Gilded Age Economics (2)

Unit 6

Late 1800’s : U.S. economy growing approx. 4% every year

• Abundant labor supply

• Advanced transportation network

• Business - friendly government policies

• The emergence of several talented entrepreneurs

1830s-1860s: dozens of separate Railroads constructed in the Northeast

• Consolidated into “Trunk Lines” after Civil War

The Transcontinental Railroad (West)

• Authorized by Congress during Civil War

• Union Pacific + Central Pacific

• Completed May 10, 1869

Competition and Consolidation

• Financial panic in 1893 forces ¼ of all railroad companies into bankruptcy

• J.P. Morgan and several other bankers take over failed companies

• A few powerful men now control the entire railroad industry, creating a monopoly

Andrew Carnegie

• Carnegie Steel quickly dominates entire industry

1900: J.P. Morgan buys Carnegie Steel for $480 million

• Renamed United States Steel

Rockefeller and the Oil Industry

• 1863: J.D. Rockefeller founds Standard Oil Company and buys out smaller competitors

• Forms a trust which allows him to control oil and supply prices

The Antitrust Movement

• 1880’s: middle class begins to fear the unchecked power of trusts

• Sherman Antitrust Act (1890): on paper → U.S. government will not let monopolies/trusts form (nothing is enforced though)

Laissez-Faire Capitalism

• Justified lack of government interference in the economy

Social Darwinism

• Natural selection & survival of the fittest

The Gospel of Wealth

• Industrialists should use their “God given” wealth on projects which benefit all of society

1990: Most Americans worked for hourly wages

• Low pay, long hours, and poor working conditions

New Inventions and Inventors

• Typewriter, telephone, Kodak camera, and more

• First department stores and mail-order catalogs

Industrial worker’s struggles → several deadly labor conflicts in the late 1800s

• Haymarket bombing, Homestead Strike, Great Railroad Strike, and Pullman Strike