The Gilded Age• The Gilded Age refers to the era of rapid economic and population growth

in the United States • During the Gilded Age, the economy functioned under unrestrained

laissez-faire capitalism. As a result, a huge gap developed between the masses of laborers and the newly wealthy.

• The American economy in 1900 was 8 times larger than that of 1865. Big business relied on efficiency to produce more and more consumer goods. Department stores were starting and sold a variety of products in a single location. The quality of life, especially in urban areas, increased rapidly.

• Laissez-Faire- French word that means the government should have "hands-off“ role in regulation of the private businesses and economic transactions.

The Industrial RevolutionsThe first Industrial Revolution began in Great Britain and made it’s way to the United States about 1780. After the Revolution, people began living in cities for factory jobs instead of on the farm. The Revolution continued through time with even more inventions such as steam power.

The Industrial Revolutions• In the late 1880’s and early 1900’s

there were so many new inventions and discoveries that the time period was called The Second Industrial Revolution.

• In the Second Industrial Revolution, people were making great use of natural resources such as coal, iron, and oil to produce electricity, steel, new machines and new forms of transportation. Banking, shipping, and world trade also contributed to the growth of industry.

Greed or Give?• The quality of life for many

Americans improved due to the giving of some of the corporate entrepreneurs . A personal philosophy, known as the "gospel of wealth," was inspired by the idea of Andrew Carnegie.

• He believed great wealth was a sign of goodness, and that anyone who had such wealth had a social responsibility to uplift those less fortunate.

Carnegie Hall-created by Andrew Carnegie

Famous Gifts• After amassing an enormous fortune,

Carnegie donated $40 million dollars to fund more than 1,600 public libraries throughout the nation.

• Despite these huge donations and financial gifts, some Americans raised questions about the methods in which he had garnered his wealth. John D. Rockefeller who made his money in oil, spent their final years of his life giving away fortunes and creating institutions like museums.

» Rockefeller Center-New York

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• Andrew Carnegie-CLICK HERE

The “Steel” Man• Andrew Carnegie was a Scottish

immigrant who rose from poverty by gaining control of the US steel market. He dominated the steel market by using the Bessemer Process to improve the quality of his steel.

• The Bessemer Process along with the business practice of vertical integration helped him gain a virtual monopoly on the steel industry.

Bessemer Steel• Carnegie benefited from the creation of the

Bessemer Steel Process• The Bessemer process was the first method

by which steel could be mass produced. Developed and patented in the 1850s by Henry Bessemer, the process involved injecting air into molten pig iron to remove impurities.

• The resulting steel, relatively easy and inexpensive to produce, was also lighter and stronger than iron; steel rails for railroads, for example, lasted 17 or 18 times longer than wrought-iron rails. The Bessemer process was succeeded by open-hearth steel production in the late 19th century.

The “Oil” Man• John D. Rockefeller was born in Richford, New York, and moved with his

family to Cleveland, Ohio, where he finished high school in 1855. The first successful drilling for oil took place in western Pennsylvania in 1859, and Rockefeller realized that Cleveland was ideally suited to exploit this new resource

• The early oil business was chaotic and hazardous. In 1870 he along with others, formed the Standard Oil Company, with Rockefeller owning 26.7 percent of the stock. Using such then-legal tactics as railroad rebates and predatory pricing, Standard Oil steadily increased its hold over the American oil industry until by 1880, he controlled fully 90 percent of all oil businesses in the United States.

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The Banker• J. P. Morgan used his banking skills to turn companies

into industry giants. He financed industries such as railroads, electrical equipment, and steel production. Morgan financed much of America's industrial growth.

• Eventually he owned 7 big railroad lines, AT&T General Electric, and the United States Steel Corporation. This one man had a great deal of wealth and power.

Railroads• Service on the transcontinental

railroad began as soon as it was finished. Passengers could ride all the way across the United States for around $200.00. The trip was difficult because of the noisy train, the dust and dirt, the danger from outlaws, and a lack of good food.

• Still, most people thought the train was a miracle. Not only people, but also goods could travel from coast to coast. It was the fulfillment of the dream called “Manifest Destiny”.

Cornelius Vanderbilt

• In 1862, Vanderbilt sold his steamboat company & started buying stock Harlem & NY Railroads companies.

• Gained control of the Hudson River & NY Central Railroads. He spent $2 million to improve it

• NY legislature approved plan to combine the Hudson and and NY Central Companies (known as the Central today).

• The route created an interconnected route crucial to the nation’s expanding economy

Cornelius Vanderbilt (cont.)• With business with the Central increasing in the 1870s, he

decided to expand from 2 to 4 tracks between Albany and Buffalo. Allowed him to move passengers and freight quickly.

• Even though it cost $40 million, the improvement paid off because the Central returned a greater profit than its competitors.

• Vanderbilt also established a route from NY to Chicago.

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Vanderbilt’s Gifts• He gave few

philanthropic gifts, but he created Vanderbilt University in Tennessee with $1 million

• Created transportation systems that stimulated and supported America’s growth.

• Died January 4, 1877 (worth more than $100 million)

Interchangeable Parts• Using interchangeable parts meant making the individual pieces of the car the

same every time. That way any valve would fit any engine, any steering wheel would fit any chassis. This meant improving the machinery and cutting tools used to make the parts.

• Ford was inspired by the meat-packing houses of Chicago and a grain mill conveyor belt he had seen. If he brought the work to the workers, they spent less time moving about. Then he divided the labor by breaking the assembly of the Model T into 84 distinct steps. Each worker was trained to do just one of these steps.

• Ford called in Frederick Taylor, the creator of "scientific management," to do time and motion studies to determine the exact speed at which the work should proceed and the exact motions workers should use to accomplish their tasks.

Henry Ford

• In 1907, Henry Ford made his goal for the Ford Motor Company: to create a motor car for the great everyone. At that time, automobiles were expensive, custom-made machines.

• Ford's engineers took the steps towards this goal by designing the Model T, a simple, sturdy car, offering no factory options -- not even a choice of color. The Model T, first produced in 1908, kept the same design until the last one -- number 15,000,000 -- rolled off the line in 1927.

• In 1913, the first moving assembly line ever used for large-scale manufacturing. Ford produced cars at a record-breaking rate. That meant he could lower the price and still make a good profit by selling more cars.

Assembly Line & Ford Motor Co.• Ford had another idea! The workers were also

potential consumers! In 1914, Ford workers' wages were raised to $5 a day -- an excellent wage -- and they soon proved him right by buying their own Model Ts.

• Ford was called "a traitor to his class" by other industrialists and professionals, but believed that well-paid workers would put up with dull work, be loyal, and buy his cars.

• Ford's manufacturing principles were used by other industries. Henry Ford went beyond his 1907 goal of making cars affordable for all; he changed the habits of a nation, and shaped its very character.

• Henry Ford

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Thomas Edison• In 1882, Thomas Edison

introduced the first electric lighting system to America by electrifying a neighborhood in New York City. By the 1890s, many towns had electric power stations.

• The introduction of cheap electric power was main reason rural American changed into an industrial nation.

Light Bulbs• Before the light bulb, people lit their homes with kerosene lamps,

or natural gas. However, these forms of lighting were dirty, dangerous, and expensive.

• After Thomas Edison invented the bulb, built a factory to mass produce the bulbs, and another factory to produce electricity, the price went down. When other companies entered the market, the price went down even more!

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