The Gilded Age
The Rise of Big Business
The Gilded Age and Progressive Era
(1865 – 1917)
Modern America really begins to emerge in this
period
This is the age of “bigness”
 Big business
 Big labor
 Big cities
 Big government
Internationalist foreign policy
Rapid technological progress
Activist social movements
The Second Industrial Revolution
Last half of nineteenth century
Associated w/ several new technologies
Electrification
Steam ships & railways
Bessemer furnace
Machine tools
Assembly line
Rotary printing press
Two nations most affected
United States
Germany
Causes of Business Growth
Labor Shortage
Technological Innovation
 Mechanization
 Agricultural Productivity
 Railroad & Communication Networks
 New, Inexpensive Power Sources
 Government Support
 New Methods of Organization
Casualties - WBTS
Dead
Wounded
Total
__________________________________________________________
Federal
364,511
281,881
646,392
Confederate*
260,000
194,000
454,000
TOTAL
624,511
475,881
1,100,392
_________________________________________________________
* Due to lost records, Confederate casualties figures are estimates based
on best evidence available
Rotary Printing Press
The Factory System
Centralized production
Continuous production
Division/ specialization of labor
Assembly line
Replaced centuries old systems of hand labor and
cottage industries
Henry Ford’s Assembly Line
Promontory Point, Utah
May 10, 1869
An 1881 Edison Dynamo
New methods of business organization
Vertical integration = control of every step in
production process by one company
Swift Meat Company
American Tobacco Company
United Fruit Company
Ford Motor Company
Horizontal integration = control of the market
for a single product by a single company
Standard Oil (by 1880 controlled 90% of nation’s
refineries)
Trusts and Holding Companies
Both of these were new forms of business ownership
that facilitated the growth of mammoth industries by
allowing centralized control of seemingly
independent companies.
TRUST – A legal arrangement that allows one or more
people to manage property that belongs to others.
(Proved vulnerable to prosecution under state laws that
prohibited monopolies or restraint of trade.)
HOLDING COMPANY – A company that controls other
companies by holding all (or at least a majority) of their
stock. (Less vulnerable under state laws, but potential
liability under Sherman Anti-Trust Act of 1890.)
Functions of Railroads
Socio-political
 Tied sprawling nation together
 A communication network
 Opened the country
Commercial
 Created and serviced a national (and eventually an international)
market
 Brought raw materials to manufacturers
 Took finished goods to consumers
 Were huge consumers themselves
 Pioneered new management techniques
Crédit-Mobilier Fraud
(1872)
Pointed out potential for corruption in railroad
construction
Construction company hired by Union Pacific RR
to build transcontinental track
Was owned by senior managers of UP
Gave stock to congressmen in return for support of
funding
Huge profits for owners of Crédit Mobilier
Virtually bankrupted Union Pacific
John D. Rockefeller
(1839 – 1937)
Made his fortune in the oil
industry
Driven by a search for order and
efficiency
Concentrated on refining and
transportation
Developed the Trust
Instrumental in the evolution of
the Holding Company
Andrew Carnegie
(1835 - 1919)
Self-made millionaire
Founded Carnegie Steel Co.
Noted philanthropist
Gave away most of his fortune
The “Gospel of Wealth”




Promulgated by Andrew Carnegie in 1889
Developed a justification for big business
Employed themes from Social Darwinism
Distance between rich & poor was a measure of
civilization’s progress
 Wealthy were public benefactors
 Rich had a moral responsibility to reinvest wealth into
the larger society
J. P. Morgan
(1837 – 1913)
 Financier
 Created General Electric in
1891
 Consolidated the steel
industry in 1901 (United
States Steel)
 Controlled over 100
corporations
Montgomery Ward
& Co.
Chicago c. 1870
The first department store
An Early Sears Catalogue
Cornelius Vanderbilt
Thomas Alva
Edison
Bessemer Furnace
Typical Factory
Setting
Chinese laborers building railroads
Natural Resource Areas