THE GILDED AGE

Gilded Age

A name for the late 1800s, coined by Mark Twain to describe the tremendous

increase in wealth caused by the industrial age and the ostentatious lifestyles

it allowed the very rich. The great industrial success of the U.S. and the

fabulous lifestyles of the wealthy hid the many social problems of the time,

including a high poverty rate, a high crime rate, and corruption in the

government.

Characteristics of Capitalism

Factories are privately owned, but subject to government regulation.

Employers furnish raw materials and machinery; workers provide the labor.

The owners get profits and the workers get wages.

Corporation

A company owned by many people, each of who becomes a part owner by

purchasing stock.

Advantages & Disadvantages of Corporations

Advantages to big business:

• Build modern and efficient plants and factories.

•Acquire up-to-date and specialized machinery. • Maintains a large distribution market for its products.

• Increased sales through national advertising.

Disadvantages to big businesses:

• Tends to be Monopolistic- destroys smaller independent

competition.

• Enormous wealth and power is concentrated into the hands

of a few.

The game Monopoly is based on the concept of monopolizing

the board and getting rid of your competition as practiced by

many industrial giants during the Gilded Age.

Socialism and Communism

Socialism is the social theory advocating community control of the means of

production.

Communism is the social system based on collective ownership of all

productive property.

Class System

People having the same social, economic, or educational status

Robber Barons

American capitalists that became wealthy through exploitation (as of

natural resources, governmental influence, or low wage scales).

Social Darwinism

Applied Darwin's theory of natural selection and "survival of the fittest" to

human society, the poor are poor because they are not as fit to survive. Used

as an argument against social reforms to help the poor.

Years later, Adolph Hitler would

subscribe to social Darwinism as

a basis for Nazi racism.

Charles Darwin: His evolution theory was very controversial in the

late 1800s and caused many heated debates. Many big business

leaders subscribed to this belief as to why they were justified in

monopolizing business and controlled their wealthy status in society.

Laissez-Faire

A theory that the economy does better without government intervention in

business.

Market Economy

An economy in which decisions regarding investment, production and

distribution are based on supply and demand.

The prices of goods and services are determined in a free price system.

Mixed Economy

A mixed economy is that the means of production are mainly under private

ownership and that profit-seeking enterprises and the accumulation of capital

remain the fundamental driving force behind economic activity.

However, the government would wield considerable indirect influence over

the economy through fiscal and monetary policies designed to counteract

economic downturns, financial crises, and unemployment.

Planned Economy

An economic system in which the government controls and regulates

production, distribution, prices, etc.

Charles Darwin & the Origin of Species

Presented the theory of evolution, which proposed that creation was an

ongoing process in which mutation and natural selection constantly give rise

to new species.

Sparked a long-running religious debate over the issue of creation.

Andrew Carnegie (1835-1919)

Known as the “Steel King,” dominated the steel industry.

Carnegie Steel Company of Pittsburgh, Pa.

Andrew Carnegie: One of the wealthiest men in

the world was once denied boarding of a

London subway because he never carried

money with him.

Today’s Pittsburgh

Steelers adopted

Carnegie’s Steel

Company’s logo as their

own in honor of

Carnegie.

Steel Industry

The railroads were the biggest customers because of the thousands of miles

of steel track needed.

Bessemer Process

A process for removing air pockets from iron, and thus allowed steel to be

made more affordable, leading to faster expansion of railroads construction

of skyscrapers, and advances in shipbuilding and construction.

Gospel of Wealth

Andrew Carnegie was a philanthropist who donated large sums of money for

public works. His book argued that the wealthy have an obligation to give

something back to society.

Gustavus Swift

In the 1800s he enlarged fresh meat markets through branch slaughterhouses

and refrigeration. He monopolized the meat industry.

Gustavus Swift

Phillip Armour (1832-1901)

Pioneered the shipping of hogs to Chicago for slaughter, canning, and

exporting of meat.

Cornelius Vanderbilt

In 1869, Vanderbilt extended his New York Central railroad to reach Chicago

without having to transfer trains multiple times.

This greatly helped the railroad industry by making travel faster and much

easier for passengers.

Rebates

Developed in the 1880s, a practice by which railroads would give money

back to its favored customers, rather than charging them lower prices, so

that it could appear to be charging a flat rate for everyone.

Trust

A business arrangement under which a number of companies unite into one

system, in effect destroying competition and creating a monopoly.

Pierpont Morgan

Financier who arranged the merger which created the U.S. Steel Corporation,

the world's first billion dollar corporation.

Everyone involved in the merger became rich. (Vertical consolidation).

John D. Rockefeller

New York industrialist; made hundreds of millions of dollars in the 19th

century with Standard Oil Company.

Rockefeller came to own more than 90% of America’s oil industry.

Early oil drill in Titusville, Pennsylvania.

In May 1911, the U.S.

Supreme Court ordered that

John D. Rockefeller’s

Standard Oil be dismembered.

Ironically, as the company was

split into many separate pieces

and the pieces sold,

Rockefeller made a huge

profit on the sales.

Standard Oil

An oil company founded by John D. Rockefeller that monopolized the oil

industry as it served as the nation's first trust.

Monopolies

Markets in which there is only one supplier of a product and no market

competition.

Vertical Integration

A business strategy in which one corporation owns not only the company

that produces the finished product, but also the companies that provide the

materials necessary for production.

Horizontal Integration

Buy out your competition until you have control of a single area of industry.

Holding Companies

A company that buys controlling amounts of stock in related companies, thus

becoming the majority shareholder, and holding considerable say over each

company's business operations.

Sherman Antitrust Act (1890)

A federal law that committed the American government to opposing

monopolies, it prohibits contracts, combinations and conspiracies in

restraint of trade.

Samuel Morse and the Telegraph

Samuel Morse developed the telegraph which used lightning wires and the

Morse code, an electronic alphabet that could carry messages.

A telegraph line was constructed between Baltimore and Washington, D.C.

and the first message sent on May 24, 1844 was “What Hath God Wrought”

Alexander Graham Bell

Alexander Graham Bell is most well known for inventing the telephone. He came to

the U.S as a teacher of the deaf, and conceived the idea of "electronic speech" while

visiting his hearing-impaired mother in Canada. This led him to invent the

microphone and later the "electrical speech machine“ his name for the first telephone.

When commercial telephone service was introduced between New York

and London in 1927, the first three minutes of a call cost $75.00

Thomas Edison

US inventor who invented the phonograph, the motion picture camera, the

electric light bulb, and came up with the innovative idea of central power

companies that provided electrical power to large numbers of customers.

Phonograph

Invention by Thomas Edison that recorded sound.

Electric Light Bulb

Invention by Thomas Edison that greatly transformed how people lived and worked.

Light bulbs provided much more light than oil lamps and meant that people could

work and do more after dark factories and businesses could stay open longer and

produce more.

Motion Picture Camera

Camera invention by Thomas Edison that recorded motion pictures and

eventually made the movie industry possible.