Unit 8 Flashcards
(75 cards)
Jay Gould
Jay Gould was born May 27th, 1836 in Roxbury, New York; he was an American railroad magnate and financial speculator who founded the Gould business dynasty. He is generally identified as one of the robber barons of the Gilded Age. His sharp and often unscrupulous business practices made him one of the wealthiest men of the late nineteenth century. He is attributed with being one of the architects of the national railroad and communication system. Gould died at the age of 58, and left a fortune of approximately $70 million dollars to his children.
Credit Mobilier Scandal
This was a political as well as financial corruption scheme. It took place in the 1860s and finally came to light in 1872. It involved the Union Pacific Railroad, and the Credit Mobilier construction company. Union Pacific had overpaid the Credit Mobilier, the company’s directors, to bribe government officials, such as the Vice President, Speaker of the House, and Secretary of the Treasury. The scandal involved many U.S. politicians, members of both companies. AMong these was James A. Garfield, who was elected president in 1880. The scandal blemished the Republican Party’s reputation, and sowed the seeds of distrust in the U.S. government among the American public.
Transcontinental Railroad
A continuous rail line connecting the east and the west coast was known as the Transcontinental railroad. It ran between Omaha, Nebraska & San Francisco Bay, California. It opened up the opportunity for people and goods to travel from coast to coast. The movement of goods facilitated distribution, created more demand and the U.S. economy flourished as it expanded. The Transcontinental railroad made transportation between the east and the west quicker, safer, and less expensive. As new towns were created along the railway, it brought about a change in where Americans lived and changed many economic changes. However, this project took land away from Native Americans and many of them perished during the early stages of development.
William (Boss) Tweed
William Tweed was born April 3rd, 1823 in New York, New York. An American politician and the boss of Tammany Hall, the Democratic Party’s political machine which played a big role in the 19th century politics of New York City and state. He was very popular among immigrants primarily because he was the one willing to stand up to labor unions when no one else would and voice the needs of the working class. He fought hard for more liberal immigration laws, and provided immigrants food, fuel, and patronage in exchange for their votes.
Tweed Ring
Tweed Ring controlled New York city until 1870. They used bribery, embezzlement, and kickbacks to divert massive amounts of New York city’s budget into their own pockets. It is estimated that anywhere from $40 to $200 million made its way to pockets of the Tweed Ring. The group was started by William Marcy Tweed, aka “Boss Tweed”. He started as a volunteer fireman and worked his way up the political ladder. He became a member of the House of Representative in 1853 and rose to Senator in 1867. He gathered a select group of influential men who controlled New York’s finances. Companies under the group would bill the city for work not done or provide substandard service but charge for premium. In this way millions of dollars were siphoned and delayed the construction of the subway for years. Investigative reporting by the New York Times and Thomas Nast’s cartoons in Harper’s Weekly contributed greatly to the demise of the Tweed Ring. In 1873, William Tweed was sentenced to 12 years in prison of which he only served one but was later sued by the city for $6 million. He fled Spain but was extradited back to the U.S. and died in prison in 1878. Although a grim and sordid part of history, it’s also a perfect example of the power of the free press. Were it not for the work done through investigative reporting and Nast’s cartoons, Tweed may have never been caught and brought to justice.
Thomas Nast
Born September 26, 1840 in Landau, Germany, Thomas Nast was a caricaturist and editorial cartoonist often considered to be the “Father of the American Cartoon”. He was a sharp critic of “Boss” Tweed and the Tammany Hall Democratic Party political machine. He made a name for himself by exposing corruption in politics, primarily those of New York City. Other topics in which his cartoons focused were the Civil War and Slavery. He also became known for the modern persona of Santa Claus as the jolly, belly-laughing, jovial man who lives in the North Pole and delivers toys during Christmas.
Horace Greeley
Horace Greeley was born on February 3rd, 1811 in Amherst, New Hampshire and died on November 29th, 1872 at the age of 61. He was the editor of the New York Tribune, a daily newspaper he founded in 1841. He was considered an eccentric social reformer and erratic political strategist but also one of the counties’ most historically important journalists. The New York Tribune was a highly influential newspaper that reached rural areas and small towns. Some journalists considered its influence in the Midwest second only to that of the Bible. Greeley’s editorial opinions could mold public opinion better than the president. Although the Tribune remained a Whig paper, Greeley maintained an independent course in his editorials. Due to opposing views and beliefs between the Whigs and Greeley, in 1853 a printed editorial where he disclaimed the paper’s identity as Whig and declared it to be nonpartisan. In 1872, Greeley was nominated as the new Liberal Republican Party’s presidential candidate, running against incumbent President Ulysses Grant. He lost to Grant in a landslide despite having the additional support of the Democratic Party. He was devastated by the death of his wife five days before the election and died one month later, prior to the meeting of the Electoral College. He was an ardent and vigorous anti-slavery advocate.
Panic of 1873
It was a financial crisis in the U.S. that led to a severe economic depression. It was caused by a number of factors:
Stock Market Crash: The Panic started with an issue in Europe where investors sold the investments they had in the new nation, particularly the railroad bonds which were a new venture. When Europeans started selling their bonds, the market suddenly found itself flooded with more Railroad bonds for sale than buyers. Railroads had no one willing to lend them cash which caused many of them to go bankrupt.
Jay Cooks & Company: Significant investments in the railroad put his bank in jeopardy and precipitated its failure.
Securities market explosion: The American securities market grew exponentially after the Civil War to fund the war effort and supported the development of the railroad.
Railroad financing: The allegations of corruption weakened investor confidence in railroad financing.
Effects:
People demanded their money from the banks which led to many banks failing.
Many commercial businesses and railroads went bankrupt.
As a result of failed business, unemployment rates soared.
Farmers lost their farms and livelihood.
Investors were forced to pay off their investments in gold, this decreased the capital available for investors to use.
The Panic of 1873 lasted for several years and its effects were felt throughout the country as well as abroad.
Greenbacks
Greenbacks refers to the paper currency issued by the Union government during the civil war. It was named for the green ink printed in the back of the bills. These bills were used to finance effort and were not backed by gold or silver. Since they were not backed by any precious metals, their value as a currency would fluctuate and were often perceived as a risky form of currency. The government printed $300 million of this currency. These were the first national currency of the United States. Although not redeemable for gold or silver, these notes were lawful money backed by the credit of the federal government.
Laissez-faire
During the Gilded Age, these were a form of economic policies which virtually meant a hands-off approach by the government. These policies permitted a business to operate with very minimal regulation. This led to a rapid industrial growth but with a significant wealth inequality and bad labor conditions for the workers. Workers had no protection due to the government letting the businesses do as they pleased. There was little intervention in the market which favored the big corporations at the expense of the workers’ rights. Some examples of these laissez-faire policies were No Minimum Wage, Minimal antitrust laws which gave way to monopolies, and Favorable tax policies to businesses.
Second Industrial Revolution
This refers to a period between 1870 and 1914 when there were rapid technological advancements. These advancements included roll out of electricity, the widespread use of steel, and the internal combustion engine. All these lead to the growth of mass production, urbanization, the development of new industries such as the automobile, the airplane, the telephone and radio. This was seen as the 2nd stage of the Industrial Revolution with the industrialization and innovation superseding the initial Industrial Revolution which showcased steam power. These new wonders had an impact on society’s daily life in being able to communicate with others more easily, work and play at all hours of the day and night, and facilitate the ease of moving more easily about the country as well as abroad.
Standard Oil Company
This was a US oil company and corporate trust that controlled transportation, the production of oil, its process and marketing from 1870 to 1911. John D. Rockefeller founded the company in Ohio in 1870. The company became a monopoly, giving the company complete control over everything to do with oil. It had control over oil prices and production in the religion. This monopoly caused an overcharge to customers as it drove other smaller companies out of business. Finally in 1911, the U.S. Supreme Court ruled that Standard Oil Company was a monopoly which violated the Sherman Antitrust Act. The ruling was that the company had to be dissolved and it would be divided into 34 separate companies. Some of the 34 companies eventually became Exxon and Amoco. This ruling set a precedence on how the courts treat antitrust actions against companies.
John D. Rockefeller
John D. Rockefeller was born on July 5th, 1839 and died in 1937 at the age of 98, and he continues to rank as one of the richest men of his time. He was an American Industrialist and philanthropist. He founded the Standard Oil Company in 1870 and set out to destroy his competition to create a monopoly of the oil industry. He branched out into other businesses such as iron, steel, and copper—as well as railroads, general stores, and newspapers. His pursuit for total control of the oil industry ran afoul of the U.S. government, which passed the Sherman Antitrust Act in 1890 to break up Standard Oil. This created a battle that the government finally won in 1911. Rockefeller became one of the wealthiest men in history. After retiring he became known for his extensive philanthropy. He donated great sums of money to various causes in medical research, education, and public health. These led to the founding of the Rockefeller Institute for Medical Research, now known as Rockefeller University, and the University of Chicago.
Trust
In economics, a trust is a term for a big business with a combination of massive corporations, like Standard Oil. The purpose of these was to protect and preserve assets. Trusts also had a lot of power in the market world.
Holding Company
A holding company is a parent company that owns and buys smaller companies to control and handle their interests. They did this without violating anti-monopoly laws or anything corrupt. One example of a holding company was J.P. Morgan’s tactic of buying Andrew Carnegie’s company.
Interlocking Directorates
Interlocking directorates are links between corporations where the management of one company works with another company’s management. The purpose of doing this was when companies had similar goals and helped one another to work towards it. It also helps the influence when working as a group.
Carnegie Steel Company
Carnegie Steel Company is a company founded by Andrew Carnegie in Pittsburgh, Pennsylvania. Later on, this company was sold to JP Morgan and combined with two other companies, making the US Steel Corporation.
Andrew Carnegie
Andrew Carnegie was an immigrant from Scotland and was nicknamed the King of American Steel. He taught himself about business at a young age by reading books from his boss’s library, which led him to become a dominating force in the steel industry. He also invested in other industries like mines, ore fields, steamships, iron mills, etc. He was so successful that he cleared 25 mil in a year. Later on, Carnegie sold his company to J.P for 500 million and retired soon after. He spends the rest of his life giving money away, providing opportunities instead of giving handouts and funding public libraries.
J.P. Morgan and Company
JP Morgan & CO was founded in 1871 by JP Morgan who established the House of Morgan on 23 Wall Street in New York. It was one the worlds;s most successful businesses and had many partners over the years.
US Steel Corporation
US Steel Corporation is an American steel producer holding company established in 1901. It includes the combination of Andrew Carnegie’s Carnegie Steel Company with Gary’s Federal Steel Company. It was one of the largest business enterprises in American history.
Cornelius Vanderbilt
Cornelius Vanderbilt is a famous American businessman who built his wealth in railroads and shipping. He’s worth 100 million dollars when he died and one of the richest men in American history. He also had 12 children who made millions too from the company and were a bit more wealthy than their father.
Vertical Integration
Vertical integration is a business strategy when a company owns every step of production, from raw materials to the product. This is a useful tactic because the company can control and fix issues efficiently that were made during production instead of having alternate sources.
Horizontal Integration
Horizontal Integration means to own one step (in this case, refineries) on everyone’s ‘ladder’ of steps to make purified oil. This made Rockefeller the wealthiest man in American history and the first billionaire in America.
Knights of Labor
The Knights of Labor were the first labor organization in the US. Their goal was to gain political power but also make sure laborers were treated fairly in their workplace. They advocated for the eight hour workday and created a movement to unite all laborers regardless of their background, race, or skills.
