Industrial and Business Industrial and Business Leaders of the 1800sLeaders of the 1800s

NCSCOS 5.02NCSCOS 5.02

AP USH Unit 15AP USH Unit 15

Macro ConceptsMacro Concepts

ConflictConflict-problem or issue that is -problem or issue that is controversial and can cause controversial and can cause problems without compromiseproblems without compromise

ChangeChange-the transformation of a -the transformation of a person, place or thing.person, place or thing.

InnovationInnovation-improvement and -improvement and advancement in the way advancement in the way something is done.something is done.

PowerPower-the authority of a -the authority of a government to carry out the government to carry out the law.law.

Supply and Demand-Supply and Demand-The belief that The belief that the amount of an item and the amount of an item and people’s desire for it will people’s desire for it will influence the price.influence the price.

Laissez FaireLaissez Faire-the belief that the -the belief that the government should leave government should leave businesses alone.businesses alone.

Social Darwinism-Social Darwinism-Belief that Belief that certain people are born superior certain people are born superior than others. People are than others. People are successful because they earned successful because they earned it and unsuccessful people did it and unsuccessful people did not.not.

MonopolyMonopoly-type of business that -type of business that runs its competition out of runs its competition out of business and takes over the business and takes over the entire industry. entire industry.

Vertical integrationVertical integration-a strategy used -a strategy used by business to control every by business to control every aspect of production.aspect of production.

Horizontal integrationHorizontal integration-another term -another term for monopoly.for monopoly.

Micro ConceptsMicro Concepts

Gilded AgeGilded Age Time period from 1870-1910 when a small number of Americans Time period from 1870-1910 when a small number of Americans

became extremely wealthy due to their exploitation of Laissez Faire became extremely wealthy due to their exploitation of Laissez Faire policies of the U.S. Government.policies of the U.S. Government.

Railroads, The Steel industry and Oil companies controlled their Railroads, The Steel industry and Oil companies controlled their business sectors with complete control.business sectors with complete control.

Competition between businesses was limited and prices of goods Competition between businesses was limited and prices of goods were very high.were very high.

There was a huge disparity [difference] between the rich and poor.There was a huge disparity [difference] between the rich and poor.

The decadent Biltmore Estate in Asheville, NC

Captains of IndustryCaptains of Industry

These were business owners who were ruthless and did everything they These were business owners who were ruthless and did everything they could to be financially successful by controlling their types of business. could to be financially successful by controlling their types of business. They were called captains of industry as a result of their tactics.They were called captains of industry as a result of their tactics.

These men became very wealthy and powerful because they controlled These men became very wealthy and powerful because they controlled huge amounts of money.huge amounts of money.

Robber Barons Robber barons were business owners who sometimes broke the

law or twisted rules to their advantage in order to make huge amounts of money.

They controlled the wealth of the United States by “stealing” money from citizens with exorbitant pricing.

Thomas Nast’s cartoons A New York City cartoonist named Thomas Nast criticized the

corruption and illegal activities of Tweed and other government officials.

His cartoons were so effective because readers did not have to know how to read to understand what Nast was describing.

Eventually the pressure applied by Nast led to Tweed’s arrest, prosecution and imprisonment.

Edwin DrakeEdwin Drake Drake was the first American to Drake was the first American to

successfully drill for and find successfully drill for and find significant oil in the United States.significant oil in the United States.

He discovered oil in Pennsylvania He discovered oil in Pennsylvania and refined it into and refined it into kerosenekerosene..

Kerosene was originally Kerosene was originally used for used for lamp fuellamp fuel..

Because of his discovery other Because of his discovery other people later drilled for oil and people later drilled for oil and eventually also became very eventually also became very wealthy.wealthy.

This discovery led to the vast This discovery led to the vast expansion of oil exploration and the expansion of oil exploration and the energy to fuel motorized engines.energy to fuel motorized engines.

Andrew Carnegie, BessemerAndrew Carnegie, Bessemer ProcessProcess and U.S. Steeland U.S. Steel

• Carnegie was a Scottish immigrant who was very poor when he arrived in the United States.

• He worked his way up to owner of U.S. Steel Corporation which later became a monopoly in the steel business.

• Carnegie was shown the Bessemer process by a chemist who demonstrated how to create high quality steel for military weapons.

• The Bessemer process enabled him to make super strong steel in a quick manner using oxidation [air blown through molten steel]. The cost of steel production plunged and increased profits.

• He also used a business strategy called vertical integration which combined every part of the steel business in order to make higher profits.

The Gospel of WealthThe Gospel of Wealth Not all wealthy business owners were bad!Not all wealthy business owners were bad! Andrew Carnegie, a robber baron, gave away almost all of his money Andrew Carnegie, a robber baron, gave away almost all of his money

before he died.before he died. He believed dying wealthy was a type of crime according to an essay He believed dying wealthy was a type of crime according to an essay

written by Andrew Carnegie.written by Andrew Carnegie. His financial gifts funded public libraries and museums across America.His financial gifts funded public libraries and museums across America. Therefore, according to Carnegie, the wealthy had a responsibility to do Therefore, according to Carnegie, the wealthy had a responsibility to do

good with their money throughgood with their money through philanthropyphilanthropy.. Philanthropy is the act donating or giving money away to charities and Philanthropy is the act donating or giving money away to charities and

needy causes to improve the public good. needy causes to improve the public good.

J.P. Morgan Railroad and banking tycoon

who financed numerous businesses and formed banking trusts

He cleverly acquired ownership in companies that were often considered unfair.

He purchased U.S. Steel Corporation from Carnegie for $400 million

He often forced companies to dissolve when profits were siphoned off [workers lost jobs]

John D. Rockefeller and Standard OilJohn D. Rockefeller and Standard Oil

► Rockefeller built on the success of Rockefeller built on the success of Drake and went into the oil Drake and went into the oil business.business.

► Because of the invention of cars Because of the invention of cars and the use of and the use of gasolinegasoline Rockefeller Rockefeller became very wealthybecame very wealthy..

► Rockefeller used a business Rockefeller used a business strategy called horizontal strategy called horizontal integration to consolidate other integration to consolidate other businesses by taking them over.businesses by taking them over.

► He was then able to create a He was then able to create a monopoly and charge whatever he monopoly and charge whatever he wanted to.wanted to.

Vanderbilt FamilyVanderbilt Family The Vanderbilt family of New York dominated the railroad industry.The Vanderbilt family of New York dominated the railroad industry.

The ruthless Vanderbilt family was well known for charging high fees The ruthless Vanderbilt family was well known for charging high fees for shipping freight.for shipping freight.

They were also well known for bribing members of the U.S. government They were also well known for bribing members of the U.S. government in order to get laws passed that would favor their business interests.in order to get laws passed that would favor their business interests.

The Interstate Commerce Act greatly reduced the power of the The Interstate Commerce Act greatly reduced the power of the railroads. railroads.

Herbert SpencerHerbert Spencer

Some people believed the reason Some people believed the reason people were rich was because they people were rich was because they were smarter.were smarter.

Nature favored much as the British Nature favored much as the British Naturalist Charles Darwin thought Naturalist Charles Darwin thought it favored stronger creatures.it favored stronger creatures.

Poor people deserved their poverty Poor people deserved their poverty because they were inferior because they were inferior according to the theory of according to the theory of Social Social DarwinismDarwinism..

This concept of Social Darwinism This concept of Social Darwinism was used by the Robber Barons as was used by the Robber Barons as justification of their wealth.justification of their wealth.

Horatio AlgerHoratio Alger

Horatio Alger wrote a Horatio Alger wrote a series of inspirational series of inspirational novels telling various novels telling various rags to richesrags to riches tales. tales.

The stories focused on The stories focused on how kids from how kids from impoverished impoverished beginnings were able to beginnings were able to pull themselves up pull themselves up by their bootstraps.by their bootstraps.

Very few of these Very few of these stories were real but stories were real but they offered hope for they offered hope for future success.future success.

Writing AssignmentWriting Assignment: Write a one page letter [if typed 12 pt : Write a one page letter [if typed 12 pt Arial font, if handwritten one side of a page] in either of the Arial font, if handwritten one side of a page] in either of the two points of view below.two points of view below.

Write a letter to the U.S. Government complaining Write a letter to the U.S. Government complaining about one of the robber barons [what do you want about one of the robber barons [what do you want to be done?]to be done?]

oror

Write a letter to the person [robber baron/captain of Write a letter to the person [robber baron/captain of industry] complementing him about what he was industry] complementing him about what he was able to accomplish?able to accomplish?

Extra CreditExtra Credit

Write a one page rags to riches story Write a one page rags to riches story about an immigrant who makes good and about an immigrant who makes good and goes from very poor to very successful goes from very poor to very successful just like Andrew Carnegie or a character just like Andrew Carnegie or a character such as Raggedy Dick. such as Raggedy Dick.

Image sources http://www.1892biltmorevillageinn.com/Pictures/Biltmore%20Estate.jpg http://notsodismal.com/wp-content/uploads/2009/03/84comm6jpg.jpeg http://explorepahistory.com/images/ExplorePAHistory-a0b6s6-a_349.jpg http://en.wikipedia.org/wiki/File:Andrew_Carnegie,_three-

quarter_length_portrait,_seated,_facing_slightly_left,_1913-crop.jpg http://en.wikipedia.org/wiki/File:5051_Earl_Bathurst_Cocklewood_Harbour.jpg http://en.wikipedia.org/wiki/File:George_Westinghouse.jpg http://en.wikipedia.org/wiki/File:Westinghouse_Air_Brake_control_handle_and_valve.jpg http://explorepahistory.com/images/ExplorePAHistory-a0m4y1-a_349.jpg http://www.power-of-giving.com/images/philanthropy-1.jpg