The Gilded Age & The Progressive Era

American History II- 11th Grade

Resources:

Monopolists Readings & Chart (see pages 4-8)

Political Cartoons (see pages 9-11)

The Gospel of Wealth Guided Reading (see page 12)

The Rise of the Cities Guided Reading (see page 13)

Census Records for 1890 & 1900 (see pages 14-15)

Growth of the Cities Guided Reading (see pages 16-17)

Urban Life Pictures (see pages 18-22)

Progressive Reform and Trusts Guided Reading (see page 23-24)

Captain of Industry or Robber Barons Resume Rubric (see page 25)

Common Core State Standards:

RH.11-12.2: Evaluate authors differing points of view on the same historical event or issue by assessing the authors claims, reasoning, and evidence.

RH.11-12.6: Evaluate authors differing points of view on the same historical event or issue by assessing the authors claims, reasoning, and evidence.

RH.11-12.7: 7. Integrate and evaluate multiple sources of information presented in diverse formats and media (e.g., visually, quantitatively, as well as in words) in order to address a question or solve a problem.

RH.11-12.9: Integrate information from diverse sources, both primary and secondary, into a coherent understanding of an idea or event, noting discrepancies among sources.

WHST.11-12.4: Produce clear and coherent writing in which the development, organization, and style are appropriate to task, purpose, and audience.

WHST.11-12.9: Draw evidence from informational texts to support analysis, reflection, and research.

North Carolina Essential Standards

AH2.H.4.1: Analyze the political issues and conflicts that impacted the United States since Reconstruction and the compromises that resulted.

AH2.H.8.1: Analyze the relationship between innovation, economic development, progress and various perceptions of the American Dream since Reconstruction.

Essential Questions:

Should the government regulate business closely?

Was the Progressive Movement warranted?

Step 1

Divide primary resource assignments into centers. Assign students to small groups, which will rotate through the centers. (For a large class size, the assignments for some centers can be divided.)

Center A: Monopolists Readings & Chart (pg. 4-8)

With your group, please read the descriptions about each monopolist and complete the chart.

Discuss the individual monopolists and determine if they are captains of industry or robber barons. Be able to back up your opinions.

Remember, captains of industry portray them as champion monopolists and glorifies their business tactics, while robber barons holds a negative connotation.

Center B: Political Cartoons (pg. 9-11)

With your group, discuss the 4 political cartoons. Jot down things that you notice, interpretations, questions.

Answer the following questions

To what extend do the cartoons indicate the artists concerns for workers?

How effective was it for the artists to depict Standard Oil as an octopus? To title the 2nd cartoon The Protectors of Our Industries? To depict the monopolists in the Senate as money bags? To compare the monopolists of the Gilded Age to those of the French Revolution?

Center C: The Gospel of Wealth Guided Readings (pg. 12)

In your group, read the excerpts and quotes and respond to the 4 questions. Be sure you are discussing with your group.

How can this activity be used to answer the essential questions?

Center D: The Rise of the Cities: Guided Readings (pg. 13)

Within your group, discuss the readings from key reformers during the Gilded Age.

Answer the 2 discussion questions.

How do these 4 readings relate to the materials we have been discussing?

HINT: The Gospel of Wealth & the idea of philanthropy focuses on what?

Center E: Census Records for 1890 & 1900 and Growth of the Cities Guided Reading (pg. 14-17)

What conclusions can you come to using these census records for population and death rates in the cities?

Use the Growth of the Cities to supplement the Census records.

What can you gather about government regulations (at all levels) about living and working conditions, especially working conditions?

Why would the government be hesitant to making laws on working conditions?

Center F: Urban Life Pictures (pg. 18-22)

As you are looking at the five pictures with your group, think about the following questions:

What observations can you make about these conditions?

How could big business and government provide assistance to these situations pictured?

Can you come to any additional conclusions from the census results after seeing these images?

Step 2

Gather as a whole class to conclude with discussion. Possible discussion questions.

Were big business leaders captains of industry or robber barons?

Should business be allowed to combine & reduce competition?

Should the government regulate business closely?

Was the Progressive Movement warranted?

Intervention

Intentionally group students with mixed readiness levels, so that they can scaffold one another.

Extension 1: Was the Progressive Movement Warranted?

With your group, read the 9 excerpts on Progressive reform and the monopolies. Answer the three discussion questions. (Pg. 23-24)

In paragraph form, respond to the essential question in the header: Was the Progressive Movement warranted? (Explain)

Extension 2: Captains of Industry or Robber Barons?

Individually, you will pick one of the monopolists discussed today in class to back up your opinion of whether they are a captain of industry or robber baron.

Use the rubric to assess. (Pg. 25)

Andrew Carnegie

Andrew Carnegie was a Scottish-born industrialist, businessman, and a major philanthropist. He was an immigrant as a child with his parents. He built Pittsburgh's Carnegie Steel Company, which was later merged with Elbert H. Gary's Federal Steel Company and several smaller companies to create U.S. Steel. With the fortune he made from business, he turned to philanthropy and interests in education, founding the Carnegie Corporation of New York, Carnegie Endowment for International Peace, and Carnegie Mellon University in Pittsburgh.

While Carnegie paid his employees the low wagestypical of the time, he later gave away most of his money tofund the establishment of many libraries, schools, anduniversities in America, the United Kingdom and othercountries, as well as a pension fund for former employees.He is often regarded as the second richest man in history. Carnegie started as a telegrapher and by the 1860s had investments in railroads, railroad sleeping cars, bridges and oil derricks. He built further wealth as a bond salesman raising money for American enterprise in Europe.

Steel was where he made his fortune. In the 1870s, he founded the Carnegie Steel Company, a step which cemented his name as one of the Captains of Industry. By the 1890s, the company was the largest and most profitable industrial enterprise in the world. Carnegie sold it to J.P. Morgan in 1901, who created US Steel. Carnegie devoted the remainder of his life to large-scale philanthropy, with special emphasis on local libraries, world peace, and education and scientific research.

Carnegie made his fortune in the steel industry, controlling the most extensive integrated iron and steel operations ever owned by an individual in the United States. One of his two great innovations was in the cheap and efficient mass production of steel rails for railroad lines. The second was in his vertical integration of all suppliers of raw materials. In the late 1880s, Carnegie Steel was the largest manufacturer of pig iron, steel rails, and coke in the world, with a capacity to produce approximately 2,000 tons of pig metal per day. In 1888, Carnegie bought the rival Homestead Steel Works, which included an extensive plant served by tributary coal and iron fields, a 425-mile (685 km) long railway, and a line of lake steamships. Carnegie combined his assets and those of his associates in 1892 with the launching of the Carnegie Steel Company.

By 1889, the U.S. output of steel exceeded that of the UK, and Carnegie owned a large part of it. Carnegie's empire grew to include the J. Edgar Thomson Steel Works, (named for John Edgar Thomson, Carnegie's former boss and president of the Pennsylvania Railroad), Pittsburgh Bessemer Steel Works, the Lucy Furnaces, the Union Iron Mills, the Union Mill (Wilson, Walker & County), the Keystone Bridge Works, the Hartman Steel Works, the Frick Coke Company, and the Scotia ore mines. Carnegie, through Keystone, supplied the steel for and owned shares in the landmark Eads Bridge project across the Mississippi River at St. Louis, Missouri (completed 1874). This project was an important proof-of-concept for steel technology, which marked the opening of a new steel market.

In 1901, Carnegie was 66 years old and considering retirement. He reformed his enterprises into conventional joint stock corporations as preparation to this end. John Pierpont Morgan was a banker and perhaps America's most important financial deal maker. He had observed how efficiently Carnegie produced profit. He envisioned an integrated steel industry that would cut costs, lower prices to consumers and raise wages to workers. To this end, he needed to buy out Carnegie and several other major producers and integrate them into one company, thereby eliminating duplication and waste. He concluded negotiations on 2 March 1901, and formed the United States Steel Corporation. It was the first corporation in the world with a market capitalization in excess of $1 billion.

Carnegie spent his last years as a philanthropist. From 1901 forward, public attention was turned from the shrewd business acumen which had enabled Carnegie to accumulate such a fortune, to the public-spirited way in which he devoted himself to utilizing it on philanthropic projects. He had written about his views on social subjects and the responsibilities of great wealth in Triumphant Democracy (1886) and Gospel of Wealth (1889).

Among his many philanthropic efforts, the establishment of public libraries throughout the United States, the United Kingdom, and other English-speaking countries was especially prominent. Carnegie libraries, as they were commonly called, were built in many places. His method was to build and equip, but only on condition that the local authority matched that by providing a site and operating maintenance. To secure local interest, in 1885, he gave $500,000 to Pittsburgh for a public library, and in 1886, he gave $250,000 to Allegheny City for a music hall and library; and $250,000 to Edinburgh, Scotland, for a free library. In total Carnegie funded some 3,000 libraries, located in 47 states. Carnegie also built libraries in Canada and overseas in the United Kingdom including the Republic of Ireland, Australia, New Zealand, the West Indies, and Fiji. He also donated 50,000 to help set up the University of Birmingham in 1899. The Broome County Public Library in New York opened in October 1904. Originally called the Binghamton Public Library, it was created with a gift of $75,000 from Andrew Carnegie. The building was designed to serve as both a public library and a community center.

He gave $2 million in 1901 to start the Carnegie Institute of Technology (CIT) at Pittsburgh, and the same amount in 1902 to found the Carnegie Institution at Washington, D.C. He later contributed more to these and other schools. CIT is now part of Carnegie Mellon University. Carnegie served on the Board of Cornell University.

His interest in music led him to fund construction of 7,000 church organs. He built and owned Carnegie Hall in New York City.

Gustavus Swift

Gustavus Swift founded a meat-packing empire in the Midwest during the late 19th century, over which he presided until his death. He is credited with the development of the first practical ice-cooled railroad car which allowed his company to ship dressed meats to all parts of the country and even abroad, which ushered in the "era of cheap beef." Swift pioneered the use of animal by-products for the manufacture of soap, glue, fertilizer, various types of sundries, and even medical products.

Swift donated large sums of money to suchinstitutions as the University of Chicago, the MethodistEpiscopal Church, and the Young Men's ChristianAssociation (YMCA). He established NorthwesternUniversity's "School of Oratory" in memory of his daughter, Annie May Swift, who died while attending the school. When he died in 1903, his company was valued at between US$125 million and $135 million, and had a workforce that was more than 21,000 strong. "The House of Swift" slaughtered as many as two million cattle, four million hogs, and two million sheep a year. Three years after his death, the value of the company's capital stock topped $250 million. He and his family are interred in a mausoleum in Mount Hope Cemetery in Chicago, Illinois.

Following the end of the American Civil War, Chicago emerged as a major railway center, making it an ideal point for the distribution of livestock raised on the Great Plains to Eastern markets. Getting the animals to market required herds to be driven distances of up to twelve hundred miles to railheads in Kansas City, MO, whereupon they were loaded into specialized stock cars and transported live (on the hoof) to regional processing centers. Driving cattle across the plains also led to tremendous weight loss, and a number of animals were typically lost along the way. Upon arrival at the local processing facility, livestock were either slaughtered by wholesalers and delivered fresh to nearby butcher shops for retail sale, smoked, or packed for shipment in barrels of salt.

Certain costly inefficiencies were inherent in the process of transporting live animals by rail, particularly due to the fact that some sixty percent of the animal's mass is composed of inedible matter. Many animals weakened by the long drive died in transit, further increasing the per-unit shipping cost. Swift's ultimate solution to these problems was to devise a method to ship dressed meats from his packing plant in Chicago to the East.

In 1878, Swift hired an engineer to design a refrigerated boxcar that was well- insulated, and positioned the ice in a compartment at the top of the car, allowing the chilled air to flow naturally downward. The design proved to be a practical solution to providing temperature-controlled carriage of dressed meats, and allowed Swift & Company to ship their products all over the United States, and even internationally, and in doing so radically altered the meat business. Swift's attempts to sell this design to the major railroads were unanimously rebuffed as the companies feared that they would jeopardize their considerable investments in stock cars and animal pens if refrigerated meat transport gained wide acceptance. In response, Swift financed the initial production run on his own, then when the American roads refused his business he contracted with the GTR (a railroad that derived little income from transporting live cattle). In 1880 the Swift Refrigerator Line (SRL) was created. Within a year the Lines roster had risen to nearly 200 units, and Swift was transporting an average of 3,000 carcasses a week to Boston. Competing firms such as Armour and Company quickly followed suit. By 1920 the SRL owned and operated 7,000 of the ice-cooled rail cars. The General American Transportation Corporation would assume ownership of the line in 1930.

Everything but the Squeal

In response to public outcries to reduce the amount of pollutants generated by his packing plants, Swift sought innovative ways to use previously discarded portions of the animals his company butchered. This practice led to the wide scale commercial production of such diverse products as oleomargarine, soap, glue, fertilizer, hairbrushes, buttons, knife handles, and pharmaceutical preparations such as pepsin and insulin. Low-grade meats were canned in products like pork and beans.

The absence of federal inspection led to abuses. Sausages might incorporate rat droppings, dead rodents, or sawdust, and meat that had spoiled or meat mixed with waste materials was sometimes packed and sold (Swift once bragged that his slaughterhouses had become so sophisticated that they used "everything but the squeal"). Transgressions such as these were first documented in Upton Sinclair's novel The Jungle, the publication of which shocked the nation and led to the passing of the Federal Meat Inspection Act of 1906.

The meat packing plants of Chicago were among the first to utilize assembly-line (or in this case, disassembly-line) production techniques. These practices symbolize the concept of "rationalized organization of work" to this day.

Swift adapted the methods of the industrial revolution to meat packing operations, which resulted in huge efficiencies by allowing his plants to produce at a massive scale. The work was divided into myriad specific sub-tasks, which were carried out under the direction of supervisory personnel. Swift & Co. was broken down organizationally into various divisions, each one responsible for conducting a different aspect of the business of "bringing meat from the ranch to the consumer". By developing a vertically integrated company, Swift was able to control the sale of his meats from the slaughterhouse to the local butcher shop.

The innovations that Swift championed not only revolutionized the meat packing industry, but also played a vital role in establishing the modern American business system, with an emphasis on mass production, functional specialization, managerial expertise, national distribution networks, and adaptation to technological innovation.

Jay Gould

Jason "Jay" Gould was an American speculator who became one of the most important railroad leaders and stock traders of his day and was notorious for his lack of scruple. He was born Jason Gould in Roxbury, N. Y., on May 27, 1836, and grew up in poverty on his father's farm. With little education, he began work early as a clerk, a blacksmith, and then a surveyor. He started a tannery in Pennsylvania and for a few years was a leather merchant in New York City.

Erie Railroad. Gould moved into railroadspeculation, investing in small lines until 1867, when hebecame a director of the Erie Railroad, a major Easterntrunk line. Preferring to manipulate the securities of a firmfrom the inside, as part of its management, rather thanranging at large over the stock market, he joined DanielDrew, the treasurer, and James Fisk, another director, in a scandalous operation in Erie stock. Commodore Cornelius Vanderbilt, president of the New York Central Railroad, wanted control of the Erie, and to prevent this the trio released on the market a total of 100,000 illegal new shares, half of them in defiance of a court injunction against the issue of new stock. Making millions on the transaction, they fled headquarters in New York City and went to Jersey City, N.J., with the corporate records and set up company offices there. Gould then bribed the New York legislators to authorize the new shares and forbid consolidation of the Erie with Vanderbilt's line. An agreement was reached with Vanderbilt in 1868, and Gould emerged in control as president, with Fisk a director and Drew retired.

Joined on the board of directors by William Tweed, the head of the Tammany ring in New York City politics, Gould and Fisk speculated unscrupulously in Erie stock, selling large amounts of fraudulent shares without regard for sound management of the line. Gould also raided other stocks. He was particularly daring in his attempt to corner the gold market in September 1869. He failed, but the "Black Friday" panic of Sept. 24, 1869, that he caused aroused a public outcry and deepened popular hostility. In 1872 Gould was ousted from his position in the Erie. He left the railroad in chaotic condition.

Having made a huge fortune, Gould turned to investing in Western railroads. About this time Russell Sage and Sidney Dillon became his close and permanent business associates. Through them and a group of lesser associates Gould stretched his own funds over many properties, often as minority holdings, and thus expanded his control. He began buying into the Union Pacific Railroad, became a director in 1874, and maintained predominant influence until 1884. The stock was cheap both because of the panic of 1873 and because of the poor condition of the line. In 1879 he sold most of his huge Union Pacific holdings after driving up the price by exuberant reports of its improved financial state, making an enormous profit.

Gould reached the peak of his career in 1881, when he controlled more railroad mileage than any other individual or group of people. These holdings brought him into frequent rate wars with other railroad systems. His aggressive policy of reducing rates

and building extensions of his lines disturbed the relative stability achieved by the railroad industry in the 1870s. His roads invaded territorial monopolies, and all efforts to end the devastating rate wars that reduced railroad revenues proved short-lived at best. Ironically, while public service was not his concern, it can be argued that Gould's rate cutting aided the shippers and paved the way for lower railroad costs and greater efficiency, since the lower rates were far-reaching and permanent. On the other hand, his lines were undermaintained and provided bad service. Nor did he introduce any new technical improvements. In the panic of 18841885 he lost heavily, and narrowly escaped bankruptcy. His railroad empire was reduced essentially to the Missouri Pacific system.

In all, Gould was a masterful manager of speculative capital, endowed with a cold-blooded lack of scruple that enabled him to take full advantage of the underdeveloped state of corporation law and the low level of political morality in his time. He lived in luxury, with a yacht and an estate at Irvington-on-Hudson, N. Y. A small, slight man, he was calm and soft-spoken. He died in New York City on Dec. 2, 1892, leaving a fortune estimated at $77 million mostly to his son George Jay Gould.

John D. Rockefeller

John D. Rockefeller was an American industrialist and philanthropist. Rockefeller revolutionized the petroleum industry and defined the structure of modern philanthropy. In 1870, he founded the Standard Oil Company and ran it until he officially retired in 1897. Rockefeller kept his stock and as gasoline grew in importance, his wealth soared and he became the world's richest man and first American billionaire, and is often regarded as the richest person in history.

Standard Oil was convicted in Federal Court of monopolistic practices and broken up in 1911. Rockefeller spent the last 40 years of his life in retirement. His fortune was mainly used to create the modern systematic approach of targeted philanthropy with foundations that had a major effect on medicine, education, and scientific research. His foundations pioneered the development of medical research, and were instrumental in the eradication of hookworm and yellow fever. He is also the founder of both The University of Chicago and Rockefeller University. He was a devoted Northern Baptist and supported many church-based institutions throughout his life. Rockefeller adhered to total abstinence from alcohol and tobacco throughout his life.

Standard Oil

In January 1870, Rockefeller formed Standard Oil of Ohio, which rapidly became the most profitable refiner in Cleveland. When it was found that at least part of Standard Oil's cost advantage came from secret rebates from the railroads bringing oil into Cleveland, the competing refiners insisted on getting similar rebates, and the railroads quickly complied. By then, however, Standard Oil had grown to become one of the largest shippers of oil and kerosene in the country.

The railroads were fighting fiercely for traffic and, in an attempt to create a cartel to control freight rates, formed the South Improvement Company. Rockefeller agreed to support this cartel if they gave him preferential treatment as a high-volume shipper, which included not just steep rebates for his product, but also rebates for the shipment of competing products. Part of this scheme was the announcement of sharply increased freight charges. This touched off a firestorm of protest, which eventually led to the discovery of Standard Oil's part of the deal. Undeterred, Rockefeller continued with his self-reinforcing cycle of buying competing refiners, improving the efficiency of his operations, pressing for discounts on oil shipments, undercutting his competition, and buying them out. In less than two months in 1872, in what was later known as "The Cleveland Conquest", Standard Oil had absorbed 22 of its 26 Cleveland competitors. For many of his competitors, Rockefeller had merely to show them his books so they could see what they were up against, then make them a decent offer. If they refused his offer, he told them he would run them into bankruptcy, then cheaply buy up their assets at auction.

Monopoly

Standard Oil gradually gained almost complete control of oil refining and marketing in the United States through horizontal integration. At that time, many legislatures had made it difficult to incorporate in one state and operate in another. As a result, Rockefeller and his associates owned separate corporations across dozens of states, making their management of the whole enterprise rather unwieldy. In 1882, Rockefeller's lawyers created an innovative form of corporation to centralize their holdings, giving birth to the Standard Oil Trust. The "trust" was a corporation of corporations, and the entity's size and wealth drew much attention. Despite improving the quality and availability of kerosene products while greatly reducing their cost to the public (the price of kerosene dropped by nearly 80% over the life of the company), Standard Oil's business practices created intense controversy. The firm was attacked by journalists and politicians throughout its existence, in part for its monopolistic practices, giving momentum to the anti-trust movement.

One of the most effective attacks on Rockefeller and his firm was the 1904 publication of The History of the Standard Oil Company, by Ida Tarbell, a leading muckraker. Tarbell's father had been driven out of the oil business during the South Improvement Company affair. Although her work prompted a huge backlash against the company, Tarbell claims to have been surprised at its magnitude. In 1911, the Supreme Court of the United States found Standard Oil Company of New Jersey in violation of the Sherman Antitrust Act and held that Standard Oil, which by then still had a 64% market share, originated in illegal monopoly practices and ordered it to be broken up into 34 new companies. Rockefeller, who had rarely sold shares, owned substantial stakes in all of them.

Philanthropy

From his very first paycheck, Rockefeller tithed ten percent of his earnings to his church. As his wealth grew, so did his giving, primarily to educational and public health causes, but also for basic science and the arts. Philanthropy on a large scale was Rockefeller's second career, in which he came to be almost better known than in oil. Cynics have scoffed at his notion of religious stewardship, but Rockefeller deeply believed that he had a duty to transfer some of his huge fortune to humanitarian use rather than merely leave it to his heirs. He eventually devoted hundreds of millions of dollars to the improvement of American medical practice, education, and research. The Rockefeller Foundation was the chief vehicle for his philanthropy, but the General Education Board, devoted to improving the deplorable state of education in the South, and the University of Chicago also were major beneficiaries.

Rockefeller embodied in one person most of the traditional traits of the Victorian businessman. Fully materialistic in his equating of business profit with its social significance, he nevertheless realized that wealth was no substitute for religious faith and personal virtue. Outliving by many years all of the men who once shared with him the epithet of "robber baron," he came in the end to be a spry old gentleman, whose habit of carrying a pocketful of shiny new dimes to present to small children was the delight of newspaper photographers everywhere.

J.P. Morgan

John Pierpont Morgan was an American financier, banker and art collector who dominated corporate finance and industrial consolidation during his time. In 1892 Morgan arranged the merger of Edison General Electric and Thompson-Houston Electric Company to form General Electric. After financing the creation of the Federal Steel Company he merged the Carnegie Steel Company and several other steel and iron businesses to form the United States Steel Corporation in 1901. He is widely credited with having saved or rescued the U.S. national economy in generaland the federal government in particularon two separate occasions. He bequeathed much of his large art collection to the Metropolitan Museum of Art in New York City and to the Wadsworth Atheneum of Hartford, Connecticut.

Morgan entered banking in 1857 at his father's Londonbranch, moving to New York City the next year where he worked at a banking house. During the American Civil War, Morgan was approached to finance the purchase of antiquated rifles being sold by the army for $3.50 each. Morgan's partner re-machined them and sold the rifles back to the army for $22 each. While it became a scandal, the military knew it was buying back its own guns and Morgan never even saw the guns, acting only as a lender. Morgan himself, like many wealthy persons, avoided military service by paying $1000 for a substitute.

Morgan's ascent to power was accompanied by dramatic financial battles. He wrestled control of the Albany and Susquehanna Railroad from Jay Gould and Jim Fisk in 1869. He led the syndicate that broke the government-financing privileges of Jay Cooke, and soon became deeply involved in developing and financing a railroad empire by reorganizations and consolidations in all parts of the United States.

He raised large sums in Europe, but instead of only handling the funds, he helped the railroads reorganize and achieve greater efficiencies. He fought against the speculators interested only in profits, and built a vision of an integrated transportation system. Morgan's process of taking over troubled businesses to reorganize them was known as "Morganization". Morgan reorganized business structures and management in order to return them to profitability. His reputation as a banker and financier also helped bring interest from investors to the businesses he took over.

After Congress passed the Interstate Commerce Act in 1887, Morgan set up conferences in 1889 and 1890 that brought together railroad presidents in order to help the industry follow the new laws and write agreements for the maintenance of "public, reasonable, uniform and stable rates." The conferences were the first of their kind, and by creating a community of interest among competing lines paved the way for the great consolidations of the early 20th century.

In 1895, at the depths of the Panic of 1893, the Federal Treasury was nearly out of gold. President Grover Cleveland arranged for Morgan to create a private syndicate on Wall Street to supply the U.S. Treasury with $65 million in gold, half of it from Europe, to float a bond issue that restored the treasury surplus of $100 million.

U.S. Steel aimed to achieve greater economies of scale, reduce transportation and resource costs, expand product lines, and improve distribution. It was also planned to allow the United States to compete globally with Britain and Germany. U.S. Steel's size was claimed by Schwab and others to allow the company to pursue distant international markets-globalization. U.S. Steel was regarded as a monopoly by critics, as the business was attempting to dominate not only steel but also the construction of bridges, ships, railroad cars and rails, wire, nails, and a host of other products. With U.S. Steel, Morgan had captured two-thirds of the steel market, and Schwab was confident that the company would soon hold a 75 percent market share. However, after 1901 the businesses' market share dropped; Schwab, himself, played an important role in falsifying his own prediction: finding the new company unwieldy, Schwab resigned from U.S. Steel in 1903 to form Bethlehem Steel, which became the second largest U.S. producer.

Enemies of banking attacked Morgan for the terms of his loan of gold to the federal government in the 1895 crisis, for his financial resolution of the Panic of 1907, and for bringing on the financial ills of the New York, New Haven and Hartford Railroad. In December 1912, Morgan testified before the Pujo Committee, a subcommittee of the House Banking and Currency committee. The committee ultimately found that a cabal of financial leaders were abusing their public trust to consolidate control over many industries: the partners of J.P. Morgan & Co. along with the directors of First National and National City Bank controlled aggregate resources of $22.245 billion.

Morgan was a notable collector of books, pictures, and other art objects, many loaned or given to the Metropolitan Museum of Art (of which he was president and was a major force in its establishment), and many housed in his London house and in his private library. His son, J. P. Morgan, Jr., made the Pierpont Morgan Library a public institution in 1924 as a memorial to his father.

Political Cartoons

Discussion Questions:

1. To what extent do the cartoons indicate the artists concerns for workers?

2. How effective was it for the artists to depict Standard Oil as an octopus? Title the 2nd cartoon The Protectors of Our Industries? Depict the monopolists in the Senate as money bags? Compare the monopolists of the Gilded Age to those of the French Revolution?

Guided Readings: The Gospel of Wealth

Reading 1

Thus is the problem of Rich and Poor to be solved. The laws of accumulation will be left free; the laws of distribution free. Individualism will continue, but the millionaire will be but a trustee for the poor; entrusted for a season with a great part of the increased wealth of the community, but administering it for the community far better than it could or would have done itself.

Andrew Carnegie

Reading 2

The rights and interests of the laboring man will be protected and cared for, not by the labor agitators, but by the Christian men to whom God in His infinite wisdom, has given control of the property interests of the country.

George F. Baer

Reading 3

Here, then, is the issue. The gospel of Christ says that progress comes from every individual merging his individuality in sympathy with his neighbors. On the other side, the conviction of the nineteenth century is that progress takes place by virtue of every individuals striving for himself with all his might and trampling his neighbor under foot whenever he gets a chance to do so. This may accurately be called the Gospel of Greed.

Charles S. Peirce

Reading 4

God gave me my money.

John D. Rockefeller

Questions for Discussion

1. How does wealth come about, according to the quotationsby exploitation or by the virtues of patience and frugality?

2. What is the role of the entrepreneur in promoting economic development? in helping the poor and disadvantaged? What are the business leaders social responsibilities, if any?

3. How is economic inequality explained?

4. Can the private sector be trusted to serve the public interest?

The Rise of the City

Reading 1

Today, what is a tenement? "It is generally a brick building from four to six stories high on the street, frequently with a store on the first floor which, when used for the sale of liquor, has a side opening for the benefit of the inmates and to evade the Sunday law; four families occupy each floor, and a set of rooms consists of one or two dark closets, used as bedrooms, with a living room twelve feet by ten. The staircase is too often a dark well in the center of the house, and no direct through ventilation is possible, each family being separated from the other by partitions. Frequently the rear of the lot is occupied by another building of three stories high with two families on a floor."

It no longer excites even passing attention, when the Sanitary police report counting 101 adults and 91 children in a Crosby Street House....Or when a midnight inspection in Mulbury Street unearths a hundred and fifty "lodgers" sleeping on filthy floors in two buildings....The tenements today are New York, harboring three-fourths of its population....

Jacob Riis, 1890

Reading 2

In most large cities...there are too many scattered efforts, aiming in a desultory manner at this and that particular evil, resulting from the condition of the children of the streets. There is no unity of plan and of work....So threatening is the danger in every populous town from the children who are neglected, that the best talent ought to be engaged to study their condition and devise their improvement....We would not breathe a word against the absolute necessity of Christianity in any scheme of thorough social reform....To attempt to prevent or cure the fearful moral diseases of our lowest classes without Christianity, is like trying to carry through a sanitary reform in a city without sunlight.

Charles Loring Brace, 1872

Reading 3

Heretofore the church has addressed itself to the inner life and left the home to supply a healthy environment; but this the congested tenement cannot do; the socialized church therefore provides certain home conditions which are absolutely essential to normal life and growth....Under the assimilating influence of the Parish House, foreigners are being Americanized....Another admirable institution is the Loan Association which has saved many from falling into the clutches of Shylock....Clinics,--medical, surgical, dental, eye, ear, throat, and nose,--are held daily except Sundays.

Josiah Strong

Reading 4

Never before in civilization have such numbers of young girls been suddenly released from the protection of the home and permitted to walk unattended upon city streets....Never before have such numbers of young boys earned money independently of the family life, and felt themselves free to spend it as they choose in the midst of vice deliberately disguised as pleasure....Let us know the modern city in its weakness and wickedness, and then seek to rectify and purify it until it shall be free at least from the grosser temptations which now beset the young people who are living in its tenement houses and working in its factories.

Jane Addams

Questions for Discussion

1. What political, economic, and moral problems were raised by the late 19th and early 20th century city?

2. How did reformers propose to solve the problems of the city?

1890 Census Data for Cities

1900 Census Data of Death Rates by States

The Growth of Cities

Urban Growth

1860

1900

Number of Cities

100,000-499,999

7

32

500,000 or more

2

6

Percent of total population

100,000-499,999

4

8

500,000 or more

4

11

Questions for Discussion

1. What factors contributed to the growth of cities in the late 19th century?

2. How does life in a very large city differ from that in smaller cities and towns?

Deaths per 100,000 Boston, New York, New Orleans, and Philadelphia

Tuberculosis

Intestinal Disorders

Diphtheria

Typhoid Typhus

Smallpox

1864-1888

365

299

123

66

53

1899-1913

223

196

58

19

25

Questions for Discussion

1. Why were death rates so high in 19th century cities?

2. What factors contributed to a decline in urban death rates?

Concentration of Immigrant Groups in Cities, 1890

Percent in Cities of 25,000 or more

Native Born Americans

18

Chinese

40

Germans

48

Irish

56

Poles

57

Russians

58

Italians

59

Questions to Think About

1. Which groups of Americans were most likely to live in cities? least likely?

2. What difference might it have made that native born Americans were unlikely to live in large cities?

Urban Life Pictures

Guided Readings: Progressive Reform and the Trusts

Reading 1

The dull, purblind folly of the very rich men; their greed and arrogance . . . and the corruption in business and politics, have tended to produce a very unhealthy condition of excitement and irritation in the popular mind, which shows itself in the great increase in the socialistic propaganda.

Theodore Roosevelt, 1906

Reading 2

I think we are in a position, after the experience of the last 20 years, to state two things: in the first place, that a corporation may well be too large to be the most efficient instrument of production and distribution, and, in the second place, whether it has exceeded the point of greatest economic efficiency or not, it may be too large to be tolerated among the people who desire to be free.

Louis Brandeis, 1911

Reading 3

1898 was the beginning of great industrial organization. . . . Within a period of three years following, 149 such reorganizations were effected with total stock and bond capitalization of $3,784,000,000. . . . The success of these [re-]organizations led quickly on to a consolidation of combined industries, until a mere handful of men controlled the industrial production of the country. . . .

No student of the economic changes in recent years can escape the conclusion that the railroads, telegraphs, shipping, cable, telephone, traction, express, mining, iron, steel, coal, oil, gas, electric light, cotton, copper, sugar, tobacco, agricultural implements and the food products are completely controlled and mainly owned by these hundred men. . . . With this enormous concentration of business it is possible to create, artificially, periods of prosperity and periods of panic. Prices can be lowered or advanced at the will of the System.

Robert LaFollette, 1908

Reading 4

If the anti-trust people really grasped the full meaning of what they said, and if they really had the power or the courage to do what they propose, they would be engaged in one of the most destructive agitations that America has known. They would be breaking up the beginning of collective organization, thwarting the possibility of cooperation, and insisting upon submitting industry to the wasteful, the planless scramble of little profiteers.

Walter Lippman, 1914

Reading 5

The effort to restore competition as it was sixty years ago, and to trust for justice solely to this proposed restoration of competition, is just as foolish as if we should go back to the flintlocks of Washingtons continentals as a substitute for modern weapons of precision. . . . Our purpose should be, not to strangle business as an incident of strangling combinations, but to regulate big corporations in a thoroughgoing and effective fashion, so as to help legitimate business as an incident to thoroughly and completely safeguarding the interests of the people as a whole.

Theodore Roosevelt,November 17, 1911

Reading 6

An attempt to sweep the country back into the old era of ruthless competition, would be the direct consequence of a vigorous enforcement of the Sherman [Anti-Trust] law, and there would return the evils of deceit and fraud in business, violent fluctuations in prices, the deliberate driving to the wall of weak concerns, and the eventual creation of monopolies by the survivors.

George W. Perkins, 1911

Reading 7

The Democratic Party insists that competition can and should be maintainedin every branch of private industry; that competition can and should be restored in those branches of industry in which it has been suppressed by the trusts andthat, if at any future time monopoly should appear to be desirable in any branch of industry, the monopoly should be a public onea monopoly owned by the people and not by the capitalists.

Louis D. Brandeis, 1912

Reading 8

In particular, the party declares for direct primaries for the nomination of State and National offices, for nation wide preferential primaries for candidates for the presidency; for the direct election of United States Senators by the people; and we urge on the states . . . the initiative, referendum, and recall. . . .

The Progressive party, believing that no people can justly claim to be a true democracy which denies equal political rights on account of sex, pledges itself to the task of securing equal suffrage to men and women alike.

We pledge our party to legislation that will compel strict limitation of all campaign contributions and expenditures, and detailed publicity of both before as well as after primaries and election. . . .

The Progressive party demands such restriction of the power of the courts all leave to the people the ultimate authority to determine fundamental questions of social welfare and public policy. . . . We believe that the issuance of injunctions in cases arising out of labor disputes should be prohibited when such injunctions would not apply when no labor disputes existed. . . .

We pledge ourselves to work . . . for:

Effective legislation looking to the prevention of industrial accidents, occupational diseases, overwork, involuntary unemployment, and other injurious effects incident to modern industry;

The fixing of minimum safety and health standards. . . .

The prohibition of child labor;

Minimum wage standards for working women, to provide a living wage in all industrial occupations;

The general prohibition of night work for women and the establishment of eight hour day for women and young persons;

One days rest in seven for all wage workers;

The eight hour day in continuous twenty-four-hour industries;

The abolition of the convict contract-labor system. . . .

Standards of compensation for death by industrial accident and injury and trade disease which will transfer the burden of lost earnings from the families of working people to the industry, and thus to the community. . . .

Establishing . . . schools for industrial education under public control and encouraging agricultural education and demonstration in rural schools;

The establishment of industrial research laboratories to put the methods and discoveries of science at the service of American producers;

We favor the organization of the workers, men and women, as means protecting their interests and of promoting their progress. . . .

We believe that the remaining forests, coal and oil lands, water powers and other natural resources still in State or National control (exception agricultural lands) are more likely to be wisely conserved and utilized for the general welfare if held in the public hands.

Progressive Party Platform, 1912

Reading 9

We have itemized with some degree of particularity the things that ought to be altered: A tariff which cuts us off from our proper part in the commerce of the world, violates the just principles of taxation, and makes the government a facile instrument in the hands of private interests; a banking and currency system based upon the necessity of the government to sell its bonds fifty years ago and perfectly adapted to concentrating cash and restricting credits; an industrial system which, take it on all its sides, financial as well as administrative, holds capital in leading strings, restricts the liberties and limits the opportunities of labor, and exploits without renewing or conserving the natural resources of the country. . . .

President Wilsons first inaugural address, 1913

Questions for Discussion

1. Why were Progressives concerned about industrial concentration?

2. What should government do about concentrated economic power? Should it regulate competition or should it break up big business?

3. Compare and contrast the platforms of the Progressive and Democratic parties.

Captains of Industry or Robber Barons?

There are several significant men in American history who turned the tides for big business. They also took American wealth to a totally different level. You are to create a resume based on the life of ONE of the 7 monopolists discussed in class (James Duke, George Pullman, J. P. Morgan, John Rockefeller, Andrew Carnegie, Jay Gould, or Gustavus Swift). After you create the resume, you must add some specific factual information to the information you add (you will see an example in class). Once you have completed the resume, you must write a paragraph explaining whether you think your person is a captain of industry OR a robber baron. You cannot pick both. You must take a stance and be able to support your reasons for your belief. (That means you need to be able to discuss their business practices in depth).

This is an opinion question, so please be sure to back up your opinion with factual information and that you analyze the effects of the factual information and tie it to your opinion. Since you are doing research, you will need to include any websites you use, and you should not use Wikipedia as your source. (MLA citations)

PLEASE do not write using I or you. State your opinion without saying I or you. For example, instead of saying I believe that the monopolists were robber barons because say The monopolists were robber barons because There is no need to put I or you in thiswrite in the 3rd person and write in past tense.

Basic Set-Up of Resume (15 points): You will receive an example of how to appropriately create a resume. You should have three categories: early life, business life, and philanthropies with information in each.Detailed Information on Resume (25 points): Given time and materials to research; information should be relevant, in your own words, and detailed

Content/Organization of Paragraph (10 points): Thesis is stated clearly; smooth transitions within the paragraph; the opinion is stated clearly; the writing is engaging and on topic.

Mechanics (10 points): No conjunctions; paragraph is written in past tense; very few spelling mistakes; correct punctuation; proper format for paragraph

Information (30 points): Information is appropriate and relevant; the information presented in the paragraph is analytical and not simply factual; Opinion is supported with information used

MLA Format (10 points): correct MLA format used for resume; no use of Wikipedia