3 Economic Sectors Serve as the Basis of the Infrastructure: Agriculture Factories Transportation/Communication

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1 The Rise of Industrial America Circa *Stuff between stars is not part of power point, only talk* Part One; The First Industrial Revolution Background: -Circa 1750 Europe s industrial revolution begins It reaches US by late 1700s Why so late? Cheap plentiful land why coop self up in factory? Labor & $ for capital investment scarce Undeveloped & undiscovered raw materials Undeveloped transportation & communication systems No markets for product = no demand for product Not until 1850 was value of industrial products greater than agricultural products * good for PK* 3 Economic Sectors Serve as the Basis of the Infrastructure: Agriculture Factories Transportation/Communication 1. Factory System: The major components of the US factory system: a. Labor = birthrate + immigration (slaves in south) b. Samuel Slater s Textile Mill (north) c. Eli Whitney s Cotton Gin (South) d. Yankee Ingenuity/Entrepreneurship = inventions, business risks, etc. Labor + machinery for spinning cotton thread + cotton gin + entrepreneurship = formula for beginning to build a diverse and interdependent economy Labor: Birthrate + Immigration Future Labor Force (population growth): By 1790 = circa 4 million Americans = steady, high birthrate + annual immigration on average of 60k = high immigration rate (Germans & Irish) By 1840s = immigration had tripled the average *60k x 3 = 180k annual immigration* By 1850s = immigration has quadrupled *60k x 4 = 240k annual immigration* US population by: a = 23 million

2 b = 31+ million c = 92+ million The Machinery 1791 Samuel Slater s Textile Mill o Located in Pawetucket, RI o Employed Child labor 1793 Eli Whitney s Cotton Gin o Separated the seed form the cotton o Immediately increased the need for more labor in the south hence the rise of slavery Yankee Ingenuity & Entrepreneurship Certainly Whitney s Cotton Gin 1798 Whitney s interchangeable parts: Starts with mass production of muskets for US Army By 1850 the concept was widely used Is the basis for modern mass-production and assembly-line methods all of the following spurs US to have to do its OWN manufacturing: o Embargo Act. Non-Intercourse Act, Macon s Bill #2, and War of and on Henry Clay s American System: o Used to promote US business o Internal improvements, high tariffs, the Bank of US (BUS) 1820s Lowell Textile Factories: o Group of Boston investors opens a series of textile factories in Lowell, Mass. o Employs thousands of young farm girls from dark to dark *work all day* 1846 Elias Howe s sewing machine: o Is the foundation for the ready made clothing industry o Causes huge rise in northern industrialism o Drives women from the farm to the factory 1848 First Incorporation laws passed in NY: o What used to be for a select few now open to all o Sell ownership of company (stock) to investorys o *Very Important* Concept of limited liability (only responsible for the amount you ve invested) facilitates increased investment capital for new business Record of Patented inventions: o By o By ,000 o By ,000 *After Civil War, wars cause lots of ingenuity. For the war of course*

3 Inventions spurred on more inventions spurred on more inventions spurred on more inventions spurred on more inventions spurred on more inventions 2. Agriculture South = Slave labor cotton becomes king after Whitney s Cotton Gin 1820s 30s: o Trans Allegheny region (Ohio River Valley) = bread basket of the nation later the world o Corn + hogs + grain traded down the rivers to the south and the east Lucrative business in all regions = incentive to cultivate land to west 1830s Cyrus McCormick s mechanical reaper: o Was to wheat farmers what cotton gin was to cotton farmers o +++ *more* land now devoted to cash crop wheat 1837 John Deere s steel plow: o Lighter, faster, easier, non-stick o Productivity per acre increased Increased Agricultural production now required a sophisticated transportation system 3. Transportation Roads of the early republic: o Primitive modes of travel o Treacherous, muddy, & rut-filled dirt roads 1790s 1810s Turnpikes: o Built by private companies o Lancaster to Philly, Penn (62 miles) Pay a toll to use then turn the pike to let go by o Attracted other companies to build 1807 Robert Fulton s steamboat: o Can now go with and against currents of rivers o Opens the west and the south to population growth & commerce 1811 The National Road: o A federal govt. interstate project from Maryland to Illinois (591 miles) o Ultimately a combo of federal and state $$$ 1814 and on Henry Clay s American System: o Used to promote US business o Internal improvements, high tariffs, the Bank of US s Canals: o Lowered shipping costs and time o Mostly located in the north for east west trade o Connected rivers and lakes to one another First railroad in US: o By 1860 = 30,000 miles of track in US

4 o Located mostly in the Northeast effects: East west connection Mississippi is less used Established the northern cities into the main commerce terminals East = machines & textiles for south South = cotton for northeast & old England West = grain * livestock for all *When south succeeded, they thought west would join them. But west actually did not give support because the North provided MORE $$$$* Circa Clipper ships: o For transoceanic travel faster than steamers 4. Communication 1844 Samuel F.B. Morse s telegraph 1860 Pony Express (lasted only 18 months) 1861 First transcontinental telegraph 1866 Permanent transatlantic cable Ultimately these networks (Transportation & Communication) would speed the nation to industrialize: 1820 = ¾ of population were farmers By 1850 = ½ of population were farmers Part Two: The Second Industrial Revolution Background: Better known as the Gilded Age, this is a time of: o Growth of big business trusts monopolies o Big business and government in bed together (graft & corruption) o Working conditions terrible, wages low o Attempts by labor to unionize = strikes & riots o Huge influx of immigrants 4 Categories Serve as the Basis of Industrial Growth at this Time: Rail Roads Mechanization The Industrialists Steel

5 1.Rail Roads Transcontinental Rail Road building: o Government subsidies: Land grants & $$$ per mile of track laid By 1869 connected east to west Effects: o United the nation and knit the west coast securely into the country o Increased domestic markets for all kinds of goods o Increased industrialization because raw materials got to market much more quickly o Increased mining & agriculture o Creation & growth of cities o Migration of population west o Helped to settle prairie lands o Made many people millionaires o Negative impact on Native Americans & environment 2. Mechanization In 1860 US = 4 th in manufacturing worldwide By 1894 US = 1 st!!! Why??? o Liquid capital: Civil War created huge profits for inventors Profits now could be combined with borrowed foreign $$ and invested into US business/industry o Natural resources: Coal, oil, ore, timber, etc. discovered as we moved west o Short supply of labor: Encouraged industrialists to invent & mechanize o Immigration: As industry grew immigrants came in droves Abundant, cheap, unskilled labor force o Yankee Ingenuity/Entrepreneurship: Business savvy new ways to organize business Utilize new techniques of mass production Inventions such as electricity, telephone, internal combustion engine, etc o Urbanization: Conveniences of city living facilitated by new inventions

6 3. The Industrialists Andrew Carnegie: o Steel Kingpin o Preached Gospel of Wealth o Known for vertical monopoly: Combined all phases of manufacturing into one Effects: More efficient Lest costly o Company: Homestead o Sold to JP Morgan (changed name to US Steel ) J.D. Rockefeller: o Oil Kingpin o Social Darwinist o Known for horizontal monopoly: Buying out controlling share of stock of competitors Combining of all competitors under one roof Creates a TRUST or monopoly of the product J.P. Morgan: (note the purple hue of his nasal organ poor Johnny Morgan) o Banking and Financial Kingpin o Known for the interlocking directorates: Companies in $$$ trouble sought his help loans Bank Officers of Morgan s bank sat on the Boards of these companies (interlock themselves) Would then exercise influence (directorates) over the business 4. Supremacy of Steel Steel much stronger, more durable, lighter, etc. than iron Could build bigger, higher, better, faster, cheaper, stronger Especially effects the construction industry (sky scrapers), bridge buildings (suspension bridge), rails for rail road industry 1850 Bessemer Process: o Made every bath of steel consistent each time o Brings down production time and cost o Increases demand for steel and its use