Business in the Gilded Age

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Everything was virtually set in place, there were new resources being found in abundant amounts, a growing marketplace for manufactured goods, and an ever-growing workforce and population. Not to mention plenty of new technologies and innovations constantly coming into American society opening even more markets! A few examples of innovations are the telephone, handheld camera, and typewriter.  An example of one we use every day to this day is the lightbulb. Although it is a common misconception that Thomas Edison invented the light bulb when it was in fact invented about forty years earlier by Warren de la Rue. All Edison did was improve on the bulb so that it uses electricity and would last longer than the traditional bulb allowing it to be easily accessible to more people.

Since there was no such thing as personal or income taxes during this era once a person got rich, the sky was the limit. Due to this, economic concentration occurred at a rapid pace. Soon over 4,000 firms were merged between a handful of companies including U.S. Steel (the first billion dollar enterprise), and Standard Oil which controlled about 90% of the oil industry. Businessmen such as Andrew Carnegie and John Rockefeller were able to gain control of single industries. Carnegie was involved in the steel business but due to many competitors, Carnegie decided to go about his company with a different approach. He used a vertically integrated system meaning, that his company controlled every phase of the steel production from raw materials to distribution. Using the vertically integrated system, also called start to finish system allowed Carnegie's company not only t omake steel affeicntly but more cost-effective. In fact, in 1889 Carnegie company was of the largest steel company in the world! Not just the United States, but the world!

John Rockefeller owned an oil company called the Standard Oil Company, and like Carnegie, he also went about his company with a different approach. He used a horizontal expansion which means he bought out all his competitors leaving him one of the only oil distributors in the game. He also incorporated the start to finish system and his company controlled every aspect of the oil business and process from it's drilling to distribution. Rockefellers once wrote Let the good work go on. We must ever remember we are refining oil for the poor man and he must have it cheap and good. With the goal in mind to have the cheapest oil, the standard oil company sold the cheapest oil and had plenty of demand. Soon, Rockefeller had a near monopoly in which he controlled about 90% of the nations oil industry. Rockefeller aggressive (massive) growth caught Congress's attention. To the point that in 1892 Congress passed the Sherman antitrust law, which in a nutshell, opposed monopolies of any kind.

With all these large companies and new resources going around, In 1862 the Pacific Railway Act was enacted which allowed construction of a railroad and a telegraph line going from Nebraska to California. Commonly known as the Transcontinental Railroad, the Pacific railway act made transportation and communication easier for all. A trip that would've taken months could now take a mere couple of days. This opened up an entirely new market, agricultural things from the country could now be delivered to the city and manufactured good from the city could now be delivered to the country. Fun fact, the four time zones implemented by the railroad to allow for a uniform schedule in 1883 is still used today.

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Business In The Gilded Age. (2019, Dec 04). Retrieved June 14, 2024 , from
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