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Copy of The Gilded Age (1877-1893)
Transcript of Copy of The Gilded Age (1877-1893)
The Gilded Age (1877-1893)
1. Railroads, Vanderbilt
2. Oil, Rockefeller
3. Steel, Carnegie
4. Banking, J.P. Morgan
5. Electricity, Edison
Items to cover:
Works originally in steamboat business
Helps the Union by providing them with support by the steamboats
His interest in railroads grows as people begin to flock to California during the Gold Rush. Why? To transport the gold.
Buys railroad in 1863 and believes he can make it profitable (Builds in NY).
Basically is able to buy out the competition, establishing a complete control and creates the first major corporation.
Battles on the stock market with rivals and eventually buys "watered stock" and loses LOTS of money. Basically they inflate the stock making investors feel the stock is worth more than it is, VERY illegal nowadays, but no laws back then prohibiting it.
US$143 billion and US$178.4 billion 2000's
Second richest man in the American history.
Eventually, rails will be made out of Carnegie steel
6. Trusts and
9. Jim Crow Laws
John D. Rockefeller
Founder of Standard Oil Company 1870-1897
He developed the catalytic cracking method that produced pure kerosene (lighting) and gasoline.
He tried to take over the market, through backdoor deals and intimidation. He is company is the first to establish "trusts."
Trusts (monopoly) - originally it was a legal instrument used to consolidate power through obtaining and owning businesses. Normally ran by one entity said to help businesses, but also to eliminate competition.
Sherman Antitrust Act (1890)
1. Congress passes the Sherman Act
2. Prohibits certain business activities that
reduce competition in the marketplace, and requires the United States federal government to investigate and pursue trusts, companies, and organizations suspected of being in violation
3. First Antitrust law in America
4. Power to pass the Sherman Act
through its constitutional authority
to regulate interstate commerce
Moves into iron ore industry to rival Carnegie in steel industry. Eventually he sells business to Carnegie
Richest American in history
(Worth $392 billion to US$663.4 billion in 2000's)
1853 begins working in Railroad industry and is quickly promoted
Learns much about management and cost control
Invests in RR companies and gains enough capital to devote his energies to the ironworks trade.
Makes his fortune in steel and eventually acquires the entire market
Comes up with cheap and efficient mass production of steel
Adapted the Bessemer process for steel making and as a consequence the price drops.
Steel is used for buildings, railways, and bridges
Creates Carnegie Steel Company
Builds Eads bridge across MS River connecting the East with the West using Carnegie Steel
Bought out by J.P. Morgan for $480 million
Worth $75 billion to $297.8 billion in 2000's
Joins his father's company and inherits a great sum of money, when his father dies (Junius Spencer Morgan).
Consolidated businesses in order to help them maintain stability.
Invests in Thomas Edison's company: Edison Electric Company. Edison used direct current (DC, one direction). However his former worker, Nikola Tesla, used alternate current (AC). Eventually J.P. Morgan is able to threaten Westinghouse Company with patent infringement and Morgan's General Electric is able to gain the upper hand.
After Civil War, Morgan saw opportunities in some businesses and acquired those with potential
Eventually he buys out Carnegie Steel calls it U.S. Steel (Has a monopoly over steel and electricity).
(General Electric Trust combines Edison's company with another competitor and Morgan was the one to push forward the consolidation. Edison was not happy.)
Bails out the government with $3.5 million in gold in the Panic of 1893 because they're nearly out of it. Congress is upset because they never authorized the loan, but President Grover Cleveland did.
He later joins the Titans together in order to buy the election of 1896 b/c William Jennings Bryan was an enemy to big business and banks. Their "donation" helped William McKinley take the presidency.
In 1907, there's a panic in the country b/c banks are on the verge of bankruptcy. Morgan steps in again and decides one company's (steel), who he believes must be saved, shares must be purchased in order to stabilize the economy. However, if he purchases this company, he would be in violation of the Sherman Antitrust Law. He asks President Theodore Roosevelt for permission and the president promises legal immunity.
In order to prevent this from happening again, Congress passed the Federal Reserve Act (establishes the Federal Reserve), which takes form in 1913. It's there to help stabilize the economy, monitor banking, and providing financial assistance where necessary. It's policies don't need approval from any branch of gov't, however is subject to congressional oversight when needed.
Inventor of the lightbulb
Edison finds a way to use electricity to light rooms, houses, cities, etc. Files for a patent in 1880.
In 1878, Edison creates the Edison Electric Light Company
Builds power stations and brings electricity into homes with direct current (D.C).
Has an electric war with Westinghouse Electric. DC vs AC (Tesla).
Launches attack adds against AC and kills many animals in the process. However, these executions backfires.
JP Morgan helps support Edison's business. (Mentioned prior in JP Morgan notes)
Edison Electric Generators
and the Labor Movement
After the Civil War, the country has trouble uniting in a peaceful way.
The South's economy has been crippled due to their investment in slaves and land. Hardly any industry in the South and there's a loss of gov't oversight.
in order to expand his company
Horizontal Integration -
taking over companies and having them produce the same product to eliminate competition
Uses Vertical Integration to acquire the market (also practiced by Rockefeller).
- the integration within one company of individual businesses working separately in related phases of the production and sale of a product.
Eventually, Rockefeller uses both vertical and horizontal integration. The picture shows him acquiring all oil refineries
Congressmen and the Cabinet members begin to take advantage of the problems /issues of Reconstruction and accept bribes and payoffs
Term is coined by Mark Twain & Charles Dudley 1873
Believed this era was of serious social problems hidden by a thin layer of Gold. "Americans driven by money lust)
~1865 ~ 1890's (Chap 8)
Growing urban population leads to new construction (bigger buildings)
Political bosses run political machines in cities
- give jobs to friends
- political favors
- appealed to immigrants
- practices "graft" - acquiring money or power through illegal or dishonest methods
(Reason for inclusion of Reconstruction is due to the corruption that occurred during that time period, but the term "Gilded Age" wasn't created until 1877.)
- Bosses and precinct captains tell the residents who to vote for
- election fraud
- receive "kickbacks" (bribes and payoffs
- Example: some communities have 100 ppl, but somehow 225 votes are registered
History of social and political organization
William Tweed (Boss Tweed)
- Collects around $200 million btwn 1865-1871
- Public eventually turns against him when a
political cartoonist revealed the "greed of
- Convicted of fraud and extortion in 1873
Filters into Ulysses S. Grant's presidency
Ulysses S. Grant's Presidency
Andrew Johnson fails at Reconstruction efforts
1. Several scandals, and he didn't know how to stop it
2. Elected and reelected solely on war record
3. Corruption continues (Spoils System)
4. Leads to increased distrust of politicians
Civil Service Reform
Rutherford B. Hayes
James Garfield & Chester A. Arthur
1. Garfield runs in 1880 election and wins, but is later assassinated and Chester A. Arthur (V.P.) takes control
2. Arthur helps pass the Pendleton Civil Service Act (1883)
- Established Civil Service Commission and also administer exams for government jobs
- Jobs should be based on merit and not spoils
1. Reforming spoils system is a major issue in 1876 presidential campaign
2. Hayes (R) becomes president and issues many reforms
a. Executive order prohibiting federal employees from participating in
b. Examination determines job
c. Proposed merit system
3. Republican party choose James Blaine as their nominee
4. However, this upsets many Republicans and they cast their votes for the Democrat
nominee Grover Cleveland
5. His biggest platform is to challenge corruption and supports entry exams
6. Cleveland loses against Benjamin Harrison (1889)
7. Harrison reestablishes the spoils system because
Republicans try and fill positions with supporters
Panic of 1873 undermines Reconstruction and people adopt the theory of "Social Darwinism"
Social Darwinism - Theory that persons, groups, and “races” are subject to the same laws of natural selection
Viewed poor blacks in this light, favored little govt intervention to help. Depleted treasury led ppl to want to spend little on freedmen, poor state governments cut back on social services (Therefore, less gov't in other areas, leading to the subjugation of blacks, immigrants, and poor whites)
Railroad, steel, and oil industry "capitalize" on less gov't intervention and practice vertical and horizontal integration
Capitalism supporters dislike gov't intervention, HOWEVER, they welcome it when it benefits the businesses
Congress passes the Sherman Antitrust Act 1890 and signed by President Harrison
Monopolies are being stripped away
Failed to define the word "monopoly" therefore enforing it was difficult and corporations continue to grow and strengthen power.
However, it's the first action taken by the federal government to place limits on business monopolies and cartels
Pass out Monopoly Activity
Jim Crow Laws
Phrased coined by Thomas Dartmouth Rice through the song, "Jump Jim Crow" (1830's). Some say the name was created earlier.
Laws created by Southern lawmakers (Democrats) to prevent black from equal rights
Followed Black Codes during mid 1800's
Plessy vs. Ferguson Supreme Court case states "separate but equal" constitutional
Jim Crow Laws established:
1. Literacy Tests
2. Poll Tax
Voter turnout decreases amongst freed blacks and poor whites, however, some are "grandfathered" in
People unionize to create better work environments, higher pay, etc.
12 -14 hours shifts
Pennies a day
Employers feel no responsibility for employee deaths
Immigration continues to grow due to industry.
Men, women, blacks, children, and people different ethnicities work in factories
Employers take advantage of cheap labor
Mexicans, Africans, and Asians work same hours, but less pay
Fatigue leads to unsafe conditions, eventually deaths occur
Employers try to establish control over workers and limit their voice.
Knights of Labor (1869)
a) Most successful in changing work environments
b) Mostly white males, but later includes blacks and women
c) Fought for d) KoL grows because of Great RR Strike of 1877
1. Temperance - Went on strike b/c of pay cuts
2. 8 hours work day - Spreads to 14 other states
3. Equal pay - President Rutherford B. Hayes sends
4. End to child labor troops to protect RR
Forget about Gingrich clip
Effects of Strike
Worker activism declines after Haymarket Riot (bomb goes off wounding 60 officers). Black lists are created that employers create and share with one another. Names include union supporters
American Federation of Labor (AFL, 1886)
a) Created for skilled labors after a large riot
b) Will mention in Progressive Prezi
Not until 1954 in Brown v. Board of Education of Topeka is Plessy vs. Ferguson overturned
Many whites in South support violence against blacks to control their way of life and also voting.
Lynch mobs begin to hang whites and blacks who support the Republican party. Not just blacks
Lynch mobs still occur today in different countries
Jim Crow Activity in Computer Lab
In one strike, the RR workers refused to operate trains & U.S. Gov't orders an end to the strike b/c it interfers with the delivering of U.S. mail (executive order).
Employers force workers to sign contracts stating they won't join a union. Also bring in other workers a.k.a "Scabs"
The efforts to strike against employers fails and leads the public to believe union workers are bad