Chapter 17, Pages 473-480

Sources of Industrial Growth Industrial Technology

Revolutionizing of iron and steel production

Bessemer Process

Iron production soared in 1870’s-1880’s

40,000 miles of RR track added

Emergence of steel industry in PA and OH

Iron ore was abundant there

Pittsburgh, a steel town!

Pittsburgh Steelers

Pittsburgh, 1908

Sources of Industrial Growth Airplane and Automobile

Creation of gasoline was key

Henry Ford: produced his first car in 1896

Wright Brothers first to fly in 1903

Kitty Hawk, NC

By 1904, they could fly 23 miles and took passengers with them

Lucky Lindy popularized commercial flying in late 1920s

Sources of Industrial Growth Research and Development

Business leaders sponsored their own research

General Electric: created first corporate lab-1900

Bell Telephones, DuPont, GE, Eastman Kodak and others

Budgeting hundreds of thousands of dollar$ for research by their own scientists and engineers

Led to government decline in support for this

Higher education transformed: p. 475

Sources of Industrial Growth Science of Production

Scientific Management

“Taylorism”—Frederick Winslow Taylor

Urged workers to subdivide tasks

Led to employers diminished independence on any one worker

Should allow for production at greater speed

Emergence of mass production and moving assembly line: Ford cut time and money!

Sources of Industrial Growth Railroad Expansion

Main cause of industrial expansion in late 19th C

Led to economic activity: farming, lumber, agriculture: Chicago became livestock hub

Time zones created in 1883 for RR’s

Vanderbilt and Huntington are two major RR men

Oligopoly????

See map on p. 477 for RR lines

Sources of Industrial Growth The Corporation

Emerged as major political force after Civil War

Limited Liability: risking only the amount of the investment

Can have nothing to do with company but still be involved

Allowed individuals to gain large amounts of capital and create many big projects out of it

Sources of Industrial Growth Corporation Con’t.

Andrew Carnegie: steel

Controlled the processing of steel from mine to market

Vertical integration

US Steel Corp. formed by Carnegie and JP Morgan

Controlled 2/3 of nation’s steel production

Horizontal integration; bought out competition

Sources of Industrial Growth Corporation Con’t.

Gustavus Swift: meat packing

Isaac Singer: Singer sewing

New managerial techniques: read about on p. 478

Sources of Industrial Growth Consolidating Corporate America

Horizontal Integration: combining of a number of firms into a single corporation

Ex. consolidation of many different RR lines into one company

Vertical Integration: taking over of all different businesses in which a company relied for its primary function

Ex. Carnegie Steel

Sources of Industrial Growth Consolidating Con’t.

Standard Oil: combo of horizontal and vertical

Read about it on page 479

Sources of Industrial Growth The Trust

Trust: A group of separate companies that are placed under the control of a single managing board (trustees)

State laws prohibited one company from owning the stock of another, feared this would restrain “free trade”

Trusts were a way to get around the law

An Example: Standard Oil Co. had a board of 9 trustees, headed by

Rockefeller Eventually Standard Oil had 40 companies in its “trust” The companies had not officially merged & therefore not

broken any laws.

Sources of Industrial Growth By 1900: 1% of corporations controlled over 33% of

manufacturing

Robber Barons or Captains of Industry?????

Rockefeller & Standard Oil

Cornelius Vanderbilt, RR Tycoon

Carnegie, Tycoon & Philanthropist