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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
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