Gilded age stock market
Many argue that America's extraordinary economic development during the Gilded Age can be summarized by a handful of statistics. This was accompanied by an increase in America's labor force from 13 million to 19 million people.
Similarly, many economic historians suggest that America's economic development can also be reduced to a rather simple formula—the convergence of a handful of critical ingredients. For starters, there was an unprecedented explosion of new industrial and agricultural technology. The United States patent office issuedpatents between and —twelve times more than during the preceding 70 years.
On the farms, steam tractors and mechanical reapersharvestersand combines all greatly increased agricultural productivity. Byit required only 15 man-hours per acre to raise wheat; a century earlier, it had taken 56 man-hours per acre.
In America's office buildings, cash registers, adding machines, and typewriters transformed the way people did business. Alexander Graham Bell's telephonedeveloped inrevolutionized business communication, while Thomas Edison's work with electricity lit homes and powered factories.
Rockefeller employed new oil refining methods, while somewhat less famously, Charles Pillsbury and Cadwallader Washburn Gold Medal Flour developed technologies that delivered inexpensive high-quality flour to American kitchens. Second, these growing industries generated goods for growing urban markets.
During the Gilded Age, America's cities exploded. About half of these new urban residents were immigrantsthe vast majority of them from Europe. During the s, five million people came to America from overseas. During the s, immigration slowed—but there was still a net arrival of 3.
The other half of this new urban population migrated to the cities from America's rural areas. Contrary to the popular myth that the American West would provide a safety valve for America's overcrowded cities, migration actually flowed in the opposite direction, from the country to the city. The new residents came for a variety of reasons—some came for the jobs offered by the expanding manufacturing sector, while others came for the conveniences and excitement city life offered.
The 68, African-Americans who moved to northern cities from the South during the s came for their own more complex and distinctive reasons. Third, America's expanding infrastructure brought new goods and a growing population together. America's railroad network grew from 35, miles of track in toin In order to make this rail system more efficient, railroad companies switched to a standard rail gauge of 4' 8.
In the name of efficiency, the railroads even used standardized time ; at the stroke of noon Eastern Standard Time on 18 Novemberthe railroads introduced a carefully devised system of new time zones, ending centuries of human experience in which each town set its own clocks to a slightly different time according to the position of the sun in the sky. Fourth, financing for all of this came from an increased supply of capital—and from capital derived from new, more extended sources.
Earlier in the century, most capital used for industrial expansion had come from the expanding companies themselves.
But in the decades after the Civil Warindividual personal savings increased and a whole new batch of institutions were created to capture and make available those savings to business borrowers—commercial banks, savings banks, and insurance companies all provided new vehicles for accumulating and dispensing the capital needed to fuel American economic growth.
And finally, new forms of business organization were devised that supported economic growth. Confronted by the ragged cycles of an immature industrial economy—volatile periods of boom and bust, overproduction and then contraction in individual industries—industrialists experimented with new forms of organization.
They began by forming pools or cartels. In these loose associations, former competitors became informal partners and tried to smooth out the market through the adoption of "gentlemen's agreements" on production levels and prices.
Soon these informal alliances evolved into more formal cooperative ventures among owners. By forming "trusts" and "holding companies," they avoided state laws forbidding monopolies while reaping the benefits of unified control over entire industries. In these associations, the stock certificates from several companies were exchanged for trust certificates, and then a board of trustees exercised governance over all of the theoretically independent companies within the trust.
The final step in this movement toward centralization was the merger movement of the late s. Abandoning altogether the appearance of competition, industrial leaders simply absorbed their competitors. The movement began in with a record 69 mergers, and then accelerated. In there were mergers, in a whopping mergers. Technology, markets, infrastructure, capital, organization—the unprecedented economic growth of the Gilded Age can be attributed to textbook ingredients for economic development, a series of large structural transformations in the economy.
Other economic historians, however, insist that this sort of analysis neglects equally critical ideological contributors to Gilded Age growth. For starters, economic development was facilitated by a supportive culture—one which placed confidence in industrialists and businessmen and refused to permit government to interfere in their efforts.
Most Americans embraced the principles of laissez faire economicswhich argued that economic forces should be allowed to work themselves out with maximum freedom and minimal government interference. Part of the logic was purely economic—it was believed that government involvement tended to hinder, or even prevent, economic development.
But part of the argument was ethical. Laissez faire advocates argued that government interference distorted the natural and equitable forces of spread table forex development. Government intervention was considered tantamount to "class legislation"—an forex broker with metatrader 4 and artificial reallocation of economic resources and power from one group ebate moneymaker another.
Laissez faire ideals enabled industrialists and entrepreneurs to operate with public support and without government interference. In addition, the philosophy was translated by the courts into a set of practical rules that enabled businesses to operate with even greater autonomy. For example, during the last decades of the nineteenth century, the court strengthened rules increasing the sanctity of the contract. State laws that attempted to regulate the workplace, such as restrictions on work hours and safety requirements, were repeatedly struck down by state courts with the buying stocks barclays that they violated the rights of employers and employees to enter into contracts freely.
Courts also increasingly applied the "fellow servant" rulewhich relieved employers of responsibility for workplace injury if a contributing cause was the negligence of another employee. And the courts weakened unions by insisting that employers had a right to replace striking workers while at the same time denying that strikers had a right to organize boycotts.
For many historians, America's economic history during the Gilded Age cannot be explained without reference to this philosophical and legal culture, which was so supportive of unregulated economic growth. Yet still others insist that acknowledging the importance of this culture does not complete the story. These scholars insist that a handful of key players were critical to the particular way that America's economy unfolded. They argue that the skills and strategies of a handful of individual industrial giants were essential to 99 binary option ebooks extraordinary economic growth.
Rockefellertrained as a bookkeeper, built a monopoly over the oil business in less than a decade and brought order to a chaotic vital industry. When he entered the oil business, it was an industry subject to violent jags in production and prices. Each discovery of a new oilfield led to rapid overproduction by wealth-seeking adventurers. But invariably markets were soon glutted, prices collapsed, and producers went bust. Rockefeller's bean-counting sensibilities were repulsed by this disorder.
And he recognized that control, and order, could be achieved by dominating a single bottleneck in the production process. Therefore he began to acquire refineries. Over the next decade, Rockefeller built his monopoly by cultivating preferential treatment from the railroads that hauled his product. He negotiated secret contracts in which he leveraged his growing market share for lower transportation rates.
These "rebates" enabled him to ship oil at a lower cost, allowing him to undercut his competitors by selling at a lower price. But rebates were just the first step in his scheme.
As his share of the oil refining business grew even larger, he was able to demand "drawbacks" from the railroads that desperately wanted his business—that is, a percentage of the news stock market commentary fees paid to them by other refineries. In other words, Rockefeller made money off the shipment of other refineries' oil. By controlling this vital bottleneck in the production process, he had established a virtual monopoly over the entire industry.
With almost every drop of the country's oil flowing through his refineries, he was able to shape price structures and production decisions at every other phase of the process, from the oil wells to consumers' homes. His method of controlling one aspect of the production process—labeled horizontal integration —was soon imitated by other industrialists also anxious to eliminate their competitors and to bring a similar stability and profitability to their industries.
Andrew Carnegie did for steel what Rockefeller did for oil. In the early s, he realized that the steel rails being introduced in England were superior to the iron rails used in America, and that it was only a matter of time before American railroads imitated their English cousins.
The Gilded Age of Bankers
And so he set about investing in steel. Utilizing the newest technologies, such as the Bessemer blast furnace and the Siemens-Martin open hearthhe built the largest steel company in America. Carnegie could be as deliberate as Rockefeller in crushing his competitors—and more aggressive in crushing his workers' attempt forex scalping strategy successful unionize.
After first supporting the right of workers to unionize, he gave his plant manager, Henry Fricka free hand in beating back the fledgling American Association of Iron and Steel Workers when the union tried to organize his Homestead steel plant outside Pittsburgh. Despite the violence at Homesteadthe public was generally more forgiving of Carnegie than they were of Rockefeller. One reason was because people found his industrial methods more defensible.
Carnegie used "vertical integration" stock market dodgx bring stability to the steel industry—he worked to control the entire production process, from the iron mines through steel production and distribution.
By the time he retired, Carnegie's holdings gilded age stock market enormous; they included pig iron works, coke refineries, and a line of steamships, as well as steel works. But the public was more accepting of this sort of industrial monopoly how to make money selling stamps on ebay they were of Rockefeller's creation of a market bottleneck through horizontal integration; it seemed better to honor the spirit of market competition.
Morgan completed the triad of America's great Gilded Age industrial giants. He similarly pursued monopoly-like control over his sector of the economy—but he ultimately established a more varied set of holdings than either Rockefeller or Carnegie.
Even his contemporaries disapproved of his earliest business deals—during the Civil War he sold defective guns to the Union army at inflated prices, and he installed a telegraph line in his office so he could buy and sell gold based on battle news from the front. After the war, he brought the same shrewd instinct to his goal of monopolizing the railroads. But not content with controlling just the railroads, Morgan also built General Electric into a great industrial conglomerate by merging the Edison General and Thompson-Houston Electric Companies.
And inhe forged a merger between Carnegie Steel and several other companies to form U. Morgan's financial moves built the great industrial corporations that would lead the American economy's charge into the twentieth century. It is hard to ignore the contributions of these industrial giants to the development of the American economy.
But some historians suggest that focusing on these sorts of individuals still fails to capture the full character of the emerging industrial economy. Like the statistical portrait, or the reduction of the economy to a list of abstract ingredients, this focus on just a handful of powerful individuals fails to capture the character of the economy for the vast majority of America's 75 million people. In particular, these approaches fail to reveal the impact of this particular form of economic growth on those at the bottom of the economic ladder.
The same economy that gave Carnegie, Rockefeller, and Morgan the opportunity to amass the largest fortunes in the history of the world also required unskilled industrial laborers to work an average of 60 hours per week for 10 cents an hour. A complete economic history of the Gilded Age thus requires an understanding of the nation's expanding underclass.
But as these people left fewer records, historians have had to patch together the character of their existence by constructing a different sort of snapshot. Their lives were lived in America's growing urban slumsplaces most middle-class and wealthy Americans tried to avoid. More than a million people were crammed into New York's 32, infamous dumbbell tenements —overcrowded, poorly ventilated fire traps.
Chicago's slums were three times more densely packed than Calcutta's. In these living conditions, disease ran rampant— choleratyphoidtuberculosisconsumption. Nor did it help that city governments could not build water and sewage facilities fast enough to serve their rapidly swelling populations. In New Orleans, the census reported that pedestrians sank in the mud made by the "oozing of foul privy vaults.
The economic history of the late nineteenth century thus cannot be too narrowly summarized.
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The period's label, "Gilded Age," comes close to capturing the juxtaposition of enormous wealth alongside crushing poverty. But even this only hints at the underside of America's booming economy. Therefore, to complete the picture, you should look at some pictures. InJacob Riisa police reporter for the New York Tribunepublished How the Other Half Livesa stark portrait of urban slum life.
His classic work, complete with text and photographs, is available here. Advertisers Jobs Partners Affiliates.
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SHMOOP PREMIUM Summary SHMOOP PREMIUM SHMOOP PREMIUM. Rockefeller, Andrew Carnegie, and J. Morgan built monopolies and revolutionized business practices Laissez faire ideology called for little or no government regulation of economic affairs Unskilled urban workers did not share in economic gains, instead enduring great poverty Understanding the Gilded Age Economy New technologies improved industrial and agricultural productivity Growing cities provided markets and workers for industrial businesses Improved rail transportation allowed products to reach distant markets Financial innovations allocated capital more efficiently New forms of business organization facilitated rapid growth Many argue that America's extraordinary economic development during the Gilded Age can be summarized by a handful of statistics.
The Importance of Culture Laissez faire ideology opposed government interference in the economy Courts struck down laws that involved government in economic regulation Other economic historians, however, insist that this sort of analysis neglects equally critical ideological contributors to Gilded Age growth. Rockefeller Leader of Standard Oil Company Created monopoly through horizontal integration John D.
Andrew Carnegie Leader of Carnegie Steel Built near-monopoly through vertical integration Andrew Carnegie did for steel what Rockefeller did for oil. John Pierpont Morgan Leading financier, founder of J. Led merger movement, creating giant industrial corporations J. Unskilled workers in industrial factories mostly did not share in Gilded Age prosperity Hours were long, wages were low, conditions were dangerous Many workers lived in miserable urban slums It is hard to ignore the contributions of these industrial giants to the development of the American economy.
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