By 1900, the U.S. had emerged as the world's leading industrial power due to its abundant natural resources, growing labor supply through immigration, capital investments, technological innovations, and business-friendly government policies. Wealthy industrialists and entrepreneurs like Carnegie, Rockefeller, Morgan, and Ford built vast industrial empires in steel, oil, banking, and automobiles through practices like vertical integration and trusts that eliminated competition. New technologies revolutionized areas like transportation, communication, manufacturing, and daily life. However, concerns grew about the power of large trusts and monopolies as well as wealth inequality between the rich industrialists and the working class.

1. The Rise of Industrial
America
1865-1900
By 1900, the U.S. had emerged as the
leading industrial power in the world. Its
manufacturing output exceeded that of its
three largest rivals, Great Britain, France,
and Germany

2. Factors of Growth
 Natural Resources: coal, iron ore, copper, lead,
timber and oil
 Labor supply: immigrants and population growth
 Capital: money to invest in new business ventures
 Technology: 440,000 patents between 1860 and
1890
 Government: business friendly policies protected
entrepreneurs
 Transportation: railroads, steamboats

3. Entrepreneurs!
J.P. Morgan
One of the richest
men in the world

4.  Andrew Carnegie
 Scottish Immigrant who
started working in a factory
at age 12.
 Invested wisely and entered
the steel industry at age 38.
 By 1901 sold his steel
company for $250,000,000!
 Gave hundreds of millions to
charities (libraries)
 Wrote Gospel of Wealth
Entrepreneurs!
1835 -1919

5.  John D. Rockefeller
 Started oil-refining
business during the Civil
War.
 Elimination of competition!
 1882 his company,
controlled 90% of all
American oil refining.
 Gave hundreds of millions
to charities.
Entrepreneurs!
1839 -1937

6.  J.P Morgan
 Banker: made loans to
businesses.
 Purchased and
reorganized many
bankrupt businesses
(profit).
 Bought Carnegie Steel
and reorganized it into
the United States Steel
Corporation (the world’s
largest).
Entrepreneurs!
1837 -1913

7.  Henry Ford
 Created the
assembly line
 Paid laborers a good
wage
 Ford Motor Corp
(cars)
Entrepreneurs!
1873 -1934

8. Entrepreneurs!
 George Eastman
 In 1888 he manufactures the
first camera designed
specifically for roll film
 Mass produces photography
equipment and film
 Donates over $75 million to
establish schools.
1854 -1932

9. Industrial Empires - Steel
1870s: Carnegie dominates steel thanks to
1. Vertical Integration: company controls every
stage of the industrial process (from mining to
transportation): reduced costs and under-
price the competition monopoly
2. the Bessemer steel process  high-quality
steel
3. cost-analysis  cut back costs, higher profits
By 1900, Carnegie Steel was producing more
steel than all of Britain
Overall result: More steel produced and at lower
cost ($65/ton in 1875 vs. $11.50/ton in 1900)

10. Industrial Empires - Oil
 Standard Oil Trust controlled
90% of oil refinery business by
1881
 Horizontal Integration:
competitors bought by single
company
 Trusts: various companies run by
a board of trustees (former
competitors brought under a
single corporate umbrella)
 Monopoly

11.  Steel: 77,000 tons in 1870 to more than 1
million tons in 1879
 Railroad: from 10,000 miles of track in 1850 to
nearly 200,000 miles by 1900 –
 Opened up a huge internal market, promoting
farming, commerce, and closure of the frontier
 Railroad companies were the first “modern”
corporations – sought capital through stock
issuances.
Advances in Uses of Steel :
The Railroad Industry

12. Transcontinental Railroad
 During the Civil War,
Congress authorized
land grants and loans to
build transcontinental RR
 Union Pacific and Central
Pacific employed
thousands of new
immigrants: Irish Chinese

13. Early Stages
of Railroads

15. How did Railroads Change
America?
 Railroads changed American
life in many ways:
 Travel shorter.
 Mail faster.
 New jobs.
 Local stores profited from train
traffic.
 Sales not limited to local markets.
 Unfamiliar items appeared locally.
 Settlers moved to new locations.
 The nation together.
 Transportation cost decreased.

16. Problems of the Railroad Era
 Too many railroads were
built.
 Over-expansion
frequently ended in
bankruptcies.
 Failures spread
economic disaster to
workers, businesses, and
farmers.
 Railroads resorted to
discriminatory practices

17. Inventions change Americans’
lives.
Inventions enhanced productivity and improved
the standard of living for most Americans:
 New telegraph technology connected the
United States with Britain by cable in 1866.
 Alexander Graham Bell patented the
telephone in 1876  creation of the Bell
Telephone Co. (later, AT&T)
 Telephones were rapidly adopted,
rising from 55,000 in 1880 to
1.5 million in 1900.

18. Invention & Innovation
•Thomas Edison invented
• the phonograph (1877),
• light bulb (1879),
•the first power plant
(1882)  created General
Electric by 1892 with J.P.
Morgan
•Singer Sewing Machine
Company first mass
produced sewing
machines in the 1860s

19. Automobiles and Planes
 The automobile industry grew in steps.
1876 – invention of the gasoline-powered engine.
1893 – The US built its first motorcar.
- 1908 – Henry Ford first to implement the
moving assembly line in manufacturing,
making cars more affordable.

20. Wilbur and Wright invented an airplane powered by a gas engine in 1903.
Automobiles and Planes

21. Questioning Methods of Big
Business.
Businesses criticized for earning fortunes through unfair
business practices.
Used size and strength to drive smaller competitors
out of business
Powerful trusts sold goods below market value until
smaller competitors went out of business, then raised
prices.
Concerns when a trust gained a monopoly, or total
ownership of a product or service

22. Antitrust Movement
 Trusts came under attack/scrutiny in 1880s
 Congress passed the Sherman Antitrust Act in
1890, which prohibited any “contract, combination,
in the form of trust or otherwise, or conspiracy in
restraint of trade or commerce.”
 Supreme Court rules in United States v. E. C. Knight
Co. (1895) that the act applies to commerce, not
manufacturing

23. Laissez-Faire Capitalism
 Businesses were
booming!
 Social Darwinism: survival
of the fittest
 Gospel of Wealth:
Protestant work ethic, hard
work and material success
are signs of God’s favor
 Philanthropy charitable aid
or donations for humankind
well-being

24. The Impact of Industrialization
 By 1890s, the richest
10% of U.S. population
controlled nine-tenths of
the nation’s wealth
 Widening gap between
rich and poor
 “Self-made men” or
rags to riches
 Horatio Alger, Jr. novel
portrays young man
who becomes rich
through hard work