Grade 11 | Lesson 6

Social Sciences

Lesson Overview

Industrialization

• Public Policies and Private Investments
• Railroad Building
• Growth of Big Business
• Captains of Industry

Industrialization

Unlike the South, the North emerged virtually undamaged by the Civil War, its railroads and factories intact. Furthermore, the war and Reconstruction eliminated Southern planters as rivals to Northern industrialists for political power, allowing industrial growth to proceed at an even greater pace. Although interrupted by depressions from 1873 to 1878, 1882 to 1884, and 1893 to 1896, America's industrial production doubled every 12 to 14 years. By the 1880s the United States had overtaken Great Britain as the world's industrial leader.

The change from a primarily agricultural society to an industrial one was possible because the United States had the means necessary for a changing and growing economy. Among these were an abundance and variety of natural resources and large numbers of workers to turn raw materials into goods.

Public Policies and Private Investments
American industry developed within a free enterprise system and embraced was the philosophy of laissez-faire, which comes from the French phrase meaning "let alone." As a result, American industries developed with few government restraints. In fact, some government policies actually encouraged industrialization. Entrepreneurs, or business organizers, sought and received special favors from Congress. Liberal immigration laws ensured a steady supply of cheap labor. High protective tariffs encouraged American industries and raised manufacturers' profits by keeping out foreign goods. The federal government sold public lands containing vast mineral resources for a small proportion of their true value and assumed about one third of the cost of building Western railroads. It gave railroads grants of money totaling more than $700 million and gave them public lands throughout the West equaling the size of Texas.

A flood of important inventions helped increase America's productive capacity and improved the network of transportation and communications that was vital to the nation's industrial growth. As American universities extended their activities beyond teaching, they became important centers of scientific research.

Perhaps even more famous than Alexander Graham Bel,l who invented the telephone, was Thomas Alva Edison, who has been erroneously credited with inventing the electric light and moving pictures. Edison actually made few original discoveries. Instead, he was a great innovator who put the inventions of others to practical use. For example, Edison's redesign of Holes's typewriter permitted people to type faster than they could write. His improvement of Bell's telephone allowed voices to be transmitted longer distances. His work on improving the telegraph led to one of his few actual inventions, the phonograph.

Research It!
Who was Nikola Tesla and how did he influence Edison's inventions?

The incandescent electric light had been demonstrated in Britain in 1840. But it was Edison who, in 1879, developed cheap methods of supplying power and wire, as well as filaments that lasted more than just a few minutes. The incandescent bulb lighted America's cities and made industrial production possible 24 hours a day.

Research It!
What changes came about in these industries:

The Canning Industry,
Textiles, Clothing, and Shoes
Steel, Oil, and Trains

Railroad Building
Perhaps no other single factor was more responsible for the growth of industry in the United States than the expansion of the nation's railroads. At the end of the Civil War, there were 35,000 miles of railroad track in the United States. The tracks were of various gauges, or widths between the two rails.

By the mid-1870s the amount of track had doubled, and by 1890 it had more than doubled again. In 1900 passenger and freight trains steamed along almost 200,000 miles of rails. By then track also was laid according to a standard gauge--4 feet, 8 ½ inches wide--so that freight could move from line to line without having to be unloaded from one car and reloaded onto another. This standardized railroad network bound all sections of the country into one market and one nation. Trains could carry bulky products long distances quickly and cheaply, making it possible for businesses to sell their goods across the continent. In 1860 railroads carried less than half as much freight as inland waterways. By 1890 railroads carried five times as much.

One of the most successful railroad consolidators was Cornelius Vanderbilt, who built the New York Central system. By the mid-1850s, he had built the largest steamboat fleet in America. Yet Vanderbilt saw that the future of transportation was in railroads. So at age 73 he merged 3 short New York railroads he had purchased to form the New York Central, which ran from New York City to Buffalo. Within 4 years Vanderbilt extended his control over lines all the way to Chicago. In addition to bringing many lines under one management, Vanderbilt made great improvements in service. He was one of the first to use the Westinghouse air brake and the very first to lay a four-track main line--two tracks for freight and two for passenger traffic.

Throughout most of the nineteenth century, few Americans could agree on the time of day because every community determined its own time by the position of the sun. Railways, however, required a single standard of time for scheduling and routing. In 1883 American and Canadian railroads established standardized time zones. In 1884 delegates from 27 nations met in Washington, D.C., and divided the earth into 24 time zones. The base time zone was established with the Prime Meridian (0° longitude) as its midpoint. Since the Prime Meridian ran through Greenwich in Britain, the time in the base zone became known as Greenwich time.

Growth of Big Business
The railroads were America’s first "Big Business." Founding a major railroad consumed larger sums of money than any previous American enterprise. The investment required was so great that no one individual could make it. Instead, a large railroad line was organized as a corporation--a company formed by a group of investors who each receive a share of ownership in proportion to the amount they invested. Investors also enjoyed the protection of limited liability: they risked only the amount of their investment, even if the corporation went bankrupt and could not pay its bills. Corporate structure allowed entrepreneurs in many industries to raise the money they needed to launch or expand companies as opportunities arose. Big business enjoyed many advantages.

The advantages of big business were shown dramatically by the development of large meat packing companies. In the past, fresh meat had been slaughtered locally, and every town had at least one slaughterhouse. When the refrigerated railroad car made it possible to ship fresh meat over long distances, huge companies such as Swift and Armour appeared, selling their products throughout the country. The big packers were so highly organized and efficient that they could sell meat at a loss and make their profit from the rest of the carcass.

Big business in the late nineteenth century resulted from the vision of people who recognized great opportunities for wealth and were willing to take risks to get it. The companies they organized--American Tobacco, General Electric, and United Fruit, among them--came to dominate their industries and sold products not just nationwide but to the entire world.

Success in business became a best-selling theme in popular fiction. Horatio Alger became wealthy himself when he wrote novels like Mark the Match Boy, Tattered Tom, and more than 100 others--all "rags-to-riches'' stories of young men who became successful in business because of hard work and lucky breaks.

American law allowed the formation of business corporations, and conditions in the United States encouraged their existence. As a business form, the corporation offered a number of advantages over a partnership or a sole proprietorship. The corporation had a permanence that lasted beyond the lives of its owners or stockholders. That meant company managers could confidently plan far into the future.

Captains of Industry
Although giant combinations arose to control the beef, flour, whiskey, tobacco, lead, and sugar industries, as well as many others, by 1900 the American economy ran on oil, and its backbone was steel. No industrialists exemplified the principles of doing "big business" in late-nineteenth-century America more than the entrepreneurs who dominated these two basic industries: John D. Rockefeller in oil and Andrew Carnegie in steel.

Research It!
What was the Standard Oil Trust and why why it so effective? What laws were enacted in response?