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Define: free enterprise

laissez-faire

entrepreneurs

robber barons

tariffs

Identify: Alexander Graham Bell

Thomas Alva Edison

William Stanley

George Westinghouse

America’s industrial revolution started in the early 1800s. Textile mills dotted the Northeast and provided jobs to women and children. In the Midwest, farming was still the #1 occupation but cities popped up on bodies of water and manufacturing lured new workers from farms to these urban centers. By 1860 1.3 million Americans worked in urban factories but 29 million still farmed. At the end of the Civil War in 1865, the nation went from a farming economy to a growing, urban industrial power.

The Civil War destroyed former Confederate states’ farmland and cities. The South lost 9000 miles of railroads and 2/3 of its shipping industry. Farms’ value dropped 70%. In addition, more than 1.5 million free laborers [former slaves] flooded the labor market. The South was desperate.

However, by 1900, the US changed and became the world’s leading industrial nation. Reasons for America’s industrial revolution were: the settlement of the west & the discovery of natural resources there; a workforce made up of women, children and immigrants; free enterprise; the government’s lack of control over industry; & new inventions like steel, electricity, and oil/ gas engines.

Western Settlement leads to more Natural Resources

The first factor which led the US into a prosperous industrial revolution was westward expansion, which led to access to more natural resources. Settlement of America, west of the Mississippi River, led to the discovery of abundant natural resources such as: water, timber, coal, iron, & copper, all of which supported eastern US industry. These resources meant that US companies could purchase domestic resources cheaply, many of which were located in the Rocky and Sierra Nevada mountains. Mining and lumber industries grew in the west and new railroads made shipping these resources more efficient and timely.

In 1859 oil was discovered in Pennsylvania and a new kerosene industry was born. Kerosene is a by-product of oil. Lanterns and stoves used it. By 1900 US oil fields expanded to Texas. With the invention of the automobile, oil became known as ‘liquid gold’ in America, making millions of dollars for oil barons. Oil became the key ingredient for economic expansion in America.

The Abundant Workforce of American Industry

A second factor supporting industrialization in the US was a growing workforce. The US population tripled between 1860 & 1900, largely due to immigration from Eastern Europe and China. New immigrants migrated here to find a better life. They were the poorest of the poor, uneducated, and desperate for work.

Between 1870 and 1910, 20 million new immigrants came to America. Longing to work, they took low paying jobs & worked long hours in horrible conditions. They helped businessmen get rich because there were no government regulations to force them to pay employees fair wages or work fewer hours or to make the workplace safe.

Free Enterprise

The third factor in America’s industrial rise was free enterprise, an economic system in which private business compete with one another, free of government control or regulations. To support free enterprise businessmen embraced the idea of laissez-faire, a French phrase meaning, “let the people do as they choose.” Laissez-faire said that governments should not interfere in the economy other than to protect private property rights and maintain peace. It argued that regulations would increase costs which would be passed onto consumers and hurt society.

Laissez-faire relies on supply and demand, not the government, to regulate prices & wages. Supporters felt that a free market led to more efficiency and created wealth for everyone. They supported low taxes to make sure that individuals, not the government, decided how to spend the nation’s wealth. Entrepreneurs, people who risk their money to organize and run a business, loved laissez –faire. Successful and filthy rich entrepreneurs were nicknamed robber barons by the working class.

Robber barons were capitalists, driven to succeed and smart enough to seize opportunities to gain large shares of a profitable enterprise. They used their wealth and power to fend off political attempts to curb their wealth. Today robber barons are called "billionaires."

Author, Matthew Josephson, used the term, robber baron, in his 1934 book, The Robber Barons. He researched the rise to wealth of several, very rich men and concluded that their wealth was a product of the sleazy wheeling and dealing fueled by their greed. Their fortunes were made on the broken backs of the workforce who were often cheated of fair pay.

The term "Robber Baron" refers to industrialists who earned their fortunes unjustly. These tycoons of the late 1800s, manipulated the common people to get rich & monopolize their industry. They eliminated the competition making small fail. Their actions corrupted industry. Their greed and power led them to form a new rich class. Called the American Aristocracy.

Government Lacks Control of Industry

A key factor that helped spur US industrialization was that federal and state governments had hands off, laissez-faire policies. They literally stayed out of business. Regulations were not imposed on industry, wages or prices. Governments said that staying out of business helped it.

Supporters favored free trade and opposed tariffs. A tariff is a fee on imported goods that an importer must pay to another country before it can sell its products in that country. For example, in order to protect American farmers, tariffs were placed on foreign imports of grain, cotton, and cattle. The fee increased the price of foreign farm products so American farmers had lower prices than the imports.

By the late 1800s, the US was one of the largest free trade areas in the world. Few government regulations existed to stop the movement of goods across the country. The US also practiced free trade in labor, placing few restrictions on immigration.

Eventually tariffs were put on imports but they hurt Americans in the end. When the US raised tariffs in the 1890s on foreign goods, other countries retaliated by raising tariffs on American imported goods. US companies with foreign markets lost business and sales dropped. Farmers who sold products to Europe watched their market disappear. Ironically, the problems faced by farmers aided the industrial revolution. Rural Americans left their farms to seek employment in urban factories.

New Inventions

The last key factor in helping the US gain industrial power was the emergence of American inventions, which helped the nation’s productivity to increase. Improved communications and transportation was vital to industrial growth.

One of the most dramatic inventions of the 19th century in communications was the telephone. In 1874 Alexander Graham Bell won the patent for a working telephone in 1876. The following year, he started the Bell Telephone Co., now AT&T, the only provider of telephone service until 1984.

In 1877 Thomas Edison invented the first phonograph, an early sound-producing machine that recorded and played sound. By 1880, Edison worked on at least three thousand different ways to make an efficient incandescent lamp, which makes light by using electricity to heat a thin strip of material until it gets hot enough to glow. His long lasting bulb was patented and he became famous for his light. He also made the first electric generator, improved the battery, the Dictaphone voice recorder, the mimeograph copy machine, and movie machines.

In 1882 the Edison Electric Illuminating Company supplied electricity to NYC. In 1889 the company was renamed: Edison General Electric [GE].

A rival of Edison’s was George Westinghouse who challenged Edison’s idea of direct current [DC] to power electricity. Westinghouse’s alternating current [AC] system was less bulky, more efficient and transmitted electricity more safely. AC beat DC and is used today to tranmit electricity. He was the first to run underground electric cables to power his home in Lenox, Massachusetts He supplied electricity to his neighbors, Edith Jones Wharton, Sara Morgan, & Lillian Vanderbilt [robber baron relatives].

William Stanley, perfected the Alternating Current transformer. In 1886, he installed the first AC power system in Great Barrington, MA to light up the town’s streets & homes.

In 1869, Westinghouse improved transportation by inventing air brakes for railroad cars to make trains stop safely. The refrigerated railroad car invented in 1877 allowed farmers to transport produce across the country and keep it fresh.

|Inventors and Inventions |

|1864 |George Pullman |sleeping car for trains |

|1865 |Thaddeus Lowe |ice machine |

|1874 |Stephen D. Field |electric streetcar |

|1879 |Thomas Edison |practical use light bulb |

Answer the following completely and in depth.

1. List the causes of the industrial revolution and explain each one.

2. How did the term robber baron evolve and why?

3. What were the pros and cons of laissez faire economics to business?

4. What were the pros and cons of tariffs?

5. What important inventions helped the industrial revolution? How?

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The American Industrial Revolution 1865-1901 Explain the causes of the Industrial Revolution and the important technological and scientific advances

Edison with his improved long-lasting light bulb

Bell in 1876 testing his telephone

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