The Second Industrial Revolution and The Gilded Age

The "Gilded Age” is a term that is often used to describe the late 19th century from around 1870 to 1900. It was coined by the author Mark Twain in the title of his 1873 novel The Gilded Age: A Tale of Today. This term was the ideal description for the time, suggesting that society’s corruption was thinly covered, or gilded, with a layer of shiny gold that made it look shiny and appealing on the outside. During the Gilded Age, which was part of the Second Industrial Revolution, the country underwent an impressive economic expansion. Much of this growth was courtesy of railroads, which now spanned from coast to coast, as well as factories, steel, and the coal mining industry. Big business boomed, with technology such as typewriters, cash registers, and adding machines helping to transform how work was done. The economic explosion included not only industrial growth but also a growth in agricultural technology such as mechanical reapers.

With this rapid growth came the rise of a class of extremely wealthy individuals who made up a very small percentage of society. Many of these individuals made their fortune through greed, corruption, and a lack of government regulations. Meanwhile, a large number of people suffered from crushing debt, unemployment, and racial discrimination, and there was an increase in immigration as foreigners sought opportunities they couldn’t find in their homelands.

Captains of Industry and Robber Barons???

The wealthy elite of the late 19th century consisted of industrialists who amassed their fortunes as robber barons and captains of industry. Both can be defined as business tycoons, but there was a significant difference in the way that they made their fortunes. The term “robber baron” dates back to the Middle Ages. Robber barons typically employed ruthless and often questionable methods such as using predatory practices to eliminate their competition and develop a monopoly in their industry. Often, they had little empathy for workers. Captains of industry, however, were often philanthropists. They made their wealth in a way that would benefit society, such as providing more jobs or increasing productivity.

John D. Rockefeller

Born in 1937, John D. Rockefeller became one of the richest men in the world as the founder of the Standard Oil Company. Standard Oil dominated the oil industry, controlling roughly 90 percent of the refineries and pipelines in the United States by the early part of the 1880s. Rockefeller’s actions can be considered those of either a robber baron or a captain of industry. His philanthropic efforts resemble those of a captain of industry, as over the course of his life, his donations to charitable causes exceeded $500 million. Unfortunately, he has also been accused of predatory behavior that would eliminate his competition, and his Standard Oil Corporation was the first example of a U.S. business trust.

Andrew Carnegie

Andrew Carnegie and his parents immigrated to the U.S. from Scotland when he was 13. He built his fortune by investing in the steel industry and became the owner of Carnegie Steel Company, which by 1889 was the largest steel company in the world. Unfortunately, Carnegie engaged in tactics that were not in the best interests of his workers. In 1892, he attempted to lower worker wages at one of his steel plants, an act that resulted in the Homestead Strike and numerous deaths. Despite this action, Carnegie was extremely active in terms of philanthropy. In his efforts to contribute to society, he established the Carnegie Endowment for International Peace, the New York Public Library, and a college that would become part of Carnegie Mellon University. He also wrote “The Gospel of Wealth,” an article that argued that the wealthy have a responsibility to contribute to the greater good of society.

J.P. Morgan

John Pierpoint Morgan was a financier from a wealthy family and is considered to have been a robber baron by many. He invested in Thomas Edison and the Edison Electricity Company, helped to create General Electric and International Harvester, formed J.P. Morgan & Company, and gained control of half of the country’s railroad mileage. He also created the first billion-dollar company, U.S. Steel. At one point in his life, he was a board member of as many as 48 corporations. He was believed to head a money trust that controlled the banking industry and was commonly considered a figurehead of Wall Street. He created a monopoly by slashing the workforce and their pay in order to maximize profits while eliminating the competition. Workers’ wages were often as low as a dollar a day or less, and there was an increase in workplace fatalities even as profits grew. When confronted with the possibility of regulations that could threaten his bottom line, he and other robber barons of the time contributed money to ensure that their candidate, William McKinley, was elected president in 1896.

Despite the numerous negatives associated with how J.P. Morgan built his wealth, some of his actions did benefit society. He helped bail out the federal government twice during an economic crisis, first in 1895 and again in 1907. As a result, this financier is also considered to be a captain of industry by some.

Henry Ford

Automaker Henry Ford was a captain of industry who treated his workers fairly well. He believed that well-paid workers would be happier and more efficient. For that reason, he instituted a $5-a-day pay rate, which was twice as much as other auto manufacturers paid. In addition, during a time when workers were required to work ten hours a day, six days a week, Ford scheduled his workers for eight-hour days, five days a week. Ford greatly disliked institutional charity, but he did contribute personal funds to organizations that he created, such as the Henry Ford Hospital for the working poor who could afford to pay some of the cost of their medical care. Over the course of his life, he donated approximately $14 million to this institution. Other organizations created by Ford included the 80-acre Valley Farm for orphaned boys, a school for African-American children in Georgia, and a Detroit trade school. He also was part of a peace ship to Europe that hoped to put an end to World War I, and he paid for work camps for boys during the Great Depression. Ford was not considered to be a robber baron, but he was anti-Semitic, and his anti-Jewish commentary helped to legitimize such sentiments.