HIST 106 2nd Edition Lecture 5Outline of Last Lecture I. US behind in IndustrializationII. Reasons why Industrial growth began in the USIII. RailroadsIV. Cornelius Vanderbilt and his legacyV. John D. RockefellerOutline of Current LectureI. Emerging IndustriesII. John D. RockefellerIII. Rise of MonopoliesIV. InventionsV. The consumer societyCurrent Lecture- Emerging industrieso Steel industry will not be covered because you have to read about it in the booko Oil industry The oil industry started in Pennsylvania (there is a lot of coal in the area and there was oil there as well)- The oil was very close to the surface and Pennsylvania will be one of the first places to have an oil boom- The two biggest oil producers of that time were Pennsylvania and Poland The first uses of oil for heating and lighting homes (oil lamps) - Since it was founded in the eastern US where the railroads are, the oil products were spread everywhere very quickly- The beginning of kerosene lamps- Now that there are very cheap ways of lighting buildings after dark, people can now work after dark and production increases- The oil business was a boom-and-bust industry, the prices would fluctuate very severely - John D. Rockefellero Founded standard oil in 1863 (when he was 24 years old) This company basically single-handidly builds the oil business in the US Will corner the market of oil in the US Rockefeller’s view of business was that competition was wasteful and that monopolies were the way to go because everyone was working in the same direction and everyone made money Ruthlessly drove his competitors out of business at the risk of his own business because he knew in the long-run it would work out for him He also surrounded himself with scientists who made different ways of using his product o By 1879, he controlled 90% of US oil production 1879 He made a lot of trusts with other people to make more monopolies, which he was a part of o Rockefeller retired worth $900 million (1870s money wise) By 1910, Rockefeller and JP Morgan will control $22 billion worth of industry in the US There are a handful of people who are like Rockefeller and JP Morgan and will control the most of the US economy They will build monopolies and will keep building them until they reach their apex and innovation stops - Rise of Monopolieso JP Morgan Born in 1837 and is mainly a finance and banking person (more of an investor, not an entrepreneur) Will be one of the people who arranges mergers (arranged the merger of Addison Electric and Thomas Jefferson Electric) Will be very wealthy and him and some of his financiers will be control the private wealth of the US Panic of 1907-not too bad because JP Morgan and some of his bank friends will bail out the US government o 1900, 1% of his companies controlled 1/3 of production of the US o Vertical integration When you control/own everything from where your product is supplied/constructed to where your product gets marketed Beef farm-own the cattle in Texas, own the railroad, own the slaughter house, own the trucking company that transports the product, owns the warehouse thatstores the meat, own the retailers that sell the meato Horizontal integration When you own all of one product/all of one service Ex. You own all of the railroads in one area so no one can transport anything without going through you- Inventionso Thomas Edison Not really discovered during this time but electricity is harnessed during this time Go from lighting things with kerosene to lighting things with electricity through the light bulb The light bulb will help keep light going for long periods of time and will allow industries to go into production 24-hours a day There will be a huge growth in patents - The typewriter- The transatlantic cable-a telegraph cable from Britain to the US and connects Europe to the US (more or less instantaneous communication across the Atlantic)o 1914-beginning of WWI and there will be a lot of communication all traveling through these telegraph lines- The stock ticker- The cash register- The camera (the mass market camera that common people can use)o Alexander Graham Bell The first telephone call is in 1876 In 1885, ATT is formed By 1895, there are a ton of phones and will allow communication between people - The consumer societyo Mail order catalogs Sears and Roba will be the pioneers of mail-order catalogs and will be the mail-order stores of the era Mail-order catalogs would allow people who lived in rural areas access to consumer productso Department stores Store that carry a large variety of manufactured-consumer products Up until this time, you didn’t find pre-made manufactured clothes and would have to get their clothes tailored or would have to make their own clothes Makes department store products available to people who would not have had them before- Macy’s will be the first department store A&P groceries will be the first chain store, a common trend that will be started o Advertising Advertising as an industry began as a result of the US becoming a consumer society Advertising firms start coming into businesses as companies will hire employees who are specialized in advertising and will have them do the advertising for themo Things that lead the US to become a consumer society Innovation The availability of products through department stores or mail order catalogs
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