Gilded Age 1877 1900 Compromise 1877 to Turn

Gilded Age • 1877 -1900, Compromise 1877 to Turn of century, Teddy Roosevelt becomes President • Time of tremendous business growth and labor conflict • Mark Twain coined the term • Gilded= gold plated • Age glittered with new technology, but at its core was corruption and human suffering • Growth of monopolies and trusts • Labor strikes: Great RR, Haymarket, Pullman, & Homestead • New Stock immigrants from Eastern & Southern Europe • Urbanization • 2 nd Industrial Revolution, (ROSE), Railroads, Oil, Steel, & Electricity

What were the Causes of Rapid Industrialization? 1. Steam power from 1 st IR of the 1830 s 1850 s. 2. The Railroad fueled the growing US economy: * * First big business in the US. A magnet for financial investment. The key to opening the West. Aided the development of other industries.

Causes of Rapid Industrialization 3. Technological innovations. * Bessemer Steel Process • • Puts air into iron to remove carbon to make steel New Uses for Steel: – Steel used in railroads, barbed wire, farm machines – Changes construction: Brooklyn Bridge; steel-framed skyscrapers * Refrigerated cars

America wasn’t discovered; it was built

Iron & Steel Production

Thomas Alva Edison “Wizard of Menlo Park”

The Light Bulb

The Phonograph (1877)

The Ediphone or Dictaphone

The Motion Picture Camera

Alexander Graham Bell Telephone (1876)

Alternate Current George Westinghouse

Alternate Current Westinghouse Lamp Advertisement

Causes of Rapid Industrialization 4. Unskilled & semi-skilled labor in abundance. 5. Abundant capital. 6. New, talented group of businessmen [entrepreneurs ] and advisors. 7. Market growing as US population increased. 8. Abundant natural resources.

9. • • Government Support tariffs private property laws railroad land grants little governmental taxation of corporate profits • armed protection of companies with federal troops • Supreme Court rulings

Relative Share of World Manufacturing

New Business Culture 1. Laissez Faire the ideology of the Industrial Age. * Individual as a moral and economic ideal. * Individuals should compete freely in the marketplace. * The market was not man-made or invented, rather it was a state of nature. * No room for government in the market!

2. Social Darwinism Herbert Spencer × British economist. × Advocate of laissez -faire. × Adapted Darwin’s ideas from the “Origin of Species” to humans. × Notion of “Survival of the Fittest. ”

2. Social Darwinism in America $ Individuals must have absolute freedom to struggle, succeed or fail. William Graham Sumner Folkways (1906) $ Therefore, state intervention to reward society and the economy is futile!

New Business Culture: “The American Dream? ” 3. Protestant (Puritan) “Work Ethic” * Horatio Alger [100+ novels] Is the idea of the “self-made man” a MYTH? ?

New Type of Business Entities 1. Pool 1887 Interstate Commerce Act Interstate Commerce Commission created. 2. Trust John D. Rockefeller * Standard Oil Co.

Trust Holding Company

Standard Oil Co.

2009 World Robber Baron List Rank Name Citizenship Age Net Worth ($bil) Residence • • • • 1 William Gates III United States 53 40. 0 United States 2 Warren Buffett United States 78 37. 0 United States 3 Carlos Slim Helu & family Mexico 69 35. 0 Mexico 4 Lawrence Ellison United 64 22. 5 United States 5 Ingvar Kamprad & family Sweden 83 22. 0 Switzerland 6 Karl Albrecht Germany 89 21. 5 Germany 7 Mukesh Ambani India 51 19. 5 India 8 Lakshmi Mittal India 58 19. 3 United Kingdom 9 Theo Albrecht Germany 87 18. 8 Germany 10 Amancio Ortega Spain 73 18. 3 Spain 11 Jim Walton United States 61 17. 8 United States 12 Alice Walton United States 59 17. 6 United States 13 Christy Walton & family United States 54 17. 6 United States 14 S Robson Walton United States 65 17. 6 United States 15 Bernard Arnault France 60 16. 5 France

2. New Type of Business Entities Trust: * Horizontal Integration John D. Rockefeller, oil * Vertical Integration : A. Gustavus Swift Meat-packing B. Andrew Carnegie U. S. Steel C. James Duke tobacco

New Type of Business Entities

Industrial Consolidation: Iron & Steel Firms

New Financial Businessman The Broker: * J. Pierpont Morgan

Wall Street – 1867 & 1900

The Reorganization of Work Frederick W. Taylor The Principles of Scientific Management (1911)

The Reorganization of Work The Assembly Line

Robber Barons or Captains of Industry?

Wealth Concentration Held by Top 1% of Households (Rockefeller at his height was worth 1. 4 billion $, or 665 billion in today’s $, Gates worth 56 Billion)

% of Billionaires in 1900

% of Billionaires in 1918

William Vanderbilt $ The public be damned! $ What do I care about the law? H’aint I got the power?

Religion in the Era of Industrialization $ Wealth no longer looked upon as bad. $ Viewed as a sign of God’s approval, the Protestant (Puritan) Work Ethic $ Christian duty to accumulate wealth. Russell H. Conwell

The Gospel of Wealth: Andrew Carnegie $ “On Wealth, ” 1889 Andrew Carnegie article $ “Inequality is inevitable and good. $ Wealthy should act as “trustees” for their “poorer brethren. ” God given responsibility $ “The man who dies rich dies disgraced. ” $ Philanthropy, Gave away $350 Million

5 minute intro • http: //www. history. com/topics/andrewcarnegie/videos/the-men-who-built-americaandrew-carnegie

• http: //www. history. com/shows/men-who-builtamerica/season-1/episode-3 • Carengie Episode 3 • Rockefeller Episode 1, 25 minutes • Electricity Wars Episode 6

Philanthropy 1 st Carnegie library

Regulating the Trusts 1877 Munn. v. Illinois: Upheld granger laws (made it illegal for RR to fix prices by pools or rebates) for a state to regulate business of a public nature 1886 Wabash V. Illinois: overturned Munn, states could not regulate interstate commerce 1886 Interstate Commerce Act -Response to Wabash, said RR rates must be “reasonable and just” -Set up Interstate Commerce commission to regulate & prosecute RR’s -Helped RR’s more, stabilized rates, curtail destructive competition

Regulating Trusts 1890 Sherman Antitrust Act * Made trusts illegal and other acts of in “restraint of trade” * Hard to obtain convictions * First used against Labor Unions! 1895 US v. E. C. Knight Co. Sugar company controlled 95% of the market, yet was not ruled a monopoly because it was manufacturing, not commerce

U. S. Patents Granted 1790 s 276 patents issued. 1990 s 1, 119, 220 patents issued.