The Gilded Age The Rise of Big Business. The Gilded Age and Progressive Era ( 1865 – 1917) Modern America really begins to emerge in this period This.

The Gilded Age

The Rise of Big Business

The Gilded Age and Progressive Era(1865 – 1917)

Modern America really begins to emerge in this period

This is the age of “bigness” Big business Big labor Big cities Big government

Internationalist foreign policyRapid technological progressActivist social movements

The Second Industrial Revolution

Last half of nineteenth centuryAssociated w/ several new technologies

ElectrificationSteam ships & railwaysBessemer furnaceMachine toolsAssembly lineRotary printing press

Two nations most affectedUnited StatesGermany

Causes of Business Growth

Labor Shortage

Technological Innovation

Mechanization

Agricultural Productivity

Railroad & Communication Networks

New, Inexpensive Power Sources

Government Support

New Methods of Organization

Casualties - WBTS

Dead Wounded Total__________________________________________________________

Federal 364,511 281,881646,392

Confederate* 260,000 194,000 454,000

TOTAL 624,511 475,881 1,100,392_________________________________________________________

* Due to lost records, Confederate casualties figures are estimates based on best evidence available

Rotary Printing Press

The Factory System

Centralized productionContinuous production Division/ specialization of laborAssembly line Replaced centuries old systems of hand labor and

cottage industries

Henry Ford’s Assembly Line

Promontory Point, UtahMay 10, 1869

An 1881 Edison Dynamo

New methods of business organization

Vertical integration = control of every step in production process by one companySwift Meat CompanyAmerican Tobacco CompanyUnited Fruit CompanyFord Motor Company

Horizontal integration = control of the market for a single product by a single companyStandard Oil (by 1880 controlled 90% of nation’s

refineries)

Trusts and Holding Companies

Both of these were new forms of business ownership that facilitated the growth of mammoth industries by allowing centralized control of seemingly independent companies.

TRUST – A legal arrangement that allows one or more people to manage property that belongs to others. (Proved vulnerable to prosecution under state laws that prohibited monopolies or restraint of trade.)HOLDING COMPANY – A company that controls other companies by holding all (or at least a majority) of their stock. (Less vulnerable under state laws, but potential liability under Sherman Anti-Trust Act of 1890.)

Functions of Railroads

Socio-politicalTied sprawling nation together A communication networkOpened the country

CommercialCreated and serviced a national (and eventually an international)

marketBrought raw materials to manufacturersTook finished goods to consumersWere huge consumers themselvesPioneered new management techniques

Crédit-Mobilier Fraud(1872)

Pointed out potential for corruption in railroad construction

Construction company hired by Union Pacific RR to build transcontinental track

Was owned by senior managers of UPGave stock to congressmen in return for support

of fundingHuge profits for owners of Crédit Mobilier Virtually bankrupted Union Pacific

John D. Rockefeller(1839 – 1937)

Made his fortune in the oil industry

Driven by a search for order and efficiency

Concentrated on refining and transportation

Developed the TrustInstrumental in the evolution of

the Holding Company

Andrew Carnegie(1835 - 1919)

Self-made millionaire

Founded Carnegie Steel Co.

Noted philanthropist

Gave away most of his fortune

The “Gospel of Wealth”

Promulgated by Andrew Carnegie in 1889 Developed a justification for big business Employed themes from Social Darwinism Distance between rich & poor was a measure of

civilization’s progress Wealthy were public benefactors Rich had a moral responsibility to reinvest wealth into

the larger society

J. P. Morgan(1837 – 1913)

Financier Created General Electric in

1891 Consolidated the steel

industry in 1901 (United States Steel)

Controlled over 100 corporations

Montgomery Ward & Co. Chicago c. 1870

The first department store

An Early Sears Catalogue

Cornelius Vanderbilt

Thomas Alva Edison

Bessemer Furnace

Typical Factory Setting

Chinese laborers building railroads

Natural Resource Areas