U.S. History II - Industrial America - Quick Guides | History

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Study GuideU.S. History II–Industrial America1. Big Business: Steel and OilAfter the Civil War, the United States experienced rapidindustrial expansion, often described as therise ofbig business. Production shifted from small workshops to large factories, and by 1900,factories employingmore than 1,000 workerswere common. Competition pushed companies togrow larger, consolidate, and develop new forms of organization that allowed a few corporations todominate entire industries. Thesteel and oil industriesbest illustrate these changes.1.1Andrew Carnegie and the Steel IndustryNew technologies such as theBessemer converterand theopen-hearth processrevolutionizedsteel production. As a result:•U.S. steel production rose from77,000 tons in 1870toover 10 million tons by 1900•One company,Carnegie Steel, dominated the industryVertical IntegrationAndrew Carnegie usedvertical integration, meaning he controlled every stage of production:•Owned iron ore mines•Controlled railroads, steamships, and factories•Reduced costs and eliminated competitorsIn1901, Carnegie sold his company toJ. P. Morganfor nearly$500 million, creatingU.S. Steel, theworld’s largest corporation at the time. It:•Controlled200 subsidiaries•Employed over168,000 workersThe Gospel of WealthCarnegie believed insocial Darwinism, arguing that competition promoted progress. InThe Gospelof Wealth, he stated:•Wealth concentration was acceptable if the rich used their money responsibly•Philanthropy should help people help themselves•He donated millions to libraries, universities, hospitals, and cultural institutions

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Study Guide1.2John D. Rockefeller and the Oil IndustryJohn D. Rockefeller foundedStandard Oil of Ohioin1870and soon controlled nearly the entire oilindustry.Vertical and Horizontal IntegrationRockefeller reduced costs by:•Making his own barrels•Building pipelines and storage facilities•Owning tank cars and refineries (vertical integration)He also usedhorizontal integrationby:•Buying out or crushing competitors•Controlling95% of U.S. oil refining capacityTrusts and Holding CompaniesIn1882, Rockefeller created theStandard Oil Trust:•Stockholders gave control to trustees in exchange for higher dividends•Trusts allowed monopolies to operate efficiently1.3Government Response: Sherman Antitrust ActThe growth of trusts alarmed the public and Congress:•Sherman Antitrust Act (1890)declared monopolies “in restraint of trade” illegal•Law was vague and weakly enforced•From 1890–1904, only18 caseswere filed, andfour targeted labor unionsAlthough theStandard Oil Trustwas dissolved by Ohio in1892, Rockefeller reorganized in1899asStandard Oil of New Jersey, aholding companythat continued to dominate the oil industry.

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Study Guide1.4Big Business Beyond Steel and Oil•Gustavus Swiftrevolutionized meatpacking using vertical integration•Sugar refining and other industries formed trusts•Retailingalso expanded:oJohn Wanamakeropened the first department store (1876)oFollowed byMacy’sandMarshall FieldoDepartment stores sold many products, bought in bulk, advertised heavily, andemphasized customer service2. Technology and BusinessIn the late 1800s, the United States experienced an incredible burst of invention. Before the Civil War,the U.S. Patent Office approved fewer than 1,000 patents a year. After the war, that number jumped tomore than 20,000 patents each yearbetween 1866 and 1900. This explosion of new ideastransformed everyday life and the economy.Even simple inventions could have huge effects.Barbed wire, introduced in 1874, changed farmingand cattle ranching in the West by making it easier to fence land and control livestock. Otherinventions improved how entire industries worked. For example,George Pullman’s sleeping car(1864)made long railroad trips more comfortable, whileGeorge Westinghouse’s air brake (1868)made trains much safer.At the same time, many new consumer products appeared. Items like thetypewriter (1867),carpetsweeper (1876),adding machine (1888), andKodak hand camera (1888)changed how Americansworked, kept records, cleaned their homes, and enjoyed leisure time.2.1Thomas Edison and a New Way to InventMany inventions in the nineteenth century came from individual inventors, butThomas A. Edisonchanged how invention itself happened. Instead of working alone, Edison created a team-basedapproach.After early successes like an electric voting machine (1869) and improvements to the telegraph,Edison opened a research lab inMenlo Park, New Jersey, in 1876. This was thefirst industrial

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Study Guideresearch laboratory, sometimes called a “factory for inventions.” There, teams of skilled workerscollaborated on new ideas.Some of Edison’s most famous inventions came from Menlo Park, including thephonograph (1877),the first practicalincandescent light bulb (1879), and thefirst central electric power station(1882). Later, at a larger lab inWest Orange, New Jersey, Edison’s team developed moreinventions, such as an improvedmotion picture projector (1897)and thealkaline storage battery(1900). Although Edison personally held over1,000 patents, many were the result of teamwork in hislaboratories.2.2Edison vs. Westinghouse: The Battle Over ElectricityEdison helped launch the electric power industry in 1882 when hisPearl Street Stationbegansupplying electricity to customers in New York City. However, Edison’s system useddirect current(DC), which worked only over short distances.George Westinghouseoffered a better solution:alternating current (AC). Developed in 1886, ACelectricity could travel long distances at high voltage and then be safely reduced for homes andbusinesses using transformers. Edison argued that high-voltage electricity was dangerous, butWestinghouse’s system proved more practical.Westinghouse ultimately won the“battle of the currents.”Because AC power could be transmittedover long distances, factories no longer needed to be located near water or coal sources. Electricityallowed industry to spread out and grow more efficiently.2.3Alexander Graham Bell and the Communication RevolutionIn 1876, the same year Edison opened his lab,Alexander Graham Bell invented the telephone. Atfirst, it seemed like a novelty, but it quickly became essential for businesses and households. By1900, nearly800,000 telephoneswere in use across the United States.Bell’s patent was extremely valuable. His company—later known asAmerican Telephone andTelegraph (AT&T)—used it to control the telephone industry by suing competitors for patentviolations. Over time, AT&T absorbed hundreds of smaller phone companies and dominated long-distance communication.

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