Rise of Corporation / Gilded Age

  • 1870-1900
  • Backstory for the Northeast (Massachusetts → New York)
    • 1780-1800: Market Revolution
    • Farmers used to farm to survive
    • Now farmers moved a majority of their activity into farming for profit
      • Cutting out the middleman: merchants would trade their crops and get a lot of money
    • US becoming a capitalist country
      • Individuals / groups of individuals own the economy (vs the government owning the economy)
    • 1800-1810
    • North - explosion of factories
      • Allowed for mass production of goods → bigger supply + more availability of goods
    • 1820-1850: Transportation Revolution
    • Erie Canal: Buffalo → Hudson River → upstate NY
    • Generated more wealth: anyone in NE US could send anything to anyone in the NE US
    • Railroads
  • Now into the story
  • Corporation is a legal agreement that protects the people running the company from liability.
    • The company can lose money but the CEO can’t
  • New Jersey starts freely giving out corporations
    • Wasn’t popular before civil war
  • Less risk: your own wealth is not on the line
  • Inequality
    • 1% - wealthiest. Very small number of people became very wealthy
  • Middle class got more money: up 30%
  • Socialism: half-way between communism and capitalism
  • Communism: government ownership
  • US is capitalist
  • Middle class → __consumer__ism
    • Coffee, sugar, bananas
    • Sears catalogue: could order from mail
    • 1890: mail delivery became free in rural areas
  • 1/20 railroad operators died. Miners also died at high rates; higher than in Europe, which also had corporations at the time
    • Here there were no government rules on corporation because the government was pro-corporation
    • Corporations faced very little oversight
  • 1890s: corporations became bigger → bought out competitors and distributors. Became trusts (mega corporations) because they took over that industry
    • Capitalism is competition, but corporations erased competition
    • Example: Disney owns everything
  • Centralization: measuring power. Where power is most acutely present
    • Power is no longer distributed
    • Used to refer to the king getting more power than the nobles
    • Corporations became more centralized than regular companies
  • DuPont: sold gunpowder in 1800s
    • Before the Civil War, had already spread in NE + midwest
    • Agent (manager of offices) decided the amount and price of gunpowder
    • After the Civil War: agents had no decision making power
  • Corporations led to more uniformity among the people. Mass culture 
    • Solidified in 20th century because of entertainment
  • Opposition of the corporation
    • Knights of Labor
    • Labor union: group where workers come together to fight for their rights against corporations
    • 1880s: 700 thousand members at its peak
    • With the rise of factories came the rise of unskilled jobs
      • Unskilled workers require less wages
      • Before the Civil War (1860), most of those jobs went to rural workers
      • After the Civil War, most of those jobs went to immigrants
      • 1875-1925: 1M immigrants came into US a year 
    • Accepted unskilled workers, women and African Americans
    • In 20th century, labor union asks for more money, more vacation time, and more benefits
    • The Knights of Labor fought for worker control for their factory or company so power is diffused, not centralized
      • Called “cooperative”
    • 1887 - fire in Chicago because of anarchists (people who don’t like government)
      • Caused backlash against “weird” politics, including labor unions
      • Knights of Labor lost all members by 1890
    • Populism
    • Populists were struggling farmers
    • Populism was big in the plains states (Nebraska, etc.) and the west
    • 1885 + 1889: drought that wiped out crops in Plains states 
      • Wiped out money for farmers for the whole year
    • Movement of desperation
    • Populism was also big in the South because South was poor 
      • All farmers were poor
      • North GA: too cold for cotton
      • 1870s - fertilizer
      • Meant that cotton grew faster and you could grow cotton in north GA now
      • By 1880s, 90% of North GA was growing cotton and +10% corn
      • Entered market revolution
      • General stores started popping up everywhere because people stopped growing food and focused on cotton
      • The British Empire
      • Egypt, India - British start to grow cotton
      • Cotton supply went up, price plummeted
    • 1890: populists turn into a small political party: “third party”
    • Populist Demands
      • Government take over the railroads
      • Instead of corporations
      • Costs too much to ship goods - if government takes over, prices will go down
      • Wanted government to build storehouses - buildings where they could store crops for long periods of time
      • Purpose: there was a hope that cotton prices would go up. Would let farmers wait until they could sell for a higher profit
      • Wanted to put silver into the circulation
      • Backstory:
        • 1879: government retired greenbacks: money printed during the civil war
        • 1888: there was 1/2 money in US than in 1879. 50% money decrease
        • South and West (plains states - Kansas and Nebraska and Dakotas) had fewer banks → less money
        • Money in circulation was tied to the gold standard
        • If there was a limit on gold, there was a limit on money supply
        • Hard to increase money supply wo finding gold
      • Would lower interest rates by expanding the currency of money
      • Silver’s more available
    • Populists, at their height, had 10/300 representatives in the House
    • 1895: Populists have died out, basically
    • William Jennings Bryan: lawyer from Nebraska
      • 1896: Democratic nominee for President
      • Because he was from Nebraska, he was more empathetic to populist concerns
      • Anti-corporate politician
      • Agreed with populist goals 1 and 3
      • Populist party gave Bryan their vote as their last attempt
      • Lost - last major party candidate to want to kill corporations
      • Said gold standard as being kept because of corporations
    • The 1896 election was a win for corporations → sealed the fact that corporations are the way business is done in the US