America’s Gilded Age

1870 - 1890

The Second Industrial Revolution

Part I

Causes of Rapid Industrialization

• Abundant Natural Resources

• Unskilled & semi-skilled labor in abundance

• Market growing as US population increased

• Abundant Capital• New, talented group of

businessmen [entrepreneurs] and advisors

• Government willing to help at all levels to stimulate economic growth

The Industrial Economy

• America produced 1/3 of the world’s industrial output by 1913

• ½ of industrial workers labored in plants with more than 250 employees

• By 1880 a majority of American workers engaged in non-farming jobs

• By 1890 2/3 of Americans worked for wages

• The heartland of the second industrial revolution was the Great Lakes region

Urban Growth 1870 - 1900

Railroads

• Fueled the growing US economy

– First big business in the US

– A magnet for financial investment

– The key to opening the West

– Aided the development of other industries

Railroad Construction

“The Big Four” Railroad Magnates

Charles Crocker

Mark Hopkins Leland Stanford

Collis Huntington

The First Transcontinental Railroad

Promontory Point, UT(May 10, 1869)

The National Market

• Spread of National Brands

• Growth of National Chains

• National Mail Order Firms

Technological Innovations

• Atlantic cable (1866)• Typewriter (1867)• Bessemer and open hearth

process• Refrigerated cars• Thomas A. Edison - Light

bulb, phonograph (1877), motion picture camera

• Handheld camera • Alexander G. Bell -

Telephone (1876)• George Westinghouse -

Alternating current

x

Westinghouse Lamp Ad

Competition and Consolidation

• 1873 to 1897 the Great Depression

• Pools

• Trusts

• Companies went out of business or were gobbled up by others

• Between 1897 and 1904 4,000 firms were consolidated into larger corporations

U.S. Corporate Mergers

Andrew Carnegie

• In 1873 Carnegie set out to establish a vertically integrated steel company

• By 1890 he dominated the steel industry

• Accumulated a fortune with hundreds of millions of dollars

• Distributed much of his wealth to various philanthropies, especially the creation of public libraries

John D. Rockefeller

• Drove out rival firms, through cutthroat competition, arranging secret deals with railroads, fixing prices and production quotas

• Started out through horizontal expansion

• Like Carnegie he also expanded vertically establishing a monopoly

• By 1880 Standard Oil Company controlled 90 percent of the nation’s oil industry

• Gave much of his fortune away, establishing foundations to promote education and medical research

New Type of Business Entities

Captains of Industry or Robber Barons?

• As the rich became wealthier, and the poor more so, people began to question and some even attacked leading industrialists calling them Robber Barons, while others maintained that they were Captains of Industry

Increasing Wealth or Poverty• By 1890 the richest 1

percent of Americans received the same total income as the bottom half of the population and owned more property than the rest of America

• Thorstein Verblen, The Theory of the Leisure Class (1899) upper class culture focused on “conscious consumption”

• Much of the working class lived in desperate conditions

Jacob Riis

How the Other

Half Lives

(1890)

“Dumbell” Tenement, NYC

“Dumbell” Tenement

Tenement Slum Living

Struggling Immigrant Families