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

Carnegie, Rockefeller,Morgan, Vanderbilt

Wealthy industrialists - “capitalists”(ROBBER BARONS)

America in the Gilded Age

Under the “Gild”:- Massive immigration

- Long hours, low wages, and dangerous working conditions- Expanding gap between rich and poor

- Expansion of industry following Civil War

- Loss of skilled labor-rise of unskilled labor

trusttrust: legal devices : legal devices that controlled that controlled several, rival several, rival

companies through companies through one directorone director

trusttrust: legal devices : legal devices that controlled that controlled several, rival several, rival

companies through companies through one directorone director

Cartoon #1

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

Cartoon #2

a company or a company or group having group having

exclusive exclusive control over a control over a commodity or commodity or

serviceservice

a company or a company or group having group having

exclusive exclusive control over a control over a commodity or commodity or

serviceservice

Rise of Big Business:Growth and

Consolidation

$$$

LINENWORKER

S

LUMBERWORKER

S$6/WEEK

FIELD’SMILLION

S

VANDERBILT’S

MILLIONSCartoon #3 CLOTH

WORKERS

AVERAGE$3/WEEK

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 ChangesEfficiency

• Assembly line production

• 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. Abundant resources: Iron,

coal, minerals, etc

2. Government protection

(High tariffs)

3. Loans/subsidies to

businesses from the

government

Railroads

•Cornelius Vanderbilt

•Made money from investors and state/national government

• Set prices and schedules

•Common track size and time zones

Cartoon #4

All trains MUST All trains MUST pass and PAY pass and PAY any toll we any toll we DEMAND.DEMAND.

All trains MUST All trains MUST pass and PAY pass and PAY any toll we any toll we DEMAND.DEMAND.

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 StrategiesHorizontal Integration

• Buy all of the same level of business

• Example: Rockefeller bought up all oil refineries and consolidated them into the Standard Oil Corporation

Vertical Integration

• Buy the whole process of production and distribution

• Example: Carnegie owned coal mines, coke fields (iron), steel mills, trains, etc

Lack of Regulation

• Anyone with money was allowed to start a railroad - Created cartels or trusts

• Speculation and selling “watered stock”

•Horizontal Integration

- were created to - were created to improve the improve the organization of large organization of large businessesbusinesses- were associated - were associated with abusive with abusive practices and often practices and often used their size to used their size to exclude competitionexclude competition

- were created to - were created to improve the improve the organization of large organization of large businessesbusinesses- were associated - were associated with abusive with abusive practices and often practices and often used their size to used their size to exclude competitionexclude competition

Buy Buy property/goodproperty/goods not to use s not to use but to sell but to sell later for a later for a

profitprofit

Buy Buy property/goodproperty/goods not to use s not to use but to sell but to sell later for a later for a

profitprofit

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

•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

Cartoon #6

Steel Industry

• Andrew Carnegie

•Rose up from poverty

•Used Bessemer Process to make steel in all factories

•Gospel of Wealth

Oil Trust

Salt Trust

Lumber

Trust Sugar

Trust

Steel

Trust

Cartoon #7

Business and Politics• 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 CommerceCommission

2. Sherman Anti-Trust Act-1890