Chapter 16: The Gilded Age

Question 1

Cornelius Vanderbilt

Answer 1

“Commodore” Cornelius Vanderbilt used his millions earned from a steamboat business to merge local railroads into the New York Central Railroad (1867), which ran from New York City to Chicago and operated more than 4,500 miles of track

Question 2

Jay Gould

Answer 2

Speculators such as Jay Gould entered the railroad business for quick profits and made their millions by selling off assets and watering stock (inflating the value of a corporation’s assets and profits before selling its stock to the public).

Question 3

Andrew Carnegie

Answer 3

Had leadership of the fast-growing steel industry passed to a shrewd business genius manufacturing steel in Pittsburgh and soon outdistanced his competitors by a combination of salesmanship and the use of the latest technology. Carne­gie employed a business strategy known as vertical integration company would control every stage of the industrial process, from mining the raw materials to transporting the finished product.

Question 4

John D. Rockefeller

Answer 4

founded a company that would come to control most of the nation’s oil refineries by eliminating its competition. Standard Oil Trust­ controlled 90 percent of the oil refinery business

Question 5

J. P. Morgan

Answer 5

extend as much as $3 billion in secured credit to Britain and France. These loans promoted U.S. prosperity as they sustained the Allies’ war effort.

Question 6

Alexander Graham Bell

Answer 6

telephone developed by Alexander Graham
Bell (1876)

Question 7

Thomas Edison

Answer 7

his first invention, a machine for recording Votes more than a thousand patented inventions, including the phonograph, the improvement of the incandescent lamp in 1879 ( the first practical electric light bulb ), the dynamo for generating electric power, the mimeograph machine, and the motion picture camera.

Question 8

Menlo Park

Answer 8

Edison to estab­lish a research laboratory in Menlo Park, New Jersey, in 1876. This was the world’s first modern research laboratory

Question 9

George Westinghouse

Answer 9

developing an air brake for railroads (1869) and a transformer for producing high-voltage alternating current (1885). The latter invention made possible the lighting of cities and the operation of electric streetcars, subways, and electrically powered machinery and appliances.

Question 10

Gustavus Swift

Answer 10

change the eating habits of Americans with mass-produced meat and vegetable products. Advertising and new mar­keting techniques not only promoted a consumer economy but also created a consumer culture in which shopping became a favorite pastime.

Question 11

R. H. Macy

Answer 11

Marketing, increased output from factories, new products, promoted business

Question 12

Samuel Gompers

Answer 12

(AF of L) concentrated on attain­ing narrower economic goals. Founded in 1886 as an association of 25 craft unions, and led by Samuel Gompers until 1924, the AF of L focused on just higher wages and improved working conditions.

Question 13

Eugene Debs

Answer 13

directed railroad workers not to handle any trains with Pullman cars.

Question 14

Adam Smith

Answer 14

argued in The Wealth of Nations that business should be regulated, not by government, but by the “invisible hand”
(impersonal economic forces) of the law of supply and demand.

Question 15

Horatio Alger’s stories

Answer 15

novel portrayed a young man of modest means who becomes wealthy through honesty, hard work, and a little luck. In reality, opportunities for upward mobility (movement into a higher economic bracket)
did exist, but the rags-to-riches career of an Andrew Carnegie was unusual.

Question 16

George Eastman

Answer 16

Kodak camera

Question 17

Trunk lines

Answer 17

A trunk line was the major route between large cities; smaller branch lines con­nected the trunk line with outlying towns.

Question 18

Transcontinental railroad

Answer 18

During the Civil War, Congress authorized land grants and loans for the building of the first transcontinental railroad to tie California to the rest of the Union.

Question 19

American Railroad Association

Answer 19

divided the country into four time zones in 1883, railroad time became standard time for all Americans

Question 20

Panic of 1893

Answer 20

stock market crashed as a result of overspeculation, and dozens of railroads went into bankruptcy as a result of overbuilding.

Question 21

“Watering stock”

Answer 21

inflating the value of a corporation’s assets and profits before selling its stock to the public

Question 22

Rebates & pools

Answer 22

competing com­panies agreed secretly and informally to fix rates and share traffic.

Question 23

Vertical and Horizontal Integration

Answer 23

Horizontal: competitors were brought under a single corporate umbrella.
Vertical: company would control every stage of the industrial process

Question 24

US Steel

Answer 24

technological breakthrough that launched the rise of heavy industry was the discovery of a new process for making large quantities of steel (a more durable metal than iron).

Question 25

Standard Oil

Answer 25

Company owned by John D. Rockefeller.

Question 26

Interlocking directorates

Answer 26

the same directors ran competing compa­nies

Question 27

Transatlantic cable

Answer 27

Cyrus W. Field’s invention of an improved transatlantic cable in 1866 suddenly made it possible to send messages across the seas in minutes

Question 28

Bessemer Process

Answer 28

Henry Bessemer in England and William Kelly in the United States discovered that blasting air through molten iron produced high-quality steel

Question 29

Mail order companies

Answer 29

Stores developed catalogs in order to reach the still large rural population, unable to shop in department stores.

Question 30

Consumer economy

Answer 30

Advertising expanded as businesses found that consumers’ demand for new products could be manipu­lated by appealing to their desires for status and popularity. Stores increased sales of the new appliances and automobiles by allowing customers to buy on Credit.

Question 31

Credit Mobilier

Answer 31

Insiders gave stock to influential members of Congress to avoid investigation of the profits they were making percent-from government subsidies for building the transconti­nental railroad.

Question 32

Interstate commerce act of 1886

Answer 32

required railroad rates to be “reasonable and just.” It also set up the first federal regulatory agency, the Interstate Commerce Commission (ICC), which had the power to investigate and prosecute pools, rebates, and other discriminatory practices.

Question 33

Anti-trust movement

Answer 33

The trusts came under widespread scrutiny and attack in the 1880s. Middle­ class citizens feared the trusts’ unchecked power, and urban elites (old wealth) resented the increasing influence of the new rich.

Question 34

Sherman Antitrust Act (1890)

Answer 34

prohibited any “contract, combination, in the form of trust or otherwise, or conspiracy in restraint of trade or commerce.”

Question 35

US v. E.C. Knight

Answer 35

Supreme Court antitrust case that severely limited the federal government’s power to pursue antitrust actions under the Sherman Antitrust Act.

Question 36

Iron law of wages

Answer 36

argued that raising wages would only increase the working population, and the availability of more workers would in tum cause wages to fall, thus creating a cycle of mis­ery and starvation.

Question 37

Railroad Strike of 1877

Answer 37

one of the worst outbreaks of labor vio­lence in the century erupted in 1877, during an economic depression, when the railroad companies cut wages in order to reduce costs. A strike on the Baltimore and Ohio Railroad quickly spread across 11 states and shut down two-thirds of the country’s rail trackage.

Question 38

Knights of Labor

Answer 38

second national labor union, the Knights of Labor, began in 1869 as a secret society in order to avoid detection by employers.

Question 39

Haymarket Bombing

Answer 39

Chicago, with about 80,000 Knights in 1886, was the site of the first May Day labor movement. Also living in Chicago were about 200 anarchists who advocated the violent overthrow of all government. In response to the May Day movement calling for a general strike to achieve an eight-hour day, labor violence broke out at Chicago’s McCormick Harvester plant.

Question 40

American Federation of Labor

Answer 40

Unlike the reform-minded Knights of Labor, the American Federation of Labor (AF of L) concentrated on attain­ing narrower economic goals.

Question 41

Pullman Strike

Answer 41

Even more alarming to conservatives was a strike of workers living in George Pullman’s company town near Chicago. Pullman man­ufactured the famous railroad sleeping cars known as Pullman cars. In 1894, he announced a general cut in wages and fired the leaders of the workers’ delega­tion who came to bargain with him.

Question 42

Protestant work ethic

Answer 42

that hard work and material success are signs of God’s favor

Question 43

Laissez Faire capitalism

Answer 43

This was an era of rapid industrialization, laissez-faire capitalism, and no income tax. Captains of industry like John D. Rockefeller and Andrew Carnegie made fortunes.

Question 44

Social Darwinism

Answer 44

belief that white, wealthy, Anglo-Saxon Americans were biologically superior to other groups fueled many social and political trends of the Gilded Age.

Question 45

Gospel of wealth

Answer 45

number of Americans found religion more convinc­ ing than social Darwinism in justifying the wealth of successful industrialists and bankers. Because he diligently applied the Protestant work ethic (that hard work and material success are signs of God’s favor) to both his business and personal life, John D. Rockefeller concluded that “God gave me my riches.” In a popular lecture, “Acres of Diamonds,” the Reverend Russell Conwell preached that everyone had a duty to become rich.