THE RISE OF
INDUSTRIAL
AMERICA:
The Industrial Titans
Mr. Phipps
U.S. History
California State Standards
11.1.4. Examine the effects of the Civil War and Reconstruction and of the industrial
revolution, including demographic shifts and the emergence in the late nineteenth
century of the United States as a world power.
11.2 Students analyze the relationship among the rise of industrialization, large-scale
rural-to-urban migration, and massive immigration from Southern and Eastern
Europe.
11.2.1. Know the effects of industrialization on living and working conditions, including the
portrayal of working conditions and food safety in Upton Sinclair's The Jungle.
11.2.2. Describe the changing landscape, including the growth of cities linked by industry
and trade, and the development of cities divided according to race, ethnicity, and
class.
11.2.4. Analyze the effect of urban political machines and responses to them by
immigrants and middle-class reformers.
11.2.5. Discuss corporate mergers that produced trusts and cartels and the economic
and political policies of industrial leaders.
11.2.6. Trace the economic development of the United States and its emergence as a
major industrial power, including its gains from trade and the advantages of its
physical geography.
Era Characteristics
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Strong and rapid growth of industry, mass production,
mechanization, and the factory system
Consolidation of wealth and creation of an American
aristocracy
Political and corporate corruption and laissezfaire/hands off approach to government involvement
Exploitation of cheap, immigrant labor
The creation of the American city and the expansion and
urbanization of the West
Rapid population growth (natural and migratory)
Increased social, racial, and labor tension
The beginning of social, political, and labor reform
movements
Vocabulary
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Monopoly: Control of one one business, able to set the market
price for an item
Trust: Group of owners, controlling multiple related business, able
to set the market price for an item
Free Enterprise: a.k.a. “Capitalism” The idea that society benefits
from free competition in the market price, yielding individual profit, a
better/cheaper product, and wide availability of goods
Urbanization: The creation and construction of cities, including its
infrastructure
Demographics: The study of populations--how they grow, change,
move, and are characterized (by age, gender, crime, behavior, diet,
customs, language, etc.)
Nativism: Expressed racism toward a group considered “unAmerican”
RAILROADS
OIL
STEEL
The Industrial Giants

The Titans
 J.D. Rockefeller-Standard Oil
 J.P. Morgan-Investment banking
and financier
 Andrew Carnegie--U.S.
Steel
 Cornelius Vanderbilt,
Jay Gould, and Jay
Fiske--Railroads
Mechanization and
Mass Production
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The U.S. GNP (measures
manufacturing) grew from #4
(1860) to #1 (1894): the
largest producer in of
manufactured goods in the
world
Full exploitation of natural
resources
Use of machines, steam and
electric power, for
manufacturing
Encouraged by federal aid
and land grants
Use of immigrants for cheap
labor
Carnegie’s U.S. Steel Plant and factory
town, Homestead, Pennsylvania (1890s)
Carnegie and U.S. Steel
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Based corporate model on
“vertical integration”--controlling
all aspects of a business (mining,
transportation, refining, and sale)
Symbolized the “American
Dream”
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Started as a poor Scottish
immigrant
Worked as a telegrapher for rail
road
Used creativity, genius, and
charisma to problem solve
Purchased stock and aggressively
bought out competition
Use of intellect, timing, and will to
achieve wealth
Carnegie’s Beliefs
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Believed that God’s will and his
unique ability made him rich
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Wealth should not be inherited
Believed that the rich were socially
obligated to share wealth with poor
Provided money and endowments
to libraries, music centers,
churches, and schools
Became a model for philanthropy
and charity
Believed that competition was
essential for American growth (no
monopolies)
Sold U.S. Steel to J.P. Morgan,
who launched the first billion dollar
company
Bessemer Steel
Process,
Homestead, PA
Homestead Steel Plant
and Smokestacks,
Homestead, PA
Williamsburg
Bridge, NYC
Flat Iron Building,
NYC (1901).
Considered to be
the first modern
urban skyscraper
Rockefeller and Standard Oil
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Based corporate model on
“horizontal integration”--controlling
one aspect of an industry (only
refining)
Bought out competition to form a
monopoly of refined oil
Controlled over 90% of refining
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After anti-trust laws, Standard Oil was
broken up into smaller pieces
(including Exxon), with Rockefeller on
the Board of Directors for each
Strategic control of refining forced
the market price for drilling (prerefining), and sale (post-refining),
effectively controlling the market
Rockefeller’s Beliefs
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Believed that individual
accomplishment resulted
in success
Believed in eliminating
competition
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Less competition made a
more efficient business
Laissez-faire increased the
ability for a business to
operate effectively
Abhorred charity,
considering it a sign of
weakness of spirit
Frank Norris’ cartoon, The Octupus: Standard Oil
Pioneer Run,
Titusville, PA
(1859)
Coal
Mining,
Michigan
Coal Mining, Michigan
OIL RET AIL AND SALE
VERTICAL INTEGRATION
CONTROL OF INDUSTRY
Controlling a Business:
Horizontal v. Vertical
10
OIL BARRE LING AND TRANSPO RTING
OIL REFI NING
HORI ZONTAL INTEGR ATION
OIL DRI LLING
20
30
40
CONT ROL OF MARKE T (SHARES)
50
60
70
80
90
The Backbone of Industry:
The Steel Rails
Creating a Transcontinental
Railroad
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Increased miles of rails 35K
(1865) to 200K (1900)
Subsidized by federal grants
Required relocation of Indian
tribes
Contradicted laissez-faire
policy; gov’t invested,
promoted, funded, and
advertised rail expansion
Spread American-ness
Brought prosperity to areas
and towns through support
services
Spread population across
continent
A Mechanism for
Manifest Destiny
Major Rail Lines: The West
 Union Pacific Railroad (1862)
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Nebraska to California
Received bad press from
Credit Mobilier Scandal
Built by Irish
Central Pacific Railroad
(1869)
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Utah to California
Constructed by the “Big
Four”: Stanford, Huntington,
Crocker, and Hill
Built by Chinese
Finished at Promontory Point
The Steel Road
Major Rail Lines
 Transcontinental Railroad:
Joined at Promontory Point, UT
 Northern Pacific (1893)
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Southern Pacific (1883)
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New Orleans to Los Angeles
Santa Fe (1884)
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Chicago to Seattle
New Mexico to California
Great Northern (1884)
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Minnesota to Washington
Creating a United States
200, 000 + Miles of Track
Creating a Rail System
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Used corporate model of
consolidation and trusts
Combined rail lines
Forced industries to use the
only available rail line and
set the price for
transportation
Gave rebates to “friendly”
industries
Refused service to
“unfriendly” industries
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Steel Rails: stronger
standardized rail gauge
making transport safer and
faster
Westinghouse air brake:
increased safety
Pullman cars: luxurious
travel cars
Armour Cars: refrigerated
meat cars (i.e. Armour hot
dogs)
Time Zones: provided
consistency for delivery
Telegraph: increased
communication down rail
lines
Rail Inventions
In Sum
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Carnegie and Rockefeller differed in their approach
to business: Carnegie favored competition and
charity; Rockefeller favored monopoly and rugged
individualism
The oil, steel, and railroad industries helped each
other grow and depended on each other for success
In less than 30 years, the U.S. became the leading
manufacturer, transporter, and richest country in the
“civilized” world