Big business in the Gilded Age: steel, oil, railroads and inventors

Grade 11 Social Studies Worksheet

Circle the best answer.

1. Read this first

   Use this

   Law, wealth and growth, 1877 to 1895 (cards A to F and two tables). Card A, the Sherman Antitrust Act, section 1 (a federal law, July 2, 1890): "Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is hereby declared to be illegal. Every person who shall make any such contract or engage in any such combination or conspiracy, shall be deemed guilty of a misdemeanor, and, on conviction thereof, shall be punished by fine not exceeding five thousand dollars, or by imprisonment not exceeding one year, or by both said punishments, in the discretion of the court."

2. 1.

   Section 1 bans a 'combination in the form of trust or otherwise'. What does 'or otherwise' tell Ren about the law's reach?

   • Trusts alone are banned, and companies that merge into one corporation stay legal under the section
   • Trusts are named just as an example, and the ban reaches one person acting alone
   • Combinations are banned whatever legal form they take, not just those called trusts
   • Any combination is banned, even one that does not restrain trade among the states

3. Use this

   Law, wealth and growth, 1877 to 1895 (cards A to F and two tables). Card A, the Sherman Antitrust Act, section 1 (a federal law, July 2, 1890): "Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is hereby declared to be illegal. Every person who shall make any such contract or engage in any such combination or conspiracy, shall be deemed guilty of a misdemeanor, and, on conviction thereof, shall be punished by fine not exceeding five thousand dollars, or by imprisonment not exceeding one year, or by both said punishments, in the discretion of the court." Card B, the Sherman Antitrust Act, section 2 (the same law): "Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a misdemeanor …"

4. 2.

   Section 2 covers a person who 'shall monopolize, or attempt to monopolize'. What does Tala learn from comparing it with section 1?

   • Section 2 can reach a person who tries to monopolize trade, not just agreements among parties
   • Section 2 bans any company with a large share of a market, whatever the company does
   • Section 2 reaches agreements among several companies, just as section 1 does, with a lighter penalty
   • Section 2 covers trade inside one state, while section 1 covers trade across states

5. Use this

   Law, wealth and growth, 1877 to 1895 (cards A to F and two tables). Card D, Andrew Carnegie, a steel maker, writing for a magazine, June 1889: "The problem of our age is the proper administration of wealth, so that the ties of brotherhood may still bind together the rich and poor in harmonious relationship."

6. 3.

   Carnegie calls 'the proper administration of wealth' the problem of his age. What does the sentence show about his view, Zee asks?

   • He said the problem was the poverty of the poor, which the rich should end by paying higher wages
   • He wanted the wealthy to give away their wealth quickly so that the poor would not suffer in the years ahead
   • He saw the task as managing wealth well so rich and poor stay bound together, not as ending wealth
   • He called the problem a lack of rich people willing to invest in new works

7. Use this

   Law, wealth and growth, 1877 to 1895 (cards A to F and two tables). Card D, Andrew Carnegie, a steel maker, writing for a magazine, June 1889: "The problem of our age is the proper administration of wealth, so that the ties of brotherhood may still bind together the rich and poor in harmonious relationship." Card E, the Standard Oil Trust (Summary in our words, not a quotation): On January 2, 1882, the properties of the Standard Oil Company were placed in the hands of trustees as the Standard Oil Trust, which began with $70 million in capital and 42 certificate holders.

8. 4.

   Carnegie wrote card D in 1889 as a steelmaker, and card E reports the Trust's 1882 form. How should Ari weigh card D as evidence about big business?

   • As a rich steelmaker's view: good evidence of his outlook, not a neutral measure of how big business behaved
   • Accept it as typical of big business leaders, since Carnegie led the largest steel firm of his day
   • Treat it as a report of what Carnegie did, since an essay describes the writer's actions
   • Discount it, since a wealthy steelmaker had reason to praise wealth and so cannot teach anything about business

9. Raw steel produced in the United States

   Year	Raw steel (1,000 short tons)
   1860	13
   1870	77
   1880	1,397
   1890	4,779

   A short ton is 2,000 pounds. Data: US Census Bureau, Historical Statistics of the United States (1975 edition), series P 265, pp. 693-694 (figures of the American Iron and Steel Institute)

10. 5.

    Why was the growth factor so much smaller from 1880 to 1890 than from 1870 to 1880, even though more tons were added, Bo asks?

    • Growth slowed in the 1880s because the Bessemer process stopped improving after the first decade
    • A larger starting amount makes the same percentage look smaller, so the 1880s must have added fewer tons
    • The factor shrank because the 1880s added fewer tons of steel than the 1870s did
    • The 1880 starting amount, 1,397, was far larger than 77 in 1870, so the same gain moves the factor less

11. Miles of railroad road operated, December 31

    Year	Miles of road operated
    1850	9,021
    1860	30,626
    1870	52,922

    Road is the length of track from end to end, not counting a second track beside it. Data: US Census Bureau, Historical Statistics of the United States (1975 edition), series Q 321, p. 731.

12. 6.

    How do the miles of railroad added in the 1850s and the 1860s compare, and how do the growth rates compare, Esme asks?

    • Miles added were about equal, and percent growth stayed about 73 in both of the decades
    • Miles added were about equal (21,605 and 22,296), but percent growth fell from about 240 to about 73
    • The 1860s added more miles than the 1850s, so growth in the 1860s was faster in each sense
    • The 1850s added about 30,000 miles, since 30,626 is the number of miles that were built in that decade

13. Use this

    Law, wealth and growth, 1877 to 1895 (cards A to F and two tables). Card C, the Sherman Act in brief (Summary in our words, not a quotation, from the National Archives): The Act was approved on July 2, 1890, after the Senate voted 51 to 1 and the House voted 242 to 0. It rested on the power of Congress to regulate trade among the states. Several states already had laws against trusts, but those laws reached only business inside one state. Trusts had come to dominate several major industries, and the Standard Oil Trust of 1882 was one example.

14. 7.

    The Senate voted 51 to 1 and the House 242 to 0 for the Sherman Act. What does that show, and not show, Jun asks?

    • The Act was enforced strictly at once, since no member of the House voted against it
    • Congress agreed that trusts were harmful and wanted them broken up, as the votes show
    • Wide agreement to pass a law against trusts, but not on what its words meant or how to enforce them
    • The Act passed because both parties feared the trusts, as the unanimous House vote shows in 1890

15. Use this

    Law, wealth and growth, 1877 to 1895 (cards A to F and two tables). Card F, rules for railroads and big companies (a chart, columns Problem | Who pushed for change | What law or result | Date). Row 1: Railroad rates that favored large shippers | Granger-led state legislatures | Munn v. Illinois: the Supreme Court upheld state control of railroads | 1877. Row 2: State limits on long-haul and short-haul charges | The state of Illinois | Wabash case: the Court struck down the Illinois law and said only Congress may regulate interstate commerce | 1886. Row 3: One company refining about 98 percent of the nation's sugar | The federal government | E. C. Knight case: the Court ruled the company had not broken the Sherman Act | 1895. A summary in our words: in the Knight case the Court reasoned that making sugar is manufacturing, which it did not count as trade among the states.

16. 8.

    Wabash (1886) and Knight (1895) came before and after the Sherman Act. What pattern in the rules does the chart show, Kira asks?

    • Congress used the Sherman Act in 1895 to break up the sugar company, where states had failed in 1886
    • States lost power over interstate rates in 1886, and the Sherman Act was read narrowly in 1895, leaving gaps
    • Courts protected railroads from states in 1886 and companies from the Sherman Act in 1895, so they opposed regulation throughout
    • Courts limited the states and then widened Congress's reach, so regulation grew steadily from 1877 to 1895
17. 9.

    Munn (1877) upheld state control of railroads; Wabash (1886) struck down an Illinois law. What best explains the different results, Milo asks?

    • The Court changed its mind because railroads grew larger between 1877 and 1886
    • Munn dealt with farmers' complaints about rates, while Wabash dealt with a different industry
    • In 1886 the Court said only Congress may regulate interstate commerce, so Illinois could not set those rates
    • Wabash overruled Munn's idea that railroads are public enterprises that states may control in the public interest

18. Use this

    Law, wealth and growth, 1877 to 1895 (cards A to F and two tables). Card A, the Sherman Antitrust Act, section 1 (a federal law, July 2, 1890): "Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is hereby declared to be illegal. Every person who shall make any such contract or engage in any such combination or conspiracy, shall be deemed guilty of a misdemeanor, and, on conviction thereof, shall be punished by fine not exceeding five thousand dollars, or by imprisonment not exceeding one year, or by both said punishments, in the discretion of the court." Card E, the Standard Oil Trust (Summary in our words, not a quotation): On January 2, 1882, the properties of the Standard Oil Company were placed in the hands of trustees as the Standard Oil Trust, which began with $70 million in capital and 42 certificate holders.

19. 10.

    In 1882 Standard Oil's properties went to trustees (card E). After 1890, could section 1 reach a combination 'in the form of trust', Noah asks?

    • No, because section 1 reaches trusts just if they hurt consumers directly through higher prices
    • No, because the trust formed in 1882, before the Act, so the Act cannot reach any later conduct
    • On its words yes, if the trust restrained trade among the states, though courts had to decide that
    • Yes, because the Act names trusts, and the Standard Oil Trust held most refining, so it broke the Act