The Gilded Age APUSH Period 6 (1865-1898) PDF

THE GILDED AGE APUSH PERIOD 6 (1865-1898) INDUSTRIALIZATION The Second Industrial Revolution In the 1850s, America entered a new period of rapid economic development and technological advancement known as the second Industrial Revolution. Coal and iron were the backbone of the first Industri...

THE GILDED AGE APUSH PERIOD 6 (1865-1898) INDUSTRIALIZATION The Second Industrial Revolution In the 1850s, America entered a new period of rapid economic development and technological advancement known as the second Industrial Revolution. Coal and iron were the backbone of the first Industrial Revolution. Oil, steel, and electricity (generated by burning coal) were the backbone of the second. Technological advancements during this time improved the standard of living for generations of Americans. However, a growing divide between the wealthy and the poor created social issues that persist today. Railroads Railroads played a critical role in the rapid economic development that occurred during the second Industrial Revolution. In 1865, there 35,000 miles of track in the US. By 1900, there were 193,000 miles of track. Connected distant regions of the US, allowing for the transportation of goods and people Created a national market for goods Led to the development of large corporations and massive profits A corporation is a business that sells shares of stock to investors. Cornelius Vanderbilt’s New York Central Railroad was an important railroad corporation in the northeastern US. Steel The growth of railroads created a booming steel industry. Steel is a form of purified iron, typically mixed with other metals to make it stronger. Railroad and steel companies depended on one another. ○ Railroad companies needed steel to build thousands of miles of track. ○ Steel companies needed railroad companies to buy their steel. Steel companies developed low-cost methods of producing steel, lowering the price of steel on the market. As the price of steel fell, other industries (such as construction) began to use steel in their products. The first steel-framed skyscraper was built in Chicago in 1885. Large corporations such as Carnegie Steel and U.S. Steel (formed by a merger between Carnegie Steel and the Federal Steel Company) dominated the steel industry. Oil Oil production in the late nineteenth century was also dependent upon railroads. At the time, crude oil was most commonly refined into kerosene and burned in lamps to produce heat and light. After being drilled and pulled from the ground, oil had to be transported to refineries on the east coast. ○ In the late 1800s, crude oil was barrelled and transported by train. ○ Due to the high cost of shipping oil by rail, large pipes called pipelines were constructed to avoid paying railroad companies for transport. John D. Rockefeller’s Standard Oil became one of the most valuable companies in the world during this time period. Other Industries The growth of railroads in the United States contributed to the growth of other industries as well. Companies that produced materials that were used to build locomotives, train cars, and tracks benefitted, as well as companies that shipped goods by rail. Coal Steel Lumber Glass Textiles Brakes Signals Time zones were also created to better manage the railroad system. The railroad revolutionized the American economy and by extension, American life. Corporations The modern corporation was perhaps the longest- lasting contribution of nineteenth century railroad companies. Railroad corporations needed large sums of money to fund expansion. ○ Railroad companies lobbied the government for subsidies (government payments) and sold shares of stock (shares of ownership in the company) to private investors. Professional managers were hired to oversee complex schedules and business transactions. Accounting and financial services were needed to ensure a company was cost-effective and profitable. Larger, more successful railroads bought smaller railroads, leading to market consolidation (a few large companies dominating a market). Nineteenth Century Technology The ability to conduct electric current led to several important innovations during the nineteenth century. 1. Telegraph Samuel Morse invented the telegraph in 1832, allowing people to instantly communicate across great distance by sending signals on electric wires. 2. Telephone Alexander Graham Bell invented the telephone in 1876, allowing people to instantly transmit their voice across great distance on electric wires. 3. Light bulb Thomas Edison invented the electric light bulb in 1879, illuminating cities, factories, and neighborhoods. This invention allowed factories to operate 24 hours per day. RISE OF BIG BUSINESS The Gilded Age On the surface, the end of the nineteenth century appeared to be a time of great prosperity, but underneath, it was also a time of great suffering for many, especially immigrants, people of color, and unskilled factory workers (including children). Some historians call the second Industrial Revolution, particularly from 1870-1900, the Gilded Age. ○ Mark Twain was the first to use this term. ○ “Gilded” means gold-plated. ○ A gilded piece of jewelry appears to be of high value, but is actually made of cheap material underneath. Robber Barons? During the nineteenth century, a small number of highly successful businessmen were able to amass large amounts of wealth by utilizing business practices that some believe were unfair, such as the monopolization of markets. Today, some historians reverently refer to these men as captains of industry while others refer to them as robber barons, implying that these men stole their wealth by preying upon smaller businesses and the working class. https://www.youtube.com/watch?v=9uZiESiaa-U. Trusts and Monopolies Captains of industry (or robber barons, if you prefer) such as Andrew Carnegie and John D. Rockefeller made fortunes in their respective industries, partly by buying their competitors or by putting their competitors out of business. 1. Rockefeller and Carnegie created trusts in an effort to form monopolies. A trust is a group of separate companies placed under the control of a single managing board in an effort to create a monopoly. A monopoly is a market (such as steel or oil) that is dominated by one, large business. Because a monopoly controls the supply of a product, it can also control the product’s price. Monopolies are price makers. 2. Nineteenth century trusts were often horizontally and vertically integrated. Horizontal integration occurs when two or business that make the exact same good merge, resulting in a larger company with more market share (percentage of sales in a market). Vertical integration occurs when two business that are involved in different steps of production within a market merge, such as when Andrew Carnegie bought coal mines, iron ore fields, ships and railroads to lower the cost of steel production. Smaller businesses struggle to compete with larger, vertically integrated trusts. When a small business fails, a larger business often buys its assets, consolidating the market further.  Competition and Consolidation Investments lead to over-speculation and corruption ○ Jay Gould Overexpansion and stock-watering- inflating the value of a corporations assets and profits before selling its stock to the public ○ RR companies begin to offer rebates and kickbacks to maintain competition ○ Offers for large companies, punished small farmers ❑ Panic of 1893 ○ ¼ of all RR’s bankrupt ○ By 1900, seven companies controlled 2/3 of RR’s (J.P. Morgan) ○ Made the system more efficient but only a few powerful men dominated the boards of competing railroad corporations Cornelius Vanderbilt Born poor, Vanderbilt made money in the steamboat industry before buying and consolidating several railroads into the New York Central Railroad in 1869. Vanderbilt continued to buy and consolidate railroad companies until his death in 1877. He ordered the construction of Grand Central Depot in New York City, which was eventually replaced by Grand Central Station. Today Vanderbilt’s assets would be worth more than $200 billion. John D. Rockefeller Rockefeller founded Standard Oil in 1870. By the time of his death, Rockefeller had become one of the wealthiest men in world history. Rockefeller was a brilliant and ruthless businessman. Utilized trusts and cartels to dominate the oil industry. ○ A cartel is formed when seperate companies agree to work together to control the price of product. Rockefeller bought struggling oil refineries and bypassed railroads by building oil pipelines to lower production costs. By 1879, Standard Oil controlled 90% of the oil industry. Today, Rockefeller’s assets would be worth over $400 billion. Andrew Carnegie Carnegie, a Scottish immigrant, founded the Carnegie Steel Company in 1892. Carnegie used new technology at the time, such as the Bessemer process, to efficiently produce steel. Like Rockefeller in the oil industry, Carnegie used horizontal and vertical integration to dominate the steel industry. Carnegie sold his company to J.P. Morgan in 1901. Today, Carnegie’s assets would be worth over $300 billion. At the end of his life, Carnegie donated large sums of money to charitable causes (Gospel of Wealth) J.P. Morgan Morgan was a financier and industrial organizer. He founded J.P. Morgan and Company in 1895, which provided financial services to major corporations. He financed the consolidation of several major corporations including United States Steel and General Electric. Today, Morgan’s assets would be worth approximately $25 billion. Antitrust Movement Trusts Under Attack ○ Middle-class rises up against perceived unchecked power ○ Old wealth vs. nouveau riche Sherman Antitrust Act (1890) ○ Prohibited organizations created with intent to regulate or control interstate trade or commerce ○ Monopolies now illegal ○ Impact: Weakened by Supreme Court US v. E.C. Knight (1895) ○ Could not apply to manufacturing, used primarily against labor unions Social Darwinism Nineteenth century industrialists justified their immense wealth with a theory known as Social Darwinism, a play on Charles Darwin’s theory of evolution. Social Darwinists argued that wealth was a sign of a person’s fitness, and the result of natural selection (survival of the fittest). ○ In other words, Social Darwinists believed that the wealthy had traits that enabled them to become wealthy, while the poor did not, meaning that they deserved to be poor. This flawed line of thinking was often used to justify racism and discrimination, with Social Darwinists arguing that minorities who lived in poverty were “unfit.”  Marketing Consumer Goods Department Stores ○ Located in the urban cities Example: RH Macy’s (NY) ○ Some department stores brought items to Rural America Example: (Sears-Roebuck) Transportation ○ Packaged foods for sale (Kellogg and Post) ○ Refrigerated Car for meat products (Swift) ○ Mass produced meats & vegetables at a highly competitve rate. Advertising ○ Birth of the consumer culture (shopping) POLITICS  Discussion Question “The politics of the Gilded Age failed to deal with the critical social and economic issues of the times.” Assess the validity of this statement. ○ Topics to consider: Laissez faire policies Political corruption Socio-economic disparities Racial inequality Plight of farmers & laborers Presidential Elections Election of 1880 ○ James Garfield (R) vs. Winfield Hancock (D) -11 weeks in he was shot and killed by a Rebulican who felt he was supposed to be given a job. ○ Chester Arthur’s (R) Presidency -Reforms spoils system – civil service , improves Navy, questions protective tariff -Was not re-nominated by the Republican party Election of 1884 ○ Grover Cleveland (D) defeats Blaine (R) -First democrat in office since 1856 (James Buchanan) Political Issues in the 1880s Civil Service Reform ○ Pendleton Civil Service Act (1881) -The act mandates that most positions within the federal government should be awarded on the basis of merit (exam) instead of political patronage. -It made it unlawful to fire or demote for political reasons employees who were covered by the law. The Gold Standard *Background: Economy depended on circulation Problems: 1. increasing gap between rich and poor 2.The Farmer’s Plight – wanted more easy or soft money in circulation which allowed borrow money at lower interest rates to pay off their loans with inflated dollars ○ The Gold standard = caused eventual depressions *Why? Hard Money vs. Greenbacks – allow the use of paper money and gold as it would hold its value against inflation. ○ Results: Specie Resumption Act (1875) – Gold Only Sherman Silver Purchase Act of 1890 – increased coinage of silver; too little to satisfy farmers Political Machines Problems with Maintaining Cities Urbanization outpaced government = corruption Rise of Political Machines ○ Tammany Hall & Boss Tweed ○ Cartoons of Thomas Nast  Presidential Elections Election of 1888 – protective tariff ○ Harrison (R) defeats Cleveland The “Billion Dollar Congress” Increases Tariff (McKinley, 1890) – 48% tax Increases Soldiers’ Pensions Sherman Anti-trust Act, Sherman Silver Purchase Act – outlaws combinations in restraint of trade ○ Immigrants dramatically shift over to the Democratic Party Election of 1892 ○ Cleveland defeats Harrison due to the high tariff Panic of 1893 ○ Overexpansion of RR’s & industry – stock market crash Combined w/Cleveland’s use ○ Cleveland wants repeal of Sherman Silver Purchase Act of troops during ○ J.P. Morgan loans $65 million – Americans believed the Pullman Strike, government was just a tool of the eastern bankers. Americans become ○ Coxey’s Army – demand $500 million to be spent on social disenchanted w/gov’t as a tool of welfare. the rich arrested for trampling grass Election of 1896 – issues of silver vs. gold ○ Populist Election – William Jennings Bryan Populism - Causes Inequities in the new industrial order and new agricultural order Political corruption and ineptitude Lack of political power by farmers Transformation of America to an urban society Increased world markets and competition Deflationary gov’t policies Rise of the Grange and Farmers’ Alliances The Populist “People’s” Party Organized in 1890 in Cincinnati ○ held first convention in 1892 in St. Louis ○ tried to unite workers and farmers: Knights of Labor ○ nominated James Weaver (Greenbacker) for President ○ Leadership: Thomas Watson Tenets: The Omaha Platform ○ Political: Direct election of senators Direct primary: is an election in which citizens vote to select Initiative, referendum, recall nominees for upcoming elections. ○ Economic: Initiative: gives people the power to put a proposed new law Unlimited coinage of silver directly on the ballot in next election by collecting citizen’s signatures on a petition. Graduated income tax Referendum: allows citizens to approve/reject laws passed by Public ownership of railroads, a legislature. telegraph, and telephone Recall: gives voters the power to remove public servants from Loans and warehouses for farmers office before their term is ended. Eight-hour workday Election of 1896 Populists merge with Democrats and run with William Jennings Bryan McKinley runs for the Republicans Populists run on platform of 16:1  End of the Populist Movement Results of the Movement: ○ The political death of rural America highlighted the problems of farmers ○ Rise of urban influence ○ It brought in the Progressive Era: reform politics ○ Important influence of third parties had dwindled but grew in popularity. ○ Birth of modern politics impact of media *The movement contributed to the rise of the Progressive era (reform) in the early 20th Century.  Two Party System? Republicans: Democrats: “Waving the Bloody Shirt” Bi-Metalism Gold Standard Low Tariffs High Tariffs Weak Platforms Higher Farm Prices Union Pensions Spoils Less Government Aid Gov’t Subsidies System/Patronage States Rights Limits on Immigration Weak Presidents Pro-Immigration (N) Makeup: Strong Congressional Makeup: Reformers, African- Presence Laborers, Small Farmers, Americans Immigrants Wealthy: Industrialists, Wealthy: Planters Bankers, Bonanza Farmers Solid South and West Northerners, Upper Midwest IMMIGRATION European Immigration Socioeconomic issues and political unrest in Europe at the end of the nineteenth century led a large number of Europeans to immigrate to the United States. Between 1880 and 1920, 20 million people immigrated to the United States from Europe and Asia. Irish and German immigrants arrived in large numbers in the decades after the American Revolution. After the Civil War, immigrants from eastern and southern Europe immigrated in large numbers. ○ These immigrants often lived in poverty, did not speak English, and were not Protestant Christians, leading them to form their own communities. ○ Immigrants were often targets of discrimination. ○ Most of these immigrants worked unskilled jobs in northern cities. Ellis Island Most European immigrants were processed at Ellis Island in New York upon their arrival to the United States. Ellis Island Immigrant Station opened in 1892, and had processed 12 million immigrants by 1924. The vast majority of European immigrants were granted entry into the country, but about 2% were denied. Asian Immigration A large number of Chinese immigrants also arrived in the United States during the second half of the 19th century, with many settling in California. Many Chinese immigrants worked for railroad companies while building the Transcontinental Railroad in the 1860s. ○ The work was both difficult and dangerous. ○ Chinese workers were paid less than white workers while being given the most dangerous tasks, such as working with dynamite. White Americans resented Chinese immigrants, leading to the passage of the Chinese Exclusion Act of 1882, which banned immigration from China for 10 years. Angel Island Most Asian immigrants were processed at Angel Island in California. Racism and xenophobia created a more difficult environment for Asian immigrants at Angel Island than Europeans faced at Ellis Island. Chinese immigrants often waited for months or years at Angel Island before being granted entry into the country, and approximately 18% were denied entry entirely. Impact of Immigration Low wages combined with overcrowding in cities led to higher rates of crime and disease, with the latter due mostly to poor sanitation. However, the impact of immigration was mostly positive. Increased demand for products (due to increased market size) improved the American economy. Low-wage labor was widely available, leading to an increase in production. American cuisine (food), music, and literature were heavily influenced by immigrants from both Europe and Asia. Ironically, white Americans called nativists (native-born citizens) resented immigrants and pushed for laws that discriminated against them. THE LABOR MOVEMENT Gilded Age Labor Conditions During the Gilded Age, unskilled workers worked long hours for low wages in unsafe conditions. Unskilled workers were often immigrants in search of opportunity, meaning that they would accept almost any job and work for low wages. Factory workers usually worked 12 hours per day, for 6 days per week. Factories were loud, dangerous, and had little or no ventilation. There were often more workers than jobs, which allowed business owners to easily replace unskilled workers who asked for better pay or treatment. High rent combined with low wages meant that workers usually lived in tenements (overcrowded multi-family apartments) in unsanitary slums (impoverished communities). In some industries, workers were forced to live in “company towns” which were owned by their employers, where high rent combined with low wages made it impossible to get ahead. Organized Labor Workers joined together in labor unions to push back against exploitation and poor treatment in factories and sweatshops. A labor union is an organization of workers who seek to improve workplace conditions by collectively bargaining (negotiating as a group) with the business’s owner(s). ○ Labor unions are based on the idea that there is strength in numbers. ○ Skilled workers and unskilled workers originally formed separate unions. Union members who felt like their demands were not being met would often organize a strike (an organized work stoppage intended to force owner(s) to negotiate by causing the business to lose money). The American Federation of Labor Samuel Gompers, an English immigrant, helped create the American Federation of Labor, a union for skilled workers organized by trade, in 1886. Gompers did not agree with socialists (advocates for public ownership of the factors of production) who believed that capitalism (private ownership of the factors of production) was the enemy of workers. Gompers urged members of the AFL to push for higher wages and better conditions without trying to destroy America’s economic system. Tactics used by Gompers included strikes and closed shops (businesses forced to only hire union members). By 1901, the AFL had over one million members. Notable Labor Protests 1. Haymarket Riot of 1886 Thousands of workers protested and organized strikes to advocate for an 8-hour workday in Chicago. Violence between strikers and police led to a riot after a bomb killed a police officer. Dozens of people were killed in the ensuing chaos. 2. Homestead Strike of 1892 A strike at a Carnegie Steel plant in Pennsylvania turned violent when the plant’s owners called in a private police force known as the Pinkertons. Several strikers and Pinkertons were killed during the fighting. The National Guard was called to put an end to the violence. 3. Pullman Strike of 1894 Eugene V. Debs organized a nationwide rail workers strike in response to the actions of George Pullman, a wealthy inventor and businessman who had fired several workers who had attempted to negotiate for higher wages. Railroad traffic ground to halt, prompting the federal government to order an end to the strike. Debs refused and was arrested and convicted for conspiring against interstate commerce. Debs appealed, but the Supreme Court upheld the conviction. An Alliance Against Labor These three incidents show a trend in which the government sided with big business against labor unions. Labor unions continued to organize throughout the 20th century, and remain active today. Some unions and their members became increasingly intertwined with socialism, including Eugene Debs, who founded the American Socialist Party in 1897. Violence and socialist ideas associated with unions caused them to lose popularity with some voters, leading to laws to restrict unions in states like Georgia. The Good and Bad of the Gilded Age Good Rapid economic growth New technological advancements Urbanization Rising wages for skilled and professional workers An increased standard of living for some Americans Bad Poverty Inequality Child labor Racial discrimination and xenophobia Pollution and disease Political corruption