Essential QuestionEssential Question:–How did the “Second Industrial

Revolution” transform the U.S. during the Gilded Age?

Warm-Up Question:Warm-Up Question:–To what extent had the United

States developed a “national market economy” by the outbreak of the Civil War (1860)?

–What developments were still needed to improve America’s national market economy?

Gilded Age IndustrializationDuring the Gilded Age, American

businesses were transformed:–Massive corporations replaced

small, family businesses–New technology, transportation,

marketing, labor relations, & efficient mass-production

–By 1900, the U.S. was the most industrialized country in the world

The Business of Invention19th-century inventors led to an

“Age of Invention”:–Cyrus Field’s telegraph cable–Business typewriters, cash

registers, adding machines–High-speed textile spindles,

auto looms, sewing machines–George Eastman’s Kodak camera–Alexander G. Bell’s telephone

By 1905, 10 million Americans had phones; (Bell Telephone Co became AT&T)

The Business of InventionThomas Edison, the “Wizard of

Menlo Park,” created the 1st research lab in New York–Edison Illuminating Co was the

to 1st use electric light in 1882–Tesla’s alternating current (AC)

allowed electricity to travel over longer distances & to power streetcars & factories

The Business of InventionNew technologies allowed for

increased industrial production–New machines were incorporated

into the first assembly lines which allowed for continuous & faster production of goods

–The railroad linked every region of America & allowed for a mass consumption of goods

The Midwest Made Meat for America A new-and-improved “market revolution”:A new-and-improved “market revolution”: More regional specialization made mass

production & mass consumption possible

New Methods of Marketing Marketing became a “science”:

–Advertising firms boomed–Department stores like Macy’s

& Marshall Field’s allowed customers to browse & buy

–Chain stores like A&P Grocery & Woolworth’s “Five & Ten”

–Mail-order catalogues, like Montgomery Ward sold to all parts of America

New Forms of Business OrganizationNew types of business organization

were used to increase profits:–“Trusts” & “holding companies”

integrated various businesses under 1 board of directors

–Vertical & horizontal integration maximized corporate profits

–Frederick Taylor’s “scientific management” emphasized time efficiency & mid-level managers

“Trusts” use a board of trustees to

manage a company

“Holding companies” oversee & manage other

subsidiary companies

Vertical & Horizontal IntegrationU. S. Corporate MergersU. S. Corporate Mergers

By 1900, 1% of U.S. companies controlled 33% of all industry

New Forms of Business OrganizationBusiness leaders used a variety

of ideas to justify their wealth:–The “Gospel of WealthGospel of Wealth” argued

that it is God's will that some men attained great wealth

– Social DarwinismSocial Darwinism taught that natural competition weeds out the weak & the strong survive

–Were monopolists “captains of industry” or “robber barons”?

The Industrialization of America

The Second Industrial Revolution was fueled

by 3 industries: railroads, steel, & oil

The Railroad Industry America’s first “big business” was

the railroad industry:–Railroads stimulated the coal,

petroleum, & iron/steel industries–Large companies bought small

railroads, standardized gauges & schedules, & pooled cars

–Small lines in the east acted as tributaries to the 4 great trunk trunk lineslines into the West

Cornelius “the Commodore”

Vanderbilt was the most powerful figure in

the railroad industry

Problems of GrowthBut, the railroad industry faced

problems due to overbuilding in the 1870s & 1880s:–Mass competition among RRs–RR lines offered special rates &

rebates (secret discounts) to lure passengers & freight on their lines

–Pooling & consolidation failed to help over-speculation

Speculators like Jay Gould built & bought rail lines to profit with

little concern for efficient use

Problems of GrowthRR bosses asked bank financier

J.P. MorganJ.P. Morgan to save their industry:–Morgan created a traffic-sharing

plan to end wasteful competition–“MorganizationMorganization” fixed costs,

cut debt, stabilized rates, issued new stock, & ended rebates

–Created a “board of trustees” By 1900, 7 giant (centralized &

efficient) rail systems dominated

The Steel Industry Steel transformed world industry:

–Allowed for taller buildings, longer bridges, stronger railroad lines, & heavier machinery

– Andrew CarnegieAndrew Carnegie’s company made more steel than England

–Carnegie converted his steel plants to the Bessemer process & was able to out-produce his competition & offer lower prices

Andrew Carnegiewas the great

example of the “American Dream” & social mobility

International Steel

Production, 1880-1914

The U.S. was ideal for steel

production because it had lots of coal,

iron, & railroads

Rockefeller and OilPetroleum also changed industry

–New industrial machines needed kerosene for lighting & lubricants

– JohnJohn D.D. RockefellerRockefeller monopolized the oil industry, lowered oil costs & improved the quality of oil

–By 1879, Standard Oil ruled 90% of all U.S. oil & sold to Asia, Africa, & South America

Standard OilStandard Oil: The Monster Monopoly?

Essential QuestionEssential Question:–What role did the business

leaders play in stabilizing the chaotic business cycles of the Gilded Age?

Reading Quiz Ch 18 B (625—639)Reading Quiz Ch 18 B (625—639)

The Industrial Workers

Industrial WorkersIndustrial work was hard:

–Laborers worked long hours & received low wages but had expensive living costs

– Industrial work was unskilled, dangerous, & monotonous

–Gender, religious, & racial biases led to different pay scales

These conditions led to a small, but significant union movement

Early American Labor UnionsIn 1868, Knights of LaborKnights of Labor formed

to help all type of workers escape the “wage system”

The most successful union, the American Federation of LaborAmerican Federation of Labor (1886) led by Samuel Gompers:–Made up only of skilled labor &

sought practical objectives (better pay, hours, conditions)

– Included 1/3 of all U.S. laborers

The KoL lacked organization to survive

Membership regardless of skill, race, or sex

Excluded women, blacks, unskilled laborers

The U.S. experienced an “era of strikes” from 1870-1890

The Great RR StrikeGreat RR Strike of 1877 shut down railroads from

WV to CA & resulted in hundreds of deaths

During the Chicago Haymarket StrikeChicago Haymarket Strike (1886), unionists demanded an 8-hr day; led to mob violence & the death of the Knights of Labor

The Homestead StrikeHomestead Strike (1892) resulted from a 20% pay cut at one of Carnegie’s steel plants

Essential QuestionEssential Question:–How did the industrialization of

the Gilded Age transform cities & immigration in America?

Reading Quiz Ch 19 A (648—663)Reading Quiz Ch 19 A (648—663)

Urbanization: 1870-1900

Gilded Age UrbanizationFrom 1870 to 1900, American

cities grew 700% due to new job opportunities in factories:–European, Latin American, &

Asian immigrants flooded cities–Blacks migrated into the North–Rural farmers moved from the

countryside to cities

The Lure of the City

By 1920, for the 1st time in U.S. history, more than 50% of the American

population lived in cities

Skyscrapers and SuburbsBy the 1880s, steel allowed cities

to build skyscrapersThe Chicago fire of 1871 allowed

for rebuilding with new designs: –John Root & Louis Sullivan

were the “fathers of modern urban architecture”

–New York & other cities used Chicago as their model

Louis Sullivan “Form follows function”

John Root “Simple & Dignified”

Skyscrapers and SuburbsCities developed distinct zones:

–Central business district with working- & upper-class residents

–Middle-class in the suburbsElectric

streetcars & elevated rapid transit made travel easy

Tenements & Overcrowding½ of NYC’s buildings were

tenements which housed the poor working class –“Dumbbell” tenements were

popular but were cramped & plagued by firetraps

–Slums had poor sanitation, polluted water & air, tuberculosis

–Homicide, suicide, & alcoholism rates all increased in U.S. cities

Jacob Riis’ “How the Other Half Lives” (1890) exposed the poverty of the urban poor

Strangers in a New LandFrom 1880-1920, 23 million

immigrants came looking for jobs:–These “new” immigrants“new” immigrants were

from eastern & southern Europe; Catholics & Jews, not Protestant

–Kept their language & religion; created ethnic newspapers, schools, & social associations

–Led to a resurgence in Nativism & attempts to limit immigration

Immigration to the U.S., 1870-1900

Foreign-born Population, 1890The influx of ethnic nationalities led to a new “melting potmelting pot” (“salad bowl”?) national image

Urban Political MachinesUrban “political machinespolitical machines” were

loose networks of party precinct captains led by a “boss”–Tammany Hall was the most

famous machine; Boss Tweed led the corrupt “Tweed Ring”

–Political machines were not all corrupt (“honest graft”); helped the urban poor & built public works like the Brooklyn Bridge

Boss Tweed

Tweed CourthouseTweed Courthouse——NY County Courthouse was Courthouse was supposed to cost $250,000 but cost $13 million. supposed to cost $250,000 but cost $13 million.

But the Tweed Ring catered to immigrants by building the Brooklyn Bridge & hosting holiday barbeques

Social Changes in the Gilded AgeUrbanization changed society:

–The U.S. saw an increase in self-sufficient female workers

–Most states had compulsory education laws & kindergartens

–150 new public & private colleges were formed

–Cities set aside land for parks & American workers found time for vaudeville & baseball

People of all races married later & had fewer children

“Family time” disappeared for working class

Women made up 40% of university students

Private philanthropy led to Stanford, Tulane, Vanderbilt, Cornell, & the Univ of Chicago

Land Grant Act (1862) led to the Universities of WI, CA, MN, IL

Conclusions:Industrialization’s Benefits & Costs

American IndustrializationBenefits of rapid industrialization:

–The U.S. became the world’s #1 industrial power

–Per capita wealth doubled – Improving standard of living

Human cost of industrialization:–Exploitation of workers; growing

gap between rich & poor–Rise of giant monopolies