The Gilded Age

The Gilded Age

• Named after a Mark Twain book published in 1873.
• A period from 1870 to 1900 after the Civil War.
• On the surface, things seemed well, but it masked deeper issues.

Positive Aspects of the Gilded Age

• Glamorous appearance.
• New communication and transportation technologies:
  • Railroads connected the nation.
  • Telegraphs enabled faster communication.
• Widespread adoption of electricity and incandescent light bulbs:
  • Illuminated cities.
  • Allowed Americans to engage in activities at night.
• Significant urbanization:
  • Brought people together in large numbers.
  • Offered opportunities for young men and women in growing cities.
• Rise of major corporations led by business tycoons:
  • Andrew Carnegie (steel).
  • John D. Rockefeller (Standard Oil).
  • JPMorgan (finance).
• Companies provided new goods and products to Americans:
  • Increased quantity, quality, and speed of production.
  • Led to the beginning of a consumption culture, based on consumerism.

Negative Aspects of the Gilded Age (According to Twain)

• Shady business methods:
  • Speculators, investors, and Wall Street financiers used questionable tactics to get wealthy.
  • Misleading stockholders and exploiting workers.
• Corruption of state and federal governments:
  • Government officials were often influenced by major corporations.
  • Corporations became de facto governments.
  • Scandals in Washington D.C. revealed the close ties between government and business.
• Economic exploitation of industrial laborers:
  • Millions of Americans and immigrants were engaged in industrial labor.
  • Employees were overworked, underpaid (subsistence wages), and offered no benefits (healthcare, pensions, unemployment, disability).
  • Many joined the class of unskilled, replaceable workers living in slums with little upward mobility.

Conflicting Interpretations of the Gilded Age

• Was it a period of prosperity, growth, and innovation?
• Or was it marked by societal, political, and economic problems?
  Both narratives hold truths.

Focus Questions for the Week

• What strengths did the United States possess in terms of resources, culture, technology, and public policy decisions that facilitated industrialization after 1865?
• How did the power of new industries impact the democratic foundations of the United States?
• Why were the Supreme Court and Congress slow to curb the power of big business?
• Why did labor have such a difficult time mobilizing against abusive and exploitative employers, and what were the repercussions of that difficulty?
• Is the comparison of our current era to a second gilded age fair, considering income inequality, environmental degradation, exploitative employment practices, and anti-democratic relationships between corporations and the government?

Visual Image: "The Strike" by Robert Kohler (1886)

• Depicts industrial discontent inspired by the Great Railroad Strike of 1877.
• Largest strike in world history in the 19th century, involving up to 600,000 workers.
  • Required state militias and the U.S. military to suppress it.
• Kohler's image is unique in its sympathy towards workers.
• Most popular presses of the time were subsidized by major corporations and hostile to workers.
• Popular depictions often portrayed workers as an unthinking mob without individuality or humanity.
  • Laborers were considered sheep, unthinking, dangerous, and radical.
    Individualizes the members of the group.
  • Workers are not merely part of a mob but have individual faces and concerns.
  • Depicts workers as fathers, children, and mothers.
  • Company represented in the background, with smokestacks.
  • Buildings in the upper right corner are likely company housing for workers (tenements, slums).
• Workers' attire varies, showing different trades (carpenters, miners, etc.).
• The image is fraught with tension.
  • A worker in the bottom right corner is stooping over to pick up a rock, with uncertain intentions.
  • A worker's wife is talking to her husband, perhaps trying to de-escalate the situation.
  • The leader of the group is agitated, gesturing vigorously.
  • Workers spill out of company housing to see what's happening.
    The owner's facial expression is mask-like and unmoved by the workers' appeals.
• The painting highlights the stakes involved, showing that the workers' actions affect people beyond just themselves.
• A mother looks on with trepidation, with two children who are dependent on her and her husband.

Central Tension

• The image captures the central tension in late 19th-century American society: which side, labor or capital, worker or employer, is in the right?
• The period between 1880 and 1910 was the most strike-ridden time in American history, with 37,000 strikes involving upwards of 6,000,000 workers.
• Strikes were a common feature of life in the Gilded Age.

Differing Views on Labor Unrest

• Some believed that labor unrest was squarely on the shoulders of working-class radicalism and agitators.
• Others were highly critical of management and ownership for exploiting workers, keeping them in dangerous conditions, working them long hours, giving them unlivable wages, and housing them in unhealthy tenements.

Central Themes of the Gilded Age

• What is the proper role of government in regulating the economy?
• What rights did workers have to collectively bargain, form unions, and go on strike?
  What was the impact of growing wealth disparities on the United States' republican traditions?
• Is industrial capitalism fundamentally antithetical to America's democratic traditions?

The United States as a Latecomer to the Industrial Revolution

• The United States industrialized later than Great Britain.
• The first major wave of industrialization occurred in Great Britain in the 1770s and 1780s.
• It caught on in parts of the United States (particularly the Northeast) in the 1820s and 1830s.
• The United States didn't industrialize on a nationwide scale until after the Civil War.
• By 1900, the United States became one of the most powerful industrial economies in the world, second only to Great Britain.
• It was predicted the United States would soon surpass Great Britain.

Factors Enabling U.S. Industrialization

• Abundance of cheap raw materials:
  • Major coal reserves in West Virginia, Pennsylvania, and Kentucky.
  • Vast deposits of copper, gold, iron, lead, wood, cotton, and oil.
    Great geographical advantages.
    Abundant pool of cheap labor.
    Record levels of immigration from Europe, China, and Mexico.
    Movement of native-born Americans from rural areas to urban cities.
    Hundreds of thousands of women and children entered the labor force.
    The United States saw unprecedented levels of innovation in technology, methodologies, workers.
    During its peak, there were 20,000 new patents filed per year in the 1890s.
• Government policy played a significant role:
  • Subsidized rail development with tax breaks, subsidies, loans, and granting 80,000,000 acres of federal land to rail companies.
  • Established high tariffs, like the highest tariff in American history passed in the 1890s, to protect domestic industries.
  • Adopted the laissez-faire governing ethos, promoting deregulation, tax breaks, and subsidies to major companies.
  • Supreme Court rulings expanded the rights and protections of corporations under the Constitution.

Cartoon Depicting Laissez-faire

• Thomas Nast's cartoon shows Lady Liberty chained and dragged down by government regulation and intervention.
• Government intervention into the economy is portrayed as the opposite of liberty.

Economic Growth Statistics

• Explosive economic growth in the United States from shortly after the Civil War to 1900.

The Preindustrial United States (circa 1865)

• Overwhelmingly rural and local.
• Historian Robert Wiebe described it as a "nation of island communities."
• People saw the world through personal relationships and small-town values.
• During the 1880s and 1890s, forces of big business began elbowing their way into these island communities, causing American society to become distended.
  Distending forces included urbanization, immigration, industrialization, the rise of corporations and corporate finance, and the rise of monopolies.
  Preindustrial United States consisted of small businesses and small farms.
  People eke out a precarious living and rarely saw the world outside their own small town.
  Economic value was measured in tangible things like property, livestock, and crops.

Shift in Economic Value

• Industrialization and the rise of industrial capitalism shifted economic value from tangible goods to more abstract ones.
• Assets became abstract, with credit cards, securities, annuities, stocks, dividends, and paper currency.
  Preindustrial era currency was hard currency, which shifted with industrialization.
  Before 1865, Americans worked in manufacturing operations with less than 25 employees.

Impacts of Railroads and Telegraphs

• By 1900, integrated railways owned and managed by seven major corporations crisscrossed the country.
• Trade was no longer confined to meandering and dangerous roads and winding canals and rivers.
• New towns sprang up along the tracks, becoming major consumers of finished goods.
• Railroads became major consumers of other industrial goods (iron, coal, steel, wood), leading to the emergence of other big businesses.
• Rapid expansion; a stagecoach could only travel 50 miles a day as where train could travel the same distance in two hours.

Emergence of Large Corporations and Wage Labor

• The most dramatic change in the late 19th-century economy was the emergence of large corporations and the growth of wage labor.
  Wage labor was uncommon to Americans of 1865, where people usually worked for subsistence.
• Now, people worked for a set number of hours and were compensated with currency rather than tangible goods.

Economic Integration and Healing Sectional Wounds

• Companies celebrated the dominance of the railroad, arguing that it would integrate the nation economically and help heal the sectional wounds from the Civil War.
  Adopted the standard gauge in the 1880s.

The Metaphysics of Time

• The new emphasis on wage labor and turning profit changed the way Americans conceived of time.
• Humans based their notion of time on the seasons and observable phenomena.
• The market revolution of the 1820s and 1830s and the industrial revolution emphasized mechanized time, measured by the clock.
• Experience of modernity linked to mechanized time and alienation from the natural world.
  Many Americans were revolted at the idea of clock time.
  Mechanized time was seen as an infringement on their liberty.
  The switch to clock time helped to radicalize the working classes.
  Humans did increasingly become out of touch with the biological rhythms of the planet, increasingly replacing the biological rhythms of tides and harvests and sunrises with artificial mechanical contrivances.
  Railroad time is to be the time of the future; this was a profound existentiaal shift for Americans.

Economic Developments

• The first major industry to industrialize was the railroad.
• All industries that followed during the Gilded Age modeled their practices on what the railroads did.

Success of Railroad Corporations

• The success of railroad corporations was predicated on two new ideas:
  • Issuance of stock (incorporation)
  • Standardization
    Stock sales allowed comapnies to raise money quickly.
    Stock system seemed benificial to stockholders and to the company.
    System incentivizes stock speculation.

Stock System

• Stocks are a way to raise vast amounts of money in a relatively quick period of time.
  Benefical for stockholders because they only liability is the amount put into the company.

Standardization

• Railroads pioneered processes to standardize business practices to eliminate waste, increase efficiency, minimize losses, and maximize revenue.
  Railroads pushes for timezones to comabat time irregulaties.
  Railroads pioneered timezones and the use of growing lass of middle managers.
  Managers, superintendents, clerks, accountants, implementated scientific management.
  Scientific management was a way to rationalize business practices. The assembly line is an example of this.
  Scientific managers would also time workers

Entrepreneurs

• Vertical Integration (Andrew Carnegie): Is where one company controls all of the main phases of production, reduces cost, invest in technologies. For example, Carnegie Still.
• Horizontal Integration (John D. Rockefeller): Is where Companies will simply buy out other companies producing similar or competing products with the goal of eliminating competition and achieving greater efficiency. For example, Standard Oil Company, this led to the creation of trusts.
  Trusts: Legally binding arrangements between companies; deemed anticompetitive.
  Holding Companies Replaces trust in the 1890s; a huge corporation that buys other companies by purchasing a majority of their stock and brings everything under one roof. Example: Johnson & Johnson. It allows for the creation of enormous corporations. By 1910, 1% of corporations control 44% of all US manufacturing output, resulted in powerful, wealth, and influential corporations.

Reactions to Corporate Growth

• Some Americans viewed the growth of corporations as a good thing.
  • Walt Whitman said railroads were kind of like the in his words, quote, the pulse of the continent.
    Advent of trust and holding companies creates monopolies, which eliminates market competition, creating a question of if the unchecked power is in so few compatible with the nation's republican principles.
    Series of scandals exposed government officials having accepted bribes from corporations.

Efforts to Curb Corporate Power

• Railroad commissions did not have the authority to regulate railroads because only congress has the right to do that.
  The Santa Clara County v Southern Pacific Supreme Court case declared that corporations were de facto people subject to the protections of the fourteenth amendment.
  Interstate Commerce Commission was first federal agency created to regulate the power of railroads.
  Supreme Court sided with railroads 15/16 times with cases brought about by the ICC; Businesses were pretty much unchecked.
  Critical Imgages portrayed with Railroads and with Monopolies stifling American Society.
  Organized grass root movements were created like The Grange.
  It Also lead to influences working class organizations of the 1880s that demanded accountability in industry as well.
  Workers tried to frame corporations being dishonest and tried to paint Corporations as undemocratic, leading to protests.

Conflicting Views of Business Leaders

• Were men like Jay Gould and Andrew Carnegie robber barons or captains of industry?
  Andrew Carnegie kind of mellowed criticism with philanthropy and softer endorsement of industrial capitalism and of competition.

Media Portrayal

• Was often critical of power wielded of the corporations.
  Senate if not being run by elected representatives, but by those that are wealthy.

Rise of Consumption

• Made everyday items more and more accessible.
  Transformed Citizens relationship to companies, fellow citizens.
  Advertising becomes big and more sophisticated in the nineteenth century.
  Advertising involved incorporating psychology and sociology to create brand awareness, brand loyalty, selling an idea and identity.
  Department Store grows and expands and offers consumers a want to shop place.
  Made shopping on experience with clerks and staff.
  These department stores are not just about providing goods, but selling an experience.
  There Are also mall order catalogs for rural Americans.

Consumer Culture

• Americans are able to purchase and consume a whole host of goods that transform their relationship to companies, and transform their relationship to to their fellow to their fellow citizens.
  This is especially important as a new wave of immigration comes to The United States between 1880 and 1920, which brings millions of people into The United States with different languages, cultures, religions, backgrounds, uniting immigrants in shared culture of Americanness.
  As consumption grew, so did companies that increasingly looked outward to capitalized in other market around the world.
  Makes female beauty industry successful in this era.
  Most could not access the physical department store, companies like Sears and Roebuck offer, these mail order catalogs that take advantage of the spread of railroads, the efficiency and speed of railroads to sell consumer goods to Americans that are far removed from urban areas.

Negatives of New Manufacturing Technology

Significant tradeoffs come with consumption; The advent of wage labor, the advent of paychecks, and all these sorts of things make the average American's kind of day to day financial existence a little bit easier.
Mechanization also takes place with trades that once were well paying jobs become jobs that are easily replaced with machines.
A lot of lowering barries from skill workers to unskilled mean that companies can depress wages, workers have to work long hours, because they know they can be easily replaced.
A lot jobs were done by women and children.

Monotonous/ Dangerous Working Conditions

*Estimated about 35,000 workers per year died with in between 1880 and 1890, with 500,00 inujured
*Monotony and Bordom in work led to careless accidents due in lack of focus.

• Most of companies do not offer pensions, or heath insurance
  *Workers would work 6 days a week and 12 hours a day in unsafe working conditions.
• Average males unskilled labor were only $4 / 500 dollars a year.
  Historians estimate bare living minimum wage at the time $6/$800.
  Instability of the market and Wall Street cycles affected average people.

Child Labor

Is also very dangerous. In 1870 to 1900, child labor grows by a million, and the machines created allowed for terrible injuries for the kids.

• Employers were able reduce operating cost and the ability maximize profit rep or to max to maximize to maximize revenue and profit margins. Also because companies didn then have to provide benfits ot that labor. And child laboer was more available.

Control over Workers

• Business exerted such complete control over workers.
  Dilute the power of workers and dilute the and prevent workers from collectively bargaining and demanding better conditions.
  Blacklist/workers could be driven out of town or state simply due to ideas made unfavorable during employers.
  Strike breakers and replacement workers called scabs.
  Companies will play upon racial animoties and divisions.
  owners knew that they could rely on the power of the state to back them up.
  Between 1881 and nineteen o five, the nation is rocked by 37,000 strikes involving 6,000,000 workers, creating unrest and distruption in society. Because people wanted to consume and the strike distrupted that they blamed the average protestors.

Early Labor Unions

The first labor unions; National Labor Union fought eight-hour workday; went away after death of founder

• The state also uses, spectacle displays of violence to dissuade workers from striking or for or from collectively bargaining. public executions
  *Black Tuesday in 1877, '10 of those WBA, Molly Maguires are publicly executed and hung, hanged.
• Divisions amongst workers and the presence of racism. preventing African Americans or immigrants organizing within organizations. .Largest strike was the Great Railroad Strike.