American Landscape

How Did Innovation Change the American Landscape?

Public Domain

In the mid- to late-19th century, the United States relied on railroads. The Bessemer process,
patented in 1855, allowed steel to be mass-produced for the first time. Steel railroad tracks were
lighter and stronger than iron, and by the 1880s, railroads crisscrossed the nation. The
construction of the Transcontinental Railroad after the Civil War increased travel and encouraged
settlement in the West. As a result, the population and economy of this region grew. Farms,
ranches, and towns appeared throughout the West. The railroad allowed producers to send
goods to the East at a higher speed and lower cost than previously possible.

Railroads also opened up other parts of the country to new settlement and investment. For
example, industrialist Henry Flagler used the railroad to help the sparsely populated state of
Florida grow. A partner of the Standard Oil Company, Flagler became interested in Florida after
visiting the state in the late 1870s. He went on to build the Florida East Coast Railway, which
connected land as far south as Key West to the rest of the nation. Working with other investors
such as H.B Plant, Flagler also built hotels, helping to develop the region into a popular tourist
destination.
 Innovations in bridge and tunnel construction allowed trains to cross barriers, such as mountains
and bodies of water. This picture shows Flagler's Overseas Railroad, which connected the Florida
Keys to the rest of the state.

10/2/1865

© 2012 LOC [HAER FLA,44-KNIKE,1--72]

Another developer, Hamilton Disston, bought large areas of land in central and western Florida.
Towns such as Kissimmee and Tarpon Springs developed on Disston's land. When railroad
businessperson William Chipley developed rail lines running east to west across the Florida
Panhandle, the state's economy grew quickly. Visitors to Tallahassee, the state capital, admired
stately pre-Civil War architecture, including homes designed by free African American, George
Proctor.

The cattle industry was able to ship livestock across the South and to the East Coast. The cigar
makers in the West Coast cities of Tampa and Ybor City shipped their products across the
nation. The growing economy brought new immigrants to the state. Cuban and Italian immigrants
came to work in the cigar industry. Greek immigrants came in large numbers to Tarpon Springs to
work in the sponge-diving industry.

While many of these developments were positive, progress also had its drawbacks. The
Everglades, a large marshland and mangrove swamp in South Florida, was drained to allow for
development. This harmed the ecosystem and endangered species native to the area.

Changing Business Practices

How Did New Inventions Change Business Practices?

 Political Cartoon depicting power of the Standard Oil Company

© 2012 Library of Congress [LC-USZ62-63122]

Industry benefited greatly from new inventions and innovations. The development of the
Bessemer process, for example, advanced many industries beyond the steel and railroad
industries. Railroad shipping industries improved as a result of being able to move goods cheaply
over long distances. This gave companies access to new markets and increased profits. Growing
industries and improved shipping meant that Americans had to import fewer goods. During this
period, the United States practiced what was known as laissez-faire capitalism, which means that
companies were allowed to operate without a lot of government regulation or intervention. The
most successful companies grew into the first large corporations. Some of these corporations,
such as John D. Rockefeller's Standard Oil, began to reshape business practices in the United
States.

Rockefeller began working in the new industry of oil refining in the 1860s. He founded the
Standard Oil Company in 1870. It grew rapidly, thanks in part to agreements with railroads for
reduced shipping rates. By the end of the decade, Standard Oil controlled as much as 95 percent
of U.S. oil refining. In 1882, Standard Oil set up a trust. This system brought Standard Oil and
some 40 other related companies together under one management, allowing the company to
produce large quantities of oil cheaply.

A monopoly exists when one company or group of companies controls most or all of the business
in an industry. However, many people objected to one corporation having so much economic
power because there was no competition to benefit consumers. Monopolies could raise prices as
much as they wanted without worrying about being undercut. Industrialists who used exploitative
business techniques, like controlling access to natural resources or driving up prices through
monopolies, were often referred to as "Robber Barons."
A state court broke up the Standard Oil Trust in 1889. It re-formed a decade later as a holding
company that raised stock in related companies. This again gave the company a great deal of
power over the industry.

Some companies formed less formal pools. Members of the pools owned different independent
companies but agreed on rates and business practices. All of these systems limited competition.
By the Progressive Era, reformers were working hard to end the influence of these companies.

In 1890, Congress passed the Sherman Anti-trust Act, which declared trusts illegal. The act
gave the federal government the power to dissolve trusts and fine, or even jail, those involved.
The purpose of the act was to restore and promote fair trade.

Public Domain

Across the country, the economic impact of railroads and related industries was beyond
measure. During the late 1800s, railroad companies provided jobs for the majority of the
country's population. As the need for locomotives and rails grew, other industries, such as steel
and railroad car companies, that were needed to produce those high-demand items, also grew.

Railways also allowed companies to sell their products nationally, thus increasing their markets.
For example, a steel company in Pennsylvania could sell its material to railroad companies in the
West, and companies in the Midwestern region could send their products to the East Coast.

Changing Business Practices

How Did New Inventions Change Business Practices?

 Political Cartoon depicting power of the Standard Oil Company

© 2012 Library of Congress [LC-USZ62-63122]

Industry benefited greatly from new inventions and innovations. The development of the
Bessemer process, for example, advanced many industries beyond the steel and railroad
industries. Railroad shipping industries improved as a result of being able to move goods cheaply
over long distances. This gave companies access to new markets and increased profits. Growing
industries and improved shipping meant that Americans had to import fewer goods. During this
period, the United States practiced what was known as laissez-faire capitalism, which means that
companies were allowed to operate without a lot of government regulation or intervention. The
most successful companies grew into the first large corporations. Some of these corporations,
such as John D. Rockefeller's Standard Oil, began to reshape business practices in the United
States.

Rockefeller began working in the new industry of oil refining in the 1860s. He founded the
Standard Oil Company in 1870. It grew rapidly, thanks in part to agreements with railroads for
reduced shipping rates. By the end of the decade, Standard Oil controlled as much as 95 percent
of U.S. oil refining. In 1882, Standard Oil set up a trust. This system brought Standard Oil and
some 40 other related companies together under one management, allowing the company to
produce large quantities of oil cheaply.

A monopoly exists when one company or group of companies controls most or all of the business
in an industry. However, many people objected to one corporation having so much economic
power because there was no competition to benefit consumers. Monopolies could raise prices as
much as they wanted without worrying about being undercut. Industrialists who used exploitative
business techniques, like controlling access to natural resources or driving up prices through
monopolies, were often referred to as "Robber Barons."
A state court broke up the Standard Oil Trust in 1889. It re-formed a decade later as a holding
company that raised stock in related companies. This again gave the company a great deal of
power over the industry.

Some companies formed less formal pools. Members of the pools owned different independent
companies but agreed on rates and business practices. All of these systems limited competition.
By the Progressive Era, reformers were working hard to end the influence of these companies.

In 1890, Congress passed the Sherman Anti-trust Act, which declared trusts illegal. The act
gave the federal government the power to dissolve trusts and fine, or even jail, those involved.
The purpose of the act was to restore and promote fair trade.

New Business Methods

How Did New Business Methods Change Industry?

Vertical Integration

Industries developed new methods to increase efficiency levels—as well as profits. Andrew
Carnegie, owner of the Carnegie Steel Company, pioneered the use of vertical integration.

Under this system, Carnegie bought out companies that provided raw materials and services that
he needed. Iron, for example, is a main component of steel. Workers also needed a large
amount of coal to heat the furnaces used in the Bessemer process.

Instead of buying iron and coal from other suppliers, Carnegie simply bought the suppliers. This
allowed him to pay less to manufacture steel and increase his profits. To ship his steel at a lower
cost, he purchased railroads.

Horizontal Integration
Other industries, such as Rockefeller's Standard Oil, used horizontal integration. Rather than
buying suppliers, Rockefeller bought out competitors. Then he could control—or eliminate—his
competition.

The image of the octopus was often used in political cartoons of the time to show how one
person used many "arms" to control his business. For the octopus, the economy was "food" for
the taking. For much of the rest of society, the tentacles strangled their choices and their wallets.

Scientific Management
In the 1880s, engineer Frederick W. Taylor became interested in what would later be known as
time study. Taylor measured the time it took different workers to perform certain tasks. He
suggested that each worker could complete a specific job in a set period of time. He concluded
that eliminating wasted time and motion could increase production speed. This idea became the
foundation of scientific management, which signaled another change in business practices.

Although labor leaders resisted Taylor's ideas, his innovation became very influential. By the
Progressive Era, many factories used scientific management to increase production speeds.