GILDED AGE: THE INDUSTRIAL

REVOLUTION

P E R I O D 6

VOCAB REVIEW! (CHAP. 23 -24)

1. How would these words logically go together? What do

they have to do with each other?

2. Give these groups a label or category and be ready to

explain or justify the rationale behind your groups’ labels

INDUSTRIAL REVOLUTION 2

MARKET REVOLUTION

1840 – 1870

• 1st Industrial Revolution

• coal, iron, railroads, and

textiles

INDUSTRIAL REVOLUTION

1870 – 1914

• 2nd Industrial Revolution

• Electricity, petroleum, and steel

FACTORS THAT LEAD TO 1ST

PLACE MANUFACTURING

1. Foreign Investment

1. Millionaire Investors from abroad loaned more money to the United

States in the postwar period than any country had previously received

(put into private hands, not public)

2. Mass-Production Methods

1. Sheer size of the American market (cheap transportation and large

population) necessitated these methods

1. “American System” (banking, tariffs, internal improvements)

2. Interchangeable parts Ford

FACTORS THAT LEAD TO 1ST PLACE MANUFACTURING3. Labor Changes

– Machines replaced more expensive skilled labor with unskilled workers

– IMMIGRATION

4. New Inventions = Business

3. Bessemer Process

THE LIGHT BULB

THE PHONOGRAPH (1877)

THE EDIPHONE OR DICTAPHONE

THE MOTION PICTURE CAMERA

THE AIRPLANE

Wilbur Wright Orville Wright

Kitty Hawk, NC – December 7, 1903

MODEL T AUTOMOBILE

Henry FordI want to pay my workers so that they can

afford my product!

“MODEL T” PRICES & SALES

FACTORS THAT LEAD TO 1ST PLACE MANUFACTURING5. Railroads Expanded Across the Nation

5. RAILROADS EXPANDED ACROSS THE NATION

• Railroad

Improvements =

growth and expansion

– Steel Rail

– Standard Gauge Track

– Westinghouse air

brake

– Pullman Sleeping Cars

•May 10, 1869 at Promontory, Utah

•“The Wedding of the Rails”

•Central Pacific and Union Pacific

5. RAILROADS EXPANDED ACROSS THE NATION = IMPACTS

• Transcontinental Railroad (5 of ‘dem!)

– Placed the West Coast more firmly to the Union

– Facilitated trade with Asia

– Went through the deserts which paved the way for growth of the West

– Stimulated mining and agriculture in the West

• Made the United States the largest integrated national market in the

world (mass production)

• Lead to the great city-ward movement (URBANIZATION)

• Stimulated immigration

• Impacted Geography

• Time zones!

• Rise of the millionaire

CORNELIUS

VANDERBILT• Originated in Steam boating

• Welded together and expanded older eastern RR networks (New York Central)

• Offered superior railway service at lower rates he amassed a fortune

“Law! What do I care about the law? Hain’t I got the power?”

“I won’t sue you, for the law is too slow. I’ll ruin you.”

RISE OF THE MILLIONAIRE

RAILROAD CORRUPTIONWabash, St. Louis & Pacific Railroad Company vs. Illinois

1886: decreed that individual states had no power to regulate

interstate commerce

Interstate Commerce Act, 1877

• Congress: prohibited rebates and pools and required the

railroads to publish their rates

• Forbade unfair discrimination against shippers and

outlawed charging more for a short haul than for along

one over the same line.

• Set up the ICC (interstate Commerce Commission)

INTERSTATE COMMERCE ACT: 1877

• SIGNIFICANCE:

• Do not represent a total victory

• Did provide a forum where competing business interests

could resolve conflicts

• Stabilized the system, not changed

• First large scale attempt by the federal government to

regulate business in the interest of society (foreshadow for

the future)

NEW BUSINESS CULTURE

• Laissez Faire the ideology of the Industrial Age’s industry

and economics (”Let them do it” or “Let go”

– Individual as a moral and economic ideal

– Individuals should be compete free in the marketplace

– The market was not man-made or invented

– No room for government in the market!

• Free from government interference such as regulations,

privileges, tariffs, etc.

New Business Culture of the

”Self-made man”

THE RISE OF THE MILLIONAIRE AND MONOPOLISTIC TRUSTS

CAPTAINS OF INDUSTRY

• Increases the availability of goods

by building factories

• Raises productivity

• Expands markets

• Creates more jobs

• Funds many of the nation’s public

institutions: practices philanthropy

(giving to causes)

• Organizes the factors of

production efficiency

ROBBER BARONS

• Drains the country of its natural

resources

• Corrupts public officials to

interpret laws in their favor

• Drives competitors to ruin

• Pays poor wages

• Forces workers to work under

dangerous/unhealthy conditions

• Exploits the factors of production

NEW TYPES OF BUSINESS ENTITIES:

• Horizontal Integration

– Practice perfected by Rockefeller

– Allying with competitors to monopolize a

given market

– Dominating a particular phase of the

production process in order to

monopolize a market (often by forming

trusts and alliances with competitors)

JOHN D. ROCKEFELLER = OIL

• Creation of Trusts

– Any large scale business combination

– When one company is given control over another company’s operations by owning the stock of

that company.

– Sugar, tobacco, leather, harvester, meat

• Standard Oil Company

– Formed in 1870 and by 1877 he owned 95% of all the oil refineries

– Whaling kerosene Lightbulbs Automobiles

ANDREW CARNEGIE = STEELNEW TYPES OF BUSINESS ENTITIES CONTINUED:

• Vertical Integration– Integrated and controlled every phase of the industrial production

process in order to increase efficiency (reliability and quality), decrease

middlemen fees, and limit competition

• Was not a monopolist and disliked trusts– Partnership business

J. PIERPONT MORGAN = BANKINGNEW BUSINESS ENTITIES

CONTINUED:

• Interlocking Directories– The practice of having executives or

directors from one company serve

on the board of directors of another

company

– To consolidate rival enterprises and

ensure future harmony among his

businesses thus eliminated banking

competition in the 1890s

• Created the U.S. Steel Corporation by

buying Carnegie's business for $400

million– America’s first billion-dollar

corporation

U.S. CORPORATE MERGERS

WALL STREET – 1867 & 1900

“The Protectors of Our Industries”

The “Bosses of the Senate”

The ’Robber Barons’ of the Past

Cornelius [“Commodore”] Vanderbilt

REGULATING THE TRUSTS

Wabash, St. Louis & Pacific Railroad Company vs. Illinois

1886: decreed that individual states had no power to regulate

interstate commerce

Interstate Commerce Act, 1887

• Congress: prohibited rebates and pools and required the

railroads to publish their rates

• Forbade unfair discrimination against shippers and

outlawed charging more for a short haul than for along

one over the same line.

• Set up the ICC (interstate Commerce Commission)

REGULATING THE TRUSTS

Sherman Anti-Trust Act, 1890

• Forbade trusts or combinations in business considered to restraint

trade

• First congressional attempts to regulate big business for public good

• Message of private greed should now be subordinate to public need

ISSUES:

• No distinction between “good” or “bad” trusts

• Bigness, not badness the sin

• No enforcement and many loopholes

• Used to restrain labor unions or labor combinations contrary to original

intent

• Not effective until 1914

REGULATING THE TRUSTS

The People’s Party (Populists)

I M PA C T S O F T H E 2 N D I N D U S T R I A L R E V O L U T I O N

1. FOREIGN TRADE

2. SOCIAL DARWINISM• Defense of capitalism relied on “survival-of-the-fittest” theories of

English philosophers Herbert Spencer and Yale professor William

Graham Sumner

• Argument that individuals won their station in life by competing on the

basis of their natural talents

• Social classes owe each other nothing and contempt for poor develops

“There is not a poor

person in the United

States who was not

made poor by his own

shortcomings”

Reverend Russell Conwell

CARNEGIE'S GOSPEL OF WEALTH

3. WAYS OF LIFE

4. CHILD LABOR

5. WOMEN

6. CHANGING LABOR FORCE• Decline of Agriculture

• Greater class divisions• Middle class growing

• Nation of “wage earners”

• Depersonalized workforce and

uncertainty for workers

MANAGEMENT VS. LABOR

“TOOLS” OF MANAGEMENT

• “scabs”

• P. R. campaign

• Pinkertons

• lockout

• blacklisting

• yellow-dog contracts

• court injunctions

• open shop

Joseph Pulitzer

William

Randolph Hurst

7. RISE OF THE LABOR UNION• National Labor Union, 1866

– Hit by the depression of 1870s

• Knights of Labor, 1869

– Sought to include all workers in “one big union”

and welcomed skilled and unskilled men and

women, for whites and blacks

– 90,000 joined

– Focused on economic and social reform rather

than political

Knights of Labor Trade Card

GOALS OF THE

KNIGHTS OF LABOR

• Eight-hour workday.

• Workers’ cooperatives.

• Safety codes in the workplace.

• Worker-owned factories.

• Abolition of child and prison labor.

• Increased circulation of greenbacks.

• Equal pay for men and women.

• Prohibition of contract foreign labor.

• Abolition of the National Bank.

MANAGEMENT VS. LABOR

“TOOLS” OF MANAGEMENT

• “scabs”

• P. R. campaign

• Pinkertons

• lockout

• blacklisting

• yellow-dog contracts

• court injunctions

• open shop

”TOOLS” OF LABOR UNIONS

• boycotts

• sympathy

demonstrations

• informational

picketing

• closed shops

• organized

strikes

• “wildcat” strikes

8. INCREASED LABOR UNREST

STRIKE!

• Railroad Strikes, 1877

• Haymarket Square, 1886

– Samuel Gomper’s American Federation of Labor

• Homestead Strike, 1892

• Pullman Strike, 1894

• Newsboy Strike, 1899

9. SOUTHERN ECONOMY

10. URBANIZATION• the population shift from rural to urban

areas

• Reasons?

– New industrial jobs

– Inventions (electricity, indoor plumbing,

telephones, elevators, transportation)

– Immigration from Europe

– New agricultural technology that pushed

people off farms

CONS OF URBANIZATION…• New problem with waste disposal

• Criminals flourished

• Sanitary facilities could not keep pace with need

• Potentially dangerous (Chicago Fire)

Cross-section of a Typical Slum Dwelling

THE URBAN SLUM

1 1 . N E W I M M I G R A N T S

IMMIGRATIONOLD IMMIGRATION

• Up to 1880s, most immigrants had come from the British Isles and Western Europe

– Germany

– Ireland

– Chinese

• Generally had high literacy rates and experience with democratic government

• Fit well into American society as farmers

• Had faced nativism but over time had adjusted by the Gilded Age

NEW IMMIGRATION

• New Immigrants in later 1880s,

came from southern and eastern

Europe

– Italians, Jews, Croats, Slovaks,

Greeks, and Poles

• Countries with little democratic

government and opportunities for

advancement few

– Population in the Old World

increased = Unemployment

– “American Fever”

– Minority Persecution

• No intention of staying and poor

illiterate who worked low-skill, low-

wage industrial jobs

• New York and Chicago (Little Italy)

– struggle to maintain culture

1905, Jews in Russia