Industrialization, the Gilded Age, & the

West

Unit 1

19th Century Economics in the United States

System of Laissez Faire- govt.’s “hands off” approach to the economy.High tariffs to “protect” American businessesCreation of Monopolies and Trusts

Horizontal and/or Vertical Integration

Era of Big BusinessCaptains of Industry OR Robber BaronsAndrew Carnegie-Carnegie Steel-Gospel of Wealth John D. Rockefeller-Standard Oil

So if only trusts exist, what effect does that have on the American public?

Effects…Prices go up!!!! AND the economy becomes

inefficient.

We NEED competition to exist in business!!!

The federal government enacts the Sherman Anti-Trust Act-tried to regulate the economy, but it was hard

Business owners argued that the government was overstepping their bounds…Laissez-faireSocial Darwinism

In the end…Until the early 1900s, the rich remained super

rich, and the poor remained super poor.

This was called an UNEVEN DISTRIBUTION OF WEALTH!!

Labor-Workforce, Conditions, and Unions

Business owners (Carnegie, Rockefeller, etc.) had to have people to work in the factories.

Around 95% of the urban population were in the working class.

Conditions were poor:Long hours (electricity increases work day)Low pay (daily wage)Dangerous machines and spaces (ie.

Triangle Shirtwaist Fire)

So, were business owners going to change things without force???

Labor UnionsAs businesses grew bigger, and in many cases

merged, workers realized they needed to do the same thing.

Early labor unions included the American Federation of Labor (AFL) and the Knights of Labor.

Methods they used included:Collective Bargaining-negotiations between all labor and

management to reach written agreements on wages, hours, and work conditions

Strikes-refusals to work in order to make management negotiate over issues listed above

The business owners and the govt. saw unions as a threat to the economy.

Some examples…

Labor Strikes Chart

• All of these strikes were setbacks for labor unions and many people began fearing violence from them.

• Membership in unions declined!

Political CorruptionThe workplace wasn’t the only shady place in city life.

As cities rapidly grew, a new political power structure emerged in them, political machinesAn organized group that controlled the activities of a political

party in a city. The most famous of these was Tammany Hall, New York’s

powerful Democratic machine.

Each machine was led by a powerful man—the Boss. The boss’s main goals were to: gain support among voters;extend influence by whatever means necessary; and,make as much money as possible.

The most famous, or infamous, boss was William Tweed (aka “Boss” Tweed).

How did political machines gain office—and the power and wealth that come with it? by helping immigrants!!!!!!!

The main target of political machines and bosses were immigrants. They helped immigrants become citizens, find jobs, and even by translating if they knew no English.

In return, they expected the immigrants to support the machine/boss with VOTES. By far, the majority did.

Political machines were most influential and powerful in urban areas, but they did have their eyes on national politics too. Patronage will become a major issue of concern.

Patronage/Spoils System- the giving of government jobs to people who had helped a candidate get elected (also referred to as the “spoils system”)

This problem came to head on July 2, 1881, when President James Garfield was shot by Charles Guiteau. Garfield would die soon after and be replaced by his Vice President (now President) Chester A. Arthur.

This event led to the creation of the Pendleton Civil Service Act- appointments to federal jobs are to be awarded through a merit system based on a written examination

How the Other Half Lived…

The working class lived in tenements in the slums.

Some of the problems people lived with:OvercrowdingUnclean waterLack of SanitationCrime/ViolenceFire

Jacob Riis attempts to draw attention to these problems in urban areas.

The 1870s through 1900 are often referred to in U.S. history as the “Gilded Age”. Its called this b/c the population increase was dramatic, as was the wealth of the handful that became wealthy. This gilded, or covered up, many of the problems that existed in the country.

Railroads and the WestOne of the biggest U.S. industries during this

time was the railroad industry.

There were positives and negatives to this industry…POSITIVES:

Transportation of goods and people to ALL regions of the United States.

Creation/growth of towns and citiesNew jobs and off-shoot industries were created.

NEGATIVESWidespread corruption (like all businesses)Unfair treatment of farmers and ranchers out West.

Positives of Railroads…

Railroads brought more people to the West/Great Plains region (Transcontinental Railroad)

People wanted a new start out West and the govt. had some great incentives for people to move there:Homestead Act-Govt. offered 160 acres of free land

to settlersOklahoma Land Rush-Race for settlers to stake their

claim on free land in the Oklahoma Territory (cheaters were called Oklahoma Sooners).

** The Transcontinental Railroad and the Homestead Act had the greatest impacts on the opening of the American West to settlers.

Built in 1965, the Gateway Arch in St. Louis, MO, symbolizes the entrance to the West. People wanted to settle out west for many reasons.

Reasons for Western Settlement:Mining

RanchingCattle ranches on the open range allowed for the beef

industry to grow.Ranchers/cowboys pushed cattle on long drives along

the open range (no fences)With the invention of barbed wire, the cattle ranching

industry had greater limitations.

FarmingThe Great Plains became the home to many farmers.Corn and grains were easily grown here.New technology in farming equipment made the job

easier and increased the amount grown, but decreased the price and increased farmers’ debt.

Populism and FarmersBy the late 1800s, many farmers had fallen

victim to a series of problems:Falling crop pricesLack of good farm landRailroads charging excessive prices to store & ship

regardless of distanceDeflation- taking money out of circulation in order to

increase its overall valueMortgaging farm land to buy more land or to even

buy needed supplies

Farmers throughout the country realized the only way to achieve any change would be to hold political power.

Many early groups like the Farmers Alliance and the Grangers tried, but failed, to organize farmers like a union.

In 1892, the Populist, or People’s, Party was created by farmers. This party was rooted in Populism meaning movement of the people.

Major Populist platform issues: Increase the money supply in an effort to drive prices up

(create inflation instead of deflation) Support political candidates whether it be their own or from

another party Secret ballot voting to end voter fraud Use of a graduated income tax Government regulation of the railroads An 8-hour work day

When the U.S. economy collapsed in 1893, one of the central issues was the type of metal that would back up our money’s value. Two options:Bimetallism-monetary system where the government

gave either gold or silver coins in exchange for paper money. Supported by the Populists!!!

Gold Standard-money is valued only by gold. Supported by Industrialists in the East!!!

This issue became very important during the Presidential campaigns of 1896.Republican, William McKinley supported the gold standardDemocrat, William Jennings Bryan supported bimetallism

Which candidate did the Populists support??

Which candidate did Industrialists support??

Who do you think won??

McKinley wins by a very small margin.

What type of money system to we end up with?? Bimetallism?? Or the Gold Standard??

While the Populists and Bryan lost the election, most of the Populist platforms will be enacted in the 20th century.

Specifically, corruption in the RR industry was addressed

Interstate Commerce Commission

Congress passes the Interstate Commerce Act to address corruption in the RR industry.

This law created the Interstate Commerce Commission to oversee and supervise railroad activities.

RR owners complained that this violated laissez-faire since the ICC set freight rates or shipping costs.

The Supreme Court said the ICC was unconstitutional.

The Native AmericansThe Native Americans probably suffered more

than any other group during the late 1800s.

They fought with settlers and the government for many reasons:Settlers were taking their landSettlers were destroying the buffalo

population(biggest blow to tribal life/economic base and a major reason NAI had to accept reservation life)

The US govt. was forcing NAI to live on reservations (a large plot of land set aside especially for NAI to live on)

Many people believed the Native Americans should assimilate or give up their way of life to be a part of white culture.

This way of thinking led to the Dawes Act-promised the Native Americans land and education if they assimilated.

It destroyed Native American culture!

Western Expansion Rap