The Industrial Age
Outcome: The Fat Cats
1. Setting the Stage:
a. Also known as “
,” “
,” & “
”
b. Wealth fell into the hands of a few
c. By 1890 --->
millionaires
d. Approx
% of $ (wealth & assets) controlled by
% of the population
e. 1900 =
Americans lived in poverty (very small
class)
2. Who were they?
a. Cornelius Vanderbilt
i. Started out in
, buying his first
at age 16
ii. Eventually had large fleet of ferries and
iii. Saw
as the future; bought many RRs before/after Civil War
iv. Became
v. Built
in NYC
vi. Made a deal with
to transport his
vii. Would have been worth $
in 2007 dollars
b. J.D. Rockefeller
i. Founded
in 1870
ii. By 1880 --->
% monopoly; nation’s first
iii. Drove out competitors by selling oil at a
than it cost to produce
iv.
once he controlled the market
v. Gave away $
dollars
c. Andrew Carnegie
i.
: born to poor Scottish family who immigrated to U.S.
ii. Worked his way to become private secretary to the local superintendent of
the
iii. Entered the
business in 1887
iv. Controlled
% of U.S. steel production
v. Sold his steel business to
in 1901
d. James J. Hill
i.
born but settled in
ii. “Empire Builder” used no government
iii. Built
from Duluth to Puget Sound, WA
iv. Home in St. Paul belongs to MN
e. J.P. Morgan
i. Was known as the “
”
ii. Began his career as an
iii. Was a
and a great organizer of companies like
iv. Bought
in 1901; renamed it U.S. Steel
&
f. Henry Ford
i. Automobile manufacturer who created the
in 1908 and went on
to develop the
mode of production, which
revolutionized the automotive industry.
ii. First moving assembly line decreased the time it took to build a car from
hours to
hours, which in turn lowered the cost of the Model T from
in 1908 to
by 1926 for a much-improved model
3. How did they become rich?
a. Opportunity ---> a pure
opportunity, but no
system allows for unlimited economic
b. Laissez-Faire government meant unchecked
i.
attitude toward business/industry/economy
ii. No
tax (not made law until 1913, 16th amendment)
c. Labor abuses were permitted
i. No
, No
ii. Unions were
, even
d. Monopolies formed (goal: to rid
and control
)
i. Integration tactics
1.
integration: buying up resources, transportation, etc
2.
integration: merging like companies together
ii. Bribery & Corruption
1. Rockefeller forced RR’s to pay him
2.
(bribing U.S. Senate =
on shipping
club)
e. Improved Technology meant increased efficiency in:
i. Farming (McCormick’s
& John Deere’s
)
1. By 1880, 1 farmhand could harvest
acres a day on average
2. Young men migrated to cities adding to the industrial
supply
ii. Business & Industry
1. Edison --->
2. Bell --->
, stock
, Sholes --->
, etc
f. Corporations (Publically held companies) were formed.
i. Quick method of raising
($) for growth and expansion
ii. Reduced
(spread out among
)
iii. Ensures the
(life) or the company
g. Bessemer Process
i. Named after Sir
of England
ii. First industrial
for the mass-production of
from molten pig
iron prior to the open hearth furnace
iii. Key principle is the removal of
from the iron by
by blowing air through the molten iron
h. Social Darwinism - “rich were meant to be rich”
i. Life is a struggle and the
ii. Justified a “
&
are just weak &/or lazy
” method to acquire wealth and power
i. Government Actions
i.
were used to encourage railroad construction and settlements
ii. Protective
placed a tax on imported goods at compete with US goods
4. Some became believers in Carnegie’s “Gospel of Wealth”
a. Rich have an
to improve society with their fortunes
b. Philanthropy:
c. Examples:
i. Carnegie: built many
&
Hall in NYC
ii. Rockefeller: Donated $
dollars to many universities
iii. Morgan: Donated $
M to University of the South, $
M to