THE GILDED AGE: What does gilded mean? To be covered in gold…implies NOT solid gold

America in the Gilded Age Term coined by Mark Twain Vast wealth gained from industrialization Wealthy industrialists - “capitalists” (ROBBER BARONS) Carnegie, Rockefeller,Morgan, Vanderbilt

America in the Gilded Age Under the “Gild”: - Massive immigration - Expansion of industry following Civil War - Loss of skilled labor-rise of unskilled labor - Long hours, low wages, and dangerous working conditions - Expanding gap between rich and poor

trust: legal devices that controlled several, rival companies through one director Cartoon #1

What was the relationship between big business and government in the Gilded Age?

a company or group having exclusive control over a commodity or service Cartoon #2

Rise of Big Business: Growth and Consolidation $ $ $ VANDERBILT’S MILLIONS Cartoon #3 FIELD’S MILLIONS LUMBER WORKERS $6/WEEK CLOTH WORKERS AVERAGE $3/WEEK LINEN WORKERS Rise of Big Business: Growth and Consolidation

America Changes From artisan to factory From piecework to wage work From family farms to mechanized farms From water powered factories to coal From rural to urban

Business Changes Efficiency Assembly line production Mechanization Streamlined businesses - Created managers Made workers work faster (in a more dangerous work environment) Mechanization Machines replace workers (especially skilled workers) McCormick reaper Carnegie’s coal hauler

Innovation & Mechanization Steel Plow McCormick reaper Trains/Refrigerated train cars

By 1893, the US was the world’s leading industrial power, out-producing its 3 closest competitors combined.

Three Reasons for Growth: 1 Three Reasons for Growth: 1. Abundant resources: Iron, coal, minerals, etc 2. Government protection (High tariffs) 3. Loans/subsidies to businesses from the government

All trains MUST pass and PAY any toll we DEMAND. Railroads Cornelius Vanderbilt Made money from investors and state/national government Set prices and schedules Common track size and time zones Railroads began to see the need for uniformity to improve their business-Time zones were created ad track gauges were unified. All trains MUST pass and PAY any toll we DEMAND. Cartoon #4

Populist Party Emerged from beliefs that other political parties were corrupted by big business Often combined interests of farmers and laborers Platform: unlimited silver coinage Government control of railroads and tele- communications legal protection of labor unions Graduated income tax

Business Strategies Vertical Integration Buy the whole process of production and distribution Example: Carnegie owned coal mines, coke fields (iron), steel mills, trains, etc Horizontal Integration Buy all of the same level of business Example: Rockefeller bought up all oil refineries and consolidated them into the Standard Oil Corporation

Buy property/goods not to use but to sell later for a profit Lack of Regulation Buy property/goods not to use but to sell later for a profit Anyone with money was allowed to start a railroad - Created cartels or trusts Speculation and selling “watered stock” Horizontal Integration - were created to improve the organization of large businesses - were associated with abusive practices and often used their size to exclude competition

Cartoon #5

Banking Industry J.P. Morgan and Salmon P. Chase Stabilized the national economy Banks loaned people’s money out for interest

Oil Industry Cartoon #6 Oil refineries- making oil useful! 1870 - Standard Oil Company founded 1880 - Standard Oil owned 90% of oil refining in the U.S. Set prices and controlled output

Steel Industry Cartoon #7 Andrew Carnegie Rose up from poverty Used Bessemer Process to make steel in all factories Gospel of Wealth Salt Trust 1882-9/10 of nation’s steel went into rails and 1/4 of lumber Lumber Trust Sugar Trust Oil Trust Steel Trust

Business and Politics Cartoon #8 Spoils system still around Trusts and political machines control politics Massive corruption Kickbacks Cartoon #8

Cartoon #9

Some attempts at regulation: 1. Interstate Commerce Act (1887) -Created Interstate Commerce Commission 2. Sherman Anti-Trust Act-1890