Chapter 9 Gilded Age and Industrialization

1. Chapter 9Gilded Age and Industrialization

2. Gilded Age • Gilded Age refers to the gilding process by which an item made of wood, metal,

3. Industrialization • Prior to the Civil War the United States was still very much a farming country. • After the Civil War many Americans left their farms to work in mines and factories. • By 1900, the United States transformed in the world’s leading industrial nation.

4. GNP • GNP, Gross National Product, is the total value of all goods and services produced by a country.

5. Natural Resources • America realized the amount of vast resources, such as water, timber, coal, iron and copper, that were available for use. • This meant that the U.S. could cheaply obtain these resources instead of having to import them from other countries.

6. Settlement of the West as well as the Transcontinental Railroad helped accelerate industrialization. Railroads brought the resources from the West to the East for use. Petroleum was first exploited during the Industrial Revolution. Natural Resources

7. Edwin Drake • Pennsylvania was where oil was first found. • Drake drilled the first oil well in Titusville, PA. • By 1900, oil fields were opened from PA to Texas.

8. Large Workforce • Between 1878 and 1910 the American population tripled. • Consumerism was born. • Immigrants were a major cause of the population boom.

9. Laissez-Faire Economics • “Let it Be” or “Let the people choose” • Laissez-faire believed that government should not interfere in the economy other than to protect private property rights and maintain peace. • Supply and Demand rather than government regulated prices. • VCRs- Then versus now

10. Entrepreneurs • Highly ambitious and motivated individuals who risked their own money to build their own business. • Manufacturing and transportation through the railroads, helped entrepreneurs use their savings from the late 1800s through textile and shoe manufacturing. • Thousands of factories popped up and miles of railroad tracks were built to help supply the demand.

11. Capital • Cash or goods used to generate income either by investing in a business. • This is what entrepreneurs use to finance their business. • Europe, especially Britain, was the major financer of capital in the United States. • EX. Mark Zuckerberg

12. Alexander Bell • Invented the first telephone • Mother and Father were both deaf • In 1877, the Bell Telephone Company was created. • The telephone revolutionized the way people communicated both on a personal and business standpoint. • Which company arose out of his inventions?

13. Thomas Edison”I have not failed. I've just found 10,000 ways that won't work.” • In 1879, Edison perfected the light bulb and the electric generator. • He also invented the battery, mimeograph, and the early motion picture. • In 1882, the Edison Electric Illuminating Co., began to supply electric power to customers in NYC. • Which company arose out of his inventions?

14. Role of Technology • Refrigerator allowed for food to last longer and to be shipped across the country. • It reduced the risk of rotting and disease • The Automatic Loom allowed for faster textile production and ultimately standard sizes. (S, M, L) • Prices of items dropped due to the efficiency of industrialization.

15. The Big Four • The Central Pacific Railroad was a state railroad company in California owned by Leland Stanford, Charley Crocker, Mark Hopkins, and Collis P. Huntington. • Because of the shortage of labor in California the CPR hired about 10,000 Chinese workers.

16. Railroads • Linking railroads allowed for expansion of markets for many different products. • Railroad consolidation took over from 400 small railroads to a 70+ bigger railroads • Eventually there were 7 giant systems located in ‘hub’ cities. • Cornelius Vanderbilt purchased and merged 3 short rails into one. • He established NYC Grand Central Station • The first direct rail service from NYC to Chicago

17. Time Zones • Time was a problem when scheduling trains to arrive in certain cities. • Safety issues when two trains were travelling along the same track.

18. Railroads (Cont.) • Land Grant System- federal government gave land grants to major railway companies. • Sell the land to settlers, real estate companies, and other business to raise the money they needed to build the railroad. • Over 120M acres of public lands were given to railways (New England, New York, and PA combined)

19. Robber Barons • They built their fortunes by cheating investors, bribing government officials and manipulating the taxpayers. • Jay Gould was the most infamous with insider trading. • Bribery was so common because the government was so entangled in the funding of railroads.

20. Crédit Mobilier Scandal • Crédit Mobilier was a construction company set up by several stock holders of the Union Pacific Rail Co., including Oak Ames, a member of Congress. • The owners of Union Pacific then turned to Credit Mobilier to be the construction company. • These officials made excessive profits for themselves at the expense of taxpayers and minor stockholders of the railway.

21. Crédit Mobilier Scandal • Since the men who ran Crédit Mobilier also controlled the Union Pacific, they were able to award themselves contracts to build the remaining 667 miles (1,073 km) of railway for $94,000,000. (Actual construction costs were less than $50,000,000.) • One quarter of the money involved had been supplied to the railway by Congress, through loans and land grants. As the Union Pacific plunged into debt, Oakes Ames sought to prevent Congressional investigation by permitting leading members of Congress to buy Crédit Mobilier stock at greatly reduced prices.

22. Corporations • A business owned by multiple people but treated by law as if it were a single person. • People who own parts of the corporation are stockholders. • The shares of ownership are called stock. • Issuing stock allows for corporations to raise large amounts of money with minimal risk

23. Economies of Scale • Corporations make goods more cheaply because they produce so much so quickly using large manufacturing facilities. -Technology -large workforce • Fixed Cost • Operating Cost • Before the Civil War/After the Civil War

24. Pools • Pools organized to maintain the price of an item at a certain level. • Usually didn’t last.

25. Andrew Carnegie • Steel Industry • President of PA Railroad • Carnegie Steel Co. • Bessimer Process