Gilded Age America A brief look at America life in the late 1800s (to refresh your memory or bring you up to speed!) The G Word, explained. End of Civil War-Early 1900s The term was coined by Mark Twain in his 1873 book of the same name Gilded: based on pretense; deceptively pleasing; covered with a thin layer of gold Why was this name chosen? Characteristics of The Gilded Age A period of incredibly rapid industrialization and the growth of incredible wealth Population growth, immigration, urbanization, and incredible poverty New natural resources: oil, iron ore, etc. Laissez faire economics: hands off Protectionism and high tariffs to encourage the growth of business Political corruption at all levels Social Darwinism: competition and survival of the fittest was the philosophy of the day Rise of Industry At the time of the Civil War, the typical American business was small and family- owned By 1900, giant limited liability joint stock corporations were the model: mass- production, national and international markets Americans transitioned from being self- employed to being wage earners (2/3 of the population by 1900) Rise of Industry (cont.) Capital invested in manufacturing rose from $1 billion to $10 billion The number of industrial workers grew from 1,300,000 to 5,300,000 Industrial output rose from less than $2 billion to more than $13 billion America went from the number 5 industrial power in the world to the number 1 industrial power in the world by 1894 New corporate practices Horizontal integration: gain control of the market for a single product John D. Rockefeller created the Standard Oil Trust, made up of 40 companies By 1880, he controlled 90% of the oil refining industry Vertical integration: control production at every step of the way Raw materials, Processing, Transport, Distribution Corporate mergers, combinations, and consolidation lead to trusts and monopolies; gentlemens agreements Other famous American companies you may know from this era! Goodyear, General Electric, Westinghouse, Nabisco, Armour, Quaker Oats, Proctor and Gamble, Eastman-Kodak, Heinz, Campbell Soup, Pabst Brewery, Borden Milk Chain stores: A&P, Woolworths Department stores:Marshall Fields-Chicago, Filenes-Boston, Macys-New York Mail order stores: Sears, Montgomery Ward Business Tycoons/Go-Getters or Robber Barons? Carnegi e RockefellerMorgan Gould Vanderbilt Transcontinental Railroad Completed in 1869 Four more lines added in 1880s and 90s Supported by government subsidies Linked cities in every state into a nationwide market Made it easier for industry to acquire raw materials 193,000 miles by 1900 Inventors and new technologies change the world Bessemer steel process-> skyscrapers and many other innovations Coal-fired steam engines (1880s) Alexander Graham Bell (1876): telephone Thomas Edison (1879): light bulb and electricity Oil refining: John D Rockefeller Henry Ford: internal combustion engine Transatlantic telegraph cable Cash register 440,000 patents from ; before 1860, only 36,000! More inventions The invention of single gauge track, the modern locomotive, and the Westinghouse Air Brake, which revolutionized the railroad industry. The invention of new agricultural machinery which revolutionized agriculturethe McCormick Reaper, the John Deere Plow The packaging of cereals, the canning of goods, the Kodak camera, the typewriter, the cigarette rolling machine affected the lives of millions Mechanization Factories switched from water power to steam power in the 1880s Cheap and readily available coal Frederick Winslow Taylor: scientific management: assembly lines, machines, and unskilled workers Taylorism and assembly lines: Meat packers were among the first! Mail-order stores Railroad freight rates drop, postal service expands Chicago-based companies: Sears and Roebuck, Montgomery Ward Shoes, buggies, gas stoves, remedies, Armour sausage, Aunt Jemimas pancake flour, etc. Chain stores Economies of scale A&P: Atlantic and Pacific Tea Company (groceries) Woolworths (Five and dime stores) Urban Department Stores Marshall Fields- Chicago Filenes-Boston Macys-New York The Gospel of Wealth 90% of business leaders were Protestant Christians God gave me my money. -John D. Rockefeller Some tycoons used religion to justify their ruthless behavior (Gould); others donated their fortunes (Carnegie) Social responsibility; private wealth is the trust fund of the community (Carnegie) The result: Incredible economic growth and incredible corruption 7% growth in production per year! Retail sales: $8 million in 1860 $102 million in 1900 Laissez-faire government and corrupt political machines Corrupt business practices: pools, price- fixing, trusts, monopolies No laws or regulations to stop corrupt business practices, protect workers, or the environment! What aboutthe workers? Migration of people from rural areas to urban areas, from South to North 14 million new immigrants: ; more Catholics and Jews, especially post 1890 Unsafe, unhealthy, and dangerous jobs Frequent periods of unemployment due to booms and busts (Depressions of , , etc.) Growth of labor unions Labor Unions Emerge National Labor Union (1866): 300,000 members Knights of Labor (1869): fights for the eight hour workday; accepted all workers American Federation of Labor (1886): craft unions only; 10% of the population Labor Day, 1894 IWW: International Workers of the World The danger of the working class? Violence, strikes, unrest? Socialism: public control over means of production Anarchism: abolition of government; a system based on cooperation and sharing Railroad Strike of 1877, Haymarket Riot of 1886, Homestead Strike of 1892, Pullman Strike of 1894 Essential Questions to consider Are capitalism and democracy fundamentally at odds? Should the iconic businessmen of this era be considered captains of industry or robber barons? Do we live in a modern Gilded Age? We will take up these questions on Monday!