“The Gilded Age”

Mr. CalellaAmerican Studies I (Honors)

Big Ideas & Essential question

• BIG IDEAS:–Robber Baron, Monopoly, Gilded, Social

Darwinism• Essential Question:–What is the primary function of a

government: to protect the rights of the citizens or to protect the interests of big business?

After the Civil War

• Watch the following short video• Write down 3 questions that are mentioned in

the video to which you can form a connection with

• Jot down your connection (personal, something you know a little about, something that relates to current events, something you find interesting, etc.)

• Watch video “After the Civil War”

The Gilded Age: Triumph of Self-Interest• North’s industries won the Civil War; businessmen and

manufacturers were paid high respect– This paved way for Robber Barons and ascending to power– Also paved way for manufacturing and industry to begin

developing in the South• Country becomes more materialistic and people

compete for wealth• Push for laissez-faire economy and Social Darwinism• People were out for themselves; they were tired of

sacrifice (reform, Civil War, enfranchisement)• Mark Twain called this era of American culture and

politics the “Gilded Age” and wrote a novel with the same name– Dazzling on its surface , but base metal below

Activity

• Brainstorm factors, resources, political conditions, etc. necessary for industry to grow in a country.

Industrial Growth in U.S.

• Major industrial growth post Civil War• 1874 to 1883, GNP grows by 44%• Factors behind explosive growth– Natural resources discovered and exploited– Expanding population (European immigration)– Protective tariffs– Social Darwinism– Science & technology advancements

Railroads: First Big Business• RRs become largest economic forces in U.S. and

their executives very powerful– 1890, RRs $1 Billion and U.S. gov’t $403 mil.– RRs spurred economy-buying materials, building,

hiring, selling land grants

• Post Civil War, RR construction; focus on INTEGRATION (“tree trunk”)

• RRs indispensable to economic growth?• Safer, efficient-air brakes, sleeping cars• Jay Gould was Robber Baron of industry

Railroads: Competition & Monopoly

• Deflation: What is it? Why farmers hurt by it?• Competition caused profit margins to shrink• RRs charged more where no competition existed

(so farmers hurt, why?)• 1870s, RRs entered bankruptcy b/c lowering rates

continuously and debts piled up• 1880s, bigger RRs buying smaller ones• 1890s Depression, bankers like J.P. Morgan

buying RRs and agreed to set industry rates• Hurt consumers? Help? Government action?

Iron, Oil, and Electricity• Iron industry after mass-

produce steel (Bessemer Process)– Bridge/building girders,

track, machine tools– PA and OH become huge

producers• Oil-used to produce kerosene

(lamp fuel)• Telephone-Bell in 1876;

1900, 800K• Electricity-1879, Edison

invented light bulb • Typewriter-1867, Christopher

Sholes• SHOW VIDEO ON LIGHTBULB

The Steel Industry• SHOW CARNEGIE VIDEO• Andrew Carnegie: kingpin of steel “rags to riches”

story; ACTIVITY• 1901, Carnegie (to focus on philanthropic work)

bought out by Robber Baron banker J.P. Morgan to form U.S. Steel, 1st billion dollar company

• Business Practices– Better products and better, highly competitive people– Exploit blue collar laborers– Vertical Integration allowed him to achieve Horizontal

Integration (i.e., monopoly)

J.P. Morgan & The Brooklyn Bride

• Watch video • Write 3 facts learned from video and 1 higher

level question• 5 minutes to research other steel suspension

bridges in U.S.– Location?– When was it built?– Who designed it?

Andrew Carnegie & J.P. Morgan

Rockefeller and the Trust• Oil-very competitive– Output always seemed to outpace demand– J.D. Rockefeller founded Standard Oil of Cleveland in 1870

• Rockefeller consolidated oil industry so by 1879 he had 90% (fair & foul methods)

• After est. monopoly needed new business organization because prohibition of local laws

• TRUST-Samuel C.T. Dodd; Rockefeller’s interests and everyone else’s turned secretly over to 9 trustees (“supervise”)

• Competition ended, profits up, and Rockefeller made millions

Standard Oil Trust• What animal

does Standard Oil represent and why?

• What is it latching on to? Why?

• How does it represent a “trust”?

• Robber Baron Activity

Rockefeller and the Holding Company• 1888, after public outcry, federal government

outlawed trust as violation of free trade• Standard Oil responded by changing into a

HOLDING COMPANY (bought competing companies under one central administration)

• Not loved like Carnegie even though made gifts– Muckraker journalist Ida B. Tarbell exposed

Rockefeller’s unsavory business practices in a series of articles that appeared in McClure’s Magazine from 1902 to 1905

Competition & Monopoly: Retailing and Utilities• Electricity and phones formed monopolies- avoid

duplication of equipment & better, more efficient service– Do monopolies always harmful to consumers?

• Bell & Edison go through patent litigation– Should patents be granted? Do you agree? Life saving

drugs?• Edison merged with competitor to form GE– Should government have to monitor or approve of

mergers within an industry?

American Ambivalence to Big Business• Americans disliked “big” government and its

regulation of business– However, NO objection to banking laws, tariffs, RR land

grants, infrastructure improve.– Why were these items okayed by Americans?

• Americans started fearing trusts and monopolies b/c might increase prices

• Worry of AUTOCRACY & gap between rich and poor (wealth highly concentrated)– However, generally did NOT unreasonably increase prices– What would industry look like without efficiency and price

control of monopolies?

Social Darwinism & Gospel of Wealth• Social Darwinism: Darwin’s principles (On the Origin

of Species,1859) applied to human society (only the strong survive and the weak die out)

• Does this sound like a theory promulgated by the rich and powerful? Why?

• Carnegie believer in Social Darwinism but softened it a bit with his Gospel of Wealth (1889)– He preached philanthropy, but most rich people behaved

like J.P. Morgan and other Robber Barons (contribute to charity but amass a huge personal fortune)

• Social Darwinism also used to justify racism and superiority of Anglo-Americans during this immigration heavy era

Laissez-Faire & Supreme Court• Laissez-Faire: French for “let it alone”– Emphasis on free competition and lack of government

interference in economy or marketplace – Has roots in Darwin– What is the connection? Do you agree with this

philosophy?

• Supreme Court acts very conservative in 1880s and 1890s– Declare laws regulating RRs and outlawing

trusts/monopolies to be unconstitutional– Santa Clara County v. Southern Pacific RR (1886

Post-War Politics• Demographics: Danger of generalizations?– Sectionalism– Wealth– Race

• Congress wins power struggle after Lincoln– Senate: “rich man’s club”– House: inefficient and disorderly

• The Republicans– Still “waving the bloody flag” (northern carpetbagger

flogged and his shirt becomes symbol)– Grand Army of the Republic (GOP)

Post-War Politics (continued)• Tariff– What are they? Why Southern Dems against it?

• Currency Reform– Greenbacks– Deflation, What is it? Why is it bad?– Grant’s veto

• Civil Service Reform– Bureaucracy grow with nation– Spoils System or Patronage, What is it? Pros & Cons?– New York Customs House– “Life blood of politics”, What was meant by it?

Gender, Race, and Politics• Suffrage being equated with manhood-women

left out (Victorian and Darwinist stances on sex)• Why Democrats opposed to black voting?– Started equating black voting with black sexual power

and miscegenation (racial mixing)– Fear tactic (protect white women by prohibiting black

vote); same argument used to justify lynching

• AWSA and NWSA– Become NAWSA in 1890

• Suffrage in certain states• 1920 with the 19th Amendment

Post-Reconstruction Republicans• Hayes “wins” in 1876-Reconstruction ends– Not much for Southern blacks or civil service reform

• Republicans spilt into 3 factions– Stalwarts: Grant supporters; very corrupt; Conkling– Half Breeds: not as corrupt; Blaine– Mugwumps: wanted to end spoils system with civil

service reform

• 1880, P Garfield (no faction) and VP Arthur (Stalwart) win for Republicans

Garfield’s Assassination and Civil Service Reform• Federal bureaucracy grows to nearly 150,000 • On July 2, 1881, Garfield was shot– Charles Guiteau (insane, disappointed office seeker,

said he was a Stalwart and wanted Arthur to be president)

– Dies in September and Arthur becomes president

• Public outcry to end factionalism and spoils system

• 1883 Pendleton Civil Service Act: established a Civil Service Commission; made a merit system to obtain most federal jobs (i.e., you must pass a civil service test)

Regulation of the Railroads• 1867, the Grange (farmers’ cultural organization

becomes political arm for regulating RRs)• Granger laws to regulate RR rates• Munn v. Illinois (1877) &Wabash v. Illinois (1886)• 1887, Interstate Commerce Act created– RR fees must be “reasonable and just”– Outlawed RR monopoly practices and charging more

for short hauls than long hauls– How did this Act challenge laissez-faire policy?– Created ICC, but it was understaffed and overworked

Sherman Antitrust Act• (1890): any business combination (like a trust)

that restricted interstate commerce was illegal• Where did Congress get its power to pass this

law?• Problem: vague law-Why problem?• Quell public clamor to stop monopolies• U.S. v. E.C. Knight Co. (1895

• What did this case do to the Sherman Antitrust Act?• What message did this case send to industry?