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Unit II Notes: The Gilded Age and Industrialization 1877-1909.

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Presentation on theme: "Unit II Notes: The Gilded Age and Industrialization 1877-1909."— Presentation transcript:

1 Unit II Notes: The Gilded Age and Industrialization

2 What do we mean by the term “Gilded Age”? Time period from Characterized by rapid industrialization Entrepreneurial expansion Efficiencies in production = lower prices and more affordable goods Rise of corporations Huge profits made owners “instant” millionaires Industrialists amassed enormous wealth and created a lavish lifestyle for themselves

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9 Factors from the Civil War that Lead to Economic Growth in America Steam Power – Replaced human and animal power in agriculture and factories – Needed coal or wood to create steam – Used in transportation Trains Steamboats

10 The Bessemer Process (steel) Made production of steel more economical Could now make 5 tons of steel in 15 minutes instead of 12 hours

11 Coal Main source of fuel in America Production increased from 14 million tons in 1860 to 100 million tons in 1884

12 Refining Petroleum First oil well drilled 1859 PA Used to make kerosene for lighting Used for machine lubrication Will later be refined into gasoline for cars and planes

13 Internal Combustion Engine Fuel is burned to turn propellers or turbines

14 Commercial Use of Electricity First used to relay messages along telegraph wires

15 Inventors Alexander Graham Bell Created the telephone in 1876 Increased the speed of communication

16 Thomas A. Edison Patented the light bulb in 1880 Increased factory hours and efficiency First filaments were bamboo; replaced with tungsten

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20 Elisha Otis Created the passenger elevator in 1852 Allowed for the construction of sky scrappers Safety device that prevented elevator accidents

21 Elias Howe Invented the sewing machine in 1846 Shortened time for clothing production Improved quality of clothing Clothing became cheaper

22 Christopher Sholes Created QWERTY typewriter in 1867 Improved and sped up communication Sold patent to Remington Arms; mass production began in 1881

23 The Wright Brothers Wilber and Orville were bicycle shop owners Tried to make bike into flying machine * created first successful plane Dec. 17, 1903 flew for 12 seconds; traveled 120 feet in Kitty Hawk, NC

24 Cyrus McCormick Invented mechanical reaper Improved speed of harvesting grains (wheat, corn, oats) Increased farm production Decreased price of bread, cereal, etc…

25 Free Enterprise System Economic system in which people have the freedom to: – Produce what they wish – Sell what they wish at the price of their choice – Buy whatever they can afford

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27 Free Enterprise/Capitalism Right to private property Profit Motive Economic Freedom

28 Entrepreneur A person who starts a business is the hope of making a profit One who invests capital hoping to make a profit

29 “Captains of Industry” Entrepreneurs of the Gilded Age Forged the modern industrial economy of the US Created enormous wealth for themselves Lived lavish lifestyles

30 Andrew Carnegie Came to US from Scotland 1848 at age of 13 Worked in Pittsburg cotton mill as a boy Telegraph operator for Penn. RR Promoted to RR Superintendent at 30 Invested in oil and iron 1870’s went into steel business Founded Carnegie Steel in 1892

31 Andrew Carnegie Under cut his competitors prices to drive them out of business Bought his own coal mines, iron ore fields, and shipping lines to control production prices and supply Paid workers low wages and forced them to work 12 hour shifts Crushed attempts to unionize

32 Carnegie Sold Carnegie Steel to JP Morgan in 1901 for $480 million Spent the rest of his life in philanthropy Built libraries, museums, and universities Gave away $350 million

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37 John D. Rockefeller Born in New York to working class family Studies book keeping in school Went into business selling fruits and vegetables Invested his money in an oil refinery in Cleveland Made kerosene and lubricants In 1870 formed Standard Oil of Ohio By 1879, he controlled 90% of the refining in the US

38 Rockefeller Standard Oil became a monopoly or trust He forced competitors out Forced railroads to give him better rates In 1892, the government split up his company into 20 He remained the major shareholder of all 20 He gave away millions to education and science He founded the University of Chicago and Rockefeller Foundation

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44 Henry Ford Born in Dearborn, Michigan Lived on farm until 16 Apprenticed as a machinist in Detroit Hired as Edison Electric In 1896 created his first plans for a car; called the Ford Quadricycle (electric powered) In 1903 he formed Ford Motors Co.

45 Ford 1908 introduced the Model T 1914 introduced the assembly line Introduced the $5/day wage (equivalent to $110 today) By 1918, 50% of all cars in the US were Model T’s His revolutionary vision was to create a cheap, reliable, car build by skilled, loyal workers Introduced profit-sharing to employees who stayed at least 6 months

46 Ford Radical Ideas: Required that his employees maintain a “proper” lifestyle. Pacifist; opposed WWI Anti-Semite

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49 Henry Form Museum

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53 Cornelius Vanderbilt Born 1794 Staten Island, NY Grew up poor; parents illiterate Dad worked as a seaman One of 8 children Dropped out of school at 11 to work w/ his dad Invested $ in a sailboat; built a business ferrying goods around New York Harbor

54 Vanderbilt 1917 started steamboat business By 1840’s had 100+ ships Was called Commodore Vanderbilt by his contemporaries 1860’s invested in NY rail lines By 1870’s he owned RR’s in NY, Chicago, and to the west At his death, he had accumulated the largest wealth of any person in US history $ 100,000,000 estate was left primarily to his oldest son (Henry); other 12 children got $2 million each

55 Vanderbilt In todays $, his estate would be worth $143 billion Left $1 million to build Vanderbilt University

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57 Famous Descendants Gloria Vanderbilt, clothing designer Anderson Cooper, CNN news anchor

58 J. P. Morgan (John Pierpont) Born in 1837 in Hartford, CT. Son of a banker Went into family business In 1871 built his own finance company; JP Morgan & Co. Dominated banking and finance in the US Family business still in operation (Chase)

59 J.P. Morgan Created several monopolies – U.S. Steel (world’s largest steel manufacturer) – Consolidated Railways (controlled rail systems on the east coast)

60 J.P. Morgan Ardent sailor; won several World Cup races Avid art collector; his collection was donated to the Met in NYC Avid book collector; his books are found in the Morgan Library in NYC Married twice; first wife dies 5 months after wedding Four children; 1 son, 3 daughters

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62 J.P. Morgan One of America’s leading businessmen Helped to create the modern banking system His consolidation of rail systems helped to standardize railroads

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67 Monopolies A monopoly occurs when one company or group owns all or nearly all of a product or service Rockefeller was accused of having a monopoly since he controlled 90% of the oil refineries in the late 1800s Monopolies usually hurt the consumer because of a lack of competition, which can lead to poor products

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69 How Monopolies Formed Horizontal Integration – When companies acquire rival companies’ property Example – AT&T tried to merge with T Mobile Example – Rockefeller bought out his competition and then took over their refineries

70 How Monopolies Formed Vertical Integration – When a company takes control of the entire production and distribution of a product Example – Carnegie took control of the iron mines, he owned the trade routes between the mines and the mills, and the steel mills themselves

71 Comparing Horizontal and Vertical Integrations

72 Consolidating Businesses often consolidate, or to shrink, their facilities to save costs. If they can remove “X” amount of employees or steps in a manufacturing process, they can increase their profits. Example: Rockefeller merged with his competitors to consolidate the oil industry


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