Captains of Industry:
AP US HISTORY Worksheet #45
The Second Industrial Revolution and the Rise of Big Business
|Causes of Industrialization: |Effects and Impacts |
| |(Inventions, Scandals, Etc) |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|A Favorable Climate for Business |
|The American ideal was one of self-reliant individualism. A strong work ethic made one successful, and entrepreneurs risked their money and talents in new |
|ventures. |
|Free markets |Social Darwinism |
|With capitalism, competition determines prices and wages, and most |Many thinkers believed that inequalities were part of the natural order. |
|industries are run by private businesses. |Charles Darwin believed that members of a species complete for survival in a |
|In the 1800s, business leaders believed in laissez-faire capitalism with |natural selection process. |
|no government intervention. |Applied to society, stronger people, businesses, and nations would prosper, and |
|They believed government regulation would destroy self-reliance, reduce |weaker ones would fail in a “survival of the fittest.” |
|profits, and harm the economy. | |
|New Industries Emerge |
|Making steel |Oil industry begins |
|The Bessemer process of purifying steel helped to make America the world’s |Oil was a key commodity as a fuel source and for lubrication. |
|top producer and transformed the U.S. into a modern industrial economy. |Edwin L. Drake drilled the first commercial oil well. Oil prospectors, or |
|Construction companies could build bigger bridges and taller buildings. |Wildcatters, looked for oil in other regions. |
|The low cost of steel made ordinary items affordable. |Major sources of energy from oil fueled a revolution in transportation and |
| |industry. |
|Increasing Industrial Output, 1870-1910 |
| |Coal |Steel |
|1870 |20 million tons |850 million tons |
|1890 |111 million tons |6,746 million tons |
|1910 |417 million tons |24,216 million tons |
Key Ideas Impacting Big Business and Attempts at Government Regulation:
Laissez-faire: A theory that the economy does better without government intervention in business.
Monopoly: a situation in which a single company owns all or nearly all of the market for a given types of product or service.
Trusts: Firms or corporations that combine for the purpose of reducing competition and controlling prices (establishing a monopoly). There are anti-trust laws to prevent these monopolies.
Vertical consolidation: A form of monopoly that occurs when one person or company gains control of every step of the manufacturing process for a single product, such as an auto maker that also owns its own steel mills, rubber plantations, and other companies that supply its parts. This allows the company to lower its costs of production and drive its competition out of business.
Horizontal consolidation: A form of monopoly that occurs when one person or company gains control of one aspect of an entire industry or manufacturing process, such as a monopoly on auto assembly lines or on coal mining, for example.
Munn v. Illinois: 1877 - This 1876 Supreme Court case seemed like a victory for the Grangers movement and represented a step toward greater governmental regulation of the economy. The court decided that states had the right to regulate commerce within their states (particularly railroad and grain elevator companies), but this decision was largely overturned 10 years later by the Wabash case.
Wabash, St. Louis and Pacific Railroad Company v. Illinois: 1886 - This 1886 case overturned the earlier Munn vs. Illinois case. In this case, the Supreme Court severely limited the right of states to regulate businesses that dealt with interstate commerce. This meant only the federal government had a power that had been granted to the states. Farmers responded to this case with increased political organizing, and Congress responded by creating the first real business regulatory body: the Interstate Commerce Commission.
Interstate Commerce Act, Interstate Commerce Commission: A five member board that monitors the business operation of carriers transporting goods and people between states. The Interstate Commerce Act sought to address the problem by setting guidelines for how the railroads could do business. However, the task of establishing specific measures was complex, and regulators lacked a clear mission. The law sought to prevent monopoly by promoting competition, and also to outlaw discriminatory rate-setting. Its most successful provisions were a requirement that railroads submit annual reports to the ICC, and a ban on special rates the railroads would arrange among themselves. Determining which rates were discriminatory proved to be technically and politically difficult, though, and in practice the law was not highly effective.
Sherman Antitrust Act: 1890 - A federal law that committed the American government to opposing monopolies, it prohibits contracts, combinations and conspiracies in restraint of trade. It wasn’t enforced very strongly however, if at all, because there were many loopholes in the laws.
E.C. Knight Company case: 1895 - The Supreme Court ruled that since the Knight Company's monopoly over the production of sugar had no direct effect on commerce, the company couldn't be controlled by the government. It also ruled that mining and manufacturing weren't affected by interstate commerce laws and were beyond the regulatory power of Congress.
Helpful link (outline):
-----------------------
Attempts at Regulating the Trusts
1877: Munn v. Illinois
1886: Wabah v. Illinois
1890: Sherman Antitrust Act
1895: US v. E.C. Knight Co.
................
................
In order to avoid copyright disputes, this page is only a partial summary.
To fulfill the demand for quickly locating and searching documents.
It is intelligent file search solution for home and business.