Rise of Business 1865 1890 I Mechanization Innovation A Thomas Edison 1 Non mechanical changes were just as important in redefining the America workplace 2 1866 First electronic telegraph was sent across Atlantic Ocean to Europe 3 1867 Major centennial exposition in Philadelphia and Alexander Graham Bell introduced the telephone 4 1878 Thomas Edison created the phonograph and was the first person to record voice on a phonograph a These inventions gave people new ways to communicate with each other over long distances b Globalized business 5 1879 Edison invents electric light bulb a Factory owners used this to introduce night shifts b Now there was no reason for workers to stop working 6 Railroads a North had more lines than the South b After the Civil War railroad lines moved to being national lines c 1860 1880 the number of railroad tracks triples d By 1900 there were 5 continental railroads e Increase in railroads changed how people thought about space and time America adopts standard times zones in 1883 f 1860 Swift Meat Packing Company invented the refrigerated meat packing railroad car g Opens door for travel business and communication B Trusts 1 Trusts increased profit without changing production methods 2 Corporations come together to form trusts monopolies a Some were illegal unless government recognized you as legitimate b Taking away competition raised prices and forced people to pay higher prices C Andrew Carnegie 1 Known for Vertical Integration a How he collected and distributed steel b Bought out some coal mines and railroads to have the coal he needed for furnaces and shipping his product c Now he can do these things cheaper allowing him o sell steel for a cheaper price and drive other steel mills out of business 2 Created US steel the first billion dollar corporation 3 Had a railroad background opened steel mill in Pittsburgh 4 He used open hearth furnaces which produced steel cheaper and more efficiently D John Rockefeller 1 Known for Horizontal Integration 2 Owned Standard Oil Refinery 3 Bought out many oil refineries 4 Railroads depended on his business 5 Rockefeller sold his oil for really low prices until all other oil refineries were out of business 6 Standard Oil Octopus cartoon II Political Corruption in the Gilded Age A Robber Barons 1 Railroad executives 2 Manipulated government to do what they wanted 3 1862 Railroad industry convinced US government that they needed a transcontinental railroad B Pacific Railway Acts 1862 and 1864 construct two railroad tracks 2 Generous deal for railroads because 1 1862 Instructed two corporations Union Pacific and Central Pacific to a They got land out of the Pacific Railway Act 200 ft on either side of the tracks b They had ten alternating square miles of land on either side of the railroad to use at their discretion i When the government gave out this land they didn t own it Native ii Americans did If Native Americans live within 10 miles of the railroad it was the government s responsibility to make them leave c This act also set up loans the companies would get to create the railroads Money would be loaned as a 30 year bond with a 6 interest 3 1864 Expanded the land now that was gained by the railroads a Government had to take out a second mortgage on the loan b Government wound up giving away 175 million acres of land to railroad companies C Credit Mobilier c Railroads sold this land to farmers and merchants for hefty profits 4 Railroads were built cheaply and sloppy not for quality jus for profit 1 Wanted to take money from government and share holders 2 Subcontracted the railroad construction to Credit Mobilier build railroad from Iowa to Utah to a company created entirely by them subsidiary a Shareholders were 30 congressmen and executives b The subsidiary share holders made profits Railroad cost 50 million to build but subsidiary charged 73 million to build 3 Union Pacific labor was mostly Irish immigrants from New York 4 Central Pacific labor was mostly Chinese immigrants from China D Corporate Personhood 1 1886 Santa Clara County v South Pacific Railroad a Supreme Court invoked 14th amendment citizenship b Under the 14th amendment the railroad deserves property rights III Criticism of Conspicuous Consumption A Thorstein Veblen c But the amendment says no PERSON shall not be denied property rights d Corporations are considered people e Difference When one person dies their property is passed on but a corporation can keep accumulating power and wealth E Interstate Commerce Commission 1887 1 Railroads could charge reasonable rates to ship items across the country 2 Federal agency that regulates economic activity 3 All the ICC could do was monitor what individual companies were doing and file a lawsuit F Sherman Anti Trust Act 1890 1 Protect trade and commerce against unlawful monopolies 2 Hoped to insure free and fair trade in the economy a Never got corporations to act like a responsible person b Corporations took advantage of the rights they had as a person 1 Economist social critic 2 What did people like Carnegie and Rockefeller do with all their money a Didn t just buy the things they enjoy or found useful they bought things to make sure everyone knew they were rich b For example on millionaire built a marble mansion with gold staircases and a butler s pantry with three faucets for cold water hot water and iced champagne 3 Praises conspicuous wealth a Social Darwinism late 19th century b We need inequality because that is freedom We need to drive to work hard to promote success and achievement Equality promotes survival of the unfittest this would be disastrous for our society B Laissez Faire 1 Let it be 2 Free Market Government should not intervene with how the economy is working C Gospel of Wealth the poor 1 Carnegie 2 Like Social Darwinism explained why businessmen were not responsible for 3 Aiding poor individuals goes against nature 4 Wealthy people need to use their wealth to enrich the community libraries education world peace a Carnegie Foundation and Rockefeller Foundation are still essential in society today b Carnegie Melon University D Montgomery Ward 1 Dry goods salesman in the West 2 Goal was to supply dry goods to rural area farming communities 3 Mail order catalog became famous in mid 19th century a Early form of advertising b Highlight of the season 4 Expanded into department store on Michigan Ave a Sold 8 million of goods every year