U. S. Government/Industrialization

The Industrial Revolution started in England in the late 1700s. For the first time, more goods were made by machines in factories than were made by hand. When the Industrial Revolution spread to the United States. It changed the way everything worked. As industries grew, people wondered how much the government should be involved in business and the economy. Should the government try to thelp the industries grow? Should it make rules for the new businesses? Should it do nothing at all? Until the 1880s, most people believed the government should left businesses run themselves.

Growing businesses were good for consumers. The businesses provided services, like the railroad, and goods, like clothing and breakfast cereal. They helped the economy grow. However, the main goal of business was not to help consumers but to make money. Business leaders could make the most money by creating a monopoly. This means getting rid of competition and getting total control of a product or service.

One example of a monopoly was in the oil business. In 1867, John D. Rockefeller started the Standard Oil Company in Cleveland, Ohio. He began with one oil refinery. Later, Rockefeller expanded the company. It drilled for oil, refined oil, transported oil, and sold kerosene and other finished products made from oil. As the company grew, Rockefeller bought out his competitors or drove them out of business. By the late 1870s, the Standard Oil Company controlled 90 percent of the petroleum industry in the United States. Rockefeller was the richest man in the country.

Oil was not the only business that was controlled by a monopoly. Similar things happened in many other industries. A large company that had a monopoly could charge any price it wanted for goods or services. Small business owners found it hard to compete with big businesses and worried about going out of business. Many consumers were afraid that the prices of goods and services would go up.

Americans took action and demanded that the government step in and stop the monopolies. In response, Congress passed two laws. The Interstate Commerce Act passed in 1887 said that railroad rates must be "reasonable and just". In 1890, Congress passed the Sherman Anti-Trust Act. The law made it illegal to form trusts, or monopolies. Though they were hard to enforce at first, both laws are still in effect today.

Reasons why cities developed

Why did cities get big?

1. Specialized Industries, including steel (Pittsburgh), meatpacking (Chicago)
2. Immigrants from other countries
3. Movement of Americans from rural areas for job opportunities because of inventions like the reaper.

Summary

Cities developed because Immigrants and farmers moved to them in order to work in specialized Industry like steel and meatpacking.

Reasons for industrialization

What goes into an industry?

1. Access to raw materials and energy (natural resource)
2. Availability of work forces (labor resources)
3. Inventions and ideas (mind resources)
4. Financial resources

Summary

In order to start an industry, you need to have access to raw materials, a work force, inventions, and financial resources.

Reasons for prosperity of big businesses

What goes into big business?

1. National markets created by transportation advances (Railroads).
2. Captains of industry (John Rockfeller, oil; Andrew Carnegie, steel; Henry Ford; automobile)
3. Advertising
4. Lower Cost production - (assembly line, Bessemer process)

Summary

Captains of Industry became rich because they advertised their products, could produce their products at a low cost, and transport them to a national market.

See also

• U. S. Government/Industrialization/Captains of Industry