1. An Industrial Society- Economic Growth during the Gilded Age (1877-1900)
APUSH:
KC D Many business leaders sought increased profits by consolidating corporations into large trusts and holding companies, which further concentrated wealth.  
KC A Some argued that laissez-faire policies and competition promoted economic growth in the long run, and they opposed government intervention during economic downturns.

2. Bell Ringer Post your inventions poster on the wall
In a gallery walk, choose the three inventions, other than your own, that you feel most impacted the culture and economy of the 19th century. Answer in your notebook why you feel they were so impactful for the Gilded Age.

3. Essential Question:
Should the great industrialists of the 19th Century be considered “captains of industry” or “robber barons”?

4. Brinkley, pp
What’s a corporation? Why did it emerge after the civil war as a type of business organization?
What is limited liability?
What is “middle management”?
What are some examples of consolidation?

5. Big Business during the Gilded Age
Between 1869 and 1899 the U.S. became the world’s leading economic power
the population tripled,
farm production doubled
value of manufacturing grew 6X
Entrepreneurs recognized growing markets and used techniques of mass production and distribution
These “captains of industry” or “robber barons” formed single companies that dominated an industry (monopolies) or joined forces with competitors to limit competition (trusts)
Poor working conditions, business tactics and “laissez faire” relationship that government had with business would cause the formation of an organized labor movement

6. U. S. Corporate Mergers

7. Factors promoting business Growth after the Civil War
Availability of natural resources
Labor shortage after war caused the invention of high speed, labor saving machinery
Railroads/internal improvements encouraged by federal government
“laissez faire”
High tariffs
Immigration/Cheap labor pool
Growth of Agricultural sector out west
Entrepreneurs/Inventors

8. U. S. Patents Granted 1790s  276 patents issued.

9. 2nd Industrial Revolution (Market Revolution)
Centered in U.S. and Germany
Involved 3 developments:
National transportation/communication network (National telegraph and railroad system; steamships; undersea telegraph cable connecting U.S. with Europe)
Use of Electric Power created industrial efficiency and urban growth (Electric trolleys and subways; production of steel and chemicals)
Applying Scientific Research to industrial process
Researches figured out how to refine kerosene and gasoline from crude oil (Edwin Drake)
Technique for refining steel from iron (Henry Bessemer)
New products (telephone, typewriter, adding machine, sewing machine, cameras, elevators, farm machinery)
All lowered consumer prices, which created a mass consumer culture

10. Entrepreneurs—Captains of Industry or “Robber Barons”
Cornelius “Commodore” Vanderbilt
Merged rail lines connecting Albany to Buffalo into a single powerful rail network to New York City
By 1873 he had connected lines to Chicago
When he died in 1877, his son William added 13,000 miles of line in Northeast

11. Entrepreneurs—Captains of Industry or “Robber Barons”
John D. Rockefeller
Obsessed with order, precision, tidiness
Opened Standard Oil Company of Ohio in 1870; within 6 weeks he had taken over 22 of his 26 competitors
By 1879 he controlled 90-95% of oil refining business in the U.S.
Became the world’s leading philanthropist; gave away $500 million by the time he died at the age of 98

14. Entrepreneurs—Captains of Industry or “Robber Barons”
James Buchanan Duke
Bull Durham cigarettes began in 1868 with Washington Duke
His son, James Buchanan Duke, took a chance on a new cigarette-making machine in 1870s
By the late 1880s, the Duke Company was producing 4 million cigarettes daily.
Next highest competitor had a daily output of 42,000 cigarettes
Noted for his marketing and advertising
After a "tobacco war" among the five principal manufacturers, Duke emerged as the president of the American Tobacco Company

15. Union and Confederate armies regularly traded tobacco for coffee and other goods throughout the Civil War, also without much preference for brand. The Bull Durham brand, though, grew out of an incident in Durham, North Carolina that occurred at the close of the war. Soldiers from both sides raided a farmer's tobacco crop as they waited for a surrender to be completed. After returning home, these same soldiers wrote back asking for more of this tobacco. The farmer, Mr. John Green, happily obliged; the tobacco was named Bull Durham in 1868 and later became the largest selling tobacco brand in the world.
After the Civil War, there was an increased demand for not only Bull Durham tobacco but for tobacco products in general. Cigarettes became popular in the middle of the century; however, since they, too, were hand-made, tobacco companies were limited in the amount that could be made and sold. The need for a cigarette-making machine became apparent, and in the 1870s, the Allen & Ginter company offered a cash prize to anyone who could come up with a viable cigarette-rolling machine. James Bonsack answered the call and patented his machine in Because it was not completely reliable, all but one of the large tobacco manufacturers declined to buy the machine. James Buchanan Duke, of W. Duke & Sons in Durham, took a chance on Bonsack's cigarette-making machine. By the late 1880s, the Duke Company was producing 4 million cigarettes daily. Contrast this with the daily output of 42,000 cigarettes by the Kimball tobacco factory in 1876.
The tobacco companies used trade cards (similar to business cards), tin tags and posters to advertise their products. Color lithography developed in the late 1870s, and businesses could now promote themselves with a variety of attractive colorful images, some having nothing at all to do with any of their products.
Taking advantage of the development of color, James B. Duke revealed his marketing talent with the creation of a whole new way of advertising tobacco and cigarettes. With each pack of cigarettes, a small cardboard insert was added to stiffen the box. Duke employed a little imagination and turned these simple work-horses into a powerful marketing tool by printing the brand name of the cigarettes along with a picture that was part of a larger series and which was meant to be collected. Series of birds, flags, Civil War generals, and baseball players were employed, frequently with historical or educational information on them. Photographs of "actresses" - women placed in a variety of poses and often rather revealing costumes for the time - also were used on the insert cards and exceeded all expectations in their popularity among the public. (A transcript of the letter from James B. Duke's father expressing his concerns about the use of actresses in advertising is available.)
Hundreds of these insert cards, along with posters, trade cards and other tobacco advertising items, are found on-line in this project. They are organized by the name of the tobacco company and then by the product advertised. The items seen on-line have been taken from three collections here at Duke: the W. Duke, Sons & Co. Papers, the Richard Harvey Wright Papers, and the Tobacco Collection. All illustrate the growth of tobacco and advertising from the late nineteenth to the early twentieth centuries.
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16. Entrepreneurs—Captains of Industry or “Robber Barons”
Benjamin Duke
1892-Buck Duke's older brother had launched the family into the textile business
need for water power led the Dukes into the hydroelectric generating business.
In 1905, they founded the Southern Power Company, now known as Duke Power, one of the companies making up Duke Energy, Inc.
Within two decades, this company was supplying electricity to more than 300 cotton mills and various other factories, electric lines, and cities and towns

17. American Tobacco Historic District, Durham NC

18. James B. Duke House, 5th Avenue, New York City

19. James Duke statue in front of Duke Chapel, Duke University

20. Marketing-Sears and Roebuck
Richard Sears and Alvah Roebuck began a mail order catalog by the 1890s
Purpose was to extend the reach of national commerce to the millions of people who lived in isolated areas
By 1900 there were 6 million Sears catalogs distributed a year; it was the most widely read book next to the Bible

21. Entrepreneurs—Captains of Industry or “Robber Barons”
Andrew Carnegie
Emigrated to the United States with his parents from Scotland in 1848
In 1850, Carnegie became a telegraph messenger boy at the age of 14 in the Pittsburgh Office of the Ohio Telegraph Company at $2.50 per week
By the 1860s had investments in railroads, railroad sleeping cars, bridges and oil

22. Andrew Carnegie-Monopoly
By 1873, he turned his attention to the steel industry; After the Civil War steel was cheap because of the Bessemer Process; Production increased and prices decreased
In 1860 the U.S. had produced 13,000 tons of steel; by 1880 the U.S. was producing 1.4 million tons
Built Pittsburgh's Carnegie Steel Company into a monopoly
Sold to J.P. Morgan in 1901 for $480 million, creating the U.S. Steel Corporation.
It was the first corporation in the world with a market capitalization over $1 billion.

24. Iron & Steel Production

25. New Type of Business Entities

26. Andrew Carnegie-Philanthropy
Devoted the remainder of his life to large-scale philanthropy
By 1911, Carnegie had given away over $43 million for the construction of 2811 libraries
The Carnegie Corporation of New York formed to give away $150 million.; has given large grants to the other Carnegie trusts as well as universities, colleges, schools

27. Andrew Carnegie-Philanthropy
The Carnegie Endowment for International Peace Founded in 1910 with $10 million, the Endowment is the oldest public policy institution in the United States concentrating on issues of war and peace.
He gave $2 million in 1901 to start the Carnegie Institute of Technology (CIT) at Pittsburgh now part of Carnegie Mellon University

28. Unequal distribution of Wealth
1% of the families in America controlled 88% of the nation’s wealth
Problems associated with this unequal distribution?

29. SAQ Document 1: Andrew Carnegie’s “Gospel of Wealth”
Document 2: Joseph Keppler’s “Bosses of the Senate”
Explain the point of view of Document 1.
Explain the point of view of Document 2.
Which of the points of view do you agree with more? Use your understanding of Gilded Age arguments for and/or against capitalism and industrial consolidation to answer this question.

30. Document 2

31. Gilded Age: Capitalism and its critics
Pro
“Self made man”-Myth or reality?
Social Darwinism
Herbert Spencer
William Graham Sumner
Gospel of Wealth
Russell Conwell “Acres of Diamonds”
Horatio Alger
Con
Lester Frank Ward
American Socialist Party
Henry George “Progress and Poverty”
Edward Bellamy

32. The Gospel of Wealth: Religion in the Era of Industrialization
Wealth no longer looked upon as bad.
Viewed as a sign of God’s approval.
Christian duty to accumulate wealth.
Russell H. Conwell

33. “On Wealth” The Anglo-Saxon race is superior.
“Gospel of Wealth” (1901).
Inequality is inevitable and good.
Wealthy should act as “trustees” for their “poorer brethren.”
Andrew Carnegie

34. Regulating the Trusts 1877  Munn. v. IL
1886  Wabash, St. Louis & Pacific Railroad Company v. IL
1890  Sherman Antitrust Act
in “restraint of trade”
“rule of reason” loophole
1895  US v. E. C. Knight Co.

35. The Men Who Made America
Watch the episode about one particular “captain of industry”.
Answer the guided questions as you view the episode.
Should this businessman be considered a “captain of industry” or a “robber baron”?