3 The Gilded Age 1875 1900 Key Terms J P Morgan and Finance Labor Unions Pullman Strike Tenements William Boss Tweed Between this periods of time the US makes more money than have ever existence of plant earth before There will be some ramifications and ripple effects I The Rise of Big Business 1 Industrialization on a new scale Rise of big business The key to all of this wealth is industrialization The mass production of goods stuff In 1860 three products made Coal 20 million tons of coal produced in 1900 270 million tons produced percentage of increase was 1 250 percent Oil 500 000 barrels of oil produced 1900 45 824 000 9 thousand percent increase Steal 13 000 tons 1900 10 382 000 tons produced 78 000 percent increase 2 Carnegie and Steel Andrew Carnegie immigrant from Scotland He was pretty more so to help out his family he would work in factories With the help of his family they came up with enough money to come to the US in 1840s 50s If he wanted to have any success one of the key things he needed to have was an education He teaches himself how to read and right because he understood value of education His education combined with factory working made him the manager of an iron factory in Pennsylvania in the 1860 s Now he is a paper pusher that does a pretty good job and is making more money than he has ever seen He saved every single cent got lucky and in 183 the country underwent an economic crisis recession he finds a factory that is cheap and is able to buy it from saving up The Bessemer process is a cheap and effect way of turning iron into steel Carnegie says he is going to take a vacation but he is really borrowing ideas to cheaply and efficiently making steel The price of his steel and quality were very important Carnegie becomes the number one guy to buy steel from He decides to buy more iron factories to turn into steel factories but wants more money so he wants to own the entire process of making steel but there is one small problem at the time he is doing this in late 1870 s 80 s there are laws that prevent you from owning a company in one state and then owning another company in another state What he is going to do is own all these companies in Pennsylvania With these limitations Carnegie Steel still becomes the most profitable company in the United States and possibly the world Philanthropy the idea of being a wealthy person and giving away money not because you have to but just by your own choice Carnegie gives away money because he feels obligated because he would have liked in when he was growing up He wanted to give most of the money to education he sees that as the key so he tries to figure out ways to give as mush education to as many people as possible He comes up with a University in Pennsylvania and also built libraries across the United States Basically any town could call up Carnegie and say they want a library and he would send them money for the building and books to get started 3 J P Morgan and Finance Does not have money himself but not as poor as Carnegie basically middle class He gets a job in New York city as an investment banker He lucks out by a change in a law the change happens in 1886 in New Jersey JP Morgan takes advantage of this law the law says that holding companies will now be legal in the state of New Jersey A holding company is basically a corporation designed entirely to own other companies in other states Because New Jersey allowed this it completely changes the rules of the game JP Morgan calls up everyone he knows and lets them know exactly what they are going to go after In 1901 JP Morgan finally has enough cash to go after Carnegie Steel He has to get Carnegie to sign of his company to JP Morgan asks Carnegie to give any price he wants for the company Carnegie asks for 400 million dollars Morgan tells him he will send him the check and in 1901 he buys the company for 400 million dollars Morgan s next job is to buy the next 10 biggest steel companies in the United States Now he wants the biggest mines that have the iron which is mostly the state of Montane they buy almost half the state He even buys 30 thousand miles of railroads He buys about 200 smaller factories for parts for steel factories The give this whole company they purchased a name United States Steel In 1911 after 10 years this process is pretty much complete This company becomes worth 1 billion dollars in 1911 This is the birth of modern American financing At the end of the day U S Steel workers aren t seeing any of the money made The only money they get is a wage Significance in long term it shaped how financial system in the world today Only some people are getting the money and a lot of people are seeing none The first time in US history this process is utilized JP does awesome and makes a lot of money II The Rise of Labor 1 The big three worries worries that factory workers share in this period Workers have no one to go to except for themselves Labor unions begin emerging as a response to the problems worries the workers have 1 Safety Working Conditions there are no rules laws or regulations about safety of workers The workers get screwed 2 Wages How much money they are making No minimum wage at this time so the boss owner manage set low wages so they can keep making money 3 Hours No one except the boss tells them when they can and cannot leave work If they leave early they will be fired The longer you work accidents go up 2 Labor Unions The Unions ultimately go on strikes It s pretty hard to get workers to join the union because their job is on the line If you get in trouble for being in a Union family members will get fired too Not until the 1930s that minimum wages occur The biggest unions were the Knights of Labor and the American Federation of Labor Scabs were replacement workers In each labor union there were different opinions on how you should treat scabs Some people said they needed to be killed or intimidate them The owners would call the newspapers when people got killed and made their image negative They emphasized the violence of these unions The Unions fight against themselves on whether they should use violence or not 3 Pullman Strike Pullman Illinois in 1893 and 94 There is a factory called the Pullman factory owned by George Pullman They made railroad cars that carried cargo passengers etc He became known for luxury railroad cars In 1893 …