In 1856 Henry Bessemer devised a way of converting
iron into steel on a large scale.
His invention involved blowing air through molten
iron in a converter, or furnace, in order to burn off
the excess carbon.
His invention revolutionized the Industrial Age.
New Uses for Steel
Steel used in railroads, barbed wire, farm machines
Changes construction: Brooklyn Bridge; steelframed skyscrapers
With the
Bessemer Process
and Carnegie
steel, Skyscrapers
revolutionized the
building
industry…..
Major city
skylines would be
dotted with this
new type of
building as the
1900’s begin.
4
Thomas Alva Edison
“Wizard of Menlo Park”
“Wizard of Menlo Park”
Edison Inventions helped to shape modern
society
•More than 1,000 inventions patented
•Light bulb
•Phonograph
•Incandescent electric lamp
•Starter for automobiles that eliminated hand crank
•Batteries
•Perfected stock ticker
•New York City first city to powered by electricity
•The motion picture camera and projector
•First used “hello” as phone greeting
•Helped Alexander G. Bell with the telephone
Alexander Graham Bell
Telephone (1876)
The Airplane
Wilbur Wright
Orville Wright
Model T Automobile
Henry Ford
Assembly line
What was life like before Ford’s
assembly line?
• Ford began building the Model T in 1908. It
took workers 12 hours to build one.
• After 1913, when Ford built his assembly line
plant, it took 93 minutes to build one car.
• By 1925, a Ford car took 10 seconds to build.
How did the world change?
• The price of automobiles decreases from…
– $805 in 1908
– $490 in 1914
– $295 in 1924
• Now everyone could have a car…and were not
restricted to one area.
• By 1924 more people in the United States had
cars than had indoor plumbing.
– “You can’t ride to town in a bathtub”
Now let us watch the assembly line
in action….
• The assembly line is great and all, but can we
criticize anything after watching these videos?
• Charlie Chaplin at the factory…
– http://www.youtube.com/watch?v=NT-mVVprnbs
– Lucy in the candy factory….
– http://www.youtube.com/watch?v=0YGF5R9i53A
Natural Resources
• Coal
• Iron Ore
• Oil
New Business Culture
 the ideology of
the Industrial Age.
1. Laissez Faire
* Individual as a moral and
economic ideal.
* Individuals should compete freely
in the marketplace.
* The market was not man-made
or invented.
* No government intervention
(regulations) in the market
Social Darwinism
•Social Darwinists believed that
companies struggled for survival in
the economic world and the
government should not tamper with
this natural process.
•The fittest business leaders would
survive and would improve society.
•Belief that hard work and wealth
showed God’s approval and those
that were poor were lazy and
naturally a lower class.
New Business Culture:
“The American Dream?”
3. Protestant (Puritan) “Work Ethic”
* Horatio Alger [100+ novels]
Is the idea of the “self-made man” a MYTH??
Trust
• Group of businesses that united in order to
control the production and prices of a
product
• Trust began to take control of other
businesses
• Forced small businesses to sell
• Less variety in products
Monopoly
• A company that completely controls and
industry
– Standard Oil became a monopoly, people
wanted its powers divided
– Supreme Court ruled to divide the company
“Robber Barons”



Business leaders built their
fortunes by stealing from the
public.
They drained the country of
its natural resources.
They persuaded public
officials to interpret laws in
their favor.

They ruthlessly drove their
competitors to ruin.

They paid their workers
meager wages and forced
them to toil under dangerous
and unhealthful conditions.
“Captains of Industry”

The business leaders served
their nation in a positive way.

They increased the supply of
goods by building factories.

They raised productivity and
expanded markets.

They created jobs that enabled
many Americans to buy new
goods and raise their standard
of living.

They also created museums,
libraries, and universities,
many of which still serve the
public today.
Forbes 2011
Rank
Name
Worth
Age
Source
Country
1
Carlos Slim Helu & family
$74 B
71
telecom
Mexico
2
Bill Gates
$56 B
55
Microsoft
USA
3
Warren Buffett
$50 B
81
Berkshire Hathaway
USA
4
Bernard Arnault
$41 B
62
LVMH
France
5
Larry Ellison
$39.5 B
67
Oracle
USA
6
Lakshmi Mittal
$31.1 B
61
Steel
India
7
Amancio Ortega
$31 B
75
Zara
Spain
8
Eike Batista
$30 B
54
mining, oil
Brazil
9
Mukesh Ambani
$27 B
54
petrochemicals, oil &
gas
India
10
Christy Walton & family
$26.5 B
56
Walmart
USA
Andrew Carnegie
$75 Billion

Andrew Carnegie came from Scotland
with his parents in 1848.

In 1861, at the age of 26, he started
up the Freedom Iron Company, and
used the new Bessemer process for
making steel

He formed all of his companies into
the Carnegie Steel Company in 1899,
which controlled raw materials,
manufacturing, storage, and
distribution for steel.

Vertical Integration
Vertical Integration
You control all phases of production
from the raw material to the finished
product
Coke fields
purchased
by Carnegie
Iron ore deposits
purchased
by Carnegie
Steel mills
purchased
by Carnegie
Ships
purchased
by Carnegie
Horizontal Integration
Buy out your competition until you
have control of a single area of
industry
Railroads
purchased
by Carnegie
John D. Rockefeller
$192 Billion





Born in 1839
His working life started as a
bookkeeper
He established one of the first oil
refineries
1870—With partners, forms a
business trust: Standard Oil
At its peak, controls 90% of all oil
companies

Horizontal Integration
Vertical Integration
You control all phases of production
from the raw material to the finished
product
Coke fields
purchased
by Carnegie
Iron ore deposits
purchased
by Carnegie
Steel mills
purchased
by Carnegie
Ships
purchased
by Carnegie
Horizontal Integration
Buy out your competition until you
have control of a single area of
industry
Railroads
purchased
by Carnegie
New Financial
Businessman
The Banking Magnet:
* J. Pierpont Morgan
Interlocking
Directorate
•After Civil War Vanderbilt
bought most railroad lines
from New York to Chicago
•1877, controlled 4,500 miles
of railroads
•Worth over $100 million
•Used Pools
•Philanthropist--donated $1
million to Vanderbilt University
Political Cartoon 1
W
h
o
d
o
y
o
u
t
h
Gospel of Wealth
• Andrew Carnegie advocated
a gentler version of Social
Darwinism that he called the
Gospel of Wealth.
• This philosophy held that
wealthy Americans should
engage in philanthropy and
use their great fortunes to
create the conditions that
would help people help
themselves. Building schools
and hospitals, for example,
was better than giving
handouts to the poor.
• Carnegie funded libraries all
across the nation.
“Robber Barons”



Business leaders built their
fortunes by stealing from the
public.
They drained the country of
its natural resources.
They persuaded public
officials to interpret laws in
their favor.

They ruthlessly drove their
competitors to ruin.

They paid their workers
meager wages and forced
them to toil under dangerous
and unhealthful conditions.
“Captains of Industry”

The business leaders served
their nation in a positive way.

They increased the supply of
goods by building factories.

They raised productivity and
expanded markets.

They created jobs that enabled
many Americans to buy new
goods and raise their standard
of living.

They also created museums,
libraries, and universities,
many of which still serve the
public today.
Thinking Slide 1
• Monopolies are good
because we can produce
goods at a lower cost to
consumers!
• Now everyone can have
cheap oil and gas.
Thinking slide 2
• Monopolies are bad
because they control the
whole industry and there
is no competition over
prices.
• We have to pay high
prices to ship our wheat
on the trains!
• And these companies pay
low wages to their
workers!
Analysis
Rockefeller
Government Regulation
Granger State
Laws
State representatives voted into office by members of
the Grange who in turn represented the interests of
farmers and passed state laws regulating railroad
prices in 18 states.
Munn v. Illinois
(1876)
Supreme Court decision stating that states had the
ability to regulate private property if it affected public
interest.
Wabash Case
(1886)
Declared that it was unconstitutional for states to
regulate interstate commerce. Showed need for
Federal regulation of interstate commerce.
Interstate
Commerce
Commission
(1887)
Sherman
Antitrust Act
(1890)
In 1887, Congress passed the Interstate Commerce
Act that setup the ICC. The federal government has
the ability to regulate all aspects of interstate
commerce. Rebates and drawbacks were illegal.
In 1890, Congress passed this act which prohibited
monopolies or any business that prevented fair
competition.
Simulation
• Business A
– 3 volunteers (owner)
• Business B
– 5 volunteers (shareholders)
• Step 1 (August):
– Business A, set the price for tshirts
• Step 2 (September):
– Business B opens up a store
across the street, set the price
for t-shirts at store B
– Class: Which store will you
shop at?
Simulation
• Step 3 (October):
– Business A, respond to the t-shirt price of Business B
– Class: Which store will you shop at?
• Step 4 (November):
– Business B, respond to the t-shirt price of Business A
– Class: Which store will you shop at?
• Step 5 (December)
– Repeat process
– Class: Which store will you shop at?
•
•
•
•
•
•
Business Person A
You own a successful t-shirt shop on
Castro Street. You are just one shop but
you’ve managed to stay in business
because you are the only t-shirt shop on
Castro Street. Recently, a t-shirt shop
opened up across the street and it’s part
of the national chain, Shirt Me Up, that
has stores all over the nation. You are
worried about losing some of your
customers to them but you are willing to
cut prices and offer sales if it will keep
you in business.
Basics – t-shirts cost $6 to manufacture
and you currently sell them for $12.
You need to make at least a $2 profit on
each t-shirt in order cover the cost of
your rent and pay your employees.
If you lose money for more than a month
then you will not be able to pay for your
rent.
Task: Respond to the sales ideas from
Person B in competitive ways in order to
stay open.
•
•
Business Person B
You are a local manager for the national t-shirt company,
Shirt Me Up, that has stores all over the nation. You are
currently managing the new store that just opened up on
Castro Street. There is a t-shirt shop already on Castro
Street, but you are pretty confident you can drive them out
of business since you can draw on money from the
national office.
•
Basics – t-shirts cost $6 to manufacture and your
competitor currently sells them for $12. They need to
make at least $2 profit on each t-shirt to cover the cost of
rent and employees. This is true for you also, but you can
lose money for several months in a row because your
national office will cover your costs.
•
Task: Start the competition by telling the shoppers in your
group that you are willing to offer t-shirts for $10 and ask
if they will shop at your store instead. No matter what
your competitor does, respond by offering your t-shirts for
less money. It doesn’t matter if you lose money, because
eventually they’ll go bankrupt and then you won’t have to
compete with them anymore. When they go out of
business, raise your prices to $20 a t-shirt.
Protestant
Catholic and Jewish
BIRTHPLACE
North/Western
Europe
Southern/Eastern
Europe
REASONS
Both escaping poverty, religious and
political persecution
DESTINATION
Moved to farms
in the Midwest
Moved to cities in the
Northeast
Some
Mostly Illiterate
Became farmers
Unskilled workers
RELIGION
EDUCATION
OCCUPATION
Old vs New Immigrants
Ellis Island
Angel Island
1882: Chinese
Exclusion Act passed
•Stopped Chinese
immigration
•Chinese couldn’t become
citizens
•Renewed until WWII
1902: Gentlemen’s
Agreement with Japan
•Japanese workers not allowed in U.S.
Japanese immigrants had replaced
Chinese; were strong in agriculture
Signing the Agreement
Look carefully, what is missing?
http://www.youtube.com/watch?v=USL86CLK
gnw
Closed Shop
Black List or
Black Balled
Collective
Bargaining
Yellow Dog
Contracts
A working establishment where only people
belonging to the union are hired. It was done by the
unions to protect their workers from cheap labor.
List of people disliked by business owners
because they were leaders in the Union. Often
would loose their jobs, beaten up or even killed.
Type of negotiation between an employer and labor
union where they sit down face to face and discuss
better wages, etc.
A written contract between employers and
employees in which the employees sign an
agreement that they will not join a union
while working for the company
Among the first labor unions in America
was the Knights of Labor
The Knights of Labor
was open to all
workers regardless of
race, gender, or skill
•May 3, 1886, joining a nation
wide strike for an 8 work day
Chicago workers protested
against the McCormick
Reaper plant.
•A riot broke out and Chicago
police officers killed several
protesters
•To protest the killing,
protesters planned a rally for
May 4
•3,000 gather at Chicago’s Haymarket Square
•During the protest, a bomb exploded
•7 police officers were killed and civilians killed and injured
•Chicago police hunt down murderers
•8 anarchists were convicted of conspiracy to murder
During the Chicago Haymarket Strike (1886),
unionists demanded an 8-hr day; When violence
broke out, public opinion turned against unions,
viewing them as violent and “un-American”
•The five men are
clockwise from
1:00 o'clock:
•A. R. Parsons
•Adolph Fischer
•George Engel
•August Spies
•Louis Lingg (middle)
•The first four were hanged on
Friday, November 11, 1887.
•Lingg committed suicide on
November 10, 1887 by
lighting a stick of dynamite in
his mouth.
Haymarket
Riot
•Americans were suspicious of labor unions because they tended to
go against laissez faire and capitalism. Labor strikes were often
violent.
Picture: Workers vs Owner
The most successful union was the American
Federation of Labor (AFL) led by Samuel Gompers
The AFL only included
skilled workers, but it
used collective
bargaining to gain
better pay, shorter
hours, and better
working conditions
for its union members
Most workers were
unskilled and ineligible
to join the AFL
Railroad Workers Organize
The Great Railroad
Strike of 1877
– Railway workers protested
unfair wage cuts and unsafe
working conditions.
– The strike was violent and
unorganized.
– President Hayes sent federal
troops to put down the
strikes.
−From then on, employers relied on federal and state
troops to repress labor unrest.
Violence erupted in the Homestead Strike (1892) at
Carnegie’s steel plant; Federal troops were called to
re-open the factory with replacement workersScabs
Injunction
Railroad workers led a
national strike when the
Pullman Palace Company
cut wages by 50%...
…President Cleveland sent
the army to end the strike;
Strikers in 27 states
resisted & dozens died
Turn to your packet and answer
video questions
Tenement- House Slums- very crowded housing for workers and families during
industrialization. Cities were covered with this kind of housing!
Inside a tenement house!
Another view of a tenement
housing complex!
Most American cities
were not prepared for such
rapid population growth
Most urban immigrants lived
in tenements: low rent
apartments built in the
poorest parts of town called
slums
Many urban poor
developed lung
disease or
tuberculosis; About
60% of immigrant
babies died before
their first birthday
The Settlement-House Movement
• Settlement-House founders blamed poverty not on
the poor but on social and environmental causes
• Leaders believed that middle-class relief workers
must reside among the immigrant masses and
learn what services they needed
• Firsthand experience
The Settlement-House Movement
(cont.)
•
•
•
•
•
•
•
Jane Addams
Hull House in Chicago
Day-care nursery
Legal aid
Health aid
Help find jobs
Offered classes in English
and other subjects for
immigrants
Hull House in 1890’s
3. Well-Defined Voting Blocs
Democratic
Bloc
 White southerners
(preservation of
white supremacy)
 Catholics
 Recent immigrants
(esp. Jews)
 Urban working
poor (pro-labor)
 Most farmers
Republican
Bloc
 Northern whites
(pro-business)
 African Americans
 Northern
Protestants
 Old WASPs (support
for anti-immigrant
laws)
 Most of the middle
class
Waving the Bloody Shirt!
Grant was the most important president of the era,
but his administration was plagued by scandals
The worst scandal was
Crédit Mobilier which
involved bribes by
railroad companies to
gain lands grants
Whiskey Ring involved
companies bribing
government officials
to avoid paying taxes
Many city governments were run by political machines
Because machine politicians Many politicians used
controlled access to city
fraud to win elections,
jobs, business licenses, and used their influence for
building projects, they
personal gain (graft),
tended to be corrupt
or took bribes
The most notorious urban
politician was Boss Tweed
of New York’s Tammany Hall
political machine
The “Tweed Ring”
defrauded New York City
of millions of dollars
until it was exposed by
reporter Thomas Nast
Thomas
Nast was the artist for
Harper's Weekly in the late
1800’s.
 "He has been called, the
Father of American Caricature."
Nast's campaign against New
York City's political boss
William Tweed is legendary
Nast's cartoons depicted
Tweed as a sleazy criminal
Tweed was known to say,
"Stop them damn pictures.
I don't care what the
papers write about me. My
constituents can't read.
But, damn it, they can see
the pictures."
Thomas Nast
A picture is worth 1000 words!
Other creations…
Symbols for modern
republican and
democratic parties.
Uncle Sam, oh and…
1880 Presidential
Election
1881: Garfield Assassinated!
Charles Guiteau:
I Am a Stalwart, and Arthur is
President now!
Chester Arthur
• Chester Arthur surprised many
– Gave cold shoulder to Stalwarts (his chief
supporters)
– called for reform
• Republican party slowly embraces reform
Many government positions,such as tax collectors
or post office officials, were appointed as rewards
for loyalty to a political party (called patronage)
Congress passed the
Pendleton Act in 1883
that created meritbased exams for most
civil service jobs in the
federal government
Identify the top 5 changes of the Gilded Age
Rank order and be ready to explain your list