6.1 Context of Industrialization and the Gilded Age

Introduction

The Gilded Age, which spanned from the 1870s to the 1890s, was a period of rapid industrialization and economic growth in the United States. The country underwent a transformation from an agrarian to an industrialized economy, as new technologies and innovations led to the growth of industries such as steel, oil, and railroads. The Gilded Age was also marked by the rise of big business and the emergence of a new class of wealthy industrialists, known as "robber barons." These individuals, such as Andrew Carnegie and John D. Rockefeller, amassed enormous wealth and power through their business practices, which were often monopolistic and exploitative.

The Gilded Age was also characterized by a great deal of social and economic inequality. While a small number of people became incredibly wealthy, the majority of Americans struggled to make ends meet. The period saw the rise of labor unions, which sought to improve working conditions and wages for workers, and also saw a number of social and political reforms aimed at addressing the problems caused by industrialization and urbanization, such as child labor, poverty, and corruption. 

Second Industrial Revolution

The Second Industrial Revolution, which occurred between 1871 and 1914, was characterized by the development and expansion of new industries, such as chemicals, electricity, oil, and steel, as well as the popularization of mass production techniques. This period also saw the mechanization of the manufacture of food and clothing, which greatly increased production and efficiency.

During the Second Industrial Revolution, new technologies such as the internal combustion engine and the electric motor were developed, which greatly increased productivity and led to the growth of industries such as automobiles and electrical power generation. The development of the telegraph and telephone also improved communication and transportation, allowing for greater coordination and control of industrial production.

The Second Industrial Revolution also saw the rise of consumer culture, as mass-produced goods became widely available to the general population. This period also saw the popularization of new forms of entertainment, such as cinema and radio, which further fueled consumer demand for goods and services.

Overall, the Second Industrial Revolution brought widespread employment and increased production, but also led to significant changes in society, including the rise of big business, increased urbanization, and the growth of social and economic inequality.

Key Concepts/Events

Steel Industry

The steel industry was a key component of the Second Industrial Revolution, and it was led by "captains of industry" such as Andrew Carnegie. Carnegie's focus was on improving efficiency and controlling the quality of the product at all stages of production, which he achieved through vertical integration. This strategy involved controlling all aspects of the production process, from the raw materials to the finished product, and eliminating middlemen's fees.

Carnegie's most notable achievement was the creation of the United States Steel Corporation, which was capitalized at $1.4 billion, making it America's first billion-dollar corporation. The manufacturing center of the steel industry was Pittsburgh, Pennsylvania, where Carnegie had built his first steel mill in 1875.

Carnegie's success in the steel industry had a significant impact on American industrialism. His efficient and cost-effective production methods helped to fuel industrial growth and create jobs in the manufacturing sector. Additionally, the steel produced by Carnegie's mills was used in the construction of railroads, bridges, and buildings, which helped to spur economic development throughout the country.

However, his methods also led to a significant concentration of power and wealth in the hands of a few large corporations, which contributed to the growing social and economic inequality of the Gilded Age.

Oil Industry

The oil industry was another key component of the Second Industrial Revolution, and it was led by "captains of industry" such as John D. Rockefeller. In 1882, Rockefeller pioneered the use of a "trust" as a means of controlling his competition through the Standard Oil Company. This trust was a legal agreement among several companies to pool their resources and operate as a single entity.

Rockefeller's strategy for controlling the oil industry was through "horizontal integration." This involved buying out competitors to monopolize a given market. In this way, Rockefeller was able to gain control over the oil refineries, pipelines, and transportation networks that were necessary for the production and distribution of oil.

Stockholders in various smaller oil companies sold their stock to the board of directors of Rockefeller's Standard Oil Company. By the early 1890s, Standard Oil controlled about 90% of the oil refineries in the United States and controlled prices for oil products.

Rockefeller's success in the oil industry had a significant impact on American industrialism. His efficient and cost-effective production methods helped to fuel industrial growth and create jobs in the manufacturing sector. However, his methods also led to a significant concentration of power and wealth in the hands of a few large corporations, which contributed to the growing social and economic inequality of the Gilded Age.

Electricity

Thomas Edison's invention of the practical incandescent light bulb in 1879 was a major step forward in the development of electricity as a practical source of power for lighting. Edison also developed the first electric power station in 1882, which provided electricity to customers in a small area of lower Manhattan, New York City. This was the first example of a centralized power system, where electricity was generated at one location and distributed to customers through a network of wires. This model of power generation and distribution would become the standard for the electricity industry in the United States and many other countries.

Transcontinental Railroad

The completion of the Transcontinental Railroad in 1869 was a major achievement in the history of the United States. It connected the eastern and western coasts of the country for the first time, reducing travel time from months to days and greatly increasing trade and commerce. The Union Pacific and Central Pacific Railroad companies were responsible for building the railroad, with the Union Pacific building from the east and the Central Pacific building from the west. The two lines met at Promontory Summit, Utah, where a ceremony was held to celebrate the completion of the project.

The construction of the Transcontinental Railroad was a massive undertaking, and required the labor of thousands of workers. The Central Pacific used mainly Chinese immigrants as laborers, while the Union Pacific relied on mostly Irish immigrants. Both groups worked under difficult and dangerous conditions, facing harsh weather, rugged terrain, and the threat of attacks from Native Americans. The Chinese workers were often paid less than their Irish counterparts and had to work in even more dangerous conditions.

Despite the challenges, the completion of the Transcontinental Railroad represented a major step forward in the development of the United States, connecting the country and facilitating trade and commerce. It is considered as one of the greatest engineering feats of the 19th century.

Subsidy

The government provided subsidies to the railroads in the form of land grants and financial loans. The government saw the development of the railroads as important for the country's growth and expansion, and so provided financial assistance to help the companies overcome any temporary economic difficulties. This allowed the railroads to expand and connect different parts of the country, which in turn led to economic growth and increased trade. The land grants given to the railroads also contributed to the settlement and development of the western territories of the United States.

Pacific Railway Act (1862)

The Pacific Railway Act provided land grants and government loans to the Union Pacific and Central Pacific railroads to build a transcontinental railroad. The Act also established the United States Railroad Administration to oversee the construction and operation of the railroad. The completion of the transcontinental railroad greatly reduced travel time and costs between the East and West coasts, and helped spur economic development and population growth in the western states.

Union Pacific Railroad

The Union Pacific Railroad was one of the first transcontinental railroads in the United States, built westward from Omaha, Nebraska. The company was granted large amounts of land and federal loans by the government as an incentive to construct the railroad. The workers were primarily Irish immigrants, who had fought in the Union army during the Civil War, and they worked under harsh conditions to complete the railroad. The completion of the Union Pacific Railroad in 1869 helped to connect the Pacific states to the rest of the country, and was seen as crucial to national security.

Credit Mobilier

Credit Mobilier was a construction company that was formed to build the Union Pacific Railroad. It was created by the Union Pacific Railroad's own board of directors and was used to overcharge the railroad for construction expenses. The company also distributed stock to politicians and government officials in order to secure favorable legislation and contracts. The scandal broke in 1872, and several high-ranking government officials were implicated in the scandal, including Vice President Schuyler Colfax. The scandal severely damaged the reputation of the Union Pacific Railroad and the government officials involved.

Central Pacific Railroad

The Chinese laborers, also known as "coolies," faced discrimination and harsh working conditions, but their labor was crucial in the building of the Central Pacific Railroad. They were paid less than other workers and were often given the most dangerous tasks, such as drilling through mountains and laying track on steep inclines. Despite these challenges, the Central Pacific Railroad was completed in 1869, and the Chinese laborers were an integral part of its success.