A SURVEY OF AMERICAN HISTORY

Unit 3: Reconstruction and UrbanizationPart 6: The Gilded Age

INDUSTRIALIZATION INCREASES

• Between 1865 and the end of the nineteenth century, the United States experienced social changes that contributed to rapid industrialization and economic growth.

• At the heart of these changes was urbanization, the expansion of American cities.

• Urbanization increased due to immigration from abroad and the movement of freedmen from rural to urban areas. Cities were flooded with both workers and consumers, which allowed industrial businesses to thrive.

THE GILDED AGE

• One of the results of this industrialization was that people who invested in industrial businesses suddenly became extraordinarily wealthy.

• These people were known as the nouveau riche. As they acquired their wealth, they began to purchase palatial houses and to live very extravagant, opulent lifestyles.

• The period in which they did this is known as ‘the Gilded Age,’ a term coined by the satirist Mark Twain.

CORNELIUS VANDERBILT

• Acquired and built a small railroad empire in upstate New York, culminating in the construction of New York’s Grand Central Station in 1869.

• Also acquired railroad properties in New Jersey, Connecticut, and Michigan.

• Became the archetypal ‘railroad baron,’ dedicated to the further acquisition of property and the expansion of his business.

JOHN D. ROCKEFELLER

• Founded Standard Oil in 1870, one of the most profitable oil refineries in the country.

• Colluded with the railroad companies to transport refined oil and kerosene to the South at heavily discounted rates, undercutting the purchasing power of smaller refineries.

• By 1872, had purchased and absorbed twenty-two out of twenty-six oil refinery competitors in Cleveland, where Standard Oil was based.

JOHN D. ROCKEFELLER

• Began building oil pipelines in the late 1870s in order to avoid transporting oil via the railroad.

• By 1880, controlled almost all oil production and transport in the United States and ninety per cent of the global total.

• Employed more than 100,000 people and became one of the first millionaires.

• In 1882, created the Standard Oil Trust to consolidate the company’s assets.

ANDREW CARNEGIE

• Born into poverty in Dunfermline, Scotland, in 1848.

• Built the Carnegie Steel Company in Pittsburgh, profiting from the expansion of railroad businesses and the use of steel in railroad tracks.

• Acquired a fortune of almost half a million dollars in his lifetime, equivalent to about six billion dollars today.

• Had a ‘rags to riches’ life story.

ANDREW CARNEGIE

• Preached a ‘Gospel of Wealth’ in a famous article in 1889, arguing that it was the moral duty of all businessmen of his stature to act philanthropically.

• Practiced the ‘Gospel of Wealth’ by donating much of his fortune to charitable and humanitarian causes. Ultimately donated about ninety per cent of his total financial holdings or approximately $350 million.

• Sold Carnegie Steel to John Pierpont ‘J.P.’ Morgan in 1901.

J.P. MORGAN

• In 1892, created General Electric by arranging the merger of two electricity companies, Edison General Electric and Thomas-Houston Electric.

• Was primarily a financier involved in investing in new companies and acquiring old companies, rather than being involved in a particular industry.

• Financed the creation of a new steel company, then acquired Carnegie Steel and merged it with his own in 1901.

HORATIO ALGER

• Mark Twain criticized the industrial giants of the Gilded Age as ‘robber barons’ who made their fortunes by exploiting laborers who worked in poor conditions for low pay.

• Other writers, such as Horatio Alger, celebrated them and mythologized them as exemplars of the ‘self-made man’ who shapes his own economic destiny, picking himself up ‘by his bootstraps’ to ascend ‘from rags to riches’ almost by sheer force of will.

THE HORATIO ALGER NOVEL

• Alger wrote scores of cheap pulp novels that all celebrated the successes of hardworking, clever young men.

• These novels were some of the most popular of the late nineteenth century.

• With his novels, Alger advanced the idea that anyone could ‘make it in America,’ the land of opportunity, if only they tried hard enough, and, conversely, the idea that the poor deserved their misfortune because they were not working hard enough.

A SURVEY OF AMERICAN HISTORY

Unit 3: Reconstruction and UrbanizationPart 6: The Gilded Age