The Second Industrial
Revolution (1865-1914)
After the Civil War, the North & West grew quickly. The
U.S.A. became an industrial giant.
I. Growth of Railroads
-A. 1st transcontinental RR – Utah territory, 1869
-B. Helped West grow, towns born along RR tracks, created jobs
- 1. Led to adoption of standard time
-Demand for coal & steel
1869
Railroads in 1890
Driving in the golden spike, Utah
- Railroad companies began to combine. Large companies
bought smaller ones.
- C. Cornelius Vanderbilt - richest man in America and the most
powerful railroad baron.
Cornelius Vanderbilt
Abuses:
-1. Unfair business practices
a. forced many smaller RR
companies out of
business
-“What do I care about law?
Ain’t I got the power?”
-Cornelius Vanderibilt
II. Growth of the Steel Industry
The A. Bessemer Process allowed steel to be made faster &
cheaper. 1. Steel is stronger and more durable than iron.
Examples: railroads, skyscrapers, nails, bridges
Bessemer
converter
Henry Bessemer
Steel
Rolling
The billets and slabs are
heated and rolled into
finished products.
Raw Materials
Example: Iron Ore
1
4
Melting
Casting
Hot air is pumped into
a furnace, melting iron at The liquid steel is cast into
billets and slabs.
1600 degrees Celsius.
(2,912 degrees F)
2
3
Refining
Impurities are removed and alloys
are added from the molten metal
through the use of a ladle.
Iron & Steel Production
·B. Andrew Carnegie became the
“King of Steel” by
1. opened factories in U.S.
using the Bessemer process
Sold his steel empire in 1901 for
$480 million
Became a 2. philanthropist
(gave his money away to good
causes)
Andrew Carnegie
C. Carnegie’s Business Plan 1. Vertical Integration –
a. own ALL steps of production process
1. charge high prices - no other business can
compete
Carnegie Warehouses
Carnegie Steam Ships
Carnegie Railroads
Carnegie Steel Mills
Carnegie Limestone Quarries
Carnegie Iron Ore Mines
Carnegie Coal Mines
III. New Business Method - Corporations
• Business owned by many people –A. investors
• Corporations raise $ by selling B. stocks (a paper
that says you own a piece of the company)
• People who buy stocks- 1. stockholders
• When the company makes a profit, the stockholders
get $ based on the amount of stock they own –
2. dividend
C. What is the business cycle?
Industry does not grow at a steady rate; it goes through
good and bad times
1. A “boom” is a time of increased
consumer spending and investing
2. A “bust” is a time of decreased
consumer spending and investing – long period
called a.“depression”
3. A “panic” is an event that
triggers a depression
IV. The Role of Banks
· A. J. Pierpont Morganbanker who bought other
major corporations
· Morgan controlled most
of the major RR lines in
America
· By 1901, Morgan
became head of the U.S.
Steel Company- first U.S.
company to be worth
over $1 billion.
V. Growth of the Oil Industry – Rock oil was worthless until it was
boiled & condensed into kerosene. Used for lamps and gasoline
1st oil well - PA
Standard Oil Trust
A. John D. Rockefeller formed the Standard Oil trust in1890
1. He invested in 1 step of the oil
business refining. By using unfair
practices, he was able to control 95% of
oil refineries in the U.S.
*He thought his success reflected
God’s will – “God gave me my money”
B. Rockefeller’s Business Plan – Horizontal
Integration – own all of one step or resource - Also
called a 1. monopoly
Standard Oil
Rockefeller Refinery
Rockefeller Refinery
Rockefeller Refinery
VI. Problems with Monopolies
• A. No competition means higher prices – small
companies forced out of business
• B. Low wages & bad working conditions
• C. Rich become very powerful -Wide gap between
rich and poor
• D. Businessmen try to buy influence in government
by paying bribes to politicians
This is a Senate
. . .Of the monopolists
. . . By the monopolists
. . . For the monopolists
The cartoonist made a reference to
a well-known speech by whom?
Today – Some people are afraid
that Congress is serving some
special interests instead of the
People. Who, do you think, the
cartoonist would label as the
giants if he drew this cartoon
now?