrikeLawerence Textile Strike

Haymarket RiotHaymarket Riot1886- Influenced Anti-Labor

FeelingKnights Decline- AFL, Public blameBomb- 7 P.O.’s, Civilians

1886- Influenced Anti-Labor Feeling

Knights Decline- AFL, Public blameBomb- 7 P.O.’s, Civilians

Great Railway StrikeGreat Railway Strike1877- Pay cuts for railway workersPresident Hayes- Federal TroopsNo real benefits- Owners Tougher

1877- Pay cuts for railway workersPresident Hayes- Federal TroopsNo real benefits- Owners Tougher

Homestead StrikeHomestead Strike1892- Homestead, Penn. Carnegie Steel Plant-

Wage CutSecurity Guards to protect plant- 16 people

killed- National GuardLess than 25% Get jobs backStops Union Movement

1892- Homestead, Penn. Carnegie Steel Plant- Wage Cut

Security Guards to protect plant- 16 people killed- National Guard

Less than 25% Get jobs backStops Union Movement

Pullman StrikePullman Strike1894- Illinois strike- Stopped other railwaysPresident Grover Cleveland- Federal troops

Government- Business over laborWhy?

Sooner Than expected

1894- Illinois strike- Stopped other railwaysPresident Grover Cleveland- Federal troops

Government- Business over laborWhy?

Sooner Than expected

Transcontinental RailroadTranscontinental Railroad

Lawrence Textile StrikeLawrence Textile Strike IWW- Industrial Workers of the World1912- Textile mills, Lawrence, MA.Law shortening work week- Lowers wages Workers win demands (overtime, 15%, no strike

repercussions) Women, immigrants, children, can unite

IWW- Industrial Workers of the World1912- Textile mills, Lawrence, MA.Law shortening work week- Lowers wages Workers win demands (overtime, 15%, no strike

repercussions) Women, immigrants, children, can unite

TimelineTimeline

Create a timeline- From change of business mindset to strikes and

government action

Why is this significant?

Create a timeline- From change of business mindset to strikes and

government action

Why is this significant?

The Great Plains?The Great Plains?

Climate?Land?Economy?

Climate?Land?Economy?