AP US History AMSCO Guided Notes
6.6: The Rise of Industrial Capitalism
AMSCO Guided Notes
AP US History Guided Notes
AMSCO 6.6 - The Rise of Industrial Capitalism
Learning Objectives
- Explain the socioeconomic continuities and changes associated with the growth of industrial capitalism from 1865 to 1898.
I. The Business of Railroads
1. How did federal government support contribute to railroad expansion after the Civil War?
2. What were the economic and social effects of railroad development on American society?
3. Why was the modern stockholder corporation an important innovation developed by railroads?
II. Competition and Consolidation
A. Problems and Corruption
1. What problems resulted from overbuilding and speculation in the railroad industry during the 1870s and 1880s?
2. How did railroads use rebates, pools, and stock watering to increase profits and eliminate competition?
B. Concentration of Railroad Ownership
1. How did the 1893 financial panic lead to consolidation of railroad ownership and what were the consequences?
2. What were interlocking directorates and how did they allow bankers like J. Pierpont Morgan to control competing railroads?
C. Railroad Power
1. Why were early attempts to regulate railroads through Granger laws and the Interstate Commerce Act initially ineffective?
2. How did public perception of railroads reflect both their importance to the economy and concerns about corporate power?
III. Industrial Empires
1. What characterized the 'second Industrial Revolution' and how did it differ from earlier industrial development?
A. Andrew Carnegie and the Steel Industry
1. What was vertical integration and how did Andrew Carnegie use it to dominate the steel industry?
2. Why was the formation of United States Steel significant in American business history?
B. Rockefeller and the Oil Industry
1. How did John D. Rockefeller build Standard Oil into a monopoly that controlled 90 percent of oil refining?
2. What methods did Rockefeller use to eliminate competitors and maintain Standard Oil's market dominance?
C. Controversy over Corporate Power
1. What is the difference between horizontal integration, vertical integration, and a holding company?
2. What criticisms did opponents raise about monopolies and how did these companies threaten the public interest?
IV. Laissez-Faire Capitalism
A. Conservative Economics
1. What did Adam Smith mean by the 'invisible hand' and how did industrialists use laissez-faire theory to justify their practices?
2. How did Social Darwinism provide a 'scientific' justification for wealth concentration and opposition to government regulation?
3. How did the Protestant work ethic explain and justify the wealth of successful industrialists like John D. Rockefeller?
V. The Concentration of Wealth
1. What percentage of wealth did the richest 10 percent of Americans control by the 1890s and how did this reflect industrialization?
2. How did the myth of the 'self-made man' differ from the reality of who actually became wealthy during industrialization?
3. What evidence suggests that upward mobility was limited despite popular belief in rags-to-riches success stories?
VI. Business Influence Outside the United States
1. Why did American corporations increasingly seek business opportunities in Latin America and Asia during the late 19th century?
2. How did American business expansion abroad contribute to increased U.S. involvement in international affairs?
Key Terms
nation's first big business
American Railroad Association
time zones
consolidation
Cornelius Vanderbilt
Jay Gould
watering stock
rebates
pools
bankruptcy
J. Pierpont Morgan
interlocking directorates
Andrew Carnegie
United States Steel
John D. Rockefeller
monopoly
Standard Oil
trust
horizontal integration
vertical integration
holding company
laissez-faire
Adam Smith
Social Darwinism
survival of the fittest
William Graham Sumner
Protestant work ethic
concentration of wealth
"self-made men"
Horatio Alger