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 policy  Rapid technological progress  Activist social movements

The Second Industrial Revolution Last half of nineteenth century  Associated w/ several new technologies  Electrification  Steam ships & railways  Bessemer furnace  Machine tools  Assembly line  Rotary printing press  Two nations most affected  United States  Germany

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 DeadWoundedTotal __________________________________________________________ Federal364,511281,881646,392 Confederate*260,000194,000454,000 TOTAL 624,511475,8811,100,392 _________________________________________________________ * Due to lost records, Confederate casualties figures are estimates based on best evidence available

Rotary Printing Press

The Factory System  Centralized production  Continuous production  Division/ specialization of labor  Assembly line  Replaced centuries old systems of hand labor and cottage industries

Henry Ford’s Assembly Line

Promontory Point, Utah May 10, 1869

An 1881 Edison Dynamo

New methods of business organization Vertical integration = control of every step in production process by one company  Swift Meat Company  American Tobacco Company  United Fruit Company  Ford Motor Company Horizontal integration = control of the market for a single product by a single company  Standard 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-political Tied sprawling nation together A communication network Opened the country  Commercial Created and serviced a national (and eventually an international) market Brought raw materials to manufacturers Took finished goods to consumers Were huge consumers themselves Pioneered 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 UP  Gave stock to congressmen in return for support of funding  Huge 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 Trust  Instrumental in the evolution of the Holding Company

Andrew Carnegie ( )  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 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