Economic Panic
In 1873, America started using the Gold Standard.
The gold standard means that for every dollar out in circulation, we have gold to back it up.
In 1973, we got off the Gold Standard.
100 years between the superpower era, didn’t matter what we use for economic principle.
Then, we switched to Basket Economy— where we buy currency from different countries (allies and enemies).
Allows us to stabilize our economy
We can destroy the economy of others if they piss us off, vice versa.
Middle Class
Middle class is the tax base for America. During this time frame it started to come together.
Immigrants
In Promontory Point, Utah, is where the railroads from the east and west meet.
Mining — 1 in 30 would get injured, and 1 in 90 would die.
West: Chinese — General labor
Germans — Skilled Labor
| East: Irish— General labor
German — Skilled Labor (Engineer, etc)
|
Italian Grandmas are the immigrant class that would have the most success.
They would make good food which was often sought after.
As a result: Saloons, hotels, and brothels end up being created, which all assisted in forming the Middle Class.
Business Models:
Vertical Integration
Company starts with an idea and controls the market idea from the beginning.
Modern day example: Apple
Apple is known for its technology; phones, I pads, streaming services, etc.
Stores — Apple would actually sell the products to stores like Target, which would be cheaper. However, it is Target who is paying for the rest of the cost.
Offsets losses to make more money somewhere else:
Foxconn was a business owned by Apple, and was exposed for having terrible working conditions, that even required suicide safety nets.
After the controversy, Apple cut them off.
Andrew Carnegie— also used Vertical Integration
Created the Carnegie Steel — a steel company.
Works out deal with Cornelius Vanderbilt aka “King of the Rails”:
Steel was needed for railroads, so Carnegie would give Vanderbilt steel which in return would allow Carnegie to use the rail lines.
Consumer —-> Sells directly to consumers.
Main labor source was Irish Immigrants, and he can fire them if he wants to.
Brutal man, turned gunmen on his workers —-> called out by daughter for being awful.
Creates Gospel of Wealth as a result.
Gospel Wealth: A competition to give as much money as you can.
Rockefeller develops cultural centers
Carnegie builds university and public libraries.
Party Incident:
Andrew Carnegie and John D. Rockefeller were talking sh*t about J.P Morgan— who is the creator of Chase Bank.
J.P. Morgan wanted revenge.
Horizontal Integration
Comes up with a concept and absorbs everything around it — it’s pretty much a monopoly.
Modern day example: Disney:
Disney owns many things and businesses including: Streaming services, merchandise, hotels, TV shows, etc.
Disney would keep buying different businesses.
John D. Rockefeller
Created the Standard Oil company.
It all started out when Rockefeller decided to steal and drill into his neighbor’s oil reserves (which was legal because the property line is up, not down) —---> became extremely wealthy.
At one point owned 90% of the oil industry
Shady business practices:
Rockefeller signs contracts with small companies, waits for them to go bankrupt, and then buys them.
Rockefeller would also find ways to separate different oil and create different oil types.
Rockefeller used rebates and kickbacks
Rebates: Discounts, gives you SOME money back for something that you paid too much money for.
Company makes you buy in bulk, thinking that you saved money— company gives you some money back.
Kickbacks: Bribery; illegal exchange
Eventually gets exposed by Ida Tarbell
Changes names of Standard Oil as a result.
Esso —> Exxon —> Mobil —> Exxon Mobil
Jay Gould— Number #1 Hated man and Stock Speculator:
He was a stock speculator: guesses if the stock will go up or down.
Did insider trading, and can bankrupt any business that he wants by saying “this is not a good financial investment.”
Insider Trading: Tricking people to buy stocks by telling people that it will go up even though it may not, this would enhance a company.
As a result, the SEC [Securities Exchange Committee] was created to monitor the market.
50 cent and Martha Stewart are examples of insider trading.
Laissez Faire:
During this time Laissez Faire was used, however, it failed due to the many shady business practices and monopolies.
Monopolies: Controlling everything in a specific market, able to determine the prices because there is NO competition.
Holding Company: Illegal when it reaches a certain. percentage. Owning lots of the shares/stocks of a company, to the point where you “hold” or “threaten” the company.
Trusts: Similar businesses band up together and decide the price and outcome.
OPEC — Oil Producing Economic Countries— modern day example of Trusts.
Determines how much a barrel of oil goes up each day.
Since this is happening in the middle eastern, the SEC can’t do anything.
Pools: Combining stock shares to boot people out.
J.P. Morgan got his rich friends to buy the stock shares and pool them together to kick out Carnegie.
Social Darwinism: Concept of survival of the fittest.
Leads to more competitions.
Results of these:
The common people will suffer as a result because prices were fluctuating, and when people buy from companies that got exposed (Standard Oil) the prices go down.
Business Acts:
Sherman Antitrust Act of 1890:
Monopolies and artificial restrictions on businesses are illegal.
It was a vague law because of artificial restrictions because nobody knows what that means.
However, it would stop businesses from abusing each other.
Interstate Commerce Act:
There is federal authority over interstate traffic on railroads.
Allows for equitable distribution between taxation
Created because train with items went through different states — each state wanted to tax it.
People
Heinz = Pickle Company
Singer = Created typewriters
Swift = Meat packaging
Thomas Edison = “Wizard of Menlo Park” and created the lightbulb.
Alexander Graham Bell = Created the telephone
Quakers = Oats— created product for sealing & closing grains.
Campbells = Known for their soups
Tomatoes were often acidic, and it would corrode metal cans.
As a result created a liner that would prevent the aluminum from being eaten.
Business
Proprietorship = 1 person owns a business
If your business fails —> you lose all of your assets
Partnership = 2 people or more own business together
If your business fails —> you lose all of your assets
Corporation
Selling pieces of your business
Only lose what you put in
LLC [Limited Liability Company]:
In the case if something goes wrong, it separates business from personal life.
Meaning that you won’t lose everything.
Reforms:
Women
Florence Kelley: Creates the National Consumers League:
If you don’t agree with a business, just DON’T support/buy from them.
Elizabeth Cady Stanton & Susan B. Anthony:
Forms NAWSA [National American Woman Suffrage Association]
Suffrage Association that wanted ONLY white women to have voting rights.
Saying that this would take time in order for this to happen.
Alice Paul:
A radicalist that didn’t want to wait, wants to get her voting rights now.
Creates an organization that protested in front of the White House.
She and her group were arrested —> went on a hunger strike.
It would be bad if that happened because the president’s reputation would go down.
Force fed the women.
Eventually women would get it in 1920, with the 19th Amendment.
Children:
In 1904, the National Labor Committee would address how children were being misused in labor, and see how they were treated.
It wasn’t until 10 years later, in 1914, where they established limitations on what work children can do.
Age, limitations, and working conditions.
However, when a war broke out, children were required to make bullets.
Education:
Science challenges religion.
Social Gospel:
The point of society is to help out the poor and impoverish.
Red Cross: Created by Clara Barton.
Salvation Army: Religious organization that take cares of the poor.
Hull House & Settlement House:
Hull House — founded in Chicago
This was for battered women [widowed, abused, etc] and was incredibly successful.
Settlement House – in NY:
This was meant to help the homeless, however, it failed.
Johnstown, PA, a town that Carnegie created:
Carnegie created a South Fork fishing and Hunting Company that was for the rich, and was for exotic animals.
The fishing location would need to be maintained, however, Carnegie refused to do so.
The state usually maintains a town, however this town was owned by Carnegie.
A 35’ and 40’ flood came in, killing 2,200 people, and there were 750 people missing.
The Red Cross and Salvation Army came to assist.
State ended up being sue.
Consumers
Zoning Laws: Created to prevent businesses from doing whatever they want.
Department of Agriculture:
Pure Food and Drug Act: Created to prevent quackery.
Ends becoming the FDA— which determines the issues of organics, non gmos, etc.
Government:
Initiative — From the Bottom to the Government
Referendum — From the Government to the People
Basically sends out a vote to the people to decide how to enact something
Politics wouldn’t be blamed for the results.
The 17th Amendment was created, allowing for direct primaries.
Direct primaries = Narrowing down the candidates list.
Workers:
Muller vs Oregon:
Court case that established the amount of working hours for women.
8 hours.
Workman’s Compensation:
If you get hurt on the job, you are compensated.
Each part of your body is worth something.
Business:
16th Amendment: Allows government to collect income tax.
