THE RISE OF BIG BUSINESS IN THE GILDED AGE. WHAT DO YOU SEE?

THE RISE OF BIG BUSINESS IN THE GILDED AGE

WHAT DO YOU SEE?

WHAT DO THE WORKERS IN THIS IMAGE HAVE IN COMMON?

Why might factory managers hire women?

GILD – TO GIVE AN OFTEN DECEPTIVELY ATTRACTIVE OR IMPROVED

APPEARANCE TO. TO COVER WITH OR AS IF WITH A THIN LAYER OF GOLD.

THE INDUSTRIAL REVOLUTION ALSO KNOWN AS THE GILDED AGE

What was the Gilded Age?

1870-1900

T

erm coined by author Mark Twain to describe an era

of fabulous wealth, which masked problems such as

corruption and poverty

MANIFEST DESTINY

The United States had to grow in order to

achieve it.

We had to Industrialize.

Three things you need in order to Industrialize:

Land - Natural Resources opening of West led to increase of available resources-RR shipped resources

Labor - workers needed met by population growth; between 1860-1890, pop. doubles

Loot (Capital $)- manufactured goods (or $ for investment) used to make other goods and services

Loot (Capital $)- manufactured goods (or $ for investment) used to make other goods and services

WHAT DO WE HAVE? WHAT DO WE NEED?

HOW ARE WE GOING TO GET IT?

RAILROADS: THE KEY TO GROWTH

raw materials to factories

manufactured goods & produce to markets

P

rovide jobs: steel, lumber, miners, laborers

C

ities grow & communication improves

The Railroad BoomBenefits:

IMPROVEMENTS:C

onsolidation: Combining separate railroad companies into

larger ones; Large railroad companies often forced smaller

ones out of business

A

standard gauge of width for the railroad track (4 ft, 8.5

in.)was adopted, allowing for faster shipment of goods and

reduced prices.

R

ESULT: Lower costs (no more loading and unloading goods

on to different trains).

CONNECTING LINES / TIME ZONES

S

ystem that divided U.S. into 4 time zones:

E

astern, Central, Mountain, and Pacific

-

Adopted by Congress in 1919

Railroad Technology

Air brakes, George Westinghouse

– Janney car couplers, invented by Eli H. Janney

– Refrigerated cars, Gustavus Swift

– Pullman sleeping car, developed by George M. Pullman

RAILROAD BARONS

James Hill : Great Northern Line; built w/out gov’t assistance; gave seed, helped farmers buy equipment, special cattle to ranchers

MinnesotaWashington

Cornelius Vanderbilt: Rich + powerful; steamship lines, bought and consolidated railroads : used ruthless tactics to acquire track from N.Y. to Chicago

New York Central RR

 RAILROAD ABUSES

R

ate Wars –competition; caused r.r to cut fares

R

ebates – Secret discounts to large customers

P

ools several r.r. would divide up business in an area and fix prices

(high)

L

aws passed but not enforced

EFFECT ON FARMERS:

R

esult: Rebates and Pools

bad for farmers; Populist

Party formed

POSITIVES: G

rowth of Industry

• Steel• Lumber• Miners• Railroad workers (build and operate)• Opened every corner to settlement

and growth (new businesses and towns)

R

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ESSENTIAL QUESTION: HOW DID RAILROAD EXPANSION AFFECT THE UNITED STATES ECONOMY?

U

sing the graphic organizer, explain the

effects of railroad

expansion on industry in

the United States.

WHAT FACTORS CAUSED THE GROWTH OF

INDUSTRY?

Land - Natural Resources opening of West led to increase of available resources-RR shipped resources

Labor – The population growth met needs for work force; between 1860-1890, pop. doubles

Loot (Capital $)- (or $ for investment) used to make other goods and services

Loot (Capital $)- (or $ for investment) used to make other goods and services

NEW WAYS OF DOING BUSINESS

F

ormation of Corporations- businesses owned by

investors who buy portions of a company through

shares of stock, in hopes of earning dividends ($$$).

Investors (shareholders) have little risk. Few laws

limited corporations.

V

ertical Integration- Controlling all

aspects of production, from raw

materials to finished product

(Carnegie)

H

orizontal Integration- Purchase of

competing companies in the same

industry (Rockefeller)

A NEW INDUSTRYC

AUSE:

1

850s: researchers found that they could burn petroleum to produce heat

and smoke free light

E

FFECTS:

O

il became valuable

• led to growth of new industry (Oil had to be refined before use)

1

859- Edwin Drake drilled first oil well in Titusville, PA

FIRST OIL WELL- TITUSVILLE, PA

JOHN D. ROCKEFELLERLed oil industry with his Standard Oil

Company*Competition was wasteful~ Created monopoly

*Developed trust: a legal body created to hold stock in several companies* Set high prices*secret deals w/ r.r.*Standard Oil Company~ by 1880,

trust controlled 95% of oil industry

ANDREW CARNEGIE

• Controlled steel industry after creation of Bessemer steel process

• Wanted to make cheapest and best product using vertical integration

• U.S. Steel

ROBBER BARONS OR PHILANTHROPISTS? YOU DECIDE.

Philanthropists:Both men donated large sums of money

to community: charities, hospitals, universities, and libraries (Dunkirk Free Library was one!)

Robber Barons:

Definition: Business leaders who became wealthy through dishonest methods.

Both were ruthless businessmen who worked their way from the bottom up.

J

.P. Morgan: biggest banker in U.S.• Leader in business• Bought shares of stock in several businesses during

panic of 1893~ as large stockholder, won seats on board of directors

• Used $$ to buy railroads• Eventually bought into steel industry (head of U.S.

Steel)

GOVERNMENT INTERVENTION

S

herman Anti-trust Act: 1890-

prohibited trusts and

monopolies

WHAT IS FREE ENTERPRISE?

D

id monopolies and trusts

threaten the free enterprise

system?