Gilded Age America A brief look at America life in the late 1800s (to refresh your memory or bring you up to speed!) 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 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 Rise of Industry • At the time of the Civil War, the typical American business was small and familyowned • By 1900, giant “limited liability” joint stock corporations were the model: massproduction, national and international markets • Americans transitioned from being selfemployed to being wage earners (2/3 of the population by 1900) 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 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; “gentlemen’s agreements” 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: A&P, Woolworth’s • Department stores:Marshall Field’s-Chicago, Filene’s-Boston, Macy’s-New York • Mail order stores: Sears, Montgomery Ward Business Tycoons/”Go-Getters”… or “Robber Barons?” Morgan Gould Rockefeller Carnegi e Vanderbilt 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 Inventors and new technologies change the world • Bessemer steel process-> 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! 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 agriculture—the 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 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! 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 Jemima’s pancake flour, etc. Chain stores • “Economies of scale” • A&P: Atlantic and Pacific Tea Company (groceries) • Woolworth’s (Five and dime stores) Urban Department Stores • Marshall Field’sChicago • Filene’s-Boston • Macy’s-New York 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) 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, pricefixing, trusts, monopolies • No laws or regulations to stop corrupt business practices, protect workers, or the environment! What about…the 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 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 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 sharing Railroad Strike of 1877, Haymarket Riot of 1886, Homestead Strike of 1892, Pullman Strike of 1894 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?