Where the Gilded Age Began: America, An Industrial Nation

By early 20th century, America became the largest industrial nation in the world! In 1901 British writer, W.T. Stead wrote, “what is the secret of American success?” What do you think was the secret of American success? What makes a person successful? No nation iis perfect… why???? Not physical geography… meaningless, group of people

What was the secret of American success? 1. Natural Resources: oil, coal, iron, water, lumber 2. New Inventions: Drake Well, Bessemer process (iron into steel), light bulb, electricity distribution, telephone, sewing machine Expansion and mechanization of factories 3. Surge in immigration 4. Rise of corporations 5. Government support of business / “laissez faire” 6. Railroads The “secret” to American success??? How would each of these contribute to American industrial success??? How do they work together??? Corporations – big businesses (people pool resources limit liability – sue company not you – more likely to take a risk – facebook expansion) Why would rr be so important? What does America have that a lot of other countries do not have (think geography) and now it matters? (size, lots of different materials now whole country can share them easily) Are these still factors in Americas success??? Any diffeerent today??? Are they all positive??

Who is the richest person in the USA today? How did they get so rich?? As of 2016, the richest 400 Americans have a combined wealth of $2.4 trillion #1 – Bill Gates: $81 billion (Microsoft) #2 – Jeff Bezos: $67 billion (Amazon) #3 – Warren Buffet: $65.5 billion (Berkshire Hathaway) #4 – Mark Zuckerberg: $55.5 billion (Facebook) #6 – Michael Blomberg: $45 billion (Bloomberg LP) #9 – Larry Page: $38.5 billion (Google) #11 – Jim Walton: $35.6 billion (Walmart)

Who were the richest people of the Gilded Age? Why does this matter?

The “Gilded” Rich http://www.forbes.com/forbes-400/ Richest people in America 2014 Who are the richest people today??? What industries do they work in? how did they get so rich?? Do they make America rich too??? Walmart making America rich???? Vanderbilt died 1877 On September 29, 1916, John D. Rockefeller became the first person to ever reach a nominal personal fortune of US$1 billion $100 million when died 1877 Gave away over $350 million 1902 worth $200 million 1901 purchased Carnegie Steel for $480 million

What were the cartoonists’ messages?

What inferences can you draw about why these men were not wholly loved?

Monopolized their Industries Andrew Carnegie Dominated the STEEL INDUSTRY – CARNEGIE STEEL COMPANY Bessemer process – made good quality steel cheap VERTICAL INTEGRATION – own/control everything needed for a specific industry (for Carnegie to produce steel) No middle man Sell same product as other companies, but for a lower price and receive the same profit!!! What will then happen to the other companies??? Absorb other steel companies bc no one can compete, Carnegie then had a MONOPOLY over the steel industry What do you need in order to achieve vertical integration? MONEY!!!! What does this sound like? Any industries today have vertical integration?

How Apple Made ‘Vertical Integration’ Hot Again — Too Hot, Maybe Time Magazine - March 16, 2012 http://business.time.com/2012/03/16/how-apple-made-vertical-integration-hot-again-too-hot-maybe/ Vertical integration is a difficult strategy for companies to implement successfully. It is often expensive and hard to reverse

Monopolized their Industries John D. Rockefeller Dominated the OIL Industry – STANDARD OIL Horizontal Integration – bought out other companies within the same sector Lower prices so others cannot compete (so low you may not profit for a period) Special deals from railroads – rebates Smaller companies could not compete Once other companies go under, raise prices since there is no competition (MONOPOLY over the industry) Now what can Standard Oil do? Examples of horizontal integration today??? Walmart (underselling like stores so cannto compete); is it about underselling or a better product or BOTH; airline industries merging!! Cable TV ;

Based on yesterday’s class notes, how would you describe Carnegie & Rockefeller? Rich, powerful, successful, leaders in their fields

What will be the impacts of monopolies? Monopolies will make LOTS of money & become very powerful Smaller companies forced out Price controlled by one company bad for consumers?? Workers cannot leave and go somewhere else One company controls wages & working conditions How will these monopolies keep costs down??? Some will be very rich, while some will be very poor Income gap widens (top 2% own 30% country’s wealth; top 10% own 75% of countries wealth) Concept of Social Darwinism to justify this! Some are superior to others – the superior should succeed Wealth, power & corruption go hand and hand Forgotten presidents, but remembered businessmen! Sherman Anti-Trust Act 1890

Why will railroads become one of the richest, most influential and most corrupt industries during the Gilded Age?

Railroads become a PROFITABLE, POWERFUL and VERY CORRUPT business! They controlled the price of goods by controlling the price of transportation They determine which companies succeed and which fail by giving special rates to certain companies They control the government because… http://www.investopedia.com/articles/investing/120914/most-powerful-and-influential-public-companies.asp Largest companies …

How does this relate to your homework readings?

What will the workers do to protect themselves? Form UNIONS an association of workers formed to protect and further the rights of its workers Existed in America pre-Gilded Age BUT craft specific and local Now national, skilled & unskilled, different crafts combine There is power in numbers, right? What tactics can unions use to protect/further the rights of their members?

Use your assigned article to answer each question, cite examples to justify your answer/s What impact did monopolies have on workers? Were unions able to stand up to big business? What obstacles did unions face? Who played a role in how workers, strikers and business leaders were portrayed? Why does this matter? Were they Robber Barons or Captains of Industry? Lacked ability to move to differtn company – government so dependent on monopolies did nto protect workers – rich people viewed as better more deserving/social darwinism (why else this person so rich – worker just jealous) Role of media

Robber Barrons or Captains of Industry? Did they steal from the people and their workers to get rich, i.e., “Robbers” or were they just super successful and should be applauded for being successful?

Were they Robber Barons?? Who else is to blame???