INDUSTRIALIZATION AND
THE “GILDED AGE”
THE BIG 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?
BACKGROUND
 You learned about the Industrial Revolution in
World History last year, its beginnings in Great
Britain, and the results of industrialization on society
 American industrialization proceeded at a rapid pace
in the decades following the Civil War. Some people
consider this period America’s “Second Industrial
Revolution.”
 The United States soon became a world leader in
industry
TECHNOLOGICAL INNOVATIONS
 Steam and electricity replaced human and animal
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strength
Iron replaced wood, and steel replaced iron (The
Bessemer process made steel production more
economical)
Steam power drove textile mills and depended on
coal
Petroleum products were used in lighting and
machine lubrication
The internal combustion engine used gasoline from
oil to run cars and the first airplanes
THE COMMERCIAL USE OF ELECTRICITY
• First used as a means of communication along
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telegraph wires
In 1876, Alexander Graham Bell (1847-1922)
invented the telephone
In 1879,Thomas Edison produced the first effective
electric light bulb
Electricity ran motors to drive machinery in factories
By 1900, it was powering streetcars and subway
trains
By 1920s, it was used for appliances
THE GROWTH OF RAILROADS
 After the Civil War,
work began on the
Transcontinental
Railroad
 Many workers on the
California side were
Chinese immigrants
 Finally connected in
1869 at Promontory Trunk lines were soon built to
connect to the main
Point, Utah
transcontinental line, and
additional new tracks were laid
throughout North America
DEVELOPMENT OF A NATIONAL MARKET
 Railroads, canals, telegraphs and telephones linked
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together different parts of the country
Shipping was less expensive (improved transportation)
Goods were cheaper (less expensive and quicker to
produce)
New methods of selling were developed (department
stores, chain stores, mail-order)
Manufacturers advertised in magazines and
newspapers in order to sell goods throughout the
country
POPULATION GROWTH
 Between 1850 and 1900 the population more than
tripled
 Fueled by high birthrate and a constant stream of
European immigrants
 Created favorable conditions for business expansion
 Placed increasing demands on the natural
environment and resources
NEW TYPES OF BUSINESS ORGANIZATIONS
 Corporations became common
 Corporations issue shares to investors (stocks)
 Shareholders are partial owners
 More stock = larger share = more dividends ($)
 By people pooling money, companies could raise
vast sums of money needed to fund industries
 Corporations made industrial production possible
ENTREPRENEURSHIP AND PHILANTHROPY
 An entrepreneur is a person who starts a business
in the hope of making a profit
 They were able to reap huge profits and create
great personal wealth
 Many became known as “Captains of Industry” as
they forged the modern industrial economy
 Critics called the “robber barons” because many
used ruthless tactics to destroy competition and
keep worker’s wages low
BIG BUSINESS CONSOLIDATION
In 1873, America experienced a depression. Larger
corporations began driving smaller companies out of
business, hoping to establish monopolies.
 At first government did little to regulate big business
 Believed in laissez-faire (gov’t. should not interfere
in the free market)
 Even under laissez-faire, gov’t. protects property,
enforces contracts, issues patents, and enacts tariffs
 Reformers called for legislation to remedy some of
the anti-competitive practices of big business
LAWS AGAINST ANTI-COMPETITIVE
PRACTICES
 Interstate Commerce Act (1887) – prohibited unfair
practices by railroads, such as charging higher rates for
shorter routes. Provided for the Interstate Commerce
Commission to enforce the act. This was the first time
Congress stepped in to regulate business in America.
 Sherman Anti-Trust Act (1890) – stopped monopolies
engaging in unfair practices that prevented fair
competition. Showed a significant change in the
attitude of Congress toward abuses of big business
CONDITIONS OF LABOR
 Long hours & low wages (10-14 hr. days; 6 days a
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week; $3-12 weekly; immigrants, women, and
children lowest paid)
Poor conditions, boring and repetitive tasks
Work became less skilled, repetitive, monotonous,
and boring
Hazardous conditions (inadequate safety –
thousands killed or injured in accidents each year)
Child labor (1/5 of children under 15 worked in 1910)
No job security or benefits
THE RISE OF UNIONS
 Groups of workers organized to improve working conditions and
wages
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Strikes
Collective bargaining
 The Knights of Labor – formed in 1869 seeking to create a
single national union by joining skilled and unskilled workers.
Wanted 8 hr. days, higher wages, safety codes, opposed child
labor, supported equal pay for women, supported restrictions on
immigration. Disorganization led to it falling apart in the 1890s
 The American Federation of Labor (AFL) – founded in
1881 by joining separate unions of skilled workers into a single
federation. Limited membership to skilled workers (carpenters,
cigar makers, etc.). Sought closed shops (union members only).
Emerged as the main voice of organized labor.
GOVERNMENT ATTITUDE TOWARD UNIONS
 Early on, government was critical of the labor
movement
 Business leaders contributed heavily to political
campaigns and politicians saw business as being
responsible for American prosperity and worker
demands as greedy
 Feared disruptive effects of strikes would hurt the
economy (sometimes used troops to put down strikes)
 Public opinion also supported laissez-faire and thought
wage demands would increase prices and violence and
radical ideas would increase