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[[American History Lecture Nine|Lecture]] - [[American_History_Homework_Nine|Questions]] - [[American History Homework Nine Answers|Student Answers]]

[[American History Lecture Nine|Lecture]] - [[American_History_Homework_Nine|Questions]] - [[American History Homework Nine Answers|Student Answers]]

In the late 1800s the United States was still admitting new states almost as fast as they could form.  In 1896, the year this lecture starts from, Utah was admitted as a new state.  That was the territory settled by Mormons after they migrated from Illinois.  As a condition of admission to the United States, Utah agreed to accept only traditional marriage and to ban the practice of polygamy (multiple wives for one husband).

In the late 1800s the United States was still admitting new states almost as fast as they could form.  For example, in 1896 Utah was admitted as a new state.  That was the territory settled by Mormons after they migrated from Illinois.  As a condition of admission to the United States, Utah agreed to accept only traditional marriage and to ban the practice of polygamy (multiple wives for one husband).

Also in 1896, the U.S. Supreme Court held that racial segregation in public facilities, schools, railroads, restaurants and elsewhere were fully constitutional, under the "separate but equal" doctrine.  This was the decision of ''Plessy v. Ferguson'', it remained the law until it was overturned in 1954 by another Supreme Court decision, ''Brown v. Board of Education'', which then began the process of integration in many schools.  Hence from 1896 to 1954 many public schools, particularly in the South, were segregated by race.  Today ''Plessy v. Ferguson'' is considered one of the worst Supreme Court decisions ever.

Also in 1896, the U.S. Supreme Court held that racial segregation in public facilities, schools, railroads, restaurants and elsewhere were fully constitutional, under the "separate but equal" doctrine.  This was the decision of ''Plessy v. Ferguson'', and it is considered one of the worst judicial decisions ever.  It remained the law until it was overturned in 1954 by another Supreme Court decision, ''Brown v. Board of Education'', which then began the process of integration in many schools.  Hence from 1896 to 1954 many public schools, particularly in the South, were segregated by the skin color of the students.

But first let's learn more about the 1880s.

But before we get to 1896, let's learn more about the 1880s.

== Big Business and Big Oil ==

== Big Business and Big Oil ==

Oil has been used since the Ancient Greeks learned to pour it into the sea and then set fire to it in order to defend against attacking fleets of ships.  Noah may have used thick oil (called "pitch") to waterproof Noah's ark.  Moses' basket may have been made waterproof using oil, just as American Indians used it to waterproof canoes.<ref name="Oil">http://www.seed.slb.com/qa2/FAQView.cfm?ID=906</ref>

Oil has been used since the Ancient Greeks learned to pour it into the sea and then set fire to it in order to defend against attacking fleets of ships.  Noah may have used thick oil (called "pitch") to waterproof Noah's ark.  Moses' basket may have been made waterproof using oil, just as American Indians used it to waterproof canoes.<ref name="Oil">http://www.seed.slb.com/qa2/FAQView.cfm?ID=906</ref>

But the first modern oil well was in Pennsylvania, when Colonel Edwin L. Drake drilled down 72 feet near Titusville (just east of Pittsburgh) and struck "Oil Creek."  Oil production there started in 1859.  That oil sold for $40 a barrel (note that a dollar was worth far more then), so oil was even more expensive then than it is today! It was used for medicine, as there were no cars then.<ref name="Oil"/>

But the first modern oil well was in Pennsylvania, when Colonel Edwin L. Drake drilled down 72 feet near Titusville (just east of Pittsburgh) and struck "Oil Creek."  Oil production there started in 1859.  That oil sold for $40 a barrel then, compared with about $100 now.  But because a dollar was worth far more in 1859 than today, oil was more expensive then. Oil was first used for medicine, as there were no cars then.<ref name="Oil"/>

A devout Christian who abandoned public high school before finishing,<ref>When John D. Rockefeller later had children of his own, he and his wife homeschooled them until age ten. http://www.associatedcontent.com/article/44035/john_d_rockefeller_jr.html</ref> John D. Rockefeller had just started his first job a few years earlier.  He developed a tremendous work ethic, and was immediately attracted to the discovery of oil in 1859.  He quickly entered the business and hooked up with an inventor who knew how to cheaply refine the oil into something usable.  By 1870 Rockefeller founded Standard Oil Company, and then began pursuing highly aggressive business tactics to drive out competitors and consolidate his control (monopolize the industry).<ref name="Rockefeller">http://www.u-s-history.com/pages/h957.html</ref>   

A devout Christian who abandoned public high school before finishing,<ref>When John D. Rockefeller later had children of his own, he and his wife homeschooled them until age ten. http://www.associatedcontent.com/article/44035/john_d_rockefeller_jr.html</ref> John D. Rockefeller had just started his first job a few years earlier.  He developed a tremendous work ethic, and was immediately attracted to the discovery of oil in 1859.  He quickly entered the business and worked with an inventor who knew how to cheaply refine the oil into something usable.  By 1870 Rockefeller founded Standard Oil Company, and then began pursuing highly aggressive business tactics to drive out competitors and consolidate his control (monopolize the industry).<ref name="Rockefeller">http://www.u-s-history.com/pages/h957.html</ref>   

In 1882, Rockefeller formed a new type of business entity called the "trust", and named it the Standard Oil Trust of Ohio.  But ten years later a decision by the Ohio Supreme Court forced him to break up his Trust into 20 smaller businesses.  In 1899 he formed a holding company for all his businesses in the name of Standard Oil Company of New Jersey.  By 1911 it controlled an astounding 95% of the entire oil industry, but then the U.S. Supreme Court forced Rockefeller to break up it up into smaller pieces and separately controlled companies, one of which became Exxon.  Rockefeller then retired and devoted the remainder of his long life to philanthropy (giving away his money to charitable causes).<ref name="Rockefeller"/>

In 1882, Rockefeller formed a new type of business entity called the "trust", and named it the Standard Oil Trust of Ohio.  But ten years later a decision by the Ohio Supreme Court forced him to break up his Trust into 20 smaller businesses.  In 1899 he formed a holding company for all his businesses in the name of Standard Oil Company of New Jersey.  By 1911 it controlled an astounding 95% of the entire oil industry, but then the U.S. Supreme Court forced Rockefeller to break up it up into smaller pieces and separately controlled companies, one of which became Exxon.  Rockefeller then retired and devoted the remainder of his long life to philanthropy (giving away his money to charitable causes).<ref name="Rockefeller"/>

Congress ultimately passed the Sherman Antitrust Act to prohibit monopolization and "restraint of trade," or interference with competition, in 1890.  This law was sponsored by Senator John Sherman of Ohio (a candidate for the Republican presidential nomination in 1880 and the brother of General William Sherman).  The Sherman Antitrust Act was not what broke up Rockefeller's oil empire, because in 1895 the Supreme Court weakened the law by upholding a powerful Sugar Trust, in ''U.S. v. Knight Co.''  The Sugar Trust controlled 98% of the sugar market, and the Supreme Court allowed it to continue.  Despite being weakened, the Sherman Antitrust Act remains a very important law that is used frequently today.

Congress ultimately passed the Sherman Antitrust Act to prohibit monopolization and "restraint of trade," or interference with competition, in 1890.  This law was sponsored by Senator John Sherman of Ohio (a candidate for the Republican presidential nomination in 1880 and the brother of General William Sherman).  The Sherman Antitrust Act was not what broke up Rockefeller's oil empire, because in 1895 the Supreme Court weakened the law by upholding a powerful Sugar Trust, in ''U.S. v. Knight Co.''  The Sugar Trust controlled 98% of the sugar market, and the Supreme Court allowed it to continue.  Despite being weakened, the Sherman Antitrust Act remains a very important law that is used frequently today.

The controversy about Rockefeller and monopolies divides free enterprise thinkers.  Some insist that the free market will deal with monopolies adequately.  Others say that monopolies are an impediment to free market competition and should be broken up by the government.

The controversy about Rockefeller and monopolies divides free enterprise thinkers.  Some insist that the free market itself will correct break up monopolies if appropriate.  Others say that monopolies are an impediment to free market competition and should be broken up by the government.

'''Debate:  Should government break up monopolies?'''

'''Debate:  Should government break up monopolies?'''

Good or bad, Rockefeller was part of a huge economic boom that began before the end of Reconstruction in 1877 and continued through 1900.  There was an increase in America's "gross domestic product," which is the total output (in dollars) of all the goods and services produced by labor and property located our country.  It is basically how much our entire country is producing, valued in dollars.  When we are prosperous it increases, and when we are in a depression it goes down or does not increase as much.

Good or bad, Rockefeller was part of a huge economic boom that began before the end of Reconstruction in 1877 and continued through 1900.  There was a massive increase in America's "gross domestic product," which is the total output (in dollars) of all the goods and services produced by labor and property located our country.  It is basically how much our entire country is producing, valued in dollars.  When we are prosperous it increases, and when we are in a depression it goes down or does not increase as much.

By the late 1800s the wealthiest city in the United States was Williamsport, Pennsylvania, which was the center of the profitable lumber industry.  Now it is best known for hosting the Little League World Series!

By the late 1800s the wealthiest city in the United States was Williamsport, Pennsylvania, which was the center of the profitable lumber industry.  Now it is best known for hosting the Little League World Series!

== The "Gilded Age" ==

== The "Gilded Age" ==

In our last lecture we introduced the term the "Gilded Age," which was first coined by an extremely successful writer from Missouri, Mark Twain (his real name was Samuel Clemens).  

In our last lecture we introduced the term the "Gilded Age," which was first coined by a popular writer from Missouri, Mark Twain (his real name was Samuel Clemens).  

He described the era towards the end of the 1880s as "gilded" because it appeared golden, but beneath the shiny surface was greed, corruption and hardship.  Mark Twain wrote a novel by that name in which Washington, D.C. was run by greedy businessmen and corrupt government officials.  (Mark Twain wrote several other influential novels, including "The Adventures of Huckleberry Finn," describing a fictional journey on a raft on the Mississippi).   

He described the era towards the end of the 1880s as "gilded" because it appeared golden, but beneath the shiny surface was greed, corruption and hardship.  Mark Twain wrote a novel by that name in which Washington, D.C. was run by greedy businessmen and corrupt government officials.  (Mark Twain wrote several other influential novels, including "The Adventures of Huckleberry Finn," describing a fictional journey on a raft on the Mississippi).   

The Gilded Age featured "robber barons," who were people who became extremely wealthy through ruthless business practices.  The worst"“robber baron" was Jay Gould, a financier on Wall Street who committed rampant fraud by printing false stock certificates to defraud investors.  He even tried to corner the gold market in 1869.  That led to a financial panic known as Black Friday.  After Gould drove up the price of gold by hoarding it, President Grant learned of the scheme and started selling the government gold reserves on the market to cause the price to fall.  The price of gold then fell sharply, and many lost everything they had.  Gould, however, had sold out at the highest price!

The Gilded Age featured "robber barons," who were people who became extremely wealthy through ruthless business practices.  The worst"“robber baron" was Jay Gould, a financier on Wall Street who committed rampant fraud by printing false stock certificates to defraud investors.  He even tried to corner the gold market in 1869.  That led to a financial panic known as Black Friday.  After Gould drove up the price of gold by hoarding it, President Grant learned of the scheme and started selling the government gold reserves on the market to cause the price to fall.  The price of gold then fell sharply, and many lost everything they had.  Gould, however, had sold out at the highest price to make the biggest profit!

There were also phenomenal successes during this era.  Andrew Carnegie, immigrated from Scotland without any money and ended up with massive wealth from founding the Carnegie Steel Co. (later became U.S. Steel Co.).  He amassed a fortune that he then donated to build structures like Carnegie Hall, Carnegie-Mellon University, and the enormous New York Public Library (plus 2800 other public libraries).  He wrote the "Gospel of Wealth" in 1900 to describe his vision of capitalism.

There were also phenomenal successes during this era.  Andrew Carnegie, immigrated from Scotland without any money and ended up with massive wealth from founding the Carnegie Steel Co. (later became U.S. Steel Co.).  He amassed a fortune that he then donated to build structures like Carnegie Hall, Carnegie-Mellon University, and the enormous New York Public Library (plus 2800 other public libraries).  He wrote the "Gospel of Wealth" in 1900 to describe his vision of capitalism.