Gilded Age Industrialization

1. Gilded Age Industrialization • During the Gilded Age, American businesses were transformed: • Massive corporations replaced small, family businesses • New technology, transportation, marketing, labor relations, & efficient mass-production • By1900,theU.S.wasthemost industrializedcountryintheworld

2. The Business of Invention • 19th-century inventors led to an “Age of Invention”: • Cyrus Field’s telegraph cable • Business typewriters, cash registers, adding machines • High-speed textile spindles, auto looms, sewing machines • GeorgeEastman’sKodakcamera • Alexander G. Bell’s telephone By 1905, 10 million Americans had phones; (Bell Telephone Co became AT&T)

3. The Business of Invention • Thomas Edison, the “Wizard of Menlo Park,” created the 1st research lab in New York • Edison Illuminating Co was the to 1st use electric light in 1882 • Tesla’s alternating current (AC) allowed electricity to travel over longer distances & to power streetcars & factories

4. The Business of Invention • New technologies allowed for increased industrial production • Newmachineswereincorporated into the first assembly lines which allowed for continuous & faster production of goods • The railroad linked every region of America & allowed for a mass consumption of goods

5. Chicago Meatpackers: The 1st “Disassembly Line”

6. A new-and-improved “market revolution”:More regional specialization made mass production & mass consumption possible The Midwest Made Meat for America

7. New Methods of Marketing • Marketing became a “science”: • Advertising firms boomed • Department stores like Macy’s & Marshall Field’s allowed customers to browse & buy • Chain stores like A&P Grocery & Woolworth’s “Five & Ten” • Mail-order catalogues, like Montgomery Ward sold to all parts of America

8. New Forms of Business Organization “Trusts” use a board of trustees to manage a company “Holding companies” oversee & manage other subsidiary companies • Newtypesofbusinessorganization were used to increase profits: • “Trusts” & “holding companies” integrated various businesses under 1 board of directors • Vertical & horizontal integration maximized corporate profits • Frederick Taylor’s “scientific management” emphasized time efficiency & mid-level managers

9. U. S. Corporate Mergers Vertical & Horizontal Integration By 1900, 1% of U.S. companies controlled 33% of all industry

10. New Forms of Business Organization • Business leaders used a variety of ideas to justify their wealth: • The “Gospel of Wealth” argued that it is God's will that some men attained great wealth • Social Darwinism taught that natural competition weeds out the weak & the strong survive • Were monopolists “captains of industry” or “robber barons”?

11. The Industrialization of America

12. The Second Industrial Revolution was fueled by 3 industries: railroads, steel, & oil

13. The Railroad Industry • America’s first “big business” was the railroad industry: • Railroads stimulated the coal, petroleum,& iron/steel industries • Large companies bought small railroads, standardized gauges & schedules, & pooled cars • Small lines in the east acted as tributaries to the 4 great trunk lines into the West

14. Cornelius “the Commodore” Vanderbilt was the most powerful figure in the railroad industry Jim Fisk

15. Problems of Growth Speculators like Jay Gould built & bought rail lines to profit with little concern for efficient use • But, the railroad industry faced problems due to overbuilding in the 1870s & 1880s: • Mass competition among RRs • RR lines offered special rates & rebates (secret discounts) to lure passengers & freight on their lines • Pooling & consolidation failed to help over-speculation

16. Problems of Growth • RR bosses asked bank financier J.P. Morgan to save their industry: • Morgan created a traffic-sharing plan to end wasteful competition • “Morganization” fixed costs, cut debt, stabilized rates, issued new stock, & ended rebates • Created a “board of trustees” • By 1900, 7 giant (centralized & efficient) rail systems dominated

17. The Steel Industry • Steel transformed world industry: • Allowed for taller buildings, longer bridges, stronger railroad lines, & heavier machinery • Andrew Carnegie’s company made more steel than England • Carnegie converted his steel plants to the Bessemer process & was able to out-produce his competition & offer lower prices Andrew Carnegiewas the great example of the “American Dream” & social mobility

18. Thomas Edison: freethinker, “atheist” • In an October 2, 1910, interview in the New York Times Magazine, Edison stated: • “Nature is what we know. We do not know the gods of religions. And nature is not kind, or merciful, or loving. If God made me — the fabled God of the three qualities of which I spoke: mercy, kindness, love — He also made the fish I catch and eat. And where do His mercy, kindness, and love for that fish come in? No; nature made us — nature did it all — not the gods of the religions.”

19. Rockefeller and Oil • Petroleum also changed industry • New industrial machines needed kerosene for lighting & lubricants • John D. Rockefeller monopolized the oil industry, lowered oil costs & improved the quality of oil • By 1879, Standard Oil ruled 90% of all U.S. oil & sold to Asia, Africa, & South America

20. The Industrial Workers

21. Industrial Workers • Industrial work was hard: • Laborers worked long hours & received low wages but had expensive living costs • Industrial work was unskilled, dangerous, & monotonous • Gender, religious, & racial biases led to different pay scales • These conditions led to a small, but significant union movement

22. Early American Labor Unions • In 1868, Knights of Labor formed to help all type of workers escape the “wage system” • The most successful union, the American Federation of Labor (1886) led by Samuel Gompers: • Made up only of skilled labor & sought practical objectives (better pay, hours, conditions) • Included 1/3 of all U.S. laborers Membership regardless of skill, race, or sex The KoL lacked organization to survive Excluded women, blacks, unskilled laborers

23. The U.S. experienced an “era of strikes” from 1870-1890 The Great RR Strike of 1877 shut down railroads from WV to CA & resulted in hundreds of deaths During the Chicago Haymarket Strike (1886), unionists demanded an 8-hr day; led to mob violence & the death of the Knights of Labor The Homestead Strike (1892) resulted from a 20% pay cut at one of Carnegie’s steel plants

24. Urbanization: 1870-1900

25. Gilded Age Urbanization • From 1870 to 1900, American cities grew 700% due to new job opportunities in factories: • European, Latin American, & Asian immigrants flooded cities • Blacks migrated into the North • Rural farmers moved from the countryside to cities

26. The Lure of the City By 1920, for the 1st time in U.S. history, more than 50% of the American population lived in cities

27. Skyscrapers and Suburbs • By the 1880s, steel allowed cities to build skyscrapers • The Chicago fire of 1871 allowed for rebuilding with new designs: • John Root & Louis Sullivan were the “fathers of modern urban architecture” • New York & other cities used Chicago as their model

28. Tenements & Overcrowding • ½ of NYC’s buildings were tenements which housed the poor working class • “Dumbbell” tenements were popular but were cramped & plagued by firetraps • Slums had poor sanitation, polluted water & air, tuberculosis • Homicide, suicide, & alcoholism rates all increased in U.S. cities

29. Jacob Riis’ “How the Other Half Lives” (1890) exposed the poverty of the urban poor

30. Strangers in a New Land • From 1880-1920, 23 million immigrants came looking for jobs: • These “new” immigrants were from eastern & southern Europe; Catholics & Jews, not Protestant • Kept their language & religion; created ethnic newspapers, schools, & social associations • Led to a resurgence in Nativism & attempts to limit immigration

31. Immigration to the U.S., 1870-1900

32. The influx of ethnic nationalities led to a new “melting pot” (“salad bowl”?) national image Foreign-born Population, 1890

33. Urban Political Machines • Urban “political machines” were loose networks of party precinct captains led by a “boss” • Tammany Hall was the most famous machine; Boss Tweed led the corrupt “Tweed Ring” • Political machines were not all corrupt (“honest graft”); helped the urban poor & built public works like the Brooklyn Bridge

34. Women made up 40% of university students Social Changes in the Gilded Age Private philanthropy led to Stanford, Tulane, Vanderbilt, Cornell, & the Univ of Chicago • Urbanization changed society: • The U.S. saw an increase in self-sufficient female workers • Most states had compulsory education laws & kindergartens • 150 new public & private colleges were formed • Cities set aside land for parks & American workers found time for vaudeville & baseball Land Grant Act (1862) led to the Universities of WI, CA, MN, IL “Family time” disappeared for working class People of all races married later & had fewer children

35. American Industrialization • Benefits of rapid industrialization: • The U.S. became the world’s #1 industrial power • Per capita wealth doubled • Improving standard of living • Human cost of industrialization: • Exploitation of workers; growing gap between rich & poor • Rise of giant monopolies

36. The Politics of the Gilded Age

37. No more than 1% of the popular vote separated the candidates in 3 of 5 elections Politics of Stalemate • The 5 presidential elections from 1876 to 1892 were the most closely contested elections ever • Congress was split as well: • Democrats controlled the House • Republicans held the Senate • This “stalemate” made it difficult for any of the 5 presidents or either party to pass significant legislation for 20 years Pendleton Civil Service Act of 1883 Interstate Commerce Act of 1887 Sherman Antitrust Act of 1890 McKinley Tariff Act of 1890

38. The Two-Party Stalemate: 1876-1892

39. Voting Blocs in the Gilded Age Democratic Bloc Republican Bloc • Supported by white southerners, farmers, immigrants, & the working poor • Favored white supremacy & supported labor unions • Supported by Northern whites, blacks, & nativists • Supported big business & favored anti-immigration laws

40. Dept of Agriculture & Bureau of Indian Affairs were added Treasury Dept grew from 4,000 employees in 1873 to 25,000 by 1900 Civil Service Reform • The most important political issue of 1880s was civil service reform: • The federal bureaucracy swelled in size after 1860 & these positions were appointed via patronage (spoils system) • Congressmen often took bribes or company stock for their votes • Political machines ruled cities throughbribes&personalfavors 56,000 bureaucratic jobs were filled by patronage in 1881

41. Boss Tweed of the NYC Democratic Political Machine, Tammany Hall The “Bosses” of the Senate

42. “If the spoils system could kill a president, it was time to end it” Civil Service Reform • Civil service reform received a boost when disaffected patronage seeker, Charles Guiteau, assassinated President Garfield: • In 1883, Congress created the Pendleton Act for merit-based exams for civil service jobs • State & local gov’ts mirrored these reforms in 1880s & 1890s

43. Charles Guiteau assassination of Garfield

44. Gov’t Regulation of Industry • From 1870 to 1900, 28 state commissions were created to regulate industry, especially RRs: • In 1870, Illinois declared RRs to be public highways; this was upheld by Munn v. Illinois (1876) • But, was overturned in Wabash v. Illinois (1886): “only Congress can regulate interstate trade”

45. This was the 1st attempt by the federal gov’t to regulate big business The ICC became the model for future regulatory agencies Tariffs & Trusts U.S. v. E. C. Knight Co (1895) was the 1st test of the Sherman Antitrust Act The Supreme Court weakened the Sherman Antitrust Act by ruling that this sugar monopoly do not restrain trade because making a good is not the same as selling it • Congress responded by creating: • The Interstate Commerce Commission (ICC) in 1887 to regulate the railroad industry • The Sherman Antitrust Act in 1890 which made it illegal to restrain trade (punishable by dissolution of the company)

46. The Interstate Commerce Act

47. The Pullman Strike (1894) In re Debs in 1895, the Supreme Court upheld the injunction since the strike “restrained” U.S. trade • In 1894, Pullman Palace Car workers went on strike when the company cut wages by 50% • American RR Union leader Eugene V. Debs called for a national railroad strike • President Cleveland issued an injunction&sentthearmytoend the strike & resume rail traffic • Strikers in 27 states resisted U.S. troops & dozens died

48. The Pullman Strike (1894) This was a clever application of the Sherman Antitrust Act • Effects of the Pullman Strike: • Eugene Debs was arrested & became committed to socialism while in jail, sparking a brief U.S. socialist movement • In the 1895 case, In re Debs, the Supreme Court used the Sherman Antitrust Act to uphold Cleveland’s injunction since the strike “restrained” U.S. trade In re Debs made the Sherman Act a great anti-labor tool

49. The Farmers’ Movements & the Rise of the Populists

50. Political Organization • The Gilded Age saw a rise in political organization among disaffected Americans: • Labor unions (like the Knights of Labor & the AFL) encouraged industrial workers to vote • Women’s Christian Temperance Union (WCTU) advocated temperance, race relations, & the right for women to vote