U..S. History
Ch. 20
The Gilded Age Part 1:
Industrial Growth in the late 1800s
The late 1800s was a time of enormous economic growth in the United States. This economic
growth was not limited to the cattle ranchers and miners of the west. The east coast saw a period of rapid
economic growth as well. The steel and oil industry brought millions of dollars to the United States and
helped to make the economy of our nation much stronger.
The Business Cycle…
American businesses did not grow at a steady rate; it experienced ups and downs. This pattern of
good times and bad times is called the business cycle. During the good times, called booms, people buy
more and some invest in business. As a result, businesses grow. When businesses are not doing well it is
called a bust. During these times businesses lay off workers and people do not spend as much money.
When unemployment rates are very high and people are not spending very much money, the economy
is said to be in a recession. A severe and prolonged recession is called an economic depression.
Right after the Civil War the American economy was in a depression. The depression of 1873
lasted for five years and at its height, nearly 3 million people were out of work. Thousands of businesses
failed and shut down. That depression was followed by the economic growth of the late 1800s that we
have been studying in class. After each depression, our economy continued to grow larger than it had
been before the depression began.
Industrial Growth…
Just as the agricultural industry grew as a result of changes in technology (i.e. the Transcontinental
Railroad) and laws (i.e. Homestead Act), the U.S. saw rapid industrial growth too. This was a result of
several different factors:
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Plentiful Natural Resources: In addition to large supplies of wood and water, the U.S. had a large
supply of important minerals such as coal, iron, copper, silver and gold (used in the
manufacturing of goods)
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Growing Population: The population of the United States doubled in the late 1800s which led to
an increased demand for products and a large supply of labor.
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Improved Transportation: Railroad lines made it easy to transport goods and it connected the
various regions of the U.S. which lead to greater regional interdependence (which strengthened
the nation’s economy)
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Liberal Patent Laws: A patent is a government document giving an inventor an exclusive right to
make or sell his or her invention for a specific number of years. This encouraged Americans to
invent new products because it could bring them great wealth.
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Government Assistance: State and federal governments used tariffs, land grants and subsidies to
help businesses grow
The Role of Black Gold (Oil, that is…Texas “T”…)
The first recorded discovery of oil in the United States took place in Kentucky in 1818 when a salt
well suddenly filled with crude oil. The substance was thought to be useless and the well was abandoned.
It was not until 1855 when a chemist discovered that “petroleum” a substance made from crude oil, could
be used as lamp oil in people’s homes. Four years later a man named Edwin Drake came up with a
drilling process to extract crude oil from the ground in Pennsylvania. This event launched the oil
industry which went on to strengthen the American economy.
John D. Rockefeller became one of the world’s richest men as a result of the oil industry.
Rockefeller was born into a poor family in upstate New York. He grew up being very frugal with his
money (he did not spend unless it was necessary). By 1897 he had made millions of dollars in the oil
industry and he gave most of his vast fortune away. He was known as a philanthropist for donating his
money to universities and paying for the construction of public libraries.
The Deal with Steel…
The steel industry contributed greatly to the growth of the American economy. In the early
1800s steel was very expensive to produce. In the mid-1850s two inventors came up with a process for
making steel that was much less expensive. It was known as the Bessemer Process. Because the Bessemer
Process cut the cost of making steel the demand for steel rose sharply. The nation’s steel output
increased 500 times between 1867 and 1900. Businesses began making products out of steel such as
plows, nails and beams for buildings. The main use of steel was in the railroad industry. Andrew
Carnegie controlled the steel industry (just as Rockefeller controlled the oil industry). Carnegie was an
immigrant from Scotland. He grew up very poor, just as Rockefeller had. He later became one of the
richest men in the world. He too gave much of his money away (over $350 million).
Electricity and Telephones…
In 1876 Thomas Edison opened up a laboratory in Menlo Park, NJ. He invented thousands of
things and received patent for all of them. Edison is most well known for his work with electricity. He
came up with a way for people to use electricity in their homes and in public for lighting. Other
inventors had developed electric lights before Edison but they were too bright and flickery for home use.
Edison figured out a way to make a safe and steady electric light bulb. By the late 1880s Edison’s factory
was producing about a million light bulbs a year.
In 1835 Samuel Morse had invented the telegraph which allowed people to communicate over
long distances by sending electric impulses (i.e. Morse Code). The next step in communications was the
telephone which was invented by Alexander Graham Bell. In 1876 Bell perfected the technology that was
used in early telephones. People were able to send their voices over long distances. Many called his s
invention “the greatest marvel ever achieved in electrical science.”
Name:
Date:
Core:
U.S. History
The Gilded Age, Part 1:
Reflection Questions
Directions: Use the Gilded Age Part 1, Industrial Growth in the Late 1800s handout to answer
the following questions.
Fact Check…
1. True or False. Beginning in 1865, the economy of the United States grew steadily
without interruption.
I think that this statement is ____________ (true or false) because: _______________
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2. What is the “b
business cycle”? _______________________________________________
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3. In what stage of the business cycle is the United States’ current economy?
I think that the United States’ economy is currently in __________________________
(depression, recession, boom, or recovery) because: ____________________________
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4. There are several different factors which caused the economic boom of late 1800s.
Choose two of the factors that interest you most and fill in the boxes below with two
details about each cause you selected.
Cause:
Cause:
Detail:
Detail:
Detail:
Detail:
5. Name the Scottish immigrant who is well-known for dominating the steel industry and
giving away a large portion of his wealth ($350 million) to charity.
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6. Name the man who was born into a poor family, but went on to become the richest oil
man in the country in the late 1800s. ____________________________________
Reader Response…
1. Who do you think created the most important changes in America – Thomas Edison or
Alexander Graham Bell? Use evidence from the text to support your position.
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