Gilded Age America

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Gilded Age America

• A brief look at America life in the late 1800s
  (to refresh your memory or bring you up to speed!)

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The G Word, explained.

• End of Civil War-Early 1900s
• The term was coined by Mark Twain in his 1873
  book of the same name
• Gilded based on pretense deceptively pleasing
  covered with a thin layer of gold

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Characteristics of The Gilded Age

• A period of incredibly rapid industrialization
  and the growth of incredible wealth
• Population growth, immigration, urbanization, and
  incredible poverty
• New natural resources oil, iron ore, etc.
• Laissez faire economics hands off
• Protectionism and high tariffs to encourage the
  growth of business
• Political corruption at all levels
• Social Darwinism competition and survival of
  the fittest was the philosophy of the day

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Rise of Industry

• At the time of the Civil War, the typical
  American business was small and family-owned
• By 1900, giant limited liability joint stock
  corporations were the model mass-production,
  national and international markets
• Americans transitioned from being self-employed
  to being wage earners (2/3 of the population by
  1900)

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Rise of Industry (cont.)

• Capital invested in manufacturing rose from 1
  billion to 10 billion
• The number of industrial workers grew from
  1,300,000 to 5,300,000
• Industrial output rose from less than 2 billion
  to more than 13 billion
• America went from the number 5 industrial power
  in the world to the number 1 industrial power in
  the world by 1894

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New corporate practices

• Horizontal integration gain control of the
  market for a single product
• John D. Rockefeller created the Standard Oil
  Trust, made up of 40 companies
• By 1880, he controlled 90 of the oil refining
  industry
• Vertical integration control production at every
  step of the way
• Raw materials, Processing, Transport,
  Distribution
• Corporate mergers, combinations, and
  consolidation lead to trusts and monopolies
  gentlemens agreements

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Other famous American companies you may know from
this era!

• Goodyear, General Electric, Westinghouse,
  Nabisco, Armour, Quaker Oats, Proctor and Gamble,
  Eastman-Kodak, Heinz, Campbell Soup, Pabst
  Brewery, Borden Milk
• Chain stores AP, Woolworths
• Department storesMarshall Fields-Chicago,
  Filenes-Boston, Macys-New York
• Mail order stores Sears, Montgomery Ward

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Business Tycoons/Go-Getters or Robber Barons?
Rockefeller
Morgan
Carnegie
Gould
Vanderbilt
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Transcontinental Railroad

• Completed in 1869
• Four more lines added in 1880s and 90s
• Supported by government subsidies
• Linked cities in every state into a nationwide
  market
• Made it easier for industry to acquire raw
  materials
• 193,000 miles by 1900

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Inventors and new technologies change the world

• Bessemer steel process-gt skyscrapers and many
  other innovations
• Coal-fired steam engines (1880s)
• Alexander Graham Bell (1876) telephone
• Thomas Edison (1879) light bulb and electricity
• Oil refining John D Rockefeller
• Henry Ford internal combustion engine
• Transatlantic telegraph cable
• Cash register
• 440,000 patents from 1860-90 before 1860, only
  36,000!

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More inventions

• The invention of single gauge track, the modern
  locomotive, and the Westinghouse Air Brake, which
  revolutionized the railroad industry.
• The invention of new agricultural machinery which
  revolutionized agriculturethe McCormick Reaper,
  the John Deere Plow
• The packaging of cereals, the canning of goods,
  the Kodak camera, the typewriter, the cigarette
  rolling machine affected the lives of millions

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Mechanization

• Factories switched from water power to steam
  power in the 1880s
• Cheap and readily available coal
• Frederick Winslow Taylor scientific
  management assembly lines, machines, and
  unskilled workers
• Taylorism and assembly lines Meat packers were
  among the first!

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Mail-order stores

• Railroad freight rates drop, postal service
  expands
• Chicago-based companies Sears and Roebuck,
  Montgomery Ward
• Shoes, buggies, gas stoves, remedies, Armour
  sausage, Aunt Jemimas pancake flour, etc.

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Chain stores

• Economies of scale
• AP Atlantic and Pacific Tea Company (groceries)
  
• Woolworths (Five
• and dime stores)

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Urban Department Stores

• Marshall Fields-Chicago
• Filenes-Boston
• Macys-New York

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The Gospel of Wealth

• 90 of business leaders were Protestant
  Christians
• God gave me my money. -John D. Rockefeller
• Some tycoons used religion to justify their
  ruthless behavior (Gould) others donated their
  fortunes (Carnegie)
• Social responsibility private wealth is the
  trust fund of the community (Carnegie)

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The result Incredible economic growth and
incredible corruption

• 7 growth in production per year!
• Retail sales
• 8 million in 1860
• 102 million in 1900
• Laissez-faire government and corrupt political
  machines
• Corrupt business practices pools, price-fixing,
  trusts, monopolies
• No laws or regulations to stop corrupt business
  practices, protect workers, or the environment!

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What aboutthe workers?

• Migration of people from rural areas to urban
  areas, from South to North
• 14 million new immigrants 1865-1900 more
  Catholics and Jews, especially post 1890
• Unsafe, unhealthy, and dangerous jobs
• Frequent periods of unemployment due to booms and
  busts (Depressions of 1873-79, 1893-97, etc.)
• Growth of labor unions

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Labor Unions Emerge

• National Labor Union (1866) 300,000 members
• Knights of Labor (1869) fights for the eight
  hour workday accepted all workers
• American Federation of Labor (1886) craft unions
  only 10 of the population
• Labor Day, 1894
• IWW International Workers of the World

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The danger of the working class?

• Violence, strikes, unrest?
• Socialism public control over means of
  production
• Anarchism abolition of government a system
  based on cooperation and sharingRailroad Strike
  of 1877, Haymarket Riot of 1886, Homestead Strike
  of 1892, Pullman Strike of 1894

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Essential Questions to consider

• Are capitalism and democracy fundamentally at
  odds?
• Should the iconic businessmen of this era be
  considered captains of industry or robber
  barons?
• Do we live in a modern Gilded Age?