The Rise to Prominence: American Edition

1. The Rise to Prominence: American Edition

2. Industrialization • While industry had been growing throughout the country, it wasn’t until the later half of the 19th century that industrialization began • More than 440,000 patents were given in the three decades following the Civil War. • Communications • Bell would establish the first viable telephone company • Bell’s company today exist in the form of AT&T • Business • Typewriter, cash register, and an adding machine • Drastically improved the efficiency of commerce • Light bulb • Allowed for the expansion of business • Steel • Bessemer Process • Strengthened steel and mass creation of it

3. Oil, the substance that made Houston • While the steel industry created the cities that would represent American power • Oil was used as a lubrication oil • It would not be until the 1870’s, that oil was recognized as a viable fuel source • While oil had been found in Texas, it wasn’t until the discovery in Beaumont at Spindletop, that Texas was finally seen as something more than cattle industry • Houston would rise to prominence because it was the only city close enough to offer investment capital for these endeavors. • Texas did not have to heal as much as Louisiana from the Civil War. • Oil would make Texas what it is today • Texaco and the Cullinan Family

4. The American love affair with automobiles begins • While Kitty Hawk captivated man’s dreams, Henry Ford began to perfect the work of German engineers • The Model T, would be an inexpensive vehicle that would transform the American landscape • Forms of production would change the American way of doing things • Scientific management • Putting emphasis on machines and not the employee • Industrial research • American companies would spend capital on internal improvement and R&D • Mass Production and the Assembly line • Allowed for mass production • Lowering of cost • Higher Wages

5. Railroads • While the investments in railroads led to the greatest panic in American history • Railroads also led to the biggest expansion of American wealth • Investors put millions of dollars into the railroads • Resulted in expansion of economic growth throughout the nation • Of these railroad tycoons, Vanderbilt would make the biggest impact on the American landscape • The only way that people like Vanderbilt were able to gather so much money for investment was through the stock option • The American types of corporations were taking root • It would take thousands upon thousands of people to get these projects off the ground

6. Horizontal and Vertical • Horizontal Integration- combining of firms engaged in the same enterprise into one single corporation • Example- consolidation of railroads • Vertical Integration- the process of taking over all the different businesses on which a company relies for its primary function • Example- Carnegie Steel

7. New Economics at Work • The symbol for this new American economic system was John D. Rockefeller. • Founder and CEO of Standard Oil • First began as a small time refiner in Ohio • Quickly rose through the ranks and had holdings throughout the eastern seaboard • It wasn’t until he integrated vertically that Standard Oil became the behemoth that it is today • At its height, Standard Oil controlled 90+ percent of American oil interest • To stay in business, Rockefeller and many like him believed that one needed to stay ahead of the ‘cutthroat competition’ that was American business • To do that, one needed to be able to absorb competition • Trust- people would sell their stock to trustees • In turn trustees would give share of profits, but not give up any control

8. Self-Made Man • In context, capitalism expanded the gap between rich and poor • Today that gap is bigger than ever • However at the turn of the 20th century it was not looked at this way • Everyone had the opportunity to rise from the ashes • Self-Made Man • Yes there were some famous examples of this, but most of the wealthy capitalist started off that way • The wealthy were also notoriously arrogant and pompous • They would donate large sums of money to politicians and political bosses • Open corruption • Erie War

9. The Best of the Best, by the Grace of God • The assumption that hard work, and traditional Protestant virtues would be rewarded with wealth was a very popular idea amongst capitalist • The Rise of Social Darwinism- the fittest individuals would be able to survive the cut throat business of business. • The marketplace was not a place for the feeble minded • Must have the freedom to struggle, to compete, to succeed, and to fail- Herbert Spencer • Rockefeller, Carnegie, and others immediately advocated Social Darwinism • a reason behind their success and opulence