Industrial America: The Gilded Age (1865-1898)
INDUSTRIAL AMERICA: THE GILDED AGE (1865-1898)
ESSENTIAL QUESTIONS
What were distinguishing characteristics of the new industrial economy?
What were the changes to the labor force during the 1870s and 1880s?
What led to the rise and failure of labor unions during the 1870s and 1880s?
DISTINGUISHING CHARACTERISTICS OF THE NEW INDUSTRIAL ECONOMY
Abundant Resources: America had extensive natural resources available for industrialization.
Growing Population: The population surged due to immigration and higher birth rates.
Surge of Innovation: Innovations fueled the industrial economy, particularly in technology.
Driven by Western Expansion: The movement westward facilitated the growth of the economy.
RAILROADS AS A BIG BUSINESS
Considered the first big business in America.
Key Example: Cornelius Vanderbilt, who significantly impacted railroad expansion.
Immigration: Between 1790 and 1890, approximately 27.5 million European immigrants came to America.
In 1790, 95% of Americans lived on farms, while by 1890, only 35% resided in rural areas.
Urban populations grew from 10 million to 54 million between 1870 and 1920.
URBANIZATION
A significant trend where urban populations as a percentage of U.S. total increased dramatically:
1790, 1810, 1830, 1850, 1870, 1890, 1910, 1930, and beyond.
TECHNOLOGICAL DEVELOPMENTS
Steel Production: Introduction of methods such as the Bessemer Process.
Inventions: Telephone by Alexander Graham Bell (1876), Typewriter by Christopher Sholes (1868), and the Electric Light Bulb.
Employment Opportunities for Women: Technology created new job roles.
Vertical City Concepts: Innovations like electric elevators allowed cities to grow vertically.
CONSOLIDATING CORPORATIONS
VERTICAL INTEGRATION
Defined as controlling all steps in production.
Key Figure: Andrew Carnegie, who managed operations from mines to market.
Economies of Scale: Larger production volumes reduced costs.
HORIZONTAL INTEGRATION
Defined as owning the entire industry in a particular sector.
Key Figure: John D. Rockefeller of Standard Oil, utilized this strategy effectively.
Monopoly Concept: Examined by the phrase “When Monopoly Wasn’t a Game”.
NEW BUSINESS ENTITIES
Modern Corporations: Characterized by the ability to sell stock to the public, limiting liability for shareholders.
Trusts and Holding Companies: mechanisms to consolidate control over multiple companies.
Examples: Rockefeller’s Standard Oil Trust certificate and railroad corporate stock.
ROBBER BARONS OR CAPTAINS OF INDUSTRY?
Robber Barons: Were seen as exploiting the economy for profit.
Practices included:
Buying politicians and manipulating stock prices.
Offering buyouts well below market value.
Engaging in predatory pricing.
MANAGEMENT AND WORK REORGANIZATION
TAYLORISM
Developed by Frederick W. Taylor in The Principles of Scientific Management (1911).
Mass Production: The moving assembly line drastically increased production rates.
JUSTIFYING GILDED AGE CAPITALISM
Social Darwinism: Coined by Herbert Spencer and utilized by William Graham Sumner, asserting:
Concept of “survival of the fittest” applied to capitalism.
Suggested that the wealth of millionaires demonstrated natural selection.
Capitalism Principles:
Competition, forces of supply and demand, and private ownership.
CRITICS AND ALTERNATE VIEWS ON CAPITALISM AND SOCIAL DARWINISM
Karl Marx: Critiqued capitalism as unjust to workers, emphasizing exploitation.
Lester Frank Ward: Advocated for government intervention to shape society positively, rejecting Social Darwinism.
Edward Bellamy: Visioned a socialist utopia in Looking Backward (1888).
THE SUPER WEALTHY
Included prominent figures like Rockefeller and Carnegie, who showcased their wealth through massive estates and homes.
IMMIGRATION TRENDS
OLD WAVE (Before 1880)
Primarily from Northern & Western Europe, characterized by:
Religious freedom, skilled migrations, and relatively easy assimilation.
NEW WAVE (After 1880)
From Central & Eastern Europe, characterized by:
Unskilled, poor, and reluctance to assimilate; notably included Jewish immigrants fleeing antisemitism.
THE MELTING POT MYTH
A narrative that suggested ethnicities would blend, whereas many lived in ethnic neighborhoods due to advertising by railroads.
NATIVIST RESPONSE TO IMMIGRATION
Terms like “Immigrant Hoards” reflected fears and resentment.
Legislative measures included:
The Chinese Exclusion Act (1882) and subsequent laws.
Establishment of organizations like the American Protective Association aiming to limit immigration.
WORKING CONDITIONS AND THE LABOR FORCE
Experiences of immigrants, migrants, Black Americans, women, and children involved:
Monotonous, repetitive work environments with minimal skill requirements.
Long hours, low pay, and unsafe working conditions.
LABOR UNIONS
The Knights of Labor (1869): Inclusive of all workers advocating for an 8-hour workday and opposition to child labor.
The American Federation of Labor (1880s): Restricted to skilled workers, prioritized wages and working conditions, mostly excluded unskilled workers and women.
LABOR STRIKES AND FAILURES
THE GREAT RAILROAD STRIKE OF 1877
Initiated by wage cuts from the Baltimore and Ohio Railroad.
Resulted in participation from over 100,000 workers and viewed as a communist uprising.
National Guard called in, and many workers were jailed or killed without achieving significant outcomes.
HAYMARKET SQUARE (1886)
Middle-class reaction reflected fears of chaos in labor movements due to protest and violence which led to the decline of the Knights of Labor.
THE HOMESTEAD STRIKE (1892)
Sparked by wage cuts and the desire to dismantle the Amalgamated Association by Carnegie, resulting in clashes and eventual decline of union support.
THE PULLMAN STRIKE (1894)
Connected to the 1893 recession, which caused wage cuts and high rents; turned violent with federal intervention.
DOWNFALL OF LABOR
Public perception categorized union activities as anarchistic or communistic.
Union membership remained low (< 4%), with skilled workers often disregarding unskilled laborers.
INDUSTRIAL AMERICA: THE GILDED AGE (1865-1898)
ESSENTIAL QUESTIONS
What were distinguishing characteristics of the new industrial economy?
What were the changes to the labor force during the 1870s and 1880s?
What led to the rise and failure of labor unions during the 1870s and 1880s?
DISTINGUISHING CHARACTERISTICS OF THE NEW INDUSTRIAL ECONOMY
Abundant Resources: America had extensive natural resources available for industrialization.
Growing Population: The population surged due to immigration and higher birth rates.
Surge of Innovation: Innovations fueled the industrial economy, particularly in technology.
Driven by Western Expansion: The movement westward facilitated the growth of the economy.
RAILROADS AS A BIG BUSINESS
Considered the first big business in America.
Key Example: Cornelius Vanderbilt, who significantly impacted railroad expansion by consolidating several large railway companies under his control.
Immigration: Between 1790 and 1890, approximately 27.5 million European immigrants came to America.
In 1790, 95\% of Americans lived on farms, while by 1890, only 35\% resided in rural areas.
Urban populations grew from 10 million to 54 million between 1870 and 1920.
URBANIZATION
A significant trend where urban populations as a percentage of U.S. total increased dramatically across the late 19th century.
TECHNOLOGICAL DEVELOPMENTS
Steel Production: Introduction of methods such as the Bessemer Process, which allowed for mass production of steel.
Inventions: Telephone by Alexander Graham Bell (1876), Typewriter by Christopher Sholes (1868), and the Electric Light Bulb.
Employment Opportunities for Women: Technology created new job roles in offices and communications.
Vertical City Concepts: Innovations like electric elevators allowed cities to grow vertically via skyscrapers.
CONSOLIDATING CORPORATIONS
VERTICAL INTEGRATION
Defined as controlling all steps in production from raw materials to finished product.
Key Figure: Andrew Carnegie
Utilized the Bessemer process to dominate the steel industry.
Controlled iron ore mines, coal fields, and railroads to transport materials.
Economies of Scale: Larger production volumes reduced costs per unit.
HORIZONTAL INTEGRATION
Defined as owning the entire industry in a particular sector (merging with or buying out competitors).
Key Figure: John D. Rockefeller
Founded Standard Oil in 1870.
By 1880, he controlled roughly 90\% of the oil refining business in the U.S.
Monopoly Concept: Examined through the lens of aggressive elimination of competition.
NEW BUSINESS ENTITIES
Modern Corporations: Characterized by the ability to sell stock to the public, limiting liability for shareholders.
Trusts and Holding Companies: Mechanisms to consolidate control over multiple companies under one board of trustees.
J.P. Morgan: A dominant financier who utilized "interlocking directorates" and eventually bought out Carnegie Steel to form U.S. Steel, the first billion-dollar corporation.
ROBBER BARONS OR CAPTAINS OF INDUSTRY?
Robber Barons: Viewed as immoral exploiters who used shady practices to amass wealth.
Practices included:
Buying politicians and manipulating stock prices.
Engaging in predatory pricing to drive competitors out of business.
Offering buyouts well below market value after sabotaging rivals.
Captains of Industry: Viewed as ingenious leaders whose efficiency and philanthropy expanded the American economy.
Andrew Carnegie: Advocated for the "Gospel of Wealth," suggesting the rich had a moral obligation to distribute their wealth for the public good (libraries, universities).
Cornelius Vanderbilt: Known for improving efficiency in transport but criticized for his ruthless competitive tactics.
Jay Gould: Often cited as the archetypal robber baron for his fraudulent stock manipulations involving the Erie Railroad.
MANAGEMENT AND WORK REORGANIZATION
TAYLORISM
Developed by Frederick W. Taylor in The Principles of Scientific Management (1911).
Mass Production: The moving assembly line drastically increased production rates by simplifying tasks.
JUSTIFYING GILDED AGE CAPITALISM
Social Darwinism: Coined by Herbert Spencer and utilized by William Graham Sumner, asserting:
Concept of ‘survival of the fittest’ applied to capitalism.
Suggested that the wealth of millionaires demonstrated natural selection.
Capitalism Principles: Competition, forces of supply and demand, and private ownership.
CRITICS AND ALTERNATE VIEWS ON CAPITALISM AND SOCIAL DARWINISM
Karl Marx: Critiqued capitalism as unjust to workers, emphasizing exploitation and class struggle.
Lester Frank Ward: Advocated for government intervention to shape society positively, rejecting Social Darwinism.
Edward Bellamy: Visioned a socialist utopia in Looking Backward (1888).
THE SUPER WEALTHY
Included prominent figures like Rockefeller and Carnegie, who showcased their wealth through massive estates and philanthropy to improve their public image.
IMMIGRATION TRENDS
OLD WAVE (Before 1880)
Primarily from Northern & Western Europe, characterized by religious freedom, skilled migrations, and relatively easy assimilation.
NEW WAVE (After 1880)
From Central & Eastern Europe, characterized by unskilled labor, poverty, and reluctance to assimilate; notably included Jewish immigrants fleeing antisemitism.
THE MELTING POT MYTH
A narrative that suggested ethnicities would blend, whereas many lived in ethnic neighborhoods (enclaves) due to advertising by railroads and the need for support systems.
NATIVIST RESPONSE TO IMMIGRATION
Terms like “Immigrant Hoards” reflected fears and resentment.
Legislative measures included:
The Chinese Exclusion Act (1882) and subsequent laws.
Establishment of organizations like the American Protective Association aiming to limit immigration.
WORKING CONDITIONS AND THE LABOR FORCE
Experiences of immigrants, migrants, Black Americans, women, and children involved:
Monotonous, repetitive work environments with minimal skill requirements.
Long hours (10-12 hours/day), low pay, and unsafe working conditions.
LABOR UNIONS
The Knights of Labor (1869): Inclusive of all workers advocating for an 8-hour workday and opposition to child labor.
The American Federation of Labor (1880s): Restricted to skilled workers, prioritized ‘bread and butter’ issues like wages and working conditions, mostly excluded unskilled workers and women.
LABOR STRIKES AND FAILURES
THE GREAT RAILROAD STRIKE OF 1877
Initiated by wage cuts from the Baltimore and Ohio Railroad.
Resulted in participation from over 100,000 workers and viewed as a communist uprising.
National Guard called in; many workers were jailed or killed.
HAYMARKET SQUARE (1886)
Middle-class reaction reflected fears of chaos in labor movements due to protest and violence involving anarchists, which led to the decline of the Knights of Labor.
THE HOMESTEAD STRIKE (1892)
Sparked by wage cuts and the desire to dismantle the Amalgamated Association by Henry Clay Frick (Carnegie's manager), resulting in clashes with Pinkerton detectives.
THE PULLMAN STRIKE (1894)
Connected to the 1893 recession, which caused wage cuts and high rents in company towns; turned violent with federal intervention based on mail delivery interference.
DOWNFALL OF LABOR
Public perception categorized union activities as anarchistic or communistic.
Union membership remained low (< 4\%), with skilled workers often disregarding unskilled laborers.