Gilded Age America
A brief look at America life in the late 1800s (to refresh your
memory or bring you up to speed!)
The G Word, explained.
• End of Civil War-Early
1900s
• The term was coined
by Mark Twain in his
1873 book of the same
name
• Gilded: based on
pretense; deceptively
pleasing; covered with
a thin layer of gold
Characteristics of The Gilded Age
• A period of incredibly rapid industrialization
and the growth of incredible wealth
• Population growth, immigration,
urbanization, and incredible poverty
• New natural resources: oil, iron ore, etc.
• Laissez faire economics: “hands off”
• Protectionism and high tariffs to encourage
the growth of business
• Political corruption at all levels
• Social Darwinism: competition and “survival
of the fittest” was the philosophy of the day
Rise of Industry
• At the time of the Civil War, the typical
American business was small and familyowned
• By 1900, giant “limited liability” joint stock
corporations were the model: massproduction, national and international
markets
• Americans transitioned from being selfemployed to being wage earners (2/3 of the
population by 1900)
Rise of Industry (cont.)
• Capital invested in manufacturing
rose from $1 billion to $10 billion
• The number of industrial workers
grew from 1,300,000 to 5,300,000
• Industrial output rose from less than
$2 billion to more than $13 billion
• America went from the number 5
industrial power in the world to the
number 1 industrial power in the world
by 1894
New corporate practices
• Horizontal integration: gain control of the market for
a single product
• John D. Rockefeller created the Standard Oil
Trust, made up of 40 companies
• By 1880, he controlled 90% of the oil refining
industry
• Vertical integration: control production at every step
of the way
• Raw materials, Processing, Transport, Distribution
• Corporate mergers, combinations, and consolidation
lead to trusts and monopolies; “gentlemen’s
agreements”
Other famous American companies you
may know from this era!
• Goodyear, General Electric, Westinghouse,
Nabisco, Armour, Quaker Oats, Proctor and
Gamble, Eastman-Kodak, Heinz, Campbell
Soup, Pabst Brewery, Borden Milk
• Chain stores: A&P, Woolworth’s
• Department stores:Marshall Field’s-Chicago,
Filene’s-Boston, Macy’s-New York
• Mail order stores: Sears, Montgomery Ward
Business Tycoons/”Go-Getters”… or “Robber
Barons?”
Morgan
Gould
Rockefeller
Carnegi
e
Vanderbilt
Transcontinental Railroad
• Completed in 1869
• Four more lines added
in 1880s and 90s
• Supported by
government subsidies
• Linked cities in every
state into a nationwide
market
• Made it easier for
industry to acquire raw
materials
• 193,000 miles by 1900
Inventors and new technologies change the world
• Bessemer steel process-> skyscrapers and
many other innovations
• Coal-fired steam engines (1880s)
• Alexander Graham Bell (1876): telephone
• Thomas Edison (1879): light bulb and electricity
• Oil refining: John D Rockefeller
• Henry Ford: internal combustion engine
• Transatlantic telegraph cable
• Cash register
• 440,000 patents from 1860-90; before 1860,
only 36,000!
More inventions
• The invention of single gauge track, the
modern locomotive, and the Westinghouse Air
Brake, which revolutionized the railroad
industry.
• The invention of new agricultural machinery
which revolutionized agriculture—the
McCormick Reaper, the John Deere Plow
• The packaging of cereals, the canning of
goods, the Kodak camera, the typewriter, the
cigarette rolling machine affected the lives of
millions
Mechanization
• Factories switched from
water power to steam
power in the 1880s
• Cheap and readily
available coal
• Frederick Winslow Taylor:
“scientific management:”
assembly lines, machines,
and unskilled workers
• “Taylorism” and
assembly lines: Meat
packers were among the
first!
Mail-order stores
• Railroad freight rates
drop, postal service
expands
• Chicago-based
companies: Sears and
Roebuck, Montgomery
Ward
• Shoes, buggies, gas
stoves, remedies, Armour
sausage, Aunt Jemima’s
pancake flour, etc.
Chain stores
• “Economies of
scale”
• A&P: Atlantic and
Pacific Tea
Company
(groceries)
• Woolworth’s (Five
and dime stores)
Urban Department Stores
• Marshall Field’sChicago
• Filene’s-Boston
• Macy’s-New York
The “Gospel of Wealth”
• 90% of business leaders were Protestant
Christians
• “God gave me my money.” -John D.
Rockefeller
• Some tycoons used religion to justify their
ruthless behavior (Gould); others donated
their fortunes (Carnegie)
• Social responsibility; private wealth is the
trust fund of the community (Carnegie)
The result: Incredible economic growth…
and incredible corruption
• 7% growth in production per year!
• Retail sales:
• $8 million in 1860
• $102 million in 1900
• Laissez-faire government and corrupt
political machines
• Corrupt business practices: pools, pricefixing, trusts, monopolies
• No laws or regulations to stop corrupt business
practices, protect workers, or the environment!
What about…the workers?
• Migration of people from rural areas to urban areas,
from South to North
• 14 million “new” immigrants: 1865-1900; more
Catholics and Jews, especially post 1890
• Unsafe, unhealthy, and dangerous jobs
• Frequent periods of unemployment due to booms and
busts (Depressions of 1873-79, 1893-97, etc.)
• Growth of labor unions
Labor Unions Emerge
• National Labor Union (1866): 300,000 members
• Knights of Labor (1869): fights for the eight hour workday;
accepted all workers
• American Federation of Labor (1886): craft unions only; 10%
of the population
• Labor Day, 1894
• IWW: International Workers of the World
The danger of the working class?
• Violence, strikes, unrest?
• Socialism: public control
over means of production
• Anarchism: abolition of
government; a system
based on cooperation and
sharing
Railroad Strike of 1877,
Haymarket Riot of 1886,
Homestead Strike of 1892,
Pullman Strike of 1894
Essential Questions to
consider
• Are capitalism and democracy fundamentally at odds?
• Should the iconic businessmen of this era be considered
“captains of industry” or “robber barons?”
• Do we live in a modern Gilded Age?