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Where the Gilded Age Begins:
America, An Industrial Nation
By early 20th century, America became the largest industrial nation in the world!
In 1901 British writer, W.T. Stead wrote, “what is the secret of American success?”
What do you think was the secret of American success?
What was the secret of American success?
Natural Resources: oil, coal, iron, water, lumberNew Inventions: Drake Well, Bessemer process
(iron into steel), light bulb, electricity distribution, telephone, sewing machine
Expansion and mechanization of factoriesSurge in immigrationRise of corporationsGovernment support of business / “laissez faire”Railroads
The “secret” to American success???
The Rich Get Richer and Richer
What was the secret of their success?
$100 million when died 1877
Gave away over $350 million
1902 worth $200 million
1901 purchased Carnegie Steel for $480 million
http://www.forbes.com/forbes-400/Richest people in America 2014
Monopolized their Industries
Andrew Carnegie Dominated the STEEL INDUSTRY – CARNEGIE
STEEL COMPANY Bessemer process – made good quality steel cheap
VERTICAL INTEGRATION – own/control everything needed for a specific industry (for Carnegie to produce steel) No middle man Sell same product as other companies, but for a lower price and receive
the same profit!!! What will then happen to the other companies???
Absorb other steel companies bc no one can compete, Carnegie then had a MONOPOLY over the steel industry
How Apple Made ‘Vertical Integration’ Hot Again — Too Hot, Maybe
Time Magazine - March 16, 2012 http://business.time.com/2012/03/16/how-apple-made-vertical-integration-hot
-again-too-hot-maybe/
Monopolized their Industries
John D. Rockefeller Dominated the OIL Industry –
STANDARD OIL
Horizontal Integration – bought out other companies within the same sector Lower prices so others cannot compete
(so low you may not profit for a period) Special deals from railroads – rebates
Smaller companies could not compete Once other companies go under, raise
prices since there is no competition (MONOPOLY over the industry)
Now what can Standard Oil do?
Railroads become a PROFITABLE and POWERFUL business!
Why would rail roads be so profitable? Powerful? They controlled the price of goods by controlling
the price of transportationThey determine who shares on those profits
(everybody wants to); they determine which companies succeed and which fail…why?
Who uses the railroads to become rich and control their respective industries?
Who loses out???The smaller businesses
http://www.investopedia.com/articles/investing/120914/most-powerful-and-influential-public-companies.aspLargest companies …
How would you describe Carnegie & Rockefeller?
Rich, powerful, successful
What is the cartoonist’s message?
What will be the impacts of monopolies?
Monopolies will make LOTS of money & become very powerful
Smaller companies forced out Price controlled by one company
bad for consumers?? Workers cannot leave and go somewhere else
One company controls wages & working conditions How will these monopolies keep costs down???
Some will be very rich, while some will be very poor Income gap widens (top 2% own 30% country’s wealth; top 10% own
75% of countries wealth) Concept of Social Darwinism to justify this!
Some are superior to others – the superior should succeed Wealth, power & corruption go hand and hand
Forgotten presidents, but remembered businessmen! Sherman Anti-Trust Act 1890
Robber Barrons or Captains of Industry?
Did they steal from the people and their workers top get rich, i.e., “Robbers” or were they just super successful and should be applauded for being successful?
What will the workers do to protect themselves?
Form UNIONS an association of workers formed to protect and
further the rights of its workers
Existed in America pre-Gilded Age BUT craft specific and local
Now national, skilled & unskilled, different crafts combine
There is power in numbers, right?What tactics can unions use to
protect/further the rights of their members?
What impact did monopolies have on workers?
Were unions able to stand up to big business?What obstacles did unions face?Who plays a role in how workers, strikers and
business leaders portrayed? Why does this matter?
Were they Robber Barons??
Who else is to blame???