The Gilded Age

1. The Gilded Age Do Now: • HW in Agenda. • Answer this ? in your notebook: Who were the first millionaires and billionaires? How did they get rich? Agenda: • RealTalk • Review • DBQ HW: • Read and take notes over Chapter 19. • Make key terms flashcards or t-chart. • Begin pre-writing for essay

2. Big Question: AIM: To identify and explain the characteristics, successes, and challenges of business and politics in the Gilded Age. How did the national government respond to the growing industrial economy?Was industrialization a gift or a curse?  Why and for whom?How did urbanization and immigration change the national landscape?

3. The Rise of Industrial America, 1865-1900

4. Causes of Rapid Industrialization • Nature resources – coal, iron ore, copper, lead, timber, & oil • Abundant labor supply 1865-1900 b/c of constant stream of immigrants • Population + advanced transportation network = largest industrial market in world • Lots of capital  Europeans with surplus wealth invested and joined Americans in funding economic expansion Note: capital = accumulated goods dedicated to production of other goods • Laborsaving technologies invented (440,000 new patents 1860-1880) • Businesses benefited from “friendly” govt policies that protected private property, subsidized railraods with land grants and loans, supported U.S. manufacturers with protective tariffs, and didn’t heavily tax or regulate • Entrepreneurs who built and managed industrial/commercial enterprises

5. Railroads • Promoted settlement • Linked W to E  one giant national market • 80 railroad companies received 170 million + acres of public land (>3x the acres given away in Homestead Act) • Overbuilt in 1870/80s • Consolidated by 1900 with 7 giant systems controlling 2/3 of railroads • More efficient • Regional monopolies emerged

6. New Type of Business Entities • Pool: an informal agreement by competing companies to fix prices, share profits, or divide the market for their products in order to maximize profits.  • The only problem with pools is that it isn't legally binding and they were frequently broken.  • 1887Interstate Commerce Act • Interstate Commerce Commission created. • Trust: a giant business combination consisting of a number of corporations engaged in the same field or in related fields.  • There is a board of trustees that assigns stocks, trust certificates and gains proportionate profits • John D. Rockefeller and Standard Oil Co.

7. Standard Oil Co.

8. New Type of Business Entities • Trust: • Horizontal Integration John D. Rockefeller • Vertical Integration: • Gustavus Swift  Meat-packing • Andrew Carnegie  U. S. Steel

9. New Type of Business Entities

10. *By end of 19th century, monopolies and trusts exercised a significant degree of control over key aspects of the American economy. The Consolidation of Big Business Horizontal Integration: Occurs when one company gains control over other companies that produce the same product John D. Rockefeller used horizontal integration when he brought his oil competition under Standard Oil Trust (controlled 90% of oil refinery business) Controlled supply & prices of oil products $900 mil. Retirement & low gas prices for consumers Vertical Integration: • Occurs when a company controls both the production and distribution of its product • Andrew Carnegie used vertical integration to gain control of the U.S. steel industry • Controlled every stage of steel making from mining for raw materials to transporting final product • US Steel = 1st billion dollar company

11. Iron & Steel Production

12. U. S. Corporate Mergers

13. % of Billionaires in 1900

14. % of Billionaires in 1918

15. Sherman Antitrust Act, 1890 • Middle class feared trusts’ power and old money resented new money • The act forbade unreasonable combinations or contracts in restraint of trade or commerce • It had little immediate impact on the regulation of large corporations • During the last decade of the 19th century, the primary use of the act was to curb labor unions

16. Interstate Commerce Act • Passed in 1887  est. nation’s 1st regulatory agency: Interstate Commerce Commission • More of a watchdog  never strong enough to pose threat to railroads

17. Inventions: Thomas Edison • Light bulb • Phonograph • Motion picture camera

18. Alexander Graham Bell Telephone (1876)

19. Alternate Current George Westinghouse

20. The Airplane Wilbur Wright Orville Wright Kitty Hawk, NC – December 7, 1903

21. Model T Automobile Henry FordI want to pay my workers so that they can afford my product!

22. New Financial Businessman The Broker: • J. Pierpont Morgan

23. Wall Street – 1867 & 1900

24. The Reorganization of Work Frederick W. Taylor The Principles of Scientific Management (1911)

25. The Reorganization of Work The Assembly Line

26. Consequences of Industrialization • Corporations built large, systematically organized factories where work was increasingly performed by machines and unskilled workers • Corporations introduced systems of “scientific management,” also known as Taylorism, to increase factory production and lower labor costs • Corporations accumulated vast sums of investment capital • Corporations used the railroads to help develop national markets for their goods • Taylorism = system of scientific management developed by Frederick W. Taylor • Sought to develop a disciplined labor force by eliminating wasted motion

27. The Protectors of Our Industries

28. The ‘Bosses’ of the Senate

29. The ‘Robber Barons’ of the Past

30. Cornelius [“Commodore”] Vanderbilt Can’t I do what I want with my money?

31. William Vanderbilt • The public be damned! • What do I care about the law? H’aint I got the power?

32. Gospel of Wealth • Belief that the rich were the guardians of society’s wealth and had a duty to serve society • Andrew Carnegie = biggest advocate • Donated $350 mil. + to support libraries, school, peace initiatives, and the arts Laissez-Faire Economics • Economic philosophy stating that economic activities should be largely free of govt interference, regulations, and restraint • Supported by leaders who supported protective tariffs (ironic) Social Darwinism • Belief that there is a natural evolutionary process by which the fittest survive • Wealthy business & industrial leaders use this to justify success • Believed that industrial & urban problems are part of natural evolutionary process that humans can’t control

33. Social Gospel • In 1880s and 1890s, Protestant clergymen preached the Social Gospel • Social Gospel = reform movement based on the belief that Christians have a responsibility to confront social problems • Middle class Protestants are encouraged to attack urban problems

34. Temperance Movement • Urban reformers, especially women advocated total abstinence of alcohol • Women’s Christian Temperance Union (WCTU) forms in 1874 • Antisaloon League forms in 1893 • Carry A. Nation of Kansas raided saloons and smashed barrels of beer with a hatchet

35. Families and Women • Reduction in family size • Elizabeth Cady Stanton and Susan B. Anthony created the National American Women’s Suffrage Association ((NAWSA) • WY was first state to grant full suffrage to women in 1869 • Frontier life tended to promote the acceptance of greater equality for women • By 1900, some states allowed women to vote in local elections and to own property after marriage

36. Celebrating America’s Industrial Success The popular Horatio Alger Jr. stories provided concrete examples of the ideal of the self made man. • Collection of about 270 dime novels • Told rags-to-riches stories describing how down-and-out boys become rich and successful through hard work, honest, and a little luck

37. The World’s Columbian Exposition of 1893 showcased America’s industrial development • Chicago! “White City”

38. Labor and Labor Unions, 1865-1900 • Immigrants, women, and children significantly expanded the labor force • Machines increasingly replaced skilled artisans • Large bureaucratic corporations dominated the American economy • Corporations developed national & international markets for their goods Key Trends

39. Child Labor

40. Labor Unrest: 1870-1900

41. Knights of Labor • Led by Terence V. Powderly • Under his leadership Knights grew  peaked @ 730,000 in 1886 • Grew rapidly b/c: • open-membership policy, • Continuing industrialization of American economy • Growth of urban population • Welcomed unskilled & skilled workers, including women, immigrants, and African Americans • = idealists who believed they could eliminate conflict b/n labor & management • Goal = to create a cooperative society in which laborers, not capitalists, owned industries in which they worked • Haymarket Square Riot unfairly blamed on the Knights  public associated them with anarchists

42. Haymarket Riot (1886) McCormick Harvesting Machine Co.

43. The Industrial Workers of the World • Aka “Wobblies” • IWW led by “Mother” Jones, Elizabeth Flynn, and Big Bill Haywood • Like Knights, IWW strove to unite all laborers, including unskilled African Americans, who were excluded from craft unions • IWW’s motto = “An injury to one is an injurty to all” • Goal = to create “One big union” • Unlike Knights, IWW embraced rhetoric of class conflict & endorsed violent tactics • Membership probably never exceeded 150,000 workers  collapsed in WWI

44. The American Federation of Labor: 1886 • American Federation of Labor (AFL) led by Samuel Gompers – leader of Cigar Maker’s Union • = an alliance of skilled workers in craft unions • Under Gompers, AFL concentrated on bread-and-butter issues such as higher wages, shorter hours, and better working conditions • Catered to the skilled worker. • Represented workers in matters of national legislation. • Maintained a national strike fund. • Evangelized the cause of unionism. • Prevented disputes among the many craft unions. • Mediated disputes between management and labor. • Pushed for closed shops. Samuel Gompers

45. Similarities & Differences • Knights, IWW, and AFL all dedicated to organizing laborers • Knights and IWW both attempted to organize all skilled & unskilled laborers into one union • Differences: • Knights wanted cooperative society • IWW embraced class conflict and violent tactics • AFL organized skilled workers, repudiated violence, and fought for higher wages and better working conditions

46. The Pullman Strike, 1894 • Late 19th century  American labor movement experienced number of violent strikes • Two best known strikes = Homestead Strike (1892) & Pullman Strike (1894) • When national economy went in a depression, the Pullman Palace Car Company cut wages while maintaining rents & prices in a company town where 12,000 workers lived • Pullman strike halted a substantial portion of American railroad commerce • Strike ended when President Cleveland ordered federal troops to Chicago, “to protect rail-carried mail,” but really to crush strike

48. Workers formed labor unions to protect their rights and to give them power to collectively bargain. • Business owners saw labor unions as unfair because they prevent competition. • Throughout the industrial era, unions were involved in a number of strikes; often, these strikes turned violent. Key Concepts: Labor Unions

49. Timeline Andrew Carnegie (robber baron, captain of the steel industry) owned a steel mill in Homestead, PA, near Pittsburgh. Union at the steel mill, the Amalgamated Association (AA), formed and won a couple of early strikes. Homestead was run by Henry Clay Frick whose goal was to break the union. When the union’s contract was up in 1892, Frick refused to negotiate a new contract and locked workers out. Frick hired the Pinkerton Detectives to provide security and break the strike. When the Pinkertons tried to enter the mill, there was conflict. The conflict lasted for 14 hours and left 16 people dead.Homestead Strike The strike lasted four more months until the union gave in. Frick succeeded in breaking the union.