America’s economic growth during the American Industrial Revolution can be summed up by discussing geography, demography, and law.
- GEOGRAPHICALLY the US was a huge county with the resources necessary for an industrial boom. There was coal, iron, and later oil, as well as water to power the factories, which would eventually be replaced by coal. There was also grain to feed the growing population, which leads to DEMOGRAPHY.
- America’s population grew from 40 million in 1870 to 76 million in 1900 and a third of that growth was due to immigration. Many of the immigrants during this time went to the cities as America shifted from being an agrarian rural nation to an industrial urban one.
- LAW. The Constitution and its commerce clause made the US a single area of commerce, and the Supreme Court interpreted the laws in a very business friendly way. Also, the Constitution protects patents, which encouraged industrial innovation and invention. The government also helped with the growth by putting up high tariffs on imported goods and giving land grants to business organizations. Also, foreigners played a role as many people saw the US as a developing economy, in which investments in America meant bigger returns than those available in Europe.
Railroads at this time were able to become the first modern corporations with their increase of commerce and integration of the American market. Railroads like Fall Brook would buy railroad tracks in order to span the state, and nation, in order to engage in trade and commerce and gain a profit. This meant that more employees would need to be hired in order to help build, operate, and maintain the tracks and that new operation methods, including the use of middle managers, needed to be setup in order to manage the workers.
Because of the management of the companies, for the first time the owners of the railroad were not day-to-day managers. This lead to railroads being the first publicly traded corporations. Railroads needed significant capital to build tracks and stations and in order to do that they sold shares of the company, which could be bought and sold to the public.
Because of the management of the companies, for the first time the owners of the railroad were not day-to-day managers. This lead to railroads being the first publicly traded corporations. Railroads needed significant capital to build tracks and stations and in order to do that they sold shares of the company, which could be bought and sold to the public.
The public trade of railroad corporations created the first captains of the industry- such as Cornelius Vanderbilt, Andrew Carnegie, and John Morgan.
These industrial capitalists are considered both the greatest heroes and greatest villains of the era. Most of them came from humble origins, took risks, and made profit, but their methods were often unscrupulous as they drove competitors out of business and generally cared very little for their workers.
This time period saw innovation in the way that industry was organized. Many robber barons/industrial captains formed pools and trusts in order to control progress and limit the negative effect on competition. Vertical and horizontal integration were two of the industrial innovations used in order to buy what was necessary to make a huge profit.
Now, the unsung workers. Due to the growth of population, there was often job insecurity within the nation. This insecurity created booms and busts within the economy and job market which often led poverty and depression . Labors often worked 60 hours a week with no pensions, benefits, or injury compensation. This lead to unions being formed at both local and national levels who pretests working conditions and workers rights.
These industrial capitalists are considered both the greatest heroes and greatest villains of the era. Most of them came from humble origins, took risks, and made profit, but their methods were often unscrupulous as they drove competitors out of business and generally cared very little for their workers.
This time period saw innovation in the way that industry was organized. Many robber barons/industrial captains formed pools and trusts in order to control progress and limit the negative effect on competition. Vertical and horizontal integration were two of the industrial innovations used in order to buy what was necessary to make a huge profit.
Now, the unsung workers. Due to the growth of population, there was often job insecurity within the nation. This insecurity created booms and busts within the economy and job market which often led poverty and depression . Labors often worked 60 hours a week with no pensions, benefits, or injury compensation. This lead to unions being formed at both local and national levels who pretests working conditions and workers rights.
It was only one hundred and fifty years ago that this industrial change occurred and that modern businesses were formed. I am seeing through the eyes of John Magee and John Lang, the formation of modern business and just how important railroads and coal were to the industrial growth. I love that I am able to see how this industrial growth lead to political, social, and economic changes that defy how we live today.