1. Industrialization: Technology, Railroads, Monopolies
The Gilded Age

2. US Foremost Industrial Power
After Civil War, US primarily agricultural
By 1900 foremost industrial power, producing over 1/3 of world’s manufactured goods
How did this happen?

3. Natural Resources Fuel Industrialization
Edwin Drake uses a steam engine to drill for oil in Titusville, PA Petroleum-refining industries grow up in Pittsburgh & Cleveland
Also abundant deposits of coal and iron ore
Bessemer process discovered. More efficient way to create steel

4. William Kelly & Henry Bessemer Discover How to Make Steel Cheaply & Efficiently

5. Steel Changes the Face of America
Railroads become biggest customers for steel
In agriculture, used for barbed wire & farm equipment that transforms Great Plains into food producer of nation
Bridges-Brooklyn Bridge
Skyscrapers

6. New Inventions Promote Change
Thomas Alva Edison
Light bulb (1880)
First Research Lab (1876)
Christopher Sholes
Typewriter (1867)
Alexander Graham Bell
Telephone (1876)
Last two inventions affected office work & created new jobs for women

7. Age of the Railroads
Union Pacific and Central Pacific meet in Promontory Point, Utah on May 10th, 1869
First Transcontinental Railroad
By 1890, nation had over 180,000 miles of track

8. Railroad Create Worldwide Time Zones
Before time zones, each community operated on own time. Travelers west might reset watches 20 times
C.E. Dowd proposed 24 time zones. Why?
Railroads unifying force for nation

9. Advantages of Railroads to Nation
US iron, coal, steel, lumber, and glass industries grow rapidly to keep pace with railroad demand for materials & parts
RR fostered growth of towns, established new markets, & offer rich opportunities for both visionaries & profiteers
Promotes trade & interdependence

10. Railroad Abuses
Railroad misused govt. land grants (selling to other businesses rather than settlers), fixed prices to keep farmers in debt, charged different customers different rates
Farmers especially affected by railroad corruption &, through Grange demanded govt. control over RR’s

11. Granger Laws
Grangers took political action, pressing for laws to protect their interests
Illinois authorized commission “to establish maximum freight & passenger rates & prohibit discrimination.” Railroads fight back
Munn v Illinois (1877): Supreme Court upholds Granger Laws; Federal Govt. has right to regulate private industry to serve public interest.

12. Interstate Commerce Act (1887)
Supreme Court ruled that individual states could not set rates on interstate commerce
In response, Congress passes Interstate Commerce Act to reassert right of federal govt. to supervise RR activities
Five man commission

13. Corrupt Railroads Hurt Nation
Corporate Abuses, mismanagement, overbuilding, and competition pushed many RR’s to brink of bankruptcy
Played major role in nationwide economic collapse: Panic of 1893
Brought on worst depression up to that time: 600 banks & 15,000 businesses; 4 million people out of work

14. Railroads Provide Business Model
Railroads First Large US Business
Other Large Industries Copy the RR Business Model
Modern Corporation Provided Structural Framework for Transformation of US economy

15. The Corporation
Definition: Association of individuals legally authorized to act as a fictional person and relieve its members of individual legal liability. Raises Capital by selling shares of stock (ownership)
Corporation has 2 advantages:
Can outlive its founders
Corporation’s officials & owners not personally liable for corporation’s debts
Responsible for much of US industrial growth in 19th Century

16. Vertical Integration
Company takes over the whole process of production, from its suppliers and distributors and transportation systems to gain total control over the quality and cost of its product.

17. Horizontal Integration
Through merger, the complete control of one phase of production
End Result: Monopoly, trusts
Examples: Standard Oil, US Steel

18. “Captains of Industry” or “Robber Barons”

19. Wealthy Industrialists: Pro & Con
Pro: Everyone is dependent on the millionaires to run business efficiently and to provide for the needs of the surrounding communities
Con: If the millionaires control everything, they will always make people work unfairly and pay unfair prices

20. Social Darwinism
Grew out of naturalist’s Charles Darwin’s theory of evolution
“Natural Selection”
Used to explain evolution of human society
Business success & failure governed by natural law; no one has right to intervene
Appealed to Protestant work ethic: riches sign of God’s approval; therefore poor must be lazy or inferior

22. Sherman Antitrust Act (1890)
Concern that expanding corporations would stifle free competition
Sherman Antitrust Act made it illegal to form a trust that interfered with free trade between states or other countries

23. Workers Face Difficult Conditions
Trend towards unskilled & semi-skilled jobs
Long Hours
Low Wages
Unsafe Working Conditions
Women & Children enter work force
Solution: Consolidate Workers Just As Business Consolidated

25. Sweatshops

27. Workers Fight Back; Form Unions
Knights of Labor under Terrence Powderly: Welcomed Women & Blacks Motto: An Injury to One is the Concern of All
American Federation of Labor under Samuel Gompers
Craft Unionism: skilled workers from one or more trades