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The Gilded AgeChapter 16

Unit 5: 1870-1890

Second Industrial Revolution

• New inventions including the telephone and electricityoThomas Edison became the name in innovation

• Major industry develops in cities around the Great Lakes oChicago and Pittsburg benefit from railroad expansion

• Increased urbanization as people moved to cities to take jobs in factories

• Unequal distribution of wealth: Top 1% of Americans had same income as the bottom 50%

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Gilded Age Economics

• Businesses tried to reduce competition and control industriesoMonopoly on resources and production

• Trusts formed when larger companies purchased and merged with competitors

oCornelius Vanderbilt and the railroad

o J.P. Morgan and U.S. Steel

Industrial Capitalists

• Andrew Carnegie made a fortune in steel production

• Vertical integration: one director in charge of all phases of production

• Gospel of wealth: Rich should use their wealth for the benefit of

society

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• John D. Rockefeller established the Standard Oil CompanyoHorizontal Expansion: purchasing smaller companies to establish a

monopoly

oControlled 90% of the U.S. oil industry

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Political Corruption

• Tammany Hall: NYC was controlled by the Democratic political machine of “Boss” Tweed

• Graft: Politicians benefitted, economically and politically ,from bribes and favors

• Provided public welfare to guarantee votes from Irish immigrants and the poor

• Credit Mobilier (1872): Union Pacific allowed to violate laws by bribing government officials with stocks

• Civil Service Act of 1883 ended spoils system of political appointment

• Govt. jobs awarded based onexamination and merit

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Panic of 1873

• Shift to the gold standard reduced currency supply and increased interest rates

• Banks closed and led to an economic depression

• Great Railroad Strike of 1877: Workers across the country protested wage cutsoPresident advocated the use of force to protect industrialist property

Industrial Labor

• Knights of Labor/ America Federation of Labor: Unionsorganized workers and advocated for wages and safety

• Haymarket Affair (1886): bombing during a Chicago strike killed policemenoLabor unions viewed as dangerous and un-American

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Govt. Regulations

• Interstate Commerce Act (1887) created a federal agency to regulate railroads

• Sherman Antitrust Act (1890) prohibited companies and practices that limited free tradeoU.S. v. E.C. Knight Co. (1895): allowed a monopoly on sugar

manufacturing

• State regulation of business was against ideals of free laboroLochner v. New York (1905): overturned NY law that set a maximum 60

hour work week