Ch 24 Industry Comes of Age Gilded Age

Ch. 24 – Industry Comes of Age

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 –By 1900, the U. S. was the most industrialized country in the world

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

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

The Business of Invention ■ New technologies allowed for increased industrial production –New machines were incorporated 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

Chicago Meatpackers: The 1 st “Disassembly Line”

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

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

New Forms of Business Organization “Trusts” use a board “Holding companies” ■of. New types trustees to of business oversee & organization manage other were used to increase manage a company subsidiaryprofits: companies –“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

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

New Forms of Business Organization ■ Business leaders used a variety of ideas to justify their wealth: –The “Gospel of Wealth” 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”?

The “Robber Barons” of the Past

The Industrialization of America

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

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

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

Problems of Growth Speculators like Jay Gould built & bought rail lines to profit faced with ■ But, the railroad industry little concern foroverbuilding efficient use in problems due to the 1870 s & 1880 s: –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

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” 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

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

International Steel Production, 1880 -1914 The U. S. was ideal for steel production because it had lots of coal, iron, & railroads

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

Standard Oil: Oil The Monster Monopoly?

The Industrial Workers

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

Early American Labor Unions ■ In 1868, Knights of Labor formed to help all type of workers escape Membership regardless of skill, race, or sex the “wage system” The Ko. L lacked blacks, organization to survive Excluded women, unskilled ■ The most successful union, laborers 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

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