The Gilded Age
* During the Gilded Age, American businesses were transformed: * Massive corporations replaced small, family businesses * New technology, transportation, marketing, labor relations, & efficient mass-production * By 1900, the U.S. was the most industrialized country in the world * 19th-century inventors led to an “Age of Invention”: * Cyrus Field’s telegraph cable
* Business typewriters, cash registers, adding machines * High-speed textile spindles, auto looms, sewing machines * George Eastman’s Kodak camera
* Alexander G. Bell’s telephone
* By 1905, 10 million Americans had phones; (Bell Telephone Co became AT&T) * Thomas Edison, the “Wizard of Menlo Park,” created the 1st research lab in New York * Edison Illuminating Co was the to 1st use electric light in 1882 * Tesla’s alternating current (AC) allowed electricity to travel over longer distances & to power streetcars & factories * New technologies allowed for increased industrial production * New machines were incorporated into the first assembly lines which allowed for continuous & faster production of goods * The railroad linked every region of America & allowed for a mass consumption of goods * The Midwest Made Meat for America
* A new-and-improved “market revolution”: More regional specialization made mass production & mass consumption possible * Chicago → meat,
* St Louis → beer,
* Minneapolis → grain
* New Methods of Marketing
* Marketing became a “science” Advertising firms boomed * Department stores like Macy’s & Marshall Field’s allowed customers to browse & buy * Chain stores like A&P Grocery & Woolworth’s “Five & Ten” * Mail-order catalogues, like Montgomery Ward sold to all parts of America * New Forms of Business Organization
* New types of business organization were used to increase profits: * “Trusts” & “holding companies” integrated various businesses under 1 board of directors * “Trusts” use a board of trustees to manage a company * “Holding companies” oversee & manage other subsidiary companies * Vertical & horizontal integration maximized corporate profits * Frederick Taylor’s “scientific management” emphasized time efficiency & mid-level managers * Led to monopolists like Carnegie, J.P. Morgan, & Rockefeller * By 1900, 1% of U.S. companies controlled 33% of all industry * Business leaders used a variety of ideas to justify their wealth: * The “Gospel of Wealth” argued that it is God's will that some men attained great wealth * Social Darwinism taught that natural competition weeds out the weak & the strong survive * “captains of industry” or “robber barons”?
The Industrialization of America
* The Second Industrial Revolution was fueled by 3 industries: railroads, steel, & oil * The Railroad Industry
* America’s first “big business” was the railroad industry: * Railroads stimulated the coal, petroleum, & iron/steel industries * Large companies bought small railroads, standardized gauges & schedules, & pooled cars * Small lines in the east acted as tributaries to the 4 great trunk lines into the West * Cornelius “the Commodore” Vanderbilt was the most powerful figure in the railroad industry * But, the railroad industry faced problems due to overbuilding in the 1870s & 1880s: * Mass competition among RRs
* RR lines offered special rates & rebates (secret discounts) to lure passengers & freight on their lines * Pooling & consolidation failed to help over-speculation * Speculators like Jay Gould built & bought rail lines to profit with little concern for efficient use * RR bosses asked bank financier...
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