Industrialization and the
“Gilded Age”
Students will take notes on how America’s great
entrepreneurs helped the U.S. become one of the
world’s leading industrial powers.
ESSENTIAL QUESTIONS:
• What factors encouraged American economic growth in the decades after the
Civil War?
• How did workers fare in the new industrial America?
• Could workers have improved their working conditions without organizing labor
unions?
• How did industrialization bring both positive and negative changes?
Technological Innovations
● Alexander Graham Bell:
Telephone/Telegraph 1876
● Thomas Edison:
Electric Light Bulb 1879
● Additional Inventions:
o 1900 - Electric Streetcars
and Subway Trains
o 1920 - Electric Refrigerator
What a “transcontinental railroad” means...
★ Development of a National Market:
○ Shipping became less expensive → access to massproduction + large market = profits
○ Development of department stores
○ Magazine/Newspaper advertisements
★ Population Growth
★ Corporations and Stocks
○ “Shareholders” - a partial owner
○ Corporation – a company charted by a state and
recognized in law as a separate “person”.
Entrepreneurship and
Philanthropy
An entrepreneur is a person who starts a business in the hope of making
a profit.
The entrepreneurs in the late 19th century were able to reap huge profits for
themselves – making the period from 1865-1900 known as the “Gilded
Age”.
Captains of Industry (Robber Barons)
Andrew Carnegie
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(1835 - 1919)
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Invested in the Bessemer
process, which made the
production of steel more
economical - 15 minutes vs 24
hours.
Founded Carnegie Steel
Corporation in 1892, buying out
steel mills, iron ore fields, coal
mines and ships.
Carnegie paid his workers low
wages and forced them to work
12-hour long shifts.
Philanthropy – generous
donations of money.
Captains of Industry (Robber Barons)
John D. Rockefeller
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(1839 - 1937)
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Invested in refining - turns the
crude oil taken from the ground into
useful products.
Created the Standard Oil Company in
1870 and controlled 90% of the oil
refining in the U.S. by 1879.
By 1882, his company became a
“trust” in which he controlled the
largest proportion of shares became
a virtual monopoly, forcing railroad
companies to give him special, secret
rates for his oil, while they changed
his competitors higher prices.
Philanthropy
The Pros and Cons of Big Business
Pros
● Large business are more
efficient, leading to lower prices
● They can hire large numbers of
workers
● They can produce goods in large
quantities
● They have the resources to
support expensive research and
invent new items
Cons
● They have an unfair competitive
advantage against smaller
businesses
● They sometimes exploit workers
● They are less concerned with
where they do business and
pollute the area
● They have an unfair influence
over government policies
affecting them
Laws Against Anti-Competitive Practices
❖ Government leaders believed in
laissez-faire – the theory that the
government should not interfere in
the operation of the free market.
❖ Government role in a laissez-faire
economy:
-it provides laws to protect property and
enforce contracts.
-it establishes a system of patents to promote
inventions, and enacts tariffs to help manufacturers.
Laws Against Anti-Competitive
Practices
❖ Interstate Commerce Act (1887) prohibited unfair practices by
railroads, such as charging higher
rates for shorter routes. Interstate
Commerce Commission enforced.
❖ Sherman Anti-Trust (1890) stopped monopolies engaging in
unfair practices that prevented fair
competition.
Conditions of Labor
➢ Long Hours and Low Wages
○ Average workday: 10-14 hours/six days
a week
○ Pay: $3-$12 a week
➢ Poor Conditions
○ Thousands of workers were injured or
killed each year
➢ Child Labor
○ ⅕ of all American children under the
age of 15
➢ Lack of Job Security
Rise of Unions and Strikes
❖ Knights of Labor (1869) - demanded an 8-hour work
day, higher wages, safety codes in factories, opposed
child labor and supported equal pay for women.
➢ fell apart after losing a series of major strikes
❖ American Federation of Labor (1881) - goals were
higher pay, 8-hour work day, better working conditions
and job security.
➢ closed shops - places where only union members
could be hired