Transcript PPT
The Gilded Age
The Rise of Big Business
Essential Question :
•
Was the rise of industry good for the United States?
A Brassy, Flamboyant Age Gilded Age
:
-
{Reconstruction (1877) Progressive Era (1901)}
-
brassy, flamboyant age dominated by big business values, political corruption, and extremes of wealth and poverty
Major Developments
Major Developments:
1.
2.
3.
Industrialization
Urbanization Immigration
From Agriculture to Industry
• During Gilded Age, U.S. experienced
rapid shift
from an agricultural economy to an industrial one
Relative Share of World Manufacturing
USA in the Gilded Age: 1870-1900
The North: Experienced an industrial revolution, mass immigration, & urbanization
Essential Question
Was the rise of industry good for the United States?
Gilded Age Industrialization
• During the Gilded Age (1870-1900), the United States experienced an
Industrial Revolution
: • New technology, transportation, efficient
mass-production
spread ideas & industrial products • By 1900, the U.S. was the U.S. the most
industrialized
country in the world
An Age of Invention
• The Gilded Age was an Age of Invention U.S. Patents Issued (1850-1899)
An Age of Invention
• The Gilded Age was an Age of Invention • business typewriters • Alexander Graham Bell invented the first telephone • The Bessemer process transformed iron into stronger, lighter steel
An Age of Invention
• The Gilded Age was an Age of Invention • Thomas Edison (Wizard of Menlo Park) was the
What is it?
• In his research lab in New York, he created the 1 st audio recorder, • phonograph, and batteries His most influential invention was the 1 st electric light bulb
The Business of Invention
• New innovations allowed for increased industrial production • New machines were incorporated into the 1 st
assembly lines
that allowed for faster mass production • Railroads linked all regions • America ’s wealth of iron, oil, coal,
immigrant
labor, & investment capital (money) supplied factories
The Industrial Revolution was fueled by 4 industries (R.O.S.E.) Railroads, Oil, Steel, Electricity
Industrial Resources:
Iron, Coal, Railroads, & Steel Plants
The Railroad Industry
• America ’ s first “
big business
” the railroad industry: • Railroads stimulated the coal, was petroleum, iron, steel industries Eastern RRs were connected to the West by 4 great trunk lines
• • • •
Railroad growth fueled industrial development
100,000 miles of track laid between 1877 - 1893 • standardization of gauge width of tracks (4 feet, 8 1/2 inches) [encouraged development] • time zone adoption allowed U.S. divided into four zones • • massive grants of American land 131 million acres -- federal 49 million acres -- states
Railroad Construction in the Gilded Age
Oil
provided kerosene lighting & lubrication for industrial machinery
Steel Production
Steel Production
•
Steel
transformed world industry: • Allowed for taller buildings, longer bridges, stronger railroad lines, & heavier machinery Wadsworth Building, NYC
International Steel Production, 1880-1914
Efficiency & Mass Production in Factories
Causes of Rapid
1.
Industrialization
The Railroad fueled the growing US economy: * First big business in the US.
* A magnet for financial investment.
* Aided the development of other industries.
2.
Causes of Rapid Industrialization
Technological innovations: * Bessemer and open hearth process * Refrigerated cars * Edison
“ Wizard of Menlo Park ” light bulb, phonograph, motion pictures.
3.
Causes of Rapid Industrialization
• Unskilled & semi-skilled labor in abundance.
U.S. population 3x from 1860 - 1910 4.
• Government aid at all levels to stimulate economic growth High tariffs {hurt exporters (farmers)} 5.
• Abundant natural resources H 2 O, timber, coal, iron, copper, and oil
New Business Culture
Laissez Faire
an ideology of the Industrial Age
Individuals should compete freely in the marketplace.
No room for government in the market!
French -- "
let it be
"
New Business Culture
Entrepreneurs
(another) ideology of the Industrial Age
People who risk their $$$ in organizing and running a business French -- "
to undertake
"
New Forms of Business Organization
Corporation:
an organization owned by many people, treated (by law) as a single person People who own the corporation are called shareholders Share of ownership is a stock Limited liability
New Forms of Business Organization
• During the Gilded Age, business & industry were transformed: • Massive corporations replaced small, family businesses • • Managers were hired to make factories run more efficiently New business models, such as “trusts” integrated various businesses under 1 board of directors
New Business Organization
Combinations of Corporations (WHY?)
increases efficiency and profits destroyed healthy competition that often makes capitalism a viable economic model
New Business Organization:
Board of Trustees (Trust)
Board of Trustees Company Manager Employees Employees Employees Employees “ Trusts ” use a board of trustees to manage a company
New Forms of Business Organization
• Corporations in the Gilded Age used mergers to increase profits • Companies used
horizontal integration
to buy similar companies to reduce competition •
Vertical integration
allowed companies to buy companies that supply raw materials or transportation for their products
Vertical & Horizontal Integration
Monopolies
• Corporate mergers led to giant companies called
monopolies
: • Companies that control nearly all of • • a particular industry Because most monopolies of the Gilded Age were run by boards of trustees, monopolies became known as “trusts” Monopolies led to a new generation of U.S. millionaires
U.S. Corporate Mergers By 1900, 1% of U.S. companies controlled 33% of all industry
The Monopolists
•
Andrew Carnegie
created the Carnegie Steel His company made more
steel
than all the factories of Great Britain, France and Germany combined out-produce his competition & offer better quality steel at lower prices • He mastered vertical integration to lower his production
costs
U. S. Steel Corporation
• When he retired in 1901, he sold Carnegie Steel to financier J. P. Morgan for over $400 million dollars. Morgan subsequently reorganized the company into the United States Steel Corporation.
USS
Andrew Carnegie rise from a poor Scottish immigrant to ’ s
unions
in one of the richest men in the world was the great example of the “ American Dream ” , colleges,
The Monopolists
• John Rockefeller created the
Standard Oil Company
• Used
horizontal
integration to create a petroleum company that monopolized the oil industry, lowered costs & improved quality • By 1879, Standard Oil sold 90% of all U.S. oil & sold to Asia, Africa, & South America
Rockefeller was labeled a “
robber baron
” who took advantage of immigrant …but Rockefeller gave away $500 million to
charities
, workers, driving his competition created the Rockefeller Foundation, & founded the University of Chicago out of business, & used his fortune to influence the national gov’t…
Captains of Industry
• Entrepreneurs were able to achieve unprecedented wealth and power.
The
“
Robber Barons
”
Giant Corporations
• By 1900, 2/3 of all manufactured goods were being produced by giant corporations • Swift and Armour dominated meat packing • Duke family controlled tobacco • Andrew Carnegie took over every aspect of steel production.
1889 Duke Tobacco Advertisement
Distant Corporations
• Needs once met by self-sufficient rural folk now met by large corporations usually located in the Northeast
Conclusions
• Due to the Industrial Revolution: • The United States led the world in
industry
, innovation, & wealth • Laissez-faire gov ’t policies & new business tactics led to
monopolies
• However, the
gap
between the wealthy monopolists & their poor immigrant
workers
grew wider