Chapter 3
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Make 2 Lists:
1 – name the top 3 inventions/innovations of
your lifetime
2 – name the top 3 inventions/innovations of
all time
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Analyze the data and photograph on the cards
and then graph the data onto the appropriate
graph on your handouts.
Where it says to read sections of your textbook
and answer questions – ignore that!
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• Was industrialism good for industrialists?
For workers?
• Was industrialism good for the economy? For
the environment?
• Overall, was the rise of industry good for
America? Why or why not?
Abundance
of Natural
Resources
Oil
Production
Large,
Available
Workforce
US
Becomes an
Industrial
Power
Free
Enterprise
New
Inventions
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NATURAL REASOURCES AND A
LARGE LABOR FORCE ALLOWED THE
US TO INDUSTRIALIZE RAPIDLY
How did the US
become an industrial
society after the Civil
War?
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1st Industrial Revolution reached US early
1800s
Civil War – 1861 – Most people lived on farms
After the war, industry expanded
People left farms to work in mines and
factories
Second Industrial Revolution
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Increase in technology
Due to advances in electrification after 1890
Late 1800’s the US was the world’s biggest
industrial nation
GNP – Gross National Product – total value of
all goods and services that a country produces
during a year – growing fast!
What does a country need in
order to successfully achieve
industrialization?
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GUIDING QUESTION Why was the United
States successful at industrialization?
Natural Resources Timber, coal, iron, copper,
and petroleum were available in large
quantities in the United States. Manufacturers
were spared the expense of obtaining these
resources from outside the United States.
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What are Natural Resources?
Which were abundant in the United States in
the late 19th Century and early 20th Century?
How did an abundance of Natural Resources
contribute to economic growth in the United
States?
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Abundance of raw materials
Natural resources including: timber, coal, iron
and copper
Could get these cheaply
Located in the West
Industrialization impacted by settling the West
and the Railroad
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New resources: petroleum because it could be
kerosene
Where was kerosene used?
Lanterns and stoves
W. Pennsylvania – oil – Edwin Drake
Economy expanded as more people began
drilling for oil
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Where was oil found in the United States?
How did oil production affect the US
economy?
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GUIDING QUESTION Why was the United
States successful at industrialization?
Human Resources Rapid population growth
after the Civil War vastly increased the
industrial labor pool and boosted demand for
factory-made goods. Growth stemmed higher
life expectancy and increased immigration.
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Why did the US have a large workforce?
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What caused the population to increase?
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Human Resources were just as important
1860-1910 the population tripled
With more people there was more demand for
products that factories made
Population growth – where did the people come
from?
Large families and immigration
More children survived
Conditions in China and Europe convinced people to
immigrate due to religious persecution and
oppressive governments
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What were some of the inventions from this
time period that spurred economic growth?
How did these inventions cause the economy
to grow?
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Alexander Graham Bell
Telephone
Revolutionized personal communication
Bell Telephone Company
American Telephone and Telegraph Company - ATT
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Thomas Edison
Curious from an early age
First invented the phonograph and then the electric
generator and then the light bulb
Invented and improved several devices such as
affordable light bulb the battery,the dictaphone and
motion picture
Society transformed with the use of electricity
1882 began supplying electric to New York City
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Invented the air brake system
Applied this to trains
Trains could now travel more smoothly
All cars’ brakes would be applied at the same
time instead of on each car
Alternating current – distributed electricity
Hydroelectric power of Niagara Falls to light
streets of Buffalo, New York
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Changed how people lived
Refrigeration keeps food lasting longer
Textile industry depended on Northrop automatic
loom to make clothes faster
Clothes had standard
sizes and moved from
small tailor shops to
big factories
Telegraph with
Europe in 1866 –
instant communication
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Main Idea: Laissez-faire economics
promoted industrialization, but
tariffs protected American
companies from competition.
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What does Laissez-faire mean?
How did free enterprise encourage the
development of industry?
Can you foresee any problems?
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Laissez-faire – let people do as they do
Government should only protect property rights
and maintain peace – otherwise should let the
economy be.
IF government does get involved it increases cost
Supply and Demand
Let people compete and prices will decrease and
more wealth for everyone – better products
Support low taxes and limited government debt to
make sure private individuals make the most of the
decisions about how the nation’s money is spent.
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Entrepreneurs – business owners
In the late 1800s many people invested in factories
and railroads to make money
In late 1800s the government was practicing laissezfaire in some ways
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Kept taxes and spending down
Did not impose costly regulations on industry
In other ways the government went beyond:
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Introduced policies intended to promote business
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South and North had different views of economy
North wanted high tariffs to protect their
manufactures from foreign competitors
Southerners opposed tariffs to promote trade and
keep cost of imported goals low
Morrill Tariff- during Civil War when south
succeeded the Congress passed this
Increased tariff rates
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Late 1800s the US was the largest free trade areas in
the world
No tariffs between states and there were few
regulations on commerce of immigration
Therefore the economy exploded
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US goes from industrial nation to complex
industrial society
Modern convinces
1865 = “horse and buggy era”
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Lit homes with candles or oil
Icebox for fresh foods
Letters to communicate
1900 – modern technology
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Electric lights
Refrigerator
Telegraph and telephone
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Investors were willing to finance or fund the
development of new products
Without this many investors would never have
reached the market
Capitalism – economic system in which
factories, equipment and other production are
privately owned – not owned or controlled by
government
Capitalists invested money and hoped to reap
rewards if new business was profitable
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Edison – received generous financial support
from capitalists
J.P. Morgan – wealthy banker, backed Edison
Edison Electric Company
1880 – gave Edison $150,000
Edison gave them the rights to his lighting
inventions for 5 years
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Investors made inventors get patents
Patent – give inventor sole rights to make or
sell an invention
1790 – government starts issuing patents
1860 – only 36,000 issued
Between 1860-1900 – number goes to more than
600,000
Edison holds record with 1,093
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Samuel F. B. Morse – 1837 – telegraph
Dot and dash system
Morse Code
Telegraph lines followed railway lines
Western Union Telegraph Company
dominated the industry by 1870
Telephone – 1876
“Mr. Watson – come here – I want to see you”
Car
Plane
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High tariffs were not always good
Other countries raised their tariffs and it cost more
to sell American goods
As time progressed to the mid 1900s companies
thought they had grown enough and were strong
enough to compete in free trade without tariffs.
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Use your notes to identify what you think was
the most important cause of American
industrialization. Then write a sentence or two
identifying your choice and defending its
importance.
Why was the United States successful at
industrialization?
What invention from this period has had the
most impact on your daily life?
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How did laissez-faire economics promote
industrialization?
Industrialization changed nearly every aspect
of American life. Consider whether these
changes have been generally positive or
generally negative. Write a paragraph in which
you express your thoughts and feelings about
the pros and cons of widespread
industrialization.
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What economic policies allowed industries to
expand after the Civil War?
 Laissez-faire policies allowed industries to grow
rapidly because there was no government interference
or regulation to discourage entrepreneurs from starting
businesses
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What was the significance of the
Transcontinental Railroad?
 Stimulated the economy through increased trade and
the “multiplier effect.” (See page 190)
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New business models lead to the development of
big businesses
 Sole proprietorship
 Partnership
 Corporation
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New business practices also contribute to the rise
of big businesses
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Economies of Scale
Stock
Horizontal and Vertical Integration
Monopoly
Advertising and Retail Stores
"Robber Barons": that was what U.S. political and economic commentator Matthew Josephson (1934) called
the economic princes of his own day. Today we call them "billionaires." Our capitalist economy--any
capitalist economy--throws up such enormous concentrations of wealth: those lucky enough to be in the
right place at the right time, driven and smart enough to see particular economic opportunities and seize
them, foresighted enough to have gathered a large share of the equity of a highly-profitable enterprise into
their hands, and well-connected enough to fend off political attempts to curb their wealth (or wellconnected enough to make political favors the foundation of their wealth).
Matthew Josephson called them "Robber Barons". He wanted readers to think back to their European
history classes, back to thugs with spears on horses who did nothing save fight each other and loot
merchant caravans that passed under the walls of their castles. He judged that their wealth was in no sense
of their own creation, but was like a tax levied upon the productive workers and craftsmen of the American
economy. Many others agreed: President Theodore Roosevelt--the Republican Roosevelt, president in the
first decade of this century--spoke of the "malefactors of great wealth" and embraced a public, political role
for the government in "anti-trust": controlling, curbing, and breaking up large private concentrations of
economic power.
~J. Bradford DeLong, University of California at Berkeley
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Do Robber Barons exist in today’s society? If so, who are they?
He made his fortune by squeezing out efficiencies that made Standard Oil synonymous with
monopoly -- and significantly lowered fuel prices for everyday consumers.
The government broke up Standard Oil in 1911, but Rockefeller's hand can still be seen in
spinoff companies such as Exxon Mobil (XOM) and ConocoPhillips (COP), which have
benefited from the infrastructure and research-and-development advances inherited from
their parent.
Rockefeller retired at the beginning of the 20th century and for the next four decades
devoted himself to philanthropy. More than 70 years after his death, he remains one of Wall
Street's great figures.
Andrew Carnegie loved efficiency. His steel mills were always on the
leading edge of technology. Carnegie also had an excellent sense of
business timing, snapping up steel assets in every market downturn.
Like Rockefeller, Carnegie spent his golden years giving away the
fortune he spent most of his life amassing. Though less well-known
than some of his contemporaries, Carnegie built a legacy as a strong
and moralistic leader.