The Gilded Age, expanding from 1865 to World War I was an error of economic growth, never before seen in the history of the world. The standard of living of the modern age was born during this era. Wealth exploded. The middle class lived better than kings of a century earlier. And yet, this period in history is mostly ignored in classrooms. Those who address it, for whatever reason, were keen to debunk the overall trends, and instead, choose to focus on the plight of small sectors, generally seeking to debunk the idea of the Gilded Age, and the fact that the growth was real and it happened due to free markets, such as Oil industry, monopolized by oil mogul, John D Rockefeller, as well as sound money. The Gilded Age corporations became trusts or monopolies.
The Discovery of Crude Oil
The discovery of large quantities of crude oil in the northwest Pennsylvania soon changed the lives of millions of Americans. For centuries, people had known of the existence of crude oil scattered about America and the world, they just didn't know what to do with it. Farmers thought it was a nuisance and tried to plow around it; others bottled it and sold it as medicine, but it was John D. Rockefeller who would find a way to nearly monopolize it.
Rockefeller was fascinated with the prospect of refining oil into kerosene. Cleveland was a mere hundred miles from the oil region. He may have visited the region as early as 1862. By 1863, he was talking oil with Samuel Andrews, and two years later, they built a refinery together.
He was intrigued by the future of the oil industry, but repelled by its history. He shunned the drills and derricks, and chose the refining end instead. Two things bothered Rockefeller about the oil industry bothered Rockefeller right from the beginning: the appalling waste and fluctuating prices. Right from the start, he believed, that the path to success was to cut waste and produce the best product at the lowest cost. Under Rockefeller's leadership, they plowed the profits into bigger and better equipment. As their volume increased, he hired chemists and developed three hundred by-products from each barrel of oil. These ranged from paints, varnishes, to all sorts of lubricating oils. As for the main product kerosene, Rockefeller made it so cheaply, that whale oil, coal oil, and for a while, electricity lost out in the race to light American homes, factories and streets. Rockefeller had a vision, he saw vast possibilities in the oil industry, stood in the center of it, and brought knowledge, imagination, and business experience to bear in thirty different directions. He eventually developed a company called Standard Oil that would dominate the market. Building on the business model of the great railroad companies, John D. Rockefeller, owner of the Standard Oil company, moved aggressively to corner the petroleum market. His company took control of the entire process, from drilling through piping and refining, barreling, distributing, wholesaling, and retailing. Rockefeller systematically cut his prices so low that smaller companies could not compete. General stores had to stock the cheaper Standard Oil kerosene or lose customers. Tactics such as these, gave Rockefeller a near-monopoly in oil, and by 1879, he controlled ninety percent of the nation's oil. I would dare to say, Rockefeller boosted the start of the auto industry. The auto industry was in its beginning stages, and they were looking for a viable fuel, which they eventually found with the refined oil from Rockefeller.
How The Transcontinental Railroads changed America
Trains offered an efficient way to move goods over long distances in relatively short periods of time. Over a third of all freight transport happens via the railway system, but our railroads have not always been as expansive as they are today. Now we have hundreds of thousands of miles of rail connecting major cities across the country, but this was not the case two hundred years ago. The Transcontinental Railroad was built in the 1800s to connect Council Bluffs, Iowa, with the San Francisco Bay and revolutionize transport in the United States.
The 1850s were a time of westward expansion for the United States. The California Goldrush and Nevada Silver Rush pushed U.S. Americans further and further west with the promise of economic prosperity. In 1862, Congress passed the Pacific Railroad Bill and several grants that allowed financial support for the Central Pacific and Union Pacific railroad companies. These two companies then began constructing what would become the Transcontinental Railroad.
Easier transcontinental business travel allowed direct growth through expanding markets and cheaper distribution, as well as increased possibilities for partnerships and exchange of ideas. This movement between coasts allowed for business professionals to have a more expansive idea of their industry and allowed improved access to information and skills. Within ten years of the transcontinental railroad's competition, it was already shipping $50 million worth of freight from coast to coast every year. A marked production boom occurred as resources had faster transport to industrial settings, thus speeding up the process of making goods.
Despite the benefits it brought to the United States, the transcontinental railroad had some negative consequences. Most starkly, the forced relocation of the Native Americans from their lands resulted in widespread destruction of Native American cultures and ways of life. Many conflicts arose as the railroad project continued westward, and the military was brought in to fight Native American tribes. In addition, many natural resources were destroyed to make way for the expanding train tracks as well as stations.
Currently, the United States freight rail network has over 140,000 rail miles in operation. This system employs at least 221,000 people throughout the country and is a large part of our transportation industry.
Our economy depends on our railroad system, but it would not look the way it does today without the construction of the transcontinental railroad. From the 1800s to today, train transport continues to shape our economic and social live.
