Manual The Gilded Age: 1870 to 1900 (Handbook to Life in America, Volume 4)

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But a competitive marketplace threatened the promise of investments. Once the efficiency gains of mass production were realized, profit margins could be undone by cutthroat competition, which kept costs low as price cutting sank into profits. Companies rose and fell—and investors suffered losses—as manufacturing firms struggled to maintain supremacy in their particular industries. Economies of scale were a double-edged sword: while additional production provided immense profits, the high fixed costs of operating expensive factories dictated that even modest losses from selling underpriced goods were preferable to not selling profitably priced goods at all.

And as market share was won and lost, profits proved unstable. American industrial firms tried everything to avoid competition: they formed informal pools and trusts, they entered price-fixing agreements, they divided markets, and, when blocked by antitrust laws and renegade price cutting, merged into consolidations. Rather than suffer from ruinous competition, firms combined and bypassed it altogether. Between and , and particularly in the four years between and , a wave of mergers rocked the American economy.

In nearly every major industry, newly consolidated firms such as General Electric and DuPont utterly dominated their market. Forty-one separate consolidations each controlled over 70 percent of the market in their respective industries. In , financier J. Morgan oversaw the formation of United States Steel, built from eight leading steel companies. Monopoly had arrived.

The Breakers, Vanderbilt residence, Newport, R. Industrial capitalism realized the greatest advances in efficiency and productivity that the world had ever seen. Massive new companies marshaled capital on an unprecedented scale and provided enormous profits that created unheard-of fortunes. But it also created millions of low-paid, unskilled, unreliable jobs with long hours and dangerous working conditions. Industrial capitalism confronted Gilded Age Americans with unprecedented inequalities. The sudden appearance of the extreme wealth of industrial and financial leaders alongside the crippling squalor of the urban and rural poor shocked Americans.

The great financial and industrial titans, the so-called robber barons, including railroad operators such as Cornelius Vanderbilt, oilmen such as J. Rockefeller, steel magnates such as Andrew Carnegie, and bankers such as J. Morgan, won fortunes that, adjusted for inflation, are still among the largest the nation has ever seen.

Handbook to life in America / Rodney P. Carlisle, general editor - Details - Trove

And inequality only accelerated. As these vast and unprecedented new fortunes accumulated among a small number of wealthy Americans, new ideas arose to bestow moral legitimacy upon them. In , British naturalist Charles Darwin published his theory of evolution through natural selection in his On the Origin of Species. It was not until the s, however, that those theories gained widespread traction among biologists, naturalists, and other scientists in the United States and, in turn, challenged the social, political, and religious beliefs of many Americans.

The fittest, Spencer said, would demonstrate their superiority through economic success, while state welfare and private charity would lead to social degeneration—it would encourage the survival of the weak. Mencken wrote in The strong must grow stronger, and that they may do so, they must waste no strength in the vain task of trying to uplift the weak.

Social Darwinism identified a natural order that extended from the laws of the cosmos to the workings of industrial society.


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All species and all societies, including modern humans, the theory went, were governed by a relentless competitive struggle for survival. The inequality of outcomes was to be not merely tolerated but encouraged and celebrated. It signified the progress of species and societies. But not all so eagerly welcomed inequalities. The spectacular growth of the U. But as industrial capitalism overtook the nation, it achieved political protections.

Although both major political parties facilitated the rise of big business and used state power to support the interests of capital against labor, big business looked primarily to the Republican Party. Abraham Lincoln had been a corporate lawyer who defended railroads, and during the Civil War the Republican national government took advantage of the wartime absence of southern Democrats to push through a pro-business agenda.

The Republican congress gave millions of acres and dollars to railroad companies. Republicans became the party of business, and they dominated American politics throughout the Gilded Age and the first several decades of the twentieth century. Of the sixteen presidential elections between the Civil War and the Great Depression, Republican candidates won all but four.

Republicans controlled the Senate in twenty-seven out of thirty-two sessions in the same period. Republican dominance maintained a high protective tariff, an import tax designed to shield American businesses from foreign competition; southern planters had vehemently opposed this policy before the war but now could do nothing to prevent. The ideas of social Darwinism attracted little support among the mass of American industrial laborers. American workers toiled in difficult jobs for long hours and little pay. Mechanization and mass production threw skilled laborers into unskilled positions.

Industrial work ebbed and flowed with the economy.

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The typical industrial laborer could expect to be unemployed one month out of the year. They labored sixty hours a week and could still expect their annual income to fall below the poverty line. Among the working poor, wives and children were forced into the labor market to compensate. Crowded cities, meanwhile, failed to accommodate growing urban populations and skyrocketing rents trapped families in crowded slums. Strikes ruptured American industry throughout the late nineteenth and early twentieth centuries. Workers seeking higher wages, shorter hours, and safer working conditions had struck throughout the antebellum era, but organized unions were fleeting and transitory.

The Civil War and Reconstruction seemed to briefly distract the nation from the plight of labor, but the end of the sectional crisis and the explosive growth of big business, unprecedented fortunes, and a vast industrial workforce in the last quarter of the nineteenth century sparked the rise of a vast American labor movement. The failure of the Great Railroad Strike of convinced workers of the need to organize. Union memberships began to climb. The Knights of Labor enjoyed considerable success in the early s, due in part to its efforts to unite skilled and unskilled workers.

It welcomed all laborers, including women the Knights only barred lawyers, bankers, and liquor dealers. By , the Knights had over seven hundred thousand members. The Knights envisioned a cooperative producer-centered society that rewarded labor, not capital, but, despite their sweeping vision, the Knights focused on practical gains that could be won through the organization of workers into local unions.

His local union walked off the job, and soon others joined.

Gould hired strikebreakers and the Pinkerton Detective Agency, a kind of private security contractor, to suppress the strikes and get the rails moving again. The Texas governor called out the Texas Rangers. Workers countered by destroying property, only winning them negative headlines and for many justifying the use of strikebreakers and militiamen.


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  8. The strike broke, briefly undermining the Knights of Labor, but the organization regrouped and set its eyes on a national campaign for the eight-hour day. In the summer of , the campaign for an eight-hour day, long a rallying cry that united American laborers, culminated in a national strike on May 1, Somewhere between three hundred thousand and five hundred thousand workers struck across the country. In Chicago, police forces killed several workers while breaking up protesters at the McCormick reaper works. Labor leaders and radicals called for a protest at Haymarket Square the following day, which police also proceeded to break up.


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    But as they did, a bomb exploded and killed seven policemen. Police fired into the crowd, killing four. The deaths of the Chicago policemen sparked outrage across the nation, and the sensationalization of the Haymarket Riot helped many Americans to associate unionism with radicalism. Eight Chicago anarchists were arrested and, despite no direct evidence implicating them in the bombing, were charged and found guilty of conspiracy.

    Four were hanged and one committed suicide before he could be executed. Membership in the Knights had peaked earlier that year but fell rapidly after Haymarket; the group became associated with violence and radicalism.

    APUSH: Gilded Age: growth of cities & culture (1865-1900) Ch. 18 AMSCO

    The national movement for an eight-hour day collapsed. But workers continued to strike. After repeated wage cuts, workers shut the plant down and occupied the mill. The Pinkertons tried to land by river and were besieged by the striking steel workers. After several hours of pitched battle, the Pinkertons surrendered, ran a bloody gauntlet of workers, and were kicked out of the mill grounds.

    But the Pennsylvania governor called the state militia, broke the strike, and reopened the mill.

    Gilded Age

    The union was essentially destroyed in the aftermath. Still, despite repeated failure, strikes continued to roll across the industrial landscape. Thousands of workers struck and national railroad traffic ground to a halt. Unlike in nearly every other major strike, the governor of Illinois sympathized with workers and refused to dispatch the state militia.