history112lecture3 - History 112: The Rise of Big Business...

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Unformatted text preview: History 112: The Rise of Big Business Business I. 1865-1900, period of massive expansion: fueled by big business, especially I. Railroads Railroads II. The End of Reconstruction III. The transformation of the US economy: from small business to big business IV. Not just an economic, but a cultural change, especially because of the growing IV. differences between rich and poor. V. Characteristics of Large Corporations V. VI. Debating the Pros and Cons of Big Business Reminders: • Please remember to bring 3 Blue Books to your TA. • Reading this week: Text, Ch. 17, Reader Ch. 18. Essay due: answer one of the thought questions Reading one from Study Guide # 2. • Keep trying w/ Safe Assign: problem w/ Mozilla Firefox 3.5; use internet explorer or google chrome. • Today’s 1-minute Questionnaire will be done by Section 1. Today’s • Seating Chart is coming either W or next M. Important Statistics Important Total U.S. Population 1860: 31,443,000 1870: 38,558,000 1880: 50,155,000 1890: 62,947,000 1900: 75,994,000 1910: 91,972,000 1920: 105,710,000 % Increase 22.6 30.1 25.5 20.7 21 14.9 Urban/Rural Data (millions) Urban/Rural 1870 urban 9.9 urban 9.9 rural 28.7 rural 28.7 1880 14.1 14.1 36.0 1890 22.1 40.8 1900 30.1 45.8 1910 1910 42.4 50.0 50.0 1920 54.1 51.5 51.5 Urban Population Data Urban (city= 2500 residents) Year 1860 1860 1870 1870 1880 1880 1890 1890 1900 1900 1910 1910 1920 1920 % of Total Pop. 20 26 28 35 40 46 51 Cities over 2500 392 663 939 1348 1737 2262 2722 Cities over 100,000 9 14 20 28 38 49 68 The United States in 1880 The The United States in 1920 The The Eclipse of Radical Reconstruction The After a while, Northern public opinion lost After interest in enforcing black Civil Rights. Most freedpeople, as a result, lost their Most political rights and were treated as secondpolitical class citizens. Many faced not only poverty class but also political violence, especially if they were successful. Election of 1876: Tilden (D) v. Hayes (R) Tilden Election of 1876: Compromise of 1877 1877 The Politics of “Redemption” The End of Reconstruction marked an end to America’s brief End experiment with inter-racial democracy, and the beginning of the “Jim Crow” era of segregation, disfranchisement and lynching. The Changing Politics of the Republican Party Republican Part of the reason for the Republican’s Part abandonment of Reconstruction was that the party became more concerned w/ economic than moral issues. The Republican party strongly supported The the corporate transformation that is the topic of today’s lecture. The New Culture of Corporate Capitalism Capitalism Old Values Community Artisanship/apprentice Family-owned business Market forces/Invisible Market hand hand Celebration of equality New Values individualism Wage laborers/managers shareholders Control of markets Celebration of wealth Corporation was the engine of tremendous growth in economy Between 1869 and 1910, the value of US Between manufacturing rose from $3 to $13 billion. manufacturing Steel industry: 68,000 tons in 1870; 4.2 Steel million tons in 1890. Characteristics of Big Business Characteristics 1) large capital requirements 2) always open 3) new form of ownership 4) geographic scale 5) range of econ functions horizontal and vertical integration 6) bureaucracies 6) 7) Impersonal Corporation/Celebrity Leaders 7) 8) very big and powerful not just economically but 8) politically politically Original Meaning of Corporation Original A company granted a charter by the state or company local government to do work in the public interest—i.e. build a bridge. interest—i.e. Large Capital Requirements Large Older economy: family businesses, often Older located in the home, failure was common located New economy: more impersonal, more New equipment, buildings, personnel required far more money than individuals could put forth more US Steel, 1st Billion Dollar Company, US 1901 1901 Operated continuously Operated Old economy: low-fixed costs made it Old common for businesses to be run seasonally seasonally High fixed costs for buildings, equipment, High and personnel made it unprofitable to shut down. Running continuously allowed companies to Running achieve “economies of scale” achieve Shoemaker’s Home Workshop Shoemaker’s Ford’s River Rouge Plant Ford’s New Form of Ownership New Stock ownership: under this system a Stock company could have several thousand (or even million) owners. even Ownership and control of business Ownership separated. New class of managers become important. (In the old system owners tended to be managers.) Geographic Scale Geographic Corporations operated over large areas, Corporations even the entire nation. even By 1900 General Electric has plants and By sales offices in 23 cities across the country. RR’s contributed to this spread in scale Railroads in 1860 Railroads Railroads in 1890 Railroads Railroads: Gov’t Grants, Power to set time (Standard Time invented in 1883). 1883). Range of Economic Functions Range Big Businesses combined functions Big previously operated by independent businesses. Meatpacking firms, such as Armour and Meatpacking Swift owned cattle, performed slaughtering, transported the meat, and sold it to retailers. Kinds of Growth Kinds Vertical Integration Vertical Companies take over businesses that Companies perform different functions. (i.e. the potato chip manufacturer buys a potato farm). Creation of Corporate Bureaucracies Creation Elaborate organizational networks Order Entry Department, Sears Order Corporations were big and powerful Corporations Cause for concern and excitement (this is the Cause focus of the readings for discussion section this week.) “we have no word to express government by we moneyed corporation." Charles Francis Adams Jr. moneyed ." Charles Economies of scale made mass consumption Economies possible possible Standardization Tremendous clout vis a vis government Millionaires: 400 in 1865; 4047 by 1892 1892 Corporations Were Impersonal but often led by celebrities often No longer did they have family names but No corporate titans were nationally-known. corporate Cornelius Vanderbilt, Richest Man in the United States and RR Magnate the Biltmore Estate, Asheville, NC Biltmore Andrew Carnegie,US Steel Andrew Carnegie Steelworks, Homestead, PA PA John D. Rockefeller, Standard Oil John Standard Oil Building, NYC Standard 1904 Cartoon Ad for Uneeda Biscuit: the beginnings of mass-produced “name” brands “name” Ford’s Highland Park Factory, 1914 Ford’s Ford’s Assembly Line, 1913 Ford’s The Model T—“Any Color You Want as Long as its black” as Phillip Armour Phillip Armour Meatpacking Armour Hershey Chocolate Factory 1905 Hershey Share of Markets: Many big businesses were near-monopolies businesses U. S. Steel (1901) 62% Standard Oi l (1882) 91% International Harvester (1904) 85% American Can (1901) 90 Next class Next Politics of the Gilded Age ...
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This note was uploaded on 06/13/2011 for the course HIST 112 taught by Professor Littlefield during the Fall '08 term at South Carolina.

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