Gilded Age IndustrializationGilded Age IndustrializationDuring the Gilded Age, American

businesses were transformed:◦Massive corporations replaced small,

family businesses◦New technology, transportation,

marketing, labor relations, & efficient mass-production

◦By 1900, the U.S. was the most industrialized country in the world

The Business of InventionThe Business of Invention19th-century inventors led to an “Age of Invention”:◦Cyrus Field’s telegraph cable◦Business typewriters, cash registers, adding machines

◦High-speed textile spindles, auto looms, sewing machines

◦George Eastman’s Kodak

camera◦Alexander G. Bell’s telephone

By 1905, 10 million Americans had phones; (Bell Telephone Co became AT&T)

The Business of InventionThe Business of InventionThomas Edison, the “Wizard of Menlo Park,” created the 1st research lab in New York◦Edison Illuminating Co was the to 1st use electric light in 1882

◦Tesla’s alternating current (AC) allowed electricity to travel over longer distances & to power streetcars & factories

The Business of InventionThe Business of InventionNew technologies allowed for

increased industrial production◦New machines were incorporated into the

first assembly lines which allowed for continuous & faster production of goods

◦The railroad linked every region of America & allowed for a mass consumption of goods

Chicago Meatpackers: Chicago Meatpackers: The 1The 1stst “Disassembly Line” “Disassembly Line”

The Midwest Made Meat for The Midwest Made Meat for America America A new-and-improved “market revolution”:A new-and-improved “market revolution”: More regional specialization made mass

production & mass consumption possible

New Methods of Marketing New Methods of Marketing Marketing became a “science”:◦Advertising firms boomed◦Department stores like Macy’s & Marshall Field’s allowed customers to browse & buy

◦Chain stores like A&P Grocery & Woolworth’s “Five & Ten”

◦Mail-order catalogues, like Montgomery Ward sold to all parts of America

New Forms of Business New Forms of Business OrganizationOrganizationNew types of business organization were used to increase profits:◦“Trusts” & “holding companies” integrated various businesses under 1 board of directors

◦Vertical & horizontal integration maximized corporate profits

◦Frederick Taylor’s “scientific management” emphasized time efficiency & mid-level managers

“Trusts” use a board of trustees to

manage a company

“Holding companies” oversee & manage other

subsidiary companies

Vertical & Horizontal IntegrationVertical & Horizontal IntegrationU. S. Corporate MergersU. S. Corporate Mergers

By 1900, 1% of U.S. companies controlled 33% of all industry

New Forms of Business New Forms of Business OrganizationOrganizationBusiness leaders used a variety of ideas to justify their wealth:◦The “Gospel of WealthGospel of Wealth” argued that it is God's will that some men attained great wealth

◦Social DarwinismSocial Darwinism taught that natural competition weeds out the weak & the strong survive

◦Were monopolists “captains of industry” or “robber barons”?

The The Industrialization Industrialization of Americaof America

The Second Industrial Revolution was fueled

by 3 industries: railroads, steel, & oil

The Railroad Industry The Railroad Industry America’s first “big business” was

the railroad industry:◦Railroads stimulated the coal, petroleum,

& iron/steel industries◦Large companies bought small railroads,

standardized gauges & schedules, & pooled cars

◦Small lines in the east acted as tributaries to the 4 great trunk linestrunk lines into the West

Cornelius “the Commodore” Vanderbilt was the most powerful figure in the railroad industry

Jim Fisk

Problems of GrowthProblems of GrowthBut, the railroad industry faced

problems due to overbuilding in the 1870s & 1880s:◦Mass competition among RRs◦RR lines offered special rates & rebates

(secret discounts) to lure passengers & freight on their lines

◦Pooling & consolidation failed to help over-speculation

Speculators like Jay Gould built & bought rail lines to profit with

little concern for efficient use

Problems of GrowthProblems of GrowthRR bosses asked bank financier

J.P. MorganJ.P. Morgan to save their industry:◦Morgan created a traffic-sharing plan to end wasteful competition

◦“MorganizationMorganization” fixed costs, cut debt, stabilized rates, issued new stock, & ended rebates

◦Created a “board of trustees” By 1900, 7 giant (centralized & efficient) rail systems dominated

The Steel Industry The Steel Industry Steel transformed world industry:

◦Allowed for taller buildings, longer bridges, stronger railroad lines, & heavier machinery

◦Andrew CarnegieAndrew Carnegie’s company made more steel than England

◦Carnegie converted his steel plants to the Bessemer process & was able to out-produce his competition & offer lower pricesAndrew Carnegie

was the great example of the

“American Dream” & social mobility

Rockefeller and OilRockefeller and OilPetroleum also changed industry ◦New industrial machines needed kerosene for lighting & lubricants

◦John D. RockefellerJohn D. Rockefeller monopolized the oil industry, lowered oil costs & improved the quality of oil

◦By 1879, Standard Oil ruled 90% of all U.S. oil & sold to Asia, Africa, & South America

The Industrial The Industrial WorkersWorkers

Industrial WorkersIndustrial WorkersIndustrial work was hard:

◦Laborers worked long hours & received low wages but had expensive living costs

◦Industrial work was unskilled, dangerous, & monotonous

◦Gender, religious, & racial biases led to different pay scales

These conditions led to a small, but significant union movement

Early American Labor UnionsEarly American Labor UnionsIn 1868, Knights of LaborKnights of Labor formed to help all type of workers escape the “wage system”

The most successful union, the American Federation of LaborAmerican Federation of Labor (1886) led by Samuel Gompers:◦Made up only of skilled labor & sought practical objectives (better pay, hours, conditions)

◦Included 1/3 of all U.S. laborers

The KoL lacked organization to survive

Membership regardless of skill, race, or sex

Excluded women, blacks, unskilled laborers

The U.S. experienced an “era of The U.S. experienced an “era of strikes” from 1870-1890strikes” from 1870-1890

The Great RR StrikeGreat RR Strike of 1877 shut down railroads from

WV to CA & resulted in hundreds of deaths

During the Chicago Haymarket StrikeChicago Haymarket Strike (1886), unionists demanded an 8-hr day; led to mob violence & the death of the Knights of Labor

The Homestead StrikeHomestead Strike (1892) resulted from a 20% pay cut at one of Carnegie’s steel plants

Urbanization: Urbanization: 1870-1900 1870-1900

Gilded Age UrbanizationGilded Age UrbanizationFrom 1870 to 1900, American cities grew 700% due to new job opportunities in factories:◦European, Latin American, & Asian immigrants flooded cities

◦Blacks migrated into the North◦Rural farmers moved from the countryside to cities

The Lure of the CityThe Lure of the City

By 1920, for the 1st time in U.S. history, more than 50% of the American

population lived in cities

Skyscrapers and SuburbsSkyscrapers and SuburbsBy the 1880s, steel allowed cities to build skyscrapers

The Chicago fire of 1871 allowed for rebuilding with new designs: ◦John Root & Louis Sullivan were the “fathers of modern urban architecture”

◦New York & other cities used Chicago as their model

Tenements & Tenements & OvercrowdingOvercrowding½ of NYC’s buildings were tenements which housed the poor working class ◦“Dumbbell” tenements were popular but were cramped & plagued by firetraps

◦Slums had poor sanitation, polluted water & air, tuberculosis

◦Homicide, suicide, & alcoholism rates all increased in U.S. cities

Jacob Riis’ “How the Other Half Lives” (1890) exposed the poverty of the urban poor

Strangers in a New LandStrangers in a New LandFrom 1880-1920, 23 million

immigrants came looking for jobs:◦These “new” immigrants“new” immigrants were from

eastern & southern Europe; Catholics & Jews, not Protestant

◦Kept their language & religion; created ethnic newspapers, schools, & social associations

◦Led to a resurgence in Nativism & attempts to limit immigration

Immigration to the U.S., 1870-Immigration to the U.S., 1870-19001900

Foreign-born Population, 1890Foreign-born Population, 1890The influx of ethnic nationalities led to a new “melting potmelting pot” (“salad bowl”?) national image

Urban Political MachinesUrban Political MachinesUrban “political machinespolitical machines” were loose networks of party precinct captains led by a “boss”◦Tammany Hall was the most famous machine; Boss Tweed led the corrupt “Tweed Ring”

◦Political machines were not all corrupt (“honest graft”); helped the urban poor & built public works like the Brooklyn Bridge

Social Changes in the Social Changes in the Gilded AgeGilded AgeUrbanization changed society:◦The U.S. saw an increase in self-sufficient female workers

◦Most states had compulsory education laws & kindergartens

◦150 new public & private colleges were formed

◦Cities set aside land for parks & American workers found time for vaudeville & baseball

People of all races married later & had fewer children

“Family time” disappeared for working class

Women made up 40% of university students

Private philanthropy led to Stanford, Tulane, Vanderbilt, Cornell, & the Univ of Chicago

Land Grant Act (1862) led to the Universities of WI, CA, MN, IL

American IndustrializationAmerican IndustrializationBenefits of rapid industrialization:◦The U.S. became the world’s #1 industrial power

◦Per capita wealth doubled ◦Improving standard of living

Human cost of industrialization:◦Exploitation of workers; growing gap between rich & poor

◦Rise of giant monopolies

The Politics of the The Politics of the Gilded AgeGilded Age

Politics of StalematePolitics of StalemateThe 5 presidential elections from 1876 to 1892 were the most closely contested elections ever

Congress was split as well:◦Democrats controlled the House◦Republicans held the Senate

This “stalemate” made it difficult for any of the 5 presidents or either party to pass significant legislation for 20 years

No more than 1% of the popular vote separated the candidates in 3 of 5 elections

Pendleton Civil Service Act of 1883

Interstate Commerce Act of 1887

Sherman Antitrust Act of 1890

McKinley Tariff Act of 1890

The Two-Party Stalemate: The Two-Party Stalemate: 1876-1892 1876-1892

Democratic BlocDemocratic Bloc Republican BlocRepublican Bloc

Supported by white southerners, farmers, immigrants, & the working poor

Favored white supremacy & supported labor unions

Supported by Northern whites, blacks, & nativists

Supported big business & favored anti-immigration laws

Voting Blocs in the Gilded Age

Civil Service Reform Civil Service Reform The most important political issue of 1880s was civil civil service reformservice reform:◦The federal bureaucracy swelled in size after 1860 & these positions were appointed via patronagepatronage (spoils system)

◦Congressmen often took bribes or company stock for their votes

◦Political machines ruled cities through bribes & personal favors

Dept of Agriculture & Bureau of Indian Affairs were added

Treasury Dept grew from 4,000 employees in 1873

to 25,000 by 1900

56,000 bureaucratic jobs were filled by patronage in 1881

The The “Bosses” “Bosses” of the of the SenateSenate

Boss Tweed of the NYC Democratic

Political Machine, Tammany

Hall

Civil Service Reform Civil Service Reform Civil service reform received a boost when disaffected patronage seeker, Charles Guiteau, assassinated President Garfield:◦In 1883, Congress created the Pendleton ActPendleton Act for merit-based exams for civil service jobs

◦State & local gov’ts mirrored these reforms in 1880s & 1890s

“If the spoils system could kill a president, it was time to end it”

Charles Guiteau assassination of Charles Guiteau assassination of Garfield Garfield

Gov’t Regulation of Industry Gov’t Regulation of Industry From 1870 to 1900, 28 state commissions were created to regulate industry, especially RRs:◦In 1870, Illinois declared RRs to be public highways; this was upheld by Munn v. Illinois Munn v. Illinois (1876)

◦But, was overturned in Wabash Wabash v. Illinoisv. Illinois (1886): “only Congress can regulate interstate trade”

Tariffs & TrustsTariffs & TrustsCongress responded by creating:◦The Interstate Commerce Interstate Commerce CommissionCommission (ICC) in 1887 to regulate the railroad industry

◦The Sherman Antitrust Act Sherman Antitrust Act in 1890 which made it illegal to restrain trade (punishable by dissolution of the company)

The ICC became the model for future

regulatory agencies

This was the 1st attempt by the federal gov’t to regulate big business

U.S. v. E. C. Knight Co (1895) was the 1st test of the Sherman Antitrust Act

The Supreme Court weakened the Sherman Antitrust Act by ruling that this sugar

monopoly do not restrain trade because making a good is not the same as selling it

The Interstate Commerce ActThe Interstate Commerce Act

The Pullman Strike (1894)The Pullman Strike (1894)In 1894, Pullman Palace Car workers went on strike when the company cut wages by 50%◦American RR Union leader Eugene Eugene V. DebsV. Debs called for a national railroad strike

◦President Cleveland issued an injunction & sent the army to end the strike & resume rail traffic

◦Strikers in 27 states resisted U.S. troops & dozens died

In re DebsIn re Debs in 1895, the Supreme Court upheld the injunction since the strike

“restrained” U.S. trade

The Pullman Strike (1894)The Pullman Strike (1894)Effects of the Pullman Strike:

◦Eugene Debs was arrested & became committed to socialism while in jail, sparking a brief U.S. socialist movement

◦In the 1895 case, In re DebsIn re Debs, the Supreme Court used the Sherman Antitrust Act to uphold Cleveland’s injunction since the strike “restrained” U.S. trade

This was a clever application of the Sherman Antitrust Act

In re Debs made the Sherman Act a great anti-labor tool

The Farmers’ The Farmers’ Movements & the Movements & the Rise of the Rise of the PopulistsPopulists

Political OrganizationPolitical OrganizationThe Gilded Age saw a rise in political organization among disaffected Americans:◦Labor unions (like the Knights of Labor & the AFL) encouraged industrial workers to vote

◦Women’s Christian Temperance Union (WCTU) advocated temperance, race relations, & the right for women to vote

The great temperance agitator—Carrie The great temperance agitator—Carrie NationNation

The Farm ProblemThe Farm ProblemThe most discontent group during the Gilded Age were farmers:◦Harsh farming conditions◦Declining grain & cotton prices◦Rising RR rates & mortgages◦Government deflation policies

Farmers lashed out at banks, merchants, railroads, & the U.S. monetary system (gold standard)

Greenback & Silver Greenback & Silver Movements Movements Many farmers supported the “free

silver” movement:◦The U.S. minted silver & gold coins at a

ratio of 16:1, but stopped in 1873 due to an oversupply of gold

◦But western miners found huge lodes of silver & wanted “free silver”—the gov’t should buy all silver from miners & coin it

This would lead to inflation & someone would consistently buy silver from miners

In 1878, Congress passed the Bland-Allison Act to coin between

$2-4 million in silver coins

In 1890, Congress passed the Sherman Silver Purchase Act to increase silver coinage but not to

16:1 (the act was repealed in 1893)

The Granger MovementThe Granger MovementThe 1st attempt to organize farmers

began with the Grangers:Grangers:◦Grangers grew angry at the exploitive

practices of Eastern bankers, railroads, & wholesalers

◦Grangers formed co-op stores, banks, & grain elevators

The Grange died in the depression of the 1870s, but established the precedent of farmer organization

The National Farmers’ The National Farmers’ AllianceAllianceIn 1890, the National Farmers’ National Farmers’ AllianceAlliance replaced the Grange as the leading farmers’ group

In 1890, made Ocala Ocala DemandsDemands:◦Allow farmers to store crops in gov’t silos when prices are bad

◦Free-coinage of silver, a federal income tax, & regulation of RRs

◦Direct election of U.S. senators

The Populist PartyThe Populist PartyIn 1890, farmers & factory workers formed the Populist Populist PartyParty:◦Their platform included the Ocala Demands, an 8-hour day, gov’t control of RRs & banks, the breakup of monopolies, & tighter immigration restrictions

◦Populists emerged as a powerful 3rd party & got numerous state & national politicians elected

3 governors, 10 congressmen, 5 senators, & dominated the state governments of

Idaho, NV, CO, KS, & ND

The Election of 1896The Election of 1896A Populist-Democrat merger looked

possible in 1896 when William William Jennings BryanJennings Bryan received the Democratic nomination against Repub William McKinley:◦Called for free silver & income tax;

attacked trusts & injunctions◦Bryan visited 26 states on his whistle-

stop campaign to educate Americans about silver

“Having behind us the producing masses…we will answer their demand for the gold standard

‘You shall not press down upon the brow of labor this crown of thorns, you shall not crucify mankind upon a cross of gold.’”

18,000 miles of campaign “whistle stops”

Bryan: The Farmers’ Friend Bryan: The Farmers’ Friend

OR?

The Election of 1896The Election of 1896Advised by RNC chairman, Mark Hanna, McKinley waged a “front porch” campaign from Ohio

Aided by the press, McKinley’s message reached as many voters:◦Advocated economic, urban, & industrial growth

◦Aroused fear that a “free silver” victory would result in 57¢ dollar

The Election of 1896The Election of 1896The election of 1896 killed the Populist Party,

but key Populist ideas (income tax, secret ballot, & direct election of Senators)

would be enacted by other parties

The McKinley The McKinley AdministrationAdministration

The McKinley The McKinley AdministrationAdministrationRepublicans benefited from

an improving economy, better crop production, & discoveries of gold:◦The election of 1896 cemented Republican rule for 30 years & became the party of prosperity

◦From 1860-1890, Republicans had promotedpromoted industry; by 1900, it was time to regulateregulate it

The McKinley The McKinley AdministrationAdministrationMcKinley was an activist president and became the first “modern” president:◦He communicated well with the press

◦The Spanish-American War brought the USA respect as a world power

◦The Gold Standard ActThe Gold Standard Act (1900) ended the silver controversy

A Decade of Changes: The A Decade of Changes: The 1890s 1890s The Depression of 1893 and the

problems faced by farmers & industrial workers forced people to rethink industry, urbanization, & the quality of American life

Many embraced the need for reform which opened the door to the Progressive Era