HIST 1312 1st Edition Lecture 3 Outline of Last Lecture I West Affect on America II Why the West was Attractive a Land III Images from the West a Fictional characters b Rise of big business c Cowboys IV The Native Population V Closing of the Frontier Outline of Current Lecture I The Gilded Age a General themes b New Businessmen c Presidents II Key Features of Corporations III Threat to the Pursuit of Happiness IV Pursuit of Property V Foreign Immigrants Current Lecture I The Gilded Age The Gilded Age was a time of economic transformation in the United States o Rich were getting richer and poor were getting poorer lots of corruption in politics and business These notes represent a detailed interpretation of the professor s lecture GradeBuddy is best used as a supplement to your own notes not as a substitute Immediately following the Civil War America s industrial output paled in comparison to the mighty industrial powers of Western Europe especially Great Britain However by 1900 only Great Britain s industrial production exceeded the total industrial production of the United States Two major factors precipitated the rise of industry 1 New Businessmen 2 New Ways of Doing Business General Themes 1 Laissez faire 1 a doctrine opposing government interference in economic affairs beyond the minimum necessary for the maintenance of peace and property rights Source Webster s Ninth New Collegiate Dictionary 1990 Believers in laissez faire economics wanted no government interference in it 2 Concentration of power in the hands of the government at all levels local state and federal Government during this period assumed more authority and power especially expanding its bureaucratic control and authority Major areas of expansion of government power included land policy railroad subsidies tax tariff policy immigration policy and Indian policy New Businessmen Historians often describe nineteenth century businessmen in two contradictory ways 1 Captains of Industry some scholars describe nineteenth century industrialists as ingenious and industrious capitalists who transformed the American economy with their business acumen These Captains were the folk heroes of their day faces of men like Andrew Carnegie would have graced the boxes of Gilded Age Wheaties rather than Olympic gold medal winners These men seemed to embody the American dream of Rags to Riches 2 Robber Barons other historians have viewed the Gilded Age industrialists as immoral greedy and corrupt and have mustered ample the evidence to support such a view Bribery illegal business practices and cruelty to workers were not uncommon during this period and many of the most respected industrialists were also feared and hated Presidents James A Garfield 1831 1881 2nd American president to be assasinated o A Republican party leader during the nineteenth century who served as president in 1881 His record was marred by his unorthodox acceptance of a fee in the DeGolyer paving contract case and by suspicions of his complicity in the Credit Mobilier scandal o Assassinated after only a few months in office by Charles J Guiteau a disappointed office seeker on July 2 1881 Grover Cleveland o Born in Caldwell New Jersey on March 18 1837 He was admitted to the bar in Buffalo New York in 1859 and lived there as a lawyer and became active in Democratic politics II Key features of corporations 1 Investors shares of stock proportion of the value of the company Bond a debt paid back with interest Number one in America short term thinking only care about what it will be like tomorrow 2 Management CEO CFO board chair 3 Employees Japanese long term thinking 4 Product or service Germans Which is most important Debatable between countries and different people One of the key features of corporations and the Gilded Age in general was an increasing concentration of power in large entities Business and government became bigger while their respective operations became intertwined Ever since the federal government had used its power and money to encourage businessmen to build railroads all levels of government had become more involved in the nation s economic welfare A corporation was formed when a group of people requested a charter from the state legislature that provided them with a set of legal rights and presumably responsibilities State law treated the corporation as an individual o Unlike a partnership in which liability ran high for individual investors the corporation involved limited liability Limited liability makes individual investors legally liable only for their share of the investment In partnerships if a partner skips town or dies the other partners are liable for any outstanding debts In corporations if an individual investor dies no other investors are affected If the corporation goes bankrupt the law only required investors to foot the bill for a percentage corresponding to the proportion of their investment A way of limiting your liability Combination of Corporations o Small corporations began to merge with one another to increase efficiency and profits o Americans soon knew these new mega corporations as trusts monopoly o In such trusts a small board of trustees managed the means of production and distribution o Though trusts were certainly larger more efficient and more profitable than smaller corporations they also destroyed the healthy competition that often makes capitalism a viable economic model Make money by doing bigger deals not by working hard Large corporations may be anti capitalist and need to be controlled Standard Oil of New Jersey o In 1879 John D Rockefeller and a handful of associates founded Standard Oil of New Jersey the prototypical example of corporate consolidation and efficiency o Rockefeller was so successful that at his death his personal fortune was estimated at 815 647 796 89 not to mention the 40 million in profits that the Standard Oil trust averaged every year Moreover if buying stock proved too arduous Rockefeller sometimes hired armed Pinkerton Agents to persuade his competition to relinquish control o The Pinkerton Agents were famed for their club wielding ability and many a small business owner became familiar with the wrong end of those clubs III A Threat to the Pursuit of Happiness Why did so many Americans view the new corporations and trusts as evil entities that destroyed the American dream of the Pursuit of Happiness o Though we can provide many answers to this question there are three important points