Economic Growth During The Gilded Age

The Gilded Age was a period economic growth as the United States strived to the lead in industrialization. The nation was rapidly expanding, not only its borders, but also its economy, industry and big business rising fast. Many were enthusiastic about this industrialization, and those who were fortunate, rose to the top. After the Civil War, many started to move out west, looking for land and job opportunities. Railroads, often called the first “big business," took advantage of this westward expansion. The federal government started selling land and giving loans to railroad corporations, under the impression that they would use it to lay track. Instead, the railroad corporations sold the land to settlers, and they began making money. The

Jay Gould, who controlled the Union Pacific, would sell land to settlers for a lower price than what others were offering and would make large amounts of money. As a result, smaller corporations who could not compete would be forced into near bankruptcy, and Gould would buy them out, steadily expanding his railroad empire. He, and many others, also had control of railroad rates and would lower prices, buying corporations who could not compete, and raising prices again. J.P. Morgan, a banker, was also invested in the railroad business, and was infamous for teaming up with struggling railroad corporations, eventually taking control of them. At one point in time, he owned 1/6 of America’s rail lines. The railroad business made it possible to ship goods between factories, cities, and towns. Goods could be shipped faster and more often. It stimulated sales, provided more jobs, increased production, and often lowered prices.“Big business” generated immense amounts of wealth for those who crossed the finish line at the top, their industries producing more and cheaper consumer goods than ever

It was used to fuel the furnaces that melted down the iron ore, the main ingredient in steel. Andrew Carnegie, an immigrant from Scotland, made it big in the steel industry. He revolutionized steel production, employing the Bessemer process, which utilizes the blasting of air from molten metal. He placed his plants all over the North-East, using technology and methods that made manufacturing easier, faster and more productive. For every step of the process, he owned exactly what he needed: the raw materials, transportation, and coal. This refers to vertical integration, where the company does everything and owns every part. In contrast, horizontal integration was also another means of doing things. The Standard Oil Company, owned by John D. Rockefeller, utilized horizontal integration by controlling rail lines and buying out independently owned oil refineries. Rockefeller also formed secret trusts with his competitors, agreed on setting prices low enough that other corporations couldn't compete, bought those out when he could, and even had the railroads set prices for him and his associates low enough to where other companies would start struggling. Horizontal integration was all about controlling competing businesses, in this case, forming trusts, and eliminating the other competition. Eventually, this method was deemed unlawful, and the Sherman Asti-Trust Act of 1890 was passed, forbidding any trusts and behind the scenes