3B Standard- Economic Impacts

Industrialization grew in response to technological innovations.

• The Bessemer process made the production of steel more efficient.

• Electricity gave birth to new industries.

• The oil industry promoted new sources of energy to promote factory production.

• The typewriter, sewing machine, telegraph, and telephone were other innovations that promoted the rise of industrialization in the U.S.

• As factory systems grew, people migrated from rural to urban areas in search of jobs. *

• The Rise of Corporations made modern industrial production possible and for companies to raise money required for the construction of railroads, coal and iron mines, steel mills, and large mass production factories. 

The growth of railroads increased as settlement in the West encouraged new business and job opportunities.

• Industry relied on railroads for shipping. 

• Railroads grew in response to increased demands of industrialization and western expansion. 

• Railroads expanded westward to meet demands of settlement and economic growth.

• Promoted the development of the West by carrying people and shipping products.

The cattle industry boom increased during this time.

• Increased railroad lines made transportation of beef easier.

• Development of refrigerated rail carriages.

• Removal of Indians from the Plains to reservations allowed more land for ranching.

• Growing demand for beef in cities after the Civil War 

The growth of labor unions was sparked by industrialization and the negative consequences experienced as a result of new innovation. *

• As industries grew, working conditions became extremely hazardous and labor leaders criticized company owners about the poor working conditions, low wages and unsafe working environment for employees.

• The increasing exploitation of industrial workers led to the formation of unions in order to act as a group when bargaining with employers for better pay and better conditions. *

• Unions organized strikes and other forms of protest to obtain better working conditions.

• Many workers went on strike in the 1880s.

  • Haymarket Affair (1886)

  • Homestead Strike (1892) 

  • Pullman Company Strike (1893)

Farm issues became prevalent as farmers tried to keep up with the demand of agricultural products.

• With the improvement in technology and the opening of the west, farmers produced more crops leading to overproduction.

• Farmers went into debt trying to make improvements or buying machinery. 

• Banks viewed farmers as poor credit risks and charged them high interest rates.

• Farmers had to pay to ship crops to markets and were forced to pay whatever railroads charged.

• Natural Disasters could wipe out a family’s savings accumulated over many years.

• The Populist Party advocated for free coinage of silver to increase the money supply in order to assist farmers. * 

The growth of entrepreneurship was encouraged due to competition from new industry.

• An entrepreneur is someone who starts a new business in the hope of making a profit.

• Entrepreneurs began to exercise a dominant influence on American life through efficiencies of large scale production, which allowed for them to lower prices of goods, making them more affordable. 

• This made it able for industrial entrepreneurs to reap huge profits for themselves.

• Significant entrepreneurs include, Carnegie, Rockefeller, Morgan, Vanderbilt, etc. 

• Some people viewed these men as “Captains of Industry,” while others viewed them as Robber Barons.” 

The rise of big business became a characteristic of the Gilded Age.

• Industrialists and business leaders used Horizontal and Vertical Alignment to reduce competition and expand their companies. 

• Reduction of competition led to the creation of monopolies and trusts. 

• Socio-economic divisions widened as industries grew

Pros of big business included:

1.  Big business  leads to lower prices 

2.  Ability to hire large number of workers 

3. Produce goods in large quantities 

4.  Resources to support research and invent new products 

Cons of big business included: 

1. Unfair competitive advantage over small businesses 

2. Can exploit workers 

3. Less concern with business ethics and environmental safety 

4. Unfair influence over government policies affecting them.