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Post by Rita Semaan on December 29, 2015

Your slides are filled with a great amount of information and I would love to download them but I am unable to for more than half of your videos. Is there another way that I could download your slides?

The Rise of the Industrial U.S.

  • Early factories produced consumer goods and then gradually, capital goods began to drive America’s industrial economy during this “Age of Steel”
  • Steel making was revolutionized: the Bessemer process (Henry Bessemer)--the process of refining raw pig iron & making steel
  • Andrew Carnegie was the first American to fully exploit Bessemer’s invention by erecting a steel mill outside Pittsburgh, PA
  • RR construction increased and gov also helped underwrite the cost of RR construction although it was primarily paid by free enterprise; corporations with limited liability gave RRs a boost as well
  • Investment banks (J.P. Morgan & Co & Kuhn Loeb & Co.) helped forge better rates via interlocking directorates (when the same directors ran competing companies) & used monopolistic practices
  • The big business model used by the RR companies spread to other industries: corporate consolidation. Some businesses used vertical and horizontal integration.
  • John D. Rockefeller used vertical and horizontal integration to control the oil business with Standard Oil.
  • Labor strikes, anti-trust laws, and the Supreme Court began to challenge monopolies: the Great Strike of 1877, the Sherman Antitrust Act, etc... but the federal government tended to advocate for laissez-faire policies
  • Critics of greedy capitalists and cut throat competition named the era the “Gilded Age” and called the businessmen “robber barons”

The Rise of the Industrial U.S.

Lecture Slides are screen-captured images of important points in the lecture. Students can download and print out these lecture slide images to do practice problems as well as take notes while watching the lecture.

  1. Intro
    • Overview
      • The Age of Steel
      • Andrew Carnegie
      • Two Carnegeian Influential Ideologies
      • The Railroad Business
      • Map of Railroad Development
        • Corporate Consolidation
        • Corporations
        • Cornelius Vanderbilt
        • “Modern Colossus of Roads” by Joseph Keppler in Puck in 1879
          • The Great Strike of 1877
          • John D. Rockefeller
          • Vertical and Horizontal Integration
            • Gustavus Swift and Philip Armour's Meatpacking
            • Other Businesses
            • Sherman Antitrust Act of 1890
            • Laissez-Faire, and the Gilded Age
            • The Gilded Age
            • Robber Barons: History Repeats Itself
              • Robber Barons
                • Example 1
                  • Example 2
                    • Example 3
                      • Intro 0:00
                      • Overview 0:06
                      • The Age of Steel 2:37
                        • The Bessemer Process
                        • Andrew Carnegie
                        • U.S. Steel Corporation
                      • Andrew Carnegie 5:16
                        • Rags to Riches
                        • Vertical Integration
                        • Carnegie Steel
                      • Two Carnegeian Influential Ideologies 7:38
                        • Social Darwinism
                        • William Graham Sumner
                        • Gospel of Wealth
                        • Philanthropy
                      • The Railroad Business 12:26
                        • Increase of Railroad Construction
                        • John Murray Forbes, Cornelius Vanderbilt and James Hill
                        • Investment Banks
                      • Map of Railroad Development 14:44
                      • Corporate Consolidation 15:44
                        • Scarcity of Jobs and Money
                        • The Sherman Antitrust Act of 1890
                        • Corporate Consolidation
                      • Corporations 18:54
                        • Corporation
                        • Limited Liability
                        • Dominated by a Few Individuals
                        • Big Four
                      • Cornelius Vanderbilt 21:40
                        • Robber Baron
                        • Horatio Alger
                        • Synonym for Enormous Wealth and Excessive Corporate
                      • “Modern Colossus of Roads” by Joseph Keppler in Puck in 1879 24:56
                      • The Great Strike of 1877 25:28
                        • Railroad Mogul
                        • The Great Strike of 1877
                        • Fall of Railroad Building
                        • Manufacturing Output Increased
                      • John D. Rockefeller 28:35
                        • Black Gold
                        • Horizontal Integration
                        • Cut-Throat Competition
                      • Vertical and Horizontal Integration 30:29
                      • Gustavus Swift and Philip Armour's Meatpacking 31:45
                        • Dominated Meatpacking
                        • Refrigerator Cars
                      • Other Businesses 32:31
                        • Tobacco, Farm Machinery, Sewing Machine and Cereals
                        • Cartels
                        • Trusts
                      • Sherman Antitrust Act of 1890 33:50
                        • The Basic Federal Antimonopoly Law
                        • Congress Government Intervention in the Free Economy
                        • United States v. E.C. Knight
                        • Standard Oil Company v. United States
                      • Laissez-Faire, and the Gilded Age 37:48
                        • Laissez-Faire Approach
                        • Industrial Giant
                        • The Gilded Age: A Tale of Today
                        • Democratic Vistas
                        • Chromo Civilization
                      • The Gilded Age 39:58
                        • Glittery
                        • Crass Corruption
                      • Robber Barons: History Repeats Itself 41:26
                      • Robber Barons 42:31
                      • Example 1 43:13
                      • Example 2 45:29
                      • Example 3 46:53

                      Transcription: The Rise of the Industrial U.S.

                      Welcome back to www.educator.com.0000

                      This lesson is on the rise of the industrial U.S.0003

                      In this lesson, we are going to focus on the railroad business and talk about some of their sketchy business practices,0007

                      cutthroat competition, monopolistic practices.0016

                      We are going to see how wealthy a lot of these railroad tycoons become.0022

                      And in many ways, that is going to cause a lot of resentment, specially, 0027

                      for the workers who are exploited by the owners of these very profitable companies.0030

                      Along those same lines, we are going to talk about the expansion of industrial capitalism during what becomes known as the Gilded Age, 0039

                      during the time of the laissez-faire capitalism, where there is very little to no regulation, 0046

                      in terms governmental oversight of monopolistic practices.0058

                      Some of the major industries that are going to become very profitable and successful would be steel, oil, railroad business.0065

                      Inventions will be created, different machines will be used as well, and investment banking will help to fund all of these business ventures.0076

                      A special focus will be on the oil and the steel industries, and the importance of people like Rockefeller and Carnegie.0088

                      Then, we will also talk about the initial effort by the Federal government to start cracking down on a lot of monopolistic practices.0097

                      We will see the antitrust movement starting to emerge.0109

                      And this of course is very much tied into this theme, laissez-faire capitalism.0113

                      And then of course, we are going to see eventually people will get fed up with the exploitation of the labor force0118

                      In one of the following lessons we will actually get into the labor movement 0127

                      and see how they start to demand for more regulations and better conditions.0134

                      Technology inventions are invented during this time, very important, will help facilitate development in industrial capitalism.0139

                      And of course, we will touch upon discontentment but we would not go into major detail in this particular lesson.0148

                      In many ways, during the post Civil, post Reconstruction era, we are going to see huge industrialization take place across the United States.0159

                      And oftentimes, it is considered to be the age of steel because steel is going to be a major game changer.0170

                      It is going to help to industrialize and literally help build U.S. cities.0177

                      Skyscrapers, railroads, bridges, all of these types of infrastructure examples are going to be built literally by steel.0186

                      Steel is extremely important.0198

                      Early factories produce consumer goods and then gradually capital goods began to drive America's economy during this age of steel.0200

                      The industrial economy is going to help to provide the foundation.0211

                      And then yes, we will see consumer goods, the people will buy with their extra money that they have to spend, 0218

                      will help to fuel the capitalist economy.0228

                      During this age of steel, steelmaking was revolutionized.0231

                      Henry Bessemer came up with this process, Bessemer process, the process of refining raw pig iron 0236

                      and making steel by using the Bessemer converter by blowing lots of hot air through this mechanism that I have a picture of on the next slide,0243

                      the converter, and eventually creating this very malleable type of material that can be used to make steel.0256

                      This was a major game changer and is going to revolutionize the economy.0270

                      Andrew Carnegie is the one who is able to make a lot of money and embrace this converter, and make it work on a large scale.0276

                      He is able to fully exploit this invention by erecting a steel mill outside of Pittsburgh, Pennsylvania.0288

                      He becomes a very wealthy man, even though he came from humble beginnings.0297

                      He becomes the owner of the steel business and eventually, once he becomes extremely successful, 0304

                      will sell his business to the U.S. Steel Corp., and it became the richest corporation in U.S. history up to that point.0309

                      Here is a picture of Andrew Carnegie and here is the famous Bessemer converter that will allow steel production to flourish.0318

                      Andrew Carnegie is known in U.S. history as one of the greatest rags to riches success stories.0332

                      He became one of the most successful captains of industry which is another term used to glorify these industrial capitalists,0339

                      who were very clever, hardworking, innovative, and instrumental in helping to build the U.S. economy.0351

                      Originally from Scotland, he needed to have a lot of investors to take this risk, and he was very successful,0360

                      even though there were setbacks from time to time as he was building his business.0369

                      He really took a risk that ended up delivering and being very successful.0376

                      He used the process of vertical integration which is a legal process,0383

                      whereby a company buys out all the factories of production, from the raw materials to the finished product.0388

                      This is going to become a very successful tactic that will help his business prosper.0395

                      He becomes extremely rich, $25,000,000 a year as his income continues to rise.0405

                      He is going to be very successful, his steel company was responsible for ¼ of the nation's steel production.0414

                      He had a huge impact and influence over this industry.0422

                      In many ways, not quite a complete monopoly but a substantial monopoly.0427

                      A huge control over 1/4 of the nation’s steel production.0433

                      When he sold his company, as I have mentioned previously, in 1901, to JP Morgan's U.S. Steel Corporation,0440

                      he pocketed, look at this, $500,000,000.0446

                      This is the largest personal commercial transaction ever, up to in this point in history.0449

                      He made it big and therefore became this famous captain of industry.0458

                      Now a lot of ideas influenced his way of thinking and his behavior, and he will believe that he needs to do positive things with his wealth.0464

                      But he also has very strong opinions regarding opportunities for others in society and our capitalist economy.0479

                      One idea that he embraced, and there were other thinkers who also believed in this ideology that I must highlight here.0491

                      One of them being Social Darwinism.0500

                      You may recognize the term Darwin in there.0503

                      Social Darwinism is going to draw from Charles Darwin's ideas regarding evolution, especially, the concept of survival of the fittest.0509

                      Before I get into the definition of these, Charles Darwin actually did not support how this idea was being applied.0522

                      Just for the record, this is a social adaptation of Darwin's ideas.0530

                      According to this ideology, it is taking Darwin’s ideas, applying it to society.0541

                      Survival of the fittest in society, that was accepted as an ideology.0547

                      Carnegie would apply this theory to business by saying that unrestricted business competition allowed the fittest to survive.0552

                      That this is extremely important, this is very much along the same lines as laissez-faire economics, that allow businesses to compete.0562

                      Allow the consumers to decide which company is successful by purchasing their goods 0571

                      or buying their product or services, or whatever it maybe.0579

                      And that this is the way of nature that the fittest business will survive.0583

                      This could also be applied on an individual level.0590

                      This helps to justify that in capital society, there are some winners, there are some losers.0594

                      There some who are more fit than others, and this is just part of life, this is part of nature.0599

                      Herbert Spencer is also associated with this idea.0607

                      He advocated for Social Darwinism.0611

                      There is oftentimes a racist element to this as well.0615

                      That oftentimes, especially, tying in the Protestant work ethic that there are certain races that work harder0622

                      and they are more fit to survive in this competitive societies.0632

                      Something else to keep in mind.0636

                      Professor William Graham Sumner is also associated with this idea and support of this idea,0638

                      and believed that helping the poor was misguided as it interfered with the laws of nature.0645

                      He believed in a very laissez-faire approach that many of the other proponents of Social Darwinism agreed with.0652

                      Another idea that Carnegie believed in is a bit different than Social Darwinism.0661

                      It is called the Gospel of Wealth.0667

                      Carnegie did feel a responsibility to give back and not be completely greedy with all the millions of dollars0672

                      that he had acquired from becoming a successful businessman.0678

                      According to this idea, this was a doctrine that called on those who accumulated wealth to share their riches for the betterment of society.0682

                      And simply put, this is the idea of supporting philanthropic endeavors.0691

                      Carnegie will actually write a very influential essay called Wealth, in which he argues that the wealthy had to participate in philanthropy, 0700

                      and it was ultimately their duty to invest in public institutions.0708

                      For instance, Carnegie will invest in libraries that he believes that that is how he can give back to society.0716

                      He did not believe in handouts, he did not believe that the government should redistribute the wealth.0724

                      He did believe that he could contribute to society by investing in philanthropic endeavors, in education, in libraries, etc.0731

                      Something to keep in mind.0745

                      I did forget to mention, it was on the bottom part of that slide, and we will see Rockefeller will also follow in that same vein 0748

                      and also contribute quite a bit to several universities, like the University of Chicago, for instance.0756

                      He definitely invested his wealth in a lot of Protestant churches.0766

                      Moving on to railroads.0771

                      Railroads were extremely important in the post Reconstruction era.0774

                      It increased tremendously as the government helped to subsidize, underwrite the cost of railroad construction.0779

                      Although, it was primarily financed by free enterprise, private businesses and investors.0786

                      Corporations with limited liability gave railroads a boost as well.0793

                      In other words, the laws that helped industrial capitalism flourish based on limited liability, 0801

                      made it very appealing for people to take a risk, to invest in these business ventures.0811

                      I will talk more about the details of limited liability in a bit.0818

                      I will expand, some of the most famous railroad promoters in the gilded age, in the post reconstruction era,0825

                      John Murray Forbes, Cornelius Vanderbilt of New York Central, and James Hill, these were all promoters and railroad tycoons.0833

                      The extent of railroad service expanded by 1900.0844

                      The efficiency improved and other aspects were improved upon as well, obviously, this look a large amount of capital to make it happen.0847

                      Investment banks like JP Morgan and Company, and Kuhn Loeb and Company, helped to forge better rates using interlocking directorates.0856

                      When the same directors were in competing companies, and ultimately 0867

                      they will use monopolistic practices in their endeavors to become wealthy and to invest in these companies.0872

                      Here is also a map where you could see the extent of railroad development.0889

                      It was very sordid, fiercely competitive, and subject to boom and bust, as we saw with J. Gould's struggles in earlier times.0896

                      But by 1900, most of the U.S. ultimately had access to railroad service.0908

                      This was going to help the economy tremendously.0914

                      You can also see different time zones that were established as well, because in fact,0917

                      one of the problems that they did not foresee when some of the railroads were initially created, 0923

                      if all of the clocks were not set properly, they actually would have collisions and huge accidents.0930

                      They eventually created these different time zones to avoid those problems.0939

                      More about corporations and corporate consolidation.0946

                      As I was saying, rapid economic growth required lots of capital, lots of seed money.0952

                      Businessmen borrowed huge sums, and when businesses occasionally failed, bank failures could result 0957

                      which could have a negative effect on the economy.0964

                      Railroads had a huge impact on the economy when they went belly up.0967

                      This will actually be the case, for instance, in the panic of 1873, 0972

                      that was very much tied to failures with the railroad business that happened from time to time.0977

                      This has a snowball effect, hurting the lower classes the most.0985

                      Because of scarcity of jobs that therefore they do not have money, in order to invest back into the economy.0990

                      Monopolies that were starting to emerge more and more because we did not have anti-trust laws at first,0999

                      created a class of very powerful man whose interests clashed with the rest of society.1006

                      This is going to cause tensions and many would view these captains of industry as robber barons or greedy monopolists1012

                      who were becoming extremely wealthy off the backs of the many laborers who are working very hard and being exploited,1025

                      and then all of a sudden being tossed away if the jobs were obliterated, they just get rid of them.1034

                      Inconsistent government policy, there was not a lot of leadership in terms of regulation, 1046

                      very laissez-faire approach in general, except for tariff policies.1053

                      Government regulation and policies in general, very inconsistent, will further exacerbate situation 1060

                      with vague wording of laws regarding antitrust laws.1067

                      There will be one law that is passed and I will explain this a little bit more in another slide, called the Sherman Antitrust act of 1890.1073

                      But the wording of it allowed for several loopholes where clever industrialists worked around the law and exploited the situation.1084

                      We will not see until the progressive era, especially during the time of Teddy Roosevelt, and even into the Wilson administration,1096

                      where we will start to see more stringent regulations being put in place, and more leadership, 1106

                      in terms of antitrust regulation being put into place.1112

                      The big business model that was used by the railroad companies during this time, 1120

                      spread to other industries as well, because it was profitable and successful.1124

                      This in general is known as corporate consolidation.1130

                      Businesses are becoming bigger, they are incorporating.1134

                      This is going to lead to the flourishing of corporations.1140

                      Here is a definition of what a corporation is.1143

                      A company or group of people that is authorized to act as a single entity.1146

                      And legally, yes, they are considered as single entity, legally a person and recognized as such in law.1152

                      This part, I will do a double take there.1160

                      But yes, this is something that has become extremely controversial in recent times.1166

                      What is the catch, why is the idea of a corporation so appealing?1173

                      This concept of limited liability is key.1179

                      The idea here is that investors only risk the amount of their investments, whatever they invest, that is all they can lose.1183

                      They cannot lose more than what they invest.1190

                      It is risky, you can lose what you invest but you will not lose more.1193

                      They are not liable for any debts that a corporation might accumulate beyond that.1198

                      And they can sell stock to the public as well which can be another moneymaking opportunity.1203

                      The public can make money off of that corporation, if it does well.1211

                      This type of business model is going to be very successful and will grow and flourish1216

                      and become the backbone of industrial capitalism, and obviously, still around today.1222

                      Railroads were at the forefront of these business models, these corporations.1230

                      Railroad combinations were dominated by a few individuals who became very powerful.1236

                      That does not mean that they were not criticised, and that eventually they will not be regulated, because they will be regulated in due time.1244

                      The achievements and excesses of these tycoons, as some of them who were extremely greedy and were ruthless,1253

                      and use cutthroat competition, and bullied other smaller companies to fold, ultimately, so they could dominate the industry.1260

                      Anyway, some of the major players, the famous Big Four that included Leland Stanford, Collis P. Huntington, 1271

                      Mark Hopkins, Charles Crocker, and other major railroad tycoons like Cornelius Vanderbilt from New York Central,1279

                      James Hill, Jay Gould, Jim Fisk and others.1288

                      All these railroads tycoons symbolized much of the nation's great economic power, concentrated in individual hands.1292

                      Consolidate power and certainly there is a huge gap between that group of industrialists1300

                      and the majority of the working class people and middle class people.1306

                      That is going to cause a huge disparity.1313

                      A little bit more on Vanderbilt.1317

                      Cornelius Vanderbilt was a very successful railroad mogul who used ruthless methods to put his competition out of business.1320

                      He also died in 1877, many called him a robber baron because of his ruthless methods.1329

                      I have an image to go with this, of robber baron, a little bit later on.1341

                      But the idea is that you are stealing, you are squeezing the labor and you are becoming richer through monopolistic practices,1346

                      keeping your prices so low, forging rates, overcharging people, to become very wealthy at the expense of others.1362

                      That is the idea.1373

                      This is a term that was used in earlier times in history which I will expand upon later.1376

                      The rationale for modern capitalism vested squarely on the older ideology of individualism.1383

                      Survival of the fittest, and also the idea of being a self made man.1390

                      One has to look out for oneself and there is nothing wrong with competing.1396

                      If you need to step on someone else along the way, so be it, such as the nature of things.1400

                      But the idea that you can pull yourself up by your bootstraps to be a self made man, and rise up and work hard, and achieve that American dream.1408

                      This was all part of the ethos that Vanderbilt, as well as many other Americans who support these ideas will embrace.1419

                      Horacio Alger, on another note, ties in here too.1429

                      He wrote several novels using this theme that many viewed the concept of the self made man, however, as a myth.1435

                      Horacio Alger focused on young boys who were very unfortunate, that came from humble beginnings 1442

                      but were able to rise above these difficult circumstances and become successful.1454

                      A lot of this mentality fed into this idea that you could make it rich if you wanted to, that the opportunities are there.1459

                      Vanderbilt, some loved him, some hated him, depending on the perspective.1471

                      Was he the captain of industry or was he a robber baron, you decide.1477

                      Anyway, for many, Vanderbilt's name became a synonym for enormous wealth and excessive corporate power.1482

                      As suggested in the next cartoon, showing him standing astride his empire and manipulating its parts.1490

                      You got to love the sideburns of these guys during this era.1498

                      But here you can see him being a puppet master having such control over a huge industry.1501

                      Other minor, the lesser moguls, and I forget who these are in particular but, 1509

                      other participants in the railroad business that he is controlling the modern colossus of roads.1518

                      We will see that eventually, actually, in the year of 1877, ironically, this major railroad mogul 1531

                      who used ruthless methods, also died in 1877.1542

                      In 1877, there was also a huge strike that broke out and this was very significant, 1547

                      as it laid the foundation for other strikes to break out and for a large scale labor movement to break out, 1552

                      at Haymarket and others as well.1561

                      In 1877, northern railroads that were still suffering from the financial panic of 1873 began cutting salaries and wages.1565

                      The cutbacks prompted strikes and violence with lasting consequences.1575

                      It made the Pennsylvania Railroad, the nation's largest railroad company, cut wages by 10%, then in June, by another 10%.1580

                      Other railroads followed.1590

                      Then on July 13, the Baltimore and Ohio line cut the wages of all employees, making more than a dollar a day by 10%.1592

                      That also slashed the workweek to 2 to 3 days.1600

                      40 disgruntled locomotive firemen walked off the job.1605

                      By the end of the day, workers blockaded freight trains near Baltimore.1608

                      Then, more and more violence starts to break out in Baltimore, Chicago, Kansas City, Pittsburgh, St. Louis, and San Francisco.1613

                      What did the government do?1624

                      Governors in Maryland, Pennsylvania, West Virginia, they called out the state militias.1626

                      What they see is that this is in restraint of trade.1635

                      They do not crackdown on the owners of the railroads, they crackdown on the workers for causing out this violence.1638

                      Because the railroad business was ground to a halt, this was viewed as in restraining trade.1647

                      This is hurting the economy, the government is going to crack down on them.1653

                      Even though, this will eventually be quelled, quashed by Federal troops, as well as we will see efforts by the state militias,1659

                      that this will set the foundation and give many workers the confidence to strike and to speak out,1668

                      and inspire them to take matters into their own hands and to have their voice heard.1680

                      After the strike, eventually we will see recovery came within a few months.1690

                      And the next 15 years, manufacturing output increased more than 150%.1695

                      The economy was booming.1703

                      Even though the U.S. was experiencing the great deflation when prices were decreasing, 1705

                      businesses still make profits because of the growing economy.1710

                      Industrial capitalism was flourishing.1714

                      Another successful industrialist during this time was John D. Rockefeller, became extremely powerful.1718

                      He gained control of the oil industry, that many would say black gold, very profitable, still profitable today.1726

                      If you look at the top, richest companies in the world, you will actually see some of the oil companies1733

                      that were actually previously part of the Standard Oil Company, that will eventually be broken up.1740

                      But he basically had a monopoly of 90% or more of the oil refineries.1748

                      He had a monopoly over the oil industry.1754

                      He used horizontal integration as well as vertical.1758

                      But horizontal integration is considered illegal actually today.1763

                      But again, during the time of the gilded age, there was not a lot of regulation until the excesses started to come to a head.1767

                      Anyway, horizontal integration, when several smaller companies were combined into the same industry to form a larger one, 1776

                      either by being bought out legally or by being destroyed through ruthless business practices1784

                      such as cutthroat competition or pooling agreements.1790

                      I will give you a good definition of a pooling agreement.1797

                      A pooling agreement, informal agreements which competitors would fix prices and share the market among themselves.1807

                      Cutthroat competition is when they are keeping the prices so low, that other smaller companies can not compete, so they go out of business.1817

                      Obviously, the bigger the business is, the more they can do that.1825

                      They had the ability to lower the prices.1828

                      Visually, so you can do a little comparison what is the difference between vertical and horizontal integration.1831

                      Here is an example of a horizontal integration, where big company, oil company, like such as Standard Oil, ultimately, 1838

                      takes over all these other small independent refineries.1848

                      Vertical integration, and we will see Carnegie use this, as well as the meatpacking industry 1855

                      which we will be talking about in the next slide.1863

                      When a company owns every kind of aspect of the process of production.1865

                      Here we go, here they own the cattle, they own the slaughterhouse, they own the refrigerator railroad cars, and how it is being transported.1874

                      They own where it is being warehoused, cold warehouses, the meatpacking plants, the delivery wagons.1881

                      And the actual places where the meat industries where they actually sell, the shops, in other words.1888

                      Just so you can visually see the difference between a vertical and horizontal integration.1900

                      Speaking of the meat industry, some very graphic pictures here.1906

                      I hope you are not a vegetarian, this maybe offensive to you.1912

                      Anyway, Gustavus Swift and Philip Armour's meatpacking business, they end up dominating the meatpacking industry.1916

                      Swift used centralized packing methods in Chicago, as I mentioned before, became a major hub for the meat industry.1925

                      And then, they developed the refrigerator cars to transport meat to keep it cold, keep it fresh, to keep it edible, to eastern cities.1932

                      This eventually became an oligopoly, when the market was dominated by a few.1942

                      There were other businesses as well.1952

                      Other industrialists dominated the sale of tobacco, farm machinery, sewing machines like Singer, cereals, Kellog’s, and Quaker oats.1955

                      Cartels were also formed, another form of business.1965

                      These are associations of producers that coordinate prices and production.1968

                      Industrialists also established trusts, companies that have a board of trustees and combined stocks into a new organization.1974

                      All of these types of new businesses and models will become extremely important.1982

                      Trusts are also formal trust certificates and there would be a board of trustees who would manage the former competitors to control the market and maximize profits for its members.1989

                      There were also some companies that used interlocking directorates, that were used by banks and investors 2004

                      to gain seats on boards of competing corporations, in order to coordinate the management of them to manipulate the market and to increase profits.2013

                      Again, profits, profits, profits.2022

                      When, sometimes, these businesses go too far, we will see that many feel that there needs to be more oversight, 2027

                      which will eventually lead to the first regulatory law being put in place.2037

                      The Sherman Antitrust Act of 1890.2042

                      This is the basic Federal antimonopoly law that forbids every contract combination or conspiracy in the restraint of trade or commerce.2045

                      It outlawed trusts and combinations in restraint of trade, and established fines for violators.2058

                      It became aware that some of these businesses were trying to circumvent the law, and forming these trusts,2065

                      that they were working in cahoots with each other and making huge profits at the expense of the many.2073

                      Why is this significant? 2082

                      This law showed that Congressional government intervention in the free economy is essential to preserve competition.2083

                      In other words, if you only have a few companies that are dominating the market, is that truly competitive?2094

                      The more businesses that are competing, the better it is for the consumer.2101

                      Yet, great for the businessmen if they are dominating and making all the money, making all the profits, 2108

                      but it is not good for the consumer.2114

                      The fewer corporations there are, then, the less competition there is.2116

                      This is where we are going to see the push for antitrust law.2125

                      Although this was a step in the right direction, one could say, in terms of regulating these big businesses and these monopolies,2131

                      we are going to see that it was undermined shortly after it was passed.2138

                      First of all, the Supreme Court held that manufacturing trust were not engaged in commerce, 2144

                      and therefore, can be regulated only by the states.2149

                      This is going to be established in the court case, the U.S. vs. E.C. Knight case in 1895, known as the Sugar Case.2153

                      This will come up a bit later, I will talk about this more later on.2165

                      And two, the Supreme Court laid down the rule of reason by which not every combination in restraint of trade was illegal,2170

                      but only those unreasonably so.2177

                      And in fact, eventually, Standard Oil will be broken up in 1914, as it was actually declared to be a monopoly.2180

                      We will see actually in the Sugar Case that because it was considered manufacturing, 2191

                      it is an 8-1 decision written by Chief Justice Melville Fuller, the court ruled that the government lacked power 2208

                      under the constitution to enforce the Sherman act against the company's manufacturing operations.2215

                      Congress' powers are limited to those enumerated in the constitution.2222

                      The court argued in only one of those powers that given by the constitution, it is commerce clause, 2226

                      allows Congress to regulate commerce among the several states.2232

                      Because this was considered sugar manufacturing, the government did not have right to regulate it.2239

                      The wording of the law was a bit vague and lawyers were able to exploit that, and expose its weakness.2247

                      We will see later that more laws will be passed and we will start to see more regulation being put into place.2257

                      But for the time being, not so much.2265

                      In fact, it will be the labor movement that will be cracked down upon, not the big businesses.2270

                      And course, the government wants to see industrial capitalism flourish.2275

                      Yes, laissez-faire, hands off approach, allow big businesses to flourish, build the infrastructure, help build our cities.2281

                      There is a lack of leadership during the post Reconstruction era, Rutherford B. Hayes, Garfield, Arthur, Cleveland, as well as Harrison.2292

                      We are not going to see a significant change until we get to the Roosevelt administration, Teddy Roosevelt, that is.2306

                      Although many Americans do embrace the growth of business and industrialization,2315

                      many became critical of postwar individualism, corruption, cruelty and deceit, and greed.2319

                      Many started to ask themselves, was there a price for becoming an industrial giant?2328

                      Writers like Walt Whitman and Mark Twain, expressed their concerns in their writing.2333

                      Twain's and Warner’s the Gilded Age, this is where the name will come from,2339

                      A Tale of Today, was a satire of corrupt political and social life in Washington, DC.2344

                      More and more, critics were starting to point out the corruption in government, the corruption in big business,2351

                      and other aspects of society that were very immoral, unfair, and corrupt.2359

                      A lot of artists, writers, thinkers, and so forth, will get more and more involved in speaking out 2369

                      and expressing their distrust of what is happening out on society, in government.2377

                      Whitman’s Democratic Vistas discussed the materialism and selfish individualism of America's chromo civilization,2383

                      that in many ways, it was becoming very materialistic and phony, and that this was also leading to our moral decay as a nation.2392

                      The idea, just to have a visual here, under the glittery surface, something that it is gilded in gold.2411

                      The idea here is that, on the surface everything looks shiny and new, and sparkly and beautiful.2419

                      But underneath that surface, the U.S. also had poverty, unemployment, crass corruption, patronage, 2425

                      segregation, discrimination, and other social tensions.2432

                      You can add pollution and all the other kind of negative effects of industry.2437

                      Here is a very critical cartoon, as you may be able to point out.2445

                      Rockefeller, on the collar here, he has the Supreme Court in the palm of his hand.2452

                      You can see money coming out of it.2458

                      Congress, you could see smoke from the oil, smokestacks coming out of the Congress.2460

                      The trust, the trust giants point of view.2470

                      What a funny little government, showing how much power these industrialists had over government, 2475

                      that they could do whatever they wanted.2483

                      Along those same lines, the robber baron, history repeats itself.2488

                      The idea, the robber barons of the middle ages and the robber barons of today.2492

                      Here the landowners, those upper, the monarchs, and so forth, who would have to get tribute from the peasants.2498

                      Here we see in the gilded age during the 20th century, or I should say into the 19th century, farmers and workers,2511

                      you could see here this says citizen’s tax, wages, wages, wages, tax, etc.2525

                      That these people are struggling, where you could see the fat capitalist wore tariff and monopoly.2532

                      Trust, Trust, this is in legislation here.2538

                      That they were the ones who are in control, these robber barons.2544

                      This is a negative connotation that is very critical.2548

                      And yet another one, this is a very famous cartoon, the bosses of the senate.2553

                      Showing the huge influence, no pun intended, of these industrial capitalists.2558

                      This is a senate for the monopolists, by the monopolists, and for the monopolists.2566

                      Entrance for a monopolist.2572

                      People’s entrance, closed.2574

                      If you have a chance to pull this up, if you want to look at the detail, it is really well done.2578

                      Here it has steel, steel being trust, copper trust, Standard Oil, and coal, other major industrial companies.2583

                      And now we are moving on to the assessment section.2594

                      Here we go, Sumner, example one.2598

                      Competition, therefore, is the law of nature.2604

                      Nature is entirely neutral, she submits to him, notice the feminization as well.2608

                      who most energetically and resolute assails her, she grants her rewards to the fittest.2617

                      Therefore, without regard to other considerations of any kind, such as the system of nature.2625

                      If we do not like it, and if we try to amend it, there is one way in which we can do it.2632

                      We take from the better and give it to the worse.2637

                      Let it be understood that we cannot go outside this alternative.2640

                      Liberty, inequality, survival of the fittest.2644

                      Not liberty, equality, survival of the unfittest.2648

                      The former carry society forward and favors all its best members.2652

                      The latter carry society downward and favors all its worst members.2657

                      Sumner, the challenge of facts.2664

                      The idea is expressed in this excerpt most clearly show the influence of which of the following?2669

                      John Lax’s Second Treatise of Government.2675

                      Adam Smith's the Wealth of Nations.2677

                      Thomas Jefferson's Declaration of Independence.2680

                      Charles Darwin’s On the Origin of Species.2683

                      The answer.2691

                      Which of the following would Sumner likely support?2694

                      Socialist programs, laissez-faire, manifest destiny, or the Gospel of Wealth.2697

                      The answer.2706

                      Which of the following developments would be most consistent with the beliefs expressed in this excerpt?2710

                      Consolidation of wealth by an elite, expansion of women's rights, the Sherman antitrust act, the spread of organized labor.2715

                      The answer.2725

                      Next one, this is a cartoon.2731

                      Standard Oil Company, this is a rose, competitors, the American beauty rose can be produced 2734

                      in all its splendor only by sacrificing the early buds that grow up around it.2741

                      John D. Rockefeller Jr., May 1905.2747

                      This is supposed to be a bunch of skulls, and a rose that has a skull on it and a knife here.2754

                      Which of the following groups would most likely support the sentiments behind this cartoon?2763

                      Social Darwinists, supporters of antitrust legislation, Unionists, supporters of the gospel of wealth.2769

                      The answer.2782

                      The kind of sentiments in this cartoon contributed most directly to which of the following?2786

                      The sale of Standard Oil to JP Morgan for $900,000,000, The breakup of Standard Oil into competing oil companies,2790

                      The replacement of kerosene lamps with an incandescent lights, The rise of the knights of labor or union.2798

                      The answer is the breakup of Standard Oil.2807

                      Yet another one Standard Oil.2815

                      Standard Oil was best presented as the antidote to social Darwinism, a way to bring about brotherhood to a fractious industry.2817

                      In a state of ungoverned competition, selfish individuals try to maximize their profits and thereby impoverish the entire industry.2827

                      What the American economy needed instead, were new cooperative forums, trust, pools, monopolies, 2836

                      that would restrain grasping individuals for the general good, that it was an ingenious rationalization.2843

                      This is from a historian.2858

                      Using the excerpt, answer A, B, and C.2863

                      Briefly analyze the author’s conclusion that the Rockefeller’s defense of the Standard Oil trust2867

                      as the antidote to social Darwinism was an ingenious rationalization.2872

                      Here we go, Rockefeller's approach to the unrestraining markets was to control competition 2882

                      through cooperative forums such as establishing his Standard Oil trust.2895

                      It was an ingenious rationalization according to the author, while Rockefeller criticized his competitors for their tactics.2900

                      He achieved survival of the fittest through a well organized trust, that controlled 90% of the oil market,2910

                      and then defended the monopoly as an antidote to social Darwinism.2917

                      Part 2, explain how two of the four operated, as forms of cooperation among businesses.2928

                      How about, I’m going to choose trust and monopolies.2945

                      Trust were formal trust certificates and a board of trustees would manage the former competitors2951

                      to control the market and maximize profits for its members.2958

                      This shows how they cooperated with one another.2964

                      Monopolies became prominent as businesses that use cutthroat competition to have exclusive 2969

                      or total control of the market, such as oil or sugar production.2976

                      I do have to add one more to show the cooperation.2986

                      Monopolies would oftentimes use pooling agreements to work together with other companies, 2990

                      so that they could maximize their profits.2999

                      I think that is what I would probably do to add to that because I realized I needed 3003

                      to expand into the cooperation and not just simply define what monopoly means.3007

                      I think there, we are done with the lesson on the rise of industrial U.S.3016

                      Thank you for watching www.educator.com.3025