Download Sherman Anti-trust Act

GILDED AGE
POLITICS AND CULTURE
MARK TWAIN
RAILROADS: AMERICA’S FIRST BIG
BUSINESS
• By 1900, the US had
built the greatest
railroad network in
the world.
JAY GOULD
• The ‘most hated
man in America.’
• Through the stock
market, he seized
control of railroads
and Western Union
telegraph
STOCK MARKET
• The stock market
began to play a
key role in the
American economy
as capital could
now be
represented by
stocks and not just
by tangibles such as
land or machinery.
LAISSEZ-FAIRE AND THE SUPREME
COURT
• Laissez faire held the government should not
meddle in economic affairs, except to protect
private property
• Conservative Supreme Court supported laissez-faire
and used its power to build business interests
• Court reinterpreted 14th amendment and defined
‘corporations’ as ‘persons’ in order to protect
businesses from taxation, regulation, labor
organizations, and antitrust legislation
ANDREW CARNEGIE
CARNEGIE’S GOSPEL OF WEALTH
JOHN D. ROCKEFELLER
A TRUST
• A corporate system in which corporations give
shares of their stock to trustees, who coordinate the
industry to ensure profits and limit competition
• For example, Standard Oil under Rockefeller and his
‘horizontal integration’
• The term ‘trust’ is sometimes used to describe large
business combinations
MONOPOLY
• Exclusive control by a single business of an entire
industry.
HOLDING COMPANY
• It buys competing companies who can then ‘act in
concert’
• Since they are no longer separate companies, they
could make policies without violating anti-trust laws.
IDA TARBELL
RAILROAD
SLEEPING CAR
SECOND HALF OF 19TH CENTURY
‘AGE OF INVENTION’
• Alexander Graham
Bell invented
telephone, soon
Americans could
communicate both
locally and at a
long distance
EDISON
• Thomas Alva Edison
pioneered the use
of electricity as an
energy source
TYPEWRITER
ZIPPER
TELEGRAPH
• A revolution in
communication,
replacing Pony
Express mail carriers.
Served as America’s
‘nervous system.’
MASS MARKETING, ADVERTISING, AND
CONSUMER CULTURE
• Railroad allowed for a national market so largescale consumer businesses flourished
• Advertising stimulated a new consumer culture
enticing people to buy things they did not need
SWIFT
• Gustavus Swift built
a ‘vertically
integrated’ meat
packing business in
Chicago that
stimulated cattle
ranching in the
West
HEINZ
• John Henry Heinz
applied these methods
to processed foods,
others like Quaker Oats
and Campbell Soup
followed, producing
consumer goods for
national markets
CIVIL SERVICE REFORM
• Garfield’s assassination led the press to condemn
Republican factionalism;
• attacks on the spoils system increased;
• the public soon joined the chorus demanding
reform, which came with the passage of the
Pendleton Civil Service Act in 1883;
• brought some fourteen thousand jobs under a
merit system that required examinations for
office and made it impossible to remove
jobholders for political reasons.
PRESIDENTIAL POLITICS
• Corruption and party strifein the1880s
• Reformers v. spoilsmen
• Party bosses dominated national politics
PRESIDENT GROVER CLEVELAND (D)
• Ma, Ma, where’s my
pa?
• Going to the White
House, ha, ha, ha!
• Against the tariff
PRESIDENT BENJAMIN HARRISON (R)
• Grandson of
President William
Henry Harrison
• Supported the tariff
J.P. MORGAN
JP MORGAN AND FINANCE
CAPITALISM
• Morgan dominated American banking and acted
as a power broker in the creation of industrial giants
like General Electric and US Steel
• His overcapitalization [issuing more stock that the
company had value] and stress on short term gain
took a toll on the railroad industry
• 1898 turned to the steel industry, in a direct
challenge to Carnegie
FINANCE CAPITALISM
• Investment sponsored by banks and profits from the
sale of stocks and bonds
• In finance capitalism, financial institutions have the
ability to control the economy by reorganizing
industries and stabilizing markets
• For example, J.P. Morgan’s take-over of Carnegie
Steel
NEW CORPORATE WORLD ORDER
• Morgan’s acquisition of Carnegie Steel
signaled the passing of one age and the
coming of another;
• Carnegie represented the old
entrepreneurial order, Morgan the new
corporate world
• Morgan, more than the others, left his
stamp on 20th century business economy
SOCIAL DARWINISM
• According to Rockefeller’s son, the elimination of
smaller, ineffective units, was “merely the working
out of a law of nature and a law of God.”
• Social Darwinism is the theory, based on the
scientific work of Charles Darwin, that social
progress comes about as a result of relentless
competition in which the strong survived and the
weak died out.
RAILROADS, TRUSTS, AND THE
FEDERAL GOVERNMENT
• Regulation of railroads (spearheaded by
Midwestern farmers) and federal legislation against
trusts
• Supreme Court hostile to states’ efforts, so Congress
passed the Interstate Commerce Act (1887)
creating the first federal regulatory agency, the
Interstate Commerce Commission (ICC)
TARIFF
• A tax on imported
goods
• Protects American
products from
foreign competition
• Supported by
President Harrison
• The South relied on
foreign markets to
sell agricultural
crops, but had to
purchase foreign
goods at higher
prices
• They opposed the
tariff
TARIFF
• Republican Harrison
enacted the
McKinley tariff, the
highest to date
• Harrison lost the
next election, and
Grover Cleveland
was re-elected
President
SHERMAN ANTI-TRUST ACT
• Sherman Anti-trust Act 1890 outlawed pools and
trusts, ruling that businesses could no longer enter
into agreements to restrict competition
• Supreme Court gutted the act
• Both the ICC and Sherman Antitrust demonstrate a
growing concern about corporate abuses of power
and a growing willingness to use federal measures
to intervene on behalf of the public interest
SILVER ACT REPEALED
• 1878 and 1890 Congress took steps to appease
silver advocates and passed legislation requiring
the government to buy silver and issue silver
certificates
• Did little to promote inflation or help debtors, so
farmers continued to call for the free and unlimited
coinage of silver
• Despite his party’s support for it, Democratic
President Grover Cleveland’s repeal of the 1890
Silver Purchase Act in 1893 dangerously divided the
country.
PRESIDENTS OF THE GILDED AGE
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Rutherford B. Hayes (1876)
James Garfield (1880)
Chester Arthur (1881)
Grover Cleveland (1884 and 1892)
Benjamin Harrison (1888)
William McKinley (1896)