World Class Education www kean edu 1 Topic

World Class Education www. kean. edu

1 Topic 7 BIG BUSINESS AND THE GILDED AGE The New Industrial Order in The Post-Civil War Period

2 What encouraged the growth of industry and the rise of big corporations in America? � � � � Natural resources – iron and oil Fifth and Fourteenth Amendments Favorable state and federal Government policies Immigration – influx of cheap labor New sources of power – oil / electricity American inventions and innovations Improved transportation – regional and transcontinental railroads Giant corporations drive industrialization after the Civil War

3 Impact on American Economy � � � New industrial products – factory-made goods Improved standard of living begins Urban development Increased overseas trade / imperialism Problems of unregulated capitalism – monopolies and ruthless competition Great fortunes accumulated

The New Industrial System Big corporations begin to replace single-owner business / partnerships with limited capital Unfettered Competition Major investments in railroads, steel, oil, telegraph and telephone communications Corporations chartered to act as an “artificial legal person” Emergence of powerful corporate tycoons 4

5 Cornelius Vanderbilt Railroad empire begins 1869 New York to Chicago “What do I care for the law? Haven’t I got the Power? ”

6 John D. Rockefeller Oil empire Standard Oil Company of Ohio, 1870 90% of nation’s oil refineries Supreme Court limits Rockefeller monopoly

Andrew Carnegie Steel empire Carnegie Steel Company 1900 Iron ore deposits Railroads Steamships Steel mills The Gospel of Wealth the uses of wealth 7

8 J. Pierpont Morgan Finance – industrial consolidation US Steel Corporation American Telephone and Telegraph General Electric Northern Pacific RR

Others Industrialists Gustavus Swift – meatpacking Philip D. Armour – meatpacking Charles A. Pillsbury – flour milling James B. Duke – cigarette manufacturing Andrew Mellon – aluminum 9

10 “Captains of Industry” Created new industries Efficiency Order out of economic chaos Better services Improved quality of products America becomes an industrial giant Philanthropies – endowment of museums, universities, libraries or “Robber Barons” Exploitation of workers Corruption of government Greed Destruction of small producers Restraint of competition - monopolies Abuse of consumers Laissez faire economics

Workers respond to the New Industrial 11 Order Labor Strife and Unions Haymarket Affair, 1886 Homestead Steel Strike, 1892 Pullman Strike, 1894 Anthracite Coal Strike, 1902 Knights of Labor American Federation of Labor The Industrial Workers of the World Low pay Long hours Unsafe working conditions No minimum wage Employer lockouts

12 The Legacy of the Gilded Age “Mark Twain called the late 19 th century the "Gilded Age. " In the popular view, the late 19 th century was a period of greed and guile, when rapacious robber barons, unscrupulous speculators, and corporate buccaneers engaged in shady business practices and vulgar displays of wealth. It is easy to caricature the Gilded Age as an era of corruption, scandalplagued politics, conspicuous consumption, and unfettered capitalism. But it is more useful to think of this period as modern America's formative era, when the rules of modern politics and business practice were just beginning to be written. ” from www. digitalhistory. uh. edu

13 Selected Readings � Charles R. Morris, The Tycoons: How Andrew Carnegie, John D. Rockefeller, Jay Gould, and J. P. Morgan Invented the American Supereconomy � Matthew Josephson, The Robber Barons: The Great American Capitalists, 1861– 1901 � Leon Litwack, The American Labor Movement