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APUSH Period 6: The Gilded Age (1865-1898)

5 min read • january 2, 2021

In AP® US History, period 6 spans from 1865 to 1898 CE. The following guide will be updated periodically with hyperlinks to excellent resources. As you are reviewing for the Gilded Age, focus on the key concepts and use the essential questions to guide you.

PERIOD 6 DATES TO KNOW

STUDY TIP:  You will never be asked specifically to identify a date. However, knowing the order of events will help immensely with cause and effect. For this reason, we have identified the most important dates to know.

1876 - Little Bighorn

1886 -  Haymarket Square Riot

1887 - Dawes Act

1887 - Interstate Commerce

1890 - Wounded Knee

1890 - Sherman Antitrust Act

1894 - Pullman Strike

1896 - “Cross of Gold” speech

1896 - Plessy v. Ferguson

APUSH PERIOD 6 ESSENTIAL QUESTIONS

STUDY TIP:  Use the following essential questions to guide your review of this entire unit. Keep in mind, these are not meant to be practice essay questions. Each question was written to help you summarize the key concept.

How did industrial capitalism affect US business and politics?

What were the motives and consequences of 19th century migrations?

In what ways were social norms challenged during the Gilded Age?

Study Guide: Period 6 Contextualization

Past Essay Questions from Period 6

STUDY TIP:  Content from the Gilded Age has appeared on the essays twelve times since 2000. Take a look at these questions before you review the key concepts & vocabulary below to get a sense of how you will be assessed. Then, come back to these later and practice writing as many as you can!

*The APUSH exam was significantly revised in 2015, so any questions from before then are not representative of the current exam format. You can still use prior questions to practice, however DBQs will have more than 7 documents, the LEQ prompts are worded differently, and the rubrics are completely different. Use questions from 2002-2014 with caution. Essays from 1973-1999 available here .

2018 - DBQ: US Imperialism

2018 - LEQ 2: Economic impact of Civil War

2016 - SAQ 3: Industrial Business

2015 - SAQ 4: Industrialization

2013 - LEQ 4: Impact of technology

2012 - DBQ: Impact of Big Business

2009 - LEQ 4: Labor unions

2008 - LEQ 4: The New South

2007 - DBQ: Changes to agriculture

2003 - LEQ 4: Regional impacts of Civil War

2001 - LEQ 4: Developments in transportation

2000 - DBQ: Labor Unions

PERIOD 6 KEY CONCEPTS - COURSE OUTLINE

*The following outline was adapted from the AP® United States History Course Description as published by College Board in 2017 found here . This outline reflects the most recent revisions to the course.

6.1. Rise of Industrial Capitalism

💵 Study Guide - The Rise of Industrial Capitalism

Industrialization led to massive economic development.

• New transportation and communication systems opened new markets.
• Technological innovations dramatically increased the production of goods.
• Wages increased and prices decreased, which improved standards of living.
• Businesses increased profits by consolidating power, which concentrated wealth.
• The US expanded markets by gaining influence and control in Asia and Latin America.
• The South saw   New South reforms lead to some industrialization in what was previously farmland

Financial downturns sparked new perspectives on the economy.

• Some opposed government intervention in support of laissez-faire policies.
• The work force expanded because of migrations.
• Laborers formed unions and battled management on wages and conditions.
• ✊ Study Guide - Labor in the Gilded Age
• The South continued to rely on agricultural industries.

Farmers responded to new systems of production and transportation.

• Industrialization increased production and substantially decreased food prices.
• Farmers created local and regional cooperatives.
• Populism gained momentum to fight economic instability.

6.2. Migrations

Urban populations increased because of international and internal migrations.

• Cities attracted immigrants from Asia, south and eastern Europe, and African Americans from the south as they escaped oppression and sought opportunities.
• ⛴ Study Guide - Migration and Immigration and Responses to Immigration
• Ethnic neighborhoods formed in cities.
• Immigrants had to assimilate to American culture, while preserving traditions.
• Political machines powered cities by providing the poor with social services.
• The middle class continued to grow as access to education increased, which expanded consumer culture.
• 💰 Study Guide - The Growth of the Middle Class

Many people moved west in search of land and opportunity, provoking conflict.

• Study Guides -  Economic Impacts and Societal Impacts of Western Migration
• The transcontinental railroads created new communities and centers of activity.
• Motivated by ideals of self-sufficiency, migrants moved west building railroads, mining, farming, and ranching.
• Increased migrations decimated the bison population, which increased competition for land and resources between white settlers, Natives, and Mexican-Americans.
• In response to migrations, the US government violated treaties with Native Americans and then resorted to military force, confining Natives to reservations.
• American Indians attempted to preserve tradition, despite oppression.

6.3. The Gilded Age

Social norms were challenged by new intellectual movements.

• Theories of social darwinism were used to justify racial hierarchies.
• Some business leaders advocated philanthropy through the Gospel of Wealth.
• Alternative economic theories spread including utopian, socialist, and communist.

Social changes inspired debates over the relationship between business and government.

• Political parties sparred over tariffs and currency issues as reformers argued that greed had corrupted government.
• Study Guide - Gilded Age Politics
• Women fought for more equality with men through social and political reforms.
• Study Guide - Gilded Age Reform
• Racial segregation was upheld in the courts through Plessy v. Ferguson . Increased violence against black communities sparked debates about race and reform.

LIST OF CONCEPTS & VOCABULARY FROM PERIOD 6

STUDY TIP:  These are the concepts and vocabulary from period 6 that most commonly appear on the exam. Create a quizlet deck to make sure you are familiar with these terms!

Alexander Graham Bell

American Federation of Labor

Andrew Carnegie

assimilationists

Bessemer Process

Booker T. Washington

Chief Joseph

Chinese Exclusion Act

Civil Rights Cases of 1883

civil service reform

Commerce Act

conservationists

Cornelius Vanderbilt

Elizabeth Cady Stanton

Ellis Island

ethnic enclaves

Eugene Debs

Frank Lloyd Wright

Frederick Jackson Turner

Ghost Dance

Gospel of Wealth

Haymarket Strike

Horatio Alger

horizontal consolidation

Ida B. Wells

impressionism

Interstate Commerce Act

Jane Addams

Jim Crow Law

John Rockefeller

Joseph Pulitzer

Knights of Labor

labor unions

laissez faire

Land-Grant Colleges

Las Gorras Blanca

Mother Jones

Munn v. Illinois

Ocala Platform

Pendleton Act

political machine

Populist Party

preservationists

Protestant work ethic

public high school

Pullman Strike

Queen Liliuokalani

railroad strike of 1877

refrigeration

Salvation Army

Samuel Gompers

Second Industrial Revolution

Sherman Antitrust Act

social darwinism

Solid South

spectator sports

survival of the fittest

Tammany Hall

tenant farming

transcontinental railroads

Tuskegee Institute

vertical integration

W.E.B. DuBois

Wabash v. Illinois

white supremacy

William Hearst

William Jennings Bryan

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The Gilded Age Essay

Gilded Age is a period between 1870 and 1890. This is a very complicated period in the life of American citizens as during these years corruption flourished, social life in the country was supported with constant scandals and the gap between poor and rich was extremely big.

This period is characterized by enormous wealth, however, the philanthropy was also on a high level. Democrats and Republicans were two major parties which fought for power, and having received it they tried to make sure that the more people are put on the leading positions in the local and national government. Reading different sources of information, it is possible to create a personal opinion about the Gilded Age and the political issues which were spread there.

There are different points of view about political system which was during the Gilded Age. Cash ruled human decisions, and therefore, the politics was based on those people who had more money (Flehinger 159). Such state of affairs is inappropriate. It is impossible to run the country without the desire to make it better.

Those who got power by means of money were sure to have the goal to get more money from people to return what they spent and to earn more. In this case politics for people becomes simple source of money, not the desire to improve human life and to change something for better.

Buder said that “the Gilded Age was, of course, the time when the United States experienced profound demographic and economic growth” (Buder 873). It is impossible to contradict this opinion, however, it is also impossible to agree that all people experiences economic growth.

The political contradiction and the division of power negatively affected simple people. The lower layers of population were not really satisfied with what was going on. I am sure that the economical growth of the country was a successful issue, however, the benefit from such growth was available just for rich and wealthy people while simple employees remained with their personal income.

Among various disadvantages and negative effect of the Gilded Age in the American politics, Gage points to the radical violence (Gage 107). The violent acts flew through the whole country. People suffered from those but the government could do nothing to protect them. The question whether they wanted to do it raise here. Moreover, it is essential to understand that the accidents of violence could be useful for the government who could satisfy their interests while people suffered from violent acts.

Giroux is sure that the Gilded Age was even more antidemocratic than the previous period even though democracy was proclaimed as the political regime in the country. Looking at the illegal actions of the powered people and their lack of desire to maintain order in the country, It is impossible to disagree with the author of the article as proclaiming democratic regime in the country, people did not have any rights to govern the country. Only money solved all the problems and was the source of the decisions in the USA (Giroux 587).

“The Gilded Age celebrated two kinds of virtues: those of the soldier and those of the entrepreneur” (“The Loss of Public Principles and Public in Interest” 147) and this phrase reflects the real estate of affairs during the Gilded Age. Simple people had nothing, neither the power to govern the country, nor the opportunities to change anything. Just leading the lives they had to survive. Of course, the economical growth of the country affected their well-being, however, it was not that great at the well-being of the powerful people.

White says that “Gilded Age financial corruption consisted of quotidian faults—lying, deception, and dishonesty—played out largely on paper and along telegraph lines, but on a national and international scale” (White 21).

Much has already been said about corruption, however, White tried to measure the affect of corrupted government on simple population. Dwelling upon the reasons of the corruption which was provoked by the decisions proclaimed by the government, White is sure that the situation could be changed and I agree with the statement.

Cherny’s review of the book From Bloody Shirt to Full Dinner Pail: The Transformation of Politics and Governance in the Gilded Age by Charles W. Calhoun is a great opportunity to consider the presidents and the would-be presidents of the country during the mentioned period.

Having considered the presidents, their thought and reforms it is possible to draw personal conclusions about the reasons of the high economic and low political development of the country during the Gilded Age. The author points to the highest level of human participation in politics, however, the reasons and the real mechanism of that participation is not covered which is a great limitation of that study (Cherny 215).

Reuter dwells upon the place of the business in politics. He is sure that those who got more money could control the legislation in the country during the Gilded Age. This is correct and money run business in America during that period (Reuter 55).

Considering the Gilded Age, I become more and more assured that the present situation in the USA is similar to that one which happened in America in 1870-1890s. However, during 1876 and 1892 none of the candidates managed to get the priority in votes, that is why the power was constantly shared between two parties, Democrats and Republicans (Miller 51).

Cashman’s work America in the Gilded Age is the fullest edition which presents the political situation in the country. Having read this piece of writing I understood that even though the economical situation improved, the political issues were distant from being called perfect.

Two parties managed to run the country without giving an opportunity for others to interfere into the political process, however, these two parties were too opposite to agree on the manner how the country should be governed. “Government’s primary role during the nineteenth century was to distribute resources and privileges to identifiable groups” (Miller 59) rather than consider the problems of people and solve them on the political level.

Therefore, it may be concluded that the Gilded Age was a very controversial age. Being economically flourishing, it just promoted rich people, however, the charity was also developed. The political system might be characterized by the Democratic-Republican duopoly, democratic regime and corruption.

It is impossible to say for sure whether that period was good or bad as it contained both positive and negative issues. As for me, the political regime of the Gilded Age should be characterized as the negative one due to the reasons discussed above.

Works Cited

Buder, Stanley. “James T. Wall. Wall Street and the Fruited Plain: Money, Expansion and Politics in the Gilded Age.” Enterprise & Society 10.4 (2009): 873-874. Print.

Cashman, Sean. America in the Gilded Age: Third Edition . New York University Press, 1993. Print.

Cherny, Robert W. “From Bloody Shirt to Full Dinner Pail: The Transformation of Politics and Governance in the Gilded Age.” Journal of American History 98.1 (2011): 214- 215. Print.

Flehinger, Brett. “Party Games: Getting, Keeping, and Using Power in Gilded Age Politics.” Canadian Journal of History 41.1 (2006): 159-160. Print.

Gage, Beverly. “Why Violence Matters: Radicalism, Politics, and Class War in the Gilded Age and Progressive Era.” Journal for the Study of Radicalism 1.1 (2007): 99-109. Print.

Giroux, Henry A. “Beyond the biopolitics of disposability: rethinking neoliberalism in the New Gilded Age.” Social Identities 14.5 (2008): 587-620. Print.

Miller, Worth Robert. “The Lost World of Gilded Age Politics.” Journal of the Gilded Age and Progressive Era 1.1 (2002): 49-67. Print.

Reuter, William C. “Business journals and Gilded Age politics.” Historian 56.1 (1993): 55. Print.

“The Loss of Public Principles and Public in Interest: Gilded Age Rhetoric, 1872-1896.” Language of Democracy: Political Rhetoric in the United States & Britain, 1790-1900 , (2005): 146-163. Print.

White, Richard. “Information, Markets, and Corruption: Transcontinental Railroads in the Gilded Age.” Journal of American History 90.1 (2003): 19-43. Print.

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IvyPanda. (2019, May 25). The Gilded Age. https://ivypanda.com/essays/the-gilded-age/

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IvyPanda . 2019. "The Gilded Age." May 25, 2019. https://ivypanda.com/essays/the-gilded-age/.

1. IvyPanda . "The Gilded Age." May 25, 2019. https://ivypanda.com/essays/the-gilded-age/.

Bibliography

IvyPanda . "The Gilded Age." May 25, 2019. https://ivypanda.com/essays/the-gilded-age/.

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• Reforms in the Gilded Age
• Critical Analysis of Document 28-1 President Lyndon B. Johnson Describes the Great Society and Document 30-4 President Ronald Reagan Defends American Morality

The Gilded Age

• The Gilded Age /
• Discussion & Essay Questions

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Available to teachers only as part of the teaching the gilded ageteacher pass, teaching the gilded age teacher pass includes:.

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Sample of Discussion & Essay Questions

Economy in the gilded age.

• How does our infrastructure compare?
• How have the sources of capital changed?
• How supportive is modern American culture of business? Is this more or less than during the Gilded Age?
• What modern "giants" might you compare to Rockefeller, Carnegie, and Morgan? How accurate is the comparison?
• How does the underside of the American underclass compare? Still as poor?  Poorer? Better off? 
• How about urban and factory conditions? Improved? Worse? The same? 
• Is it possible to sequence these critical ingredients in terms of importance? Why or why not?
• Could economic growth have been so dramatic without all of these?
• Could one be removed without changing the bottom line?
• Put another way, without record immigration rates would the economy have grown so dramatically? Why or why not?
• If the Gilded Age government had imposed more regulations on business activities, what might the effect have been?

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Unit 6: The Gilded Age (1865-1898)

About this unit.

After the Civil War, the United States emerged as the world's foremost industrial power. With that came great wealth and great poverty.

The Gilded Age

• Introduction to the Gilded Age (Opens a modal)
• The Gilded Age and the Second Industrial Revolution (Opens a modal)
• What was the Gilded Age? (Opens a modal)
• Social Darwinism in the Gilded Age (Opens a modal)
• Misunderstanding evolution: a biologist's perspective on Social Darwinism (Opens a modal)
• Misunderstanding evolution: a historian's perspective on Social Darwinism (Opens a modal)
• America moves to the city (Opens a modal)
• Development of the middle class (Opens a modal)
• Politics in the Gilded Age (Opens a modal)
• Gilded Age politics: patronage (Opens a modal)
• Laissez-faire policies in the Gilded Age (Opens a modal)
• The Knights of Labor (Opens a modal)
• Labor battles in the Gilded Age (Opens a modal)
• The Populists (Opens a modal)
• Immigration and migration in the Gilded Age (Opens a modal)
• Continuity and change in the Gilded Age (Opens a modal)
• The Gilded Age Get 3 of 4 questions to level up!

The South after the Civil War

• Life after slavery for African Americans (Opens a modal)
• The origins of Jim Crow - introduction (Opens a modal)
• Origins of Jim Crow - the Black Codes and Reconstruction (Opens a modal)
• Origins of Jim Crow - the Fourteenth and Fifteenth Amendments (Opens a modal)
• Origins of Jim Crow - Compromise of 1877 and Plessy v. Ferguson (Opens a modal)
• Plessy v. Ferguson (Opens a modal)
• The Compromise of 1877 (Opens a modal)
• Jim Crow (Opens a modal)
• The New South (Opens a modal)
• The South after the Civil War Get 3 of 4 questions to level up!

The American West

• The Gold Rush (Opens a modal)
• The Homestead Act and the exodusters (Opens a modal)
• The reservation system (Opens a modal)
• The Dawes Act (Opens a modal)
• Chinese immigrants and Mexican Americans in the age of westward expansion (Opens a modal)
• The Indian Wars and the Battle of the Little Bighorn (Opens a modal)
• The Ghost Dance and Wounded Knee (Opens a modal)
• Westward expansion: economic development (Opens a modal)
• Westward expansion: social and cultural development (Opens a modal)
• The American West Get 3 of 4 questions to level up!

• History Classics
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By: History.com Editors

Updated: June 13, 2023 | Original: February 13, 2018

“The Gilded Age” is the term used to describe the tumultuous years between the Civil War and the turn of the 20th century. The Gilded Age: A Tale of Today was a famous satirical novel by Mark Twain set in the late 1800s, and was its namesake. During this era, America became more prosperous and saw unprecedented growth in industry and technology. But the Gilded Age had a more sinister side: It was a period where greedy, corrupt industrialists, bankers and politicians enjoyed extraordinary wealth and opulence at the expense of the working class. In fact, it was wealthy tycoons, not politicians, who inconspicuously held the most political power during the Gilded Age.

Transcontinental Railroad

Before the Civil War , rail travel was dangerous and difficult, but after the war, George Westinghouse invented the air brake, which made braking systems more dependable and safe.

Soon, the development of Pullman sleeping cars and dining cars made rail travel comfortable and more enjoyable for passengers. It wasn’t long before trains overtook other forms of long-distance travel such as the stagecoach and riding horseback.

In 1869, the Transcontinental Railroad was finished and led to rapid settlement of the western United States. It also made it much easier to transport goods over long distances from one part of the country to another.

This enormous railroad expansion resulted in rail companies and their executives receiving lavish amounts of money and land—up to 200 million acres, by some estimates—from the United States government. In many cases, politicians cut shady backroom deals and helped create railroad and shipping tycoons such as Cornelius Vanderbilt and Jay Gould . Meanwhile, thousands of African American—many of them former slaves—were hired as Pullman porters and paid a pittance to cater to riders’ every need.

Robber Barons

Railroad tycoons were just one of many types of so-called robber barons that emerged in the Gilded Age.

These men used union busting, fraud, intimidation, violence and their extensive political connections to gain an advantage over any competitors. Robber barons were relentless in their efforts to amass wealth while exploiting workers and ignoring standard business rules—and in many cases, the law itself.

They soon accumulated vast amounts of money and dominated every major industry including the railroad, oil, banking, timber, sugar, liquor, meatpacking, steel, mining, tobacco and textile industries.

Some wealthy entrepreneurs such as Andrew Carnegie , John D. Rockefeller and Henry Frick are often referred to as robber barons but may not exactly fit the mold. While it’s true they built huge monopolies, often by crushing any small business or competitor in their way, they were also generous philanthropists who didn’t always rely on political ploys to build their empires.

Some tried to improve life for their employees, donated millions to charities and nonprofits and supported their communities by providing funding for everything from libraries and hospitals to universities, public parks and zoos.

Industrial Revolution

The Gilded Age was in many ways the culmination of the Industrial Revolution , when America and much of Europe shifted from an agricultural society to an industrial one.

Millions of immigrants and struggling farmers arrived in cities such as New York , Boston , Philadelphia, St. Louis and Chicago , looking for work and hastening the urbanization of America. By 1900, about 40 percent of Americans lived in major cities.

Most cities were unprepared for rapid population growth. Housing was limited, and tenements and slums sprung up nationwide. Heating, lighting, sanitation and medical care were poor or nonexistent, and millions died from preventable disease.

Many immigrants were unskilled and willing to work long hours for little pay. Gilded Age plutocrats considered them the perfect employees for their sweatshops, where working conditions were dangerous and workers endured long periods of unemployment, wage cuts and no benefits.

Gilded Age Homes

Homes of the Gilded Age elite were nothing short of spectacular. The wealthy considered themselves America’s royalty and settled for nothing less than estates worthy of that distinction. Some of America’s most famous mansions were built during the Gilded Age such as:

Biltmore , located in Asheville, North Carolina , was the family estate of George and Edith Vanderbilt. Construction started on the 250-room chateau in 1889, prior to the couple’s marriage, and continued for six years. The home had 35 bedrooms, 43 bathrooms, 65 fireplaces, a dairy, a horse barn and beautiful formal and informal gardens.

The Breakers in Newport, Rhode Island , is another Vanderbilt mansion. It was the summer home of railroad mogul Cornelius Vanderbilt. The Italian-Renaissance style home has 70 rooms, a stable and a carriage house.

Rosecliff , also in Newport, was completed in 1902. The oceanfront home was contracted by Theresa Fair Oelrichs and built to resemble the Grand Trianon of Versailles. Today, it’s best known as the backdrop for movie scenes in The Great Gatsby , High Society , 27 Dresses and True Lies .

Whitehall , located in Palm Beach, Florida , was the neoclassical winter retreat of oil tycoon Henry Flagler and his wife Mary. The 100,000 square foot, 75-room mansion was completed in 1902 and is now a popular museum.

Income Inequality in the Gilded Age

The industrialists of the Gilded Age lived high on the hog, but most of the working class lived below poverty level. As time went on, the income inequality between wealthy and poor became more and more glaring.

While the wealthy lived in opulent homes, dined on succulent food and showered their children with gifts, the poor were crammed into filthy tenement apartments, struggled to put a loaf of bread on the table and often accompanied their children to a sweatshop each morning where they faced a 12-hour (or longer) workday.

Some moguls used Social Darwinism to justify the inequality between the classes. The theory presumes that the fittest humans are the most successful and poor people are destitute because they’re weak and lack the skills to be prosperous.

Muckrakers is a term used to describe reporters who exposed corruption among politicians and the elite. They used investigative journalism and the print revolution to dig through “the muck” of the Gilded Age and report scandal and injustice.

In 1890, reporter and photographer Jacob Riis brought the horrors of New York slum life to light in his book, How the Other Half Lives , prompting New York politicians to pass legislation to improve tenement conditions.

In 1902, McClure Magazine journalist Lincoln Steffens took on city corruption when he penned the article, “Tweed Days in St. Louis.” The article, which is widely considered the first muckracking magazine article, exposed how city officials deceitfully made deals with crooked businessmen to maintain power.

Another journalist, Ida Tarbell , spent years investigating the underhanded rise of oilman John D. Rockefeller. Her 19-part series, also published in McClure in 1902, led to the breakup of Rockefeller’s monopoly, the Standard Oil Company.

In 1906, activist journalist and novelist Upton Sinclair wrote The Jungle to expose horrendous working conditions in the meatpacking industry. The book and ensuing public outcry led to the passing of the Meat Inspection Act and the Pure Food and Drug Act.

Labor Unions Rise

It soon became obvious that the huge disparity between the wealthy and poor couldn’t last, and the working class would have to organize to improve their working and living conditions. It was also obvious this wouldn’t happen without some degree of violence.

Much of the violence, however, was between the workers themselves as they struggled to agree on what they were fighting for. Some simply wanted increased wages and a better working environment, while others also wanted to keep women, immigrants and blacks out of the workforce.

Although the first labor unions occurred around the turn of the nineteenth century, they gained momentum during the Gilded Age, thanks to the increased number of unskilled and unsatisfied factory workers.

Railroad Strikes

On July 16, 1877, the Baltimore and Ohio Railroad Company announced a 10-percent pay cut on its railroad workers in Martinsburg, West Virginia , the second cut in less than eight months.

Infuriated and fed up, the workers—with the support of the locals—announced they’d prevent all trains from leaving the roundhouse until their pay was restored.

The mayor, the police and even the National Guard couldn’t stop the strike. It wasn’t until Federal troops arrived that one train finally left the station.

The strike spread among other railroads, sparking violence across America between the working class and local and federal authorities. At its peak, over 100,000 railroad workers were on strike. Many of the Robber Barons feared an aggressive, all-out revolution against their way of life.

Instead, the strike—later known as the Great Upheaval—ended abruptly and was labeled a dismal failure. Yet it showed America’s tycoons there was strength in numbers and that organized labor had the potential to shut down entire industries and inflict major economic and political damage.

As the working class continued to use strikes and boycotts to fight for higher wages and improved working conditions, their bosses staged lock-outs and brought in replacement workers known as scabs.

They also created blacklists to prevent active union workers from becoming employed elsewhere. Even so, the working class continued to unite and press their cause and often won at least some of their demands.

Gilded Age Cities

Innovations of the Gilded Age helped usher in modern America. Urbanization and technological creativity led to many engineering advances such as bridges and canals, elevators and skyscrapers, trolley lines and subways.

The invention of electricity brought illumination to homes and businesses and created an unprecedented, thriving night life. Art and literature flourished, and the rich filled their lavish homes with expensive works of art and elaborate décor.

In 1876, Alexander Graham Bell invented the telephone and made the world a much smaller place for both individuals and businesses. Advances in sanitation and housing, and the availability of better quality food and material goods, improved quality of life for the middle  class.

But while the middle and upper classes enjoyed the allure of city life, little changed for the poor. Most still faced horrific living conditions, high crime rates and a pitiable existence.

Many escaped their drudgery by watching a vaudeville show or a spectator sport such as boxing, baseball or football, all of which enjoyed a surge during the Gilded Age.

Women in the Gilded Age

Upper-class women of the Gilded Age have been compared to dolls on display dressed in resplendent finery. They flaunted their wealth and endeavored to improve their status in society while poor and middle-class women both envied and mimicked them.

Some wealthy Gilded Age women were much more than eye candy, though, and often traded domestic life for social activism and charitable work. They felt a new degree of empowerment and fought for equality, including the right to vote through women’s suffrage groups.

Some created homes for destitute immigrants while others pushed a temperance agenda, believing the source of poverty and most family troubles was alcohol. Wealthy women philanthropists of the Gilded Age include:

Louise Whitfield Carnegie , wife of Andrew Carnegie, who created Carnegie Hall and donated to the Red Cross, the Y.W.C.A., and other charities.

Abby Aldrich Rockefeller , wife of John D. Rockefeller, Jr., who helped create hotels for women and solicited funds to create the New York Museum of Modern Art.

Margaret Olivia Sage , wife of Russell Sage, who after the death of her miserly husband gave away $45 million of her $75 million inheritance to support women’s causes, educational institutions and the creation of the Russell Sage Foundation for Social Betterment, which directly helped poor people.

Many women during the Gilded Age sought higher education. Others postponed marriage and took jobs such as typists or telephone switchboard operators.

Thanks to a print revolution and the accessibility of newspapers, magazines and books, women became increasingly knowledgeable, cultured, well-informed and a political force to be reckoned with.

Jane Addams

Jane Addams is arguably the best-known philanthropist of the Gilded Age. In 1889, she and Ellen Gates Star established a secular settlement house in Chicago known as Hull-House .

The neighborhood was a melting pot of struggling immigrants, and Hull-House provided everything from midwife services and basic medical care to kindergarten, day care and housing for abused women. It also offered English and citizenship classes. Addams received the Nobel Peace Prize in 1931.

Carrie Nation

Temperance leader Carrie Nation gained notoriety during the Gilded Age for smashing up saloons with a hatchet to bring attention to her sobriety agenda. She was also a strong voice for the suffrage movement.

Nation’s belief that alcohol was the root of all evil was partially due to her difficult first marriage to an alcoholic, and her work with women and children displaced or abused by over-imbibing husbands.

Convinced God had instructed her to use whatever means necessary to close bars throughout Kansas , she was often beaten, mocked and jailed but ultimately helped pave the way for the 18th Amendment (prohibiting the sale of alcohol) and the 19th Amendment (giving women the right to vote).

Limits to Power

Many other pivotal events happened during the Gilded Age which changed America’s course and culture. As muckrakers exposed corrupt robber barons and politicians, labor unions and reformist politicians enacted laws to limit their power.

The western frontier saw violent conflicts between white settlers and the United States Army against Native Americans. The Native Americans were eventually forced off their land and onto reservations with often disastrous results. In 1890, the western frontier was declared closed.

Populist Party

As drought and depression struck rural America, farmers in the west—who vilified railroad tycoons and wanted a political voice—organized and played a key role in forming the Populist Party.

The Populists had a democratic agenda that aimed to give power back to the people and paved the way for the progressive movement, which still fights to close the gap between the wealthy and poor and champion the needy and disenfranchised.

End of the Gilded Age

In 1893, both the overextended Philadelphia and Reading Railroad and the National Cordage Company failed, which set off an economic depression unlike any seen before in America.

Banks and other businesses folded, and the stock market plunged, leaving millions unemployed, homeless and hungry. In some states, unemployment rose to almost 50 percent.

The Panic of 1893 lasted four years and left lower and even middle-class Americans fed up with political corruption and social inequality. Their frustration gave rise to the Progressive Movement which took hold when President Theodore Roosevelt took office in 1901.

Although Roosevelt supported corporate America, he also felt there should be federal controls in place to keep excessive corporate greed in check and prevent individuals from making obscene amounts of money off the backs of immigrants and the lower class.

Helped by the muckrackers and the White House , the Progressive Era ushered in many reforms that helped shift away power from robber barons, such as:

• trust busting
• labor reform
• women’s suffrage
• birth control
• formation of trade unions
• increased conservation efforts
• food and medicine regulations
• civil rights
• election reform
• fair labor standards

By 1916, America’s cities were cleaner and healthier, factories safer, governments less corrupt and many people had better housing, working hours and wages. Fewer monopolies meant more people could pursue the American Dream and start their own businesses.

When America entered World War I in 1917, the Progressive Era and any remnants of the Gilded Age effectively ended as the country’s focus shifted to the realities of war. Most robber barons and their families, however, remained wealthy for generations.

Even so, many bequeathed much of their wealth, land and homes to charity and historical societies. And progressives continued their mission to close the gap between the wealthy and poor and champion the needy and disenfranchised.

HISTORY Vault: The Astors

A look at five generations of the colorful and wealthy family. Follows their story from its 18th-century beginnings, when fur trader John Jacob Astor became the richest man in the world.

Chicago Workers During the Long Gilded Age. The Newberry. Gilded Age Reform. University of Virginia. The Doll House: Wealth and Women in the Gilded Age. Journeys Into the Past: An Online Journal of Miami University’s History Department . The Gilded Age. Scholastic. About Jane Addams. Jane Addams Hull-House Museum . Carrie A. Nation (1846-1911). The State Historical Society of Missouri: Historic Missourians . Lincoln Steffens Exposes “Tweed Days in St. Louis.” History Matters . The Breakers. The Preservation Society of Newport County . The Progressive Era (1890-1920). The Eleanor Roosevelt Papers Project . Biltmore Estate History. Biltmore . Margaret Olivia Sage. Philanthropy Roundtable .

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Handout A: Background Essay: African Americans in the Gilded Age

Background Essay: African Americans in the Gilded Age

Directions: Read the essay and answer the review questions at the end.

In the late nineteenth century, the promise of emancipation and Reconstruction went largely unfulfilled and was even reversed in the lives of African Americans. Southern blacks suffered from horrific violence, political disfranchisement, economic discrimination, and legal segregation. Ironically, the new wave of racial discrimination that was introduced was part of an attempt to bring harmony between the races and order to American society.

Constitutional amendments were ratified during and after the war to protect the natural and civil rights of African Americans. The Thirteenth Amendment forever banned slavery from the United States, the Fourteenth Amendment protected black citizenship, and the Fifteenth Amendment granted the right to vote to African-American males. In addition, a Freedmen’s Bureau was established to help the economic condition of former slaves, and Congress passed the Civil Rights Act in 1875.

Roadblocks to Equality

Despite these legal protections, the economic condition of African Americans significantly worsened in the last few decades of the nineteenth century. Poor southern black farmers were generally forced into sharecropping whereby they borrowed money to plant a year’s crop, using the future crop as collateral on the loan. Often, they owed so much of the resulting crop that they fell into debt for the following year and eventually into a state of debt peonage. Since 90 percent of African Americans lived in the rural South, most were sharecroppers. The story was not much different as African Americans moved to southern and northern cities. Black women found work as domestic servants and men in urban factories, but they were usually in menial, low-paying jobs because white employers discriminated against African Americans in hiring. Black workers also faced a great deal of racism at the hands of labor unions which severely limited their ability to secure high-paying, skilled jobs. While the Knights of Labor and United Mine Workers were open to blacks, the largest skilled-worker union, the American Federation of Labor, curtailed black membership, thereby limiting them to menial labor.

African Americans throughout the country suffered from violence and intimidation. The most infamous examples of violence were brutal lynchings, or executions without due process, by angry white mobs. These travesties resulted in hangings, burnings, shootings, and mutilations for between 100 and 200 blacks—especially black men falsely accused of raping white women—annually. Race riots broke out in southern and northern cities from New Orleans and Atlanta to New York and Evansville, Indiana, causing dozens of deaths and property damage.

Although African Americans were elected to Congress and state legislatures during Reconstruction, and enjoyed the constitutional right to vote, black civil rights were systematically stripped away in a campaign of disfranchisement. One method was to charge a poll tax to vote, which precious few black sharecroppers could afford to pay. Another strategy was the literacy test which few former slaves could pass. Furthermore, the white clerks at courthouses had already decided that any black applicant would fail, regardless of his true reading ability. Since both of those devices at times excluded poor whites as well, grandfather clauses were introduced to exempt from the literacy test anyone whose father or grandfather had the right to vote before the Civil War. Moreover, the Supreme Court declared the 1875 Civil Rights Act guaranteeing equal access to public facilities and transportation to be unconstitutional in the Civil Rights Cases (1883) because the law regulated the private discriminatory conduct of individuals rather than government discrimination.

Segregation

One of the most pervasive and visible signs of racism was the rise of informal and legal segregation, or separation of the races. In a wholesale violation of liberty and equality, southern state legislatures passed “Jim Crow” segregation laws that denied African Americans equal access to public facilities such as hotels, restaurants, parks, and swimming pools. Southern schools and public transportation had vastly inferior “separate but equal” facilities that left the black minority subject to unjust majority rule. Housing covenants and other devices kept blacks in separate neighborhoods from whites. African Americans in the North also suffered informal residential segregation and economic discrimination in jobs.

In one of its more infamous decisions, the Supreme Court ruled that segregation statutes were legal in Plessy v. Ferguson (1896). In Plessy, the Court decided that “separate, but equal” public facilities did not violate the Equal Protection Clause of the Fourteenth Amendment or imply the inferiority of African Americans. Justice John Marshall Harlan was one of the two dissenters who wrote, “Our constitution is colorblind, and neither knows nor tolerates classes among citizens. In respect of civil rights, all citizens are equal before the law.”

Progressive and Race Relations

One of the great ironies of the series of reforms instituted in the early twentieth century known as the Progressive Era was that segregation and racism were deeply enshrined in the movement. Progressives were a group of reformers who believed that the industrialized, urbanized United States of the nineteenth century had outgrown its eighteenth-century Constitution. That Constitution did not give government, especially the federal government, enough power to deal with unprecedented problems. Many Progressives embraced Social Darwinism and eugenics which was part of the most advanced science and social science taught in universities and scientific circles. Social Darwinism ranked various groups, which its proponents considered “races,” according to certain characteristics and labelled Anglo-Saxon and Teutonic peoples as superior and Southeastern Europeans, Jews, Asians, Hispanics, and Africans as inferior races. Therefore, there was a supposed scientific basis for segregation as the “higher” races ruled the “lower.” Moreover, Progressives generally endorsed segregation as a means of achieving their central goal of social order and harmony between the races. There were notable exceptions, such as Jane Addams, black Progressives such as W.E.B. DuBois, and the Progressives of both races who founded the National Association for the Advancement of Colored People (NAACP), but Progressive ideology contributed to the growth of segregation.

Progressive Presidents Theodore Roosevelt and Woodrow Wilson generally supported the segregationist order. While Roosevelt courageously invited African-American leader Booker T. Washington to dinner in the White House and condemned lynching, he discharged 170 black soldiers because of a race riot in Brownsville, Texas in 1906. Wilson had perhaps a worse record on civil rights as his administration fired many black federal employees and segregated federal departments.

Black Leadership

Several black leaders advanced the cause of black civil rights and helped organize African Americans to defend their interests through self help. The highly-educated journalist, Ida B. Wells, launched a crusade against lynching by exposing the savage practice. She also challenged segregation by refusing to change her seat on a train because it was in an area reserved for white women. Other African Americans unsuccessfully boycotted segregated streetcars in urban areas but utilized a method that would prove successful in the mid-twentieth century.

A debate took shape between two African-American leaders, Booker T. Washington and W.E.B. DuBois. Washington was a former slave who founded the Tuskegee Institute for blacks in the 1880s and wrote Up from Slavery. He advocated that African Americans achieve racial equality slowly by patience and accommodation. Washington thought that blacks should be trained in industrial education and demonstrate the character virtues of hard work, thrift, and self-respect. They would therefore prove that they deserved equal rights and equal opportunity for social mobility. At the 1895 Atlanta Exposition, Washington delivered an address that posited, “In the long run it is the race or individual that exercises the most patience, forbearance, and self-control in the midst of trying conditions that wins…the respect of the world.”

DuBois, on the other hand, was a Harvard and Berlin-educated intellectual who believed that African Americans should win equality through a liberal arts education and fighting for political and civil equality. He wrote the Souls of Black Folk and laid out a vision whereby the “talented tenth” among African Americans would receive an excellent education and become the teachers and other professionals who would uplift fellow members of their race. He and other black leaders organized the Niagara Movement that fought segregation, lynching, and disfranchisement. In 1909 the movement’s leaders founded the NAACP, which fought for black equality and initiated a decades-long legal struggle to end segregation. DuBois edited its journal named The Crisis and wrote about issues affecting African Americans. He had the simple wish to “make it possible for a man to be both a Negro and an American, without being cursed and spit upon by his fellows, without having the doors of opportunity closed roughly in his face.”

Wartime Changes

American participation in the Spanish-American War and World War I initiated a dramatic change in the lives of African Americans and in the demography of American society. In both wars, black soldiers were relegated to segregated units and generally assigned to menial jobs rather than front-line combat. However, black soldiers had opportunities to fight in the charges against the Spanish in Cuba and against the Germans in the trenches of France. They demonstrated that they were just as courageous as white men even as they fought for a country that excluded them from its democracy. Moreover, travel to the North and overseas showed thousands of African Americans the possibility of freedom and equality that would be reinforced in World War II while fighting tyranny abroad.

Wartime America witnessed rapid change in the lives of African Americans especially in the rural South. Hundreds of thousands left southern farms to migrate to cities in the South such as Birmingham or Atlanta, or to northern cities in a mass movement called the Great Migration. This internal migration greatly increased the number of African Americans living in American cities. As a result, tensions grew with whites over jobs and housing that led to deadly race riots during and immediately after the war. However, a thriving black culture in the North also resulted in the Harlem Renaissance and the celebration of black artists.

The Great Migration eventually led to over six million African Americans following these migration patterns and laying the foundation for the Civil Rights Movement of the mid-twentieth century. Blacks resisted segregation when it was instituted and continued to organize to challenge its threat to liberty and equality in America.

REVIEW QUESTIONS

• What constitutional protections did the Thirteenth, Fourteenth, and Fifteenth Amendments give African Americans?
• What economic conditions did African Americans face in the south and north in the late nineteenth century?
• What kinds of violence did African Americans suffer during the late nineteenth century?
• Despite the amendments to the Constitution protecting the rights of African Americans, what discriminatory devices systematically took away these rights?
• What was the ruling in the Plessy v. Ferguson (1896) case? Did the case result in the advance or reversal of the rights of African Americans? Explain your answer.
• Did African Americans make gains or suffer setbacks to their rights during the Progressive Era? Explain your answer.
• Compare and contrast the means and goals of achieving black equality for Booker T. Washington and W.E.B. DuBois.
• How did World War I and the Great Migration change the lives of African Americans?

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Unit 11.5: Gilded Age and Progressive Era

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Gilded Age and Progressive Era

The United States was transformed from an agrarian to an increasingly industrial and urbanized society.  Although this transformation created new economic opportunities , it also created societal problems that were addressed by a variety of reform efforts .

Unit 5 - Gilded Age and Progressive Era - Unit Plan

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End of Unit Assessments: Unit 5 Synthesis Task

Students will recall content learned in unit 5 and organize and align content according to the three unit themes (economic systems, reform movements, equality).  Students will then use this content as evidence to answer the unit 5 essential questions.

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Four introductory vocabulary routines to introduce content and concepts.  

Unit Vocabulary: Vocabulary Review Activity - Mad Libs

Students review vocabulary and content using a mad-libs style reading worksheet. 

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Unit Vocabulary: Unit 5 Vocabulary Chart - Teacher

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Building Context See 4 items Hide 4 items

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Building Context: Unit 5 Essential Questions Introduction

Students will use a durable learning routine, images draw you in, to think conceptually about unit themes and essential questions.  

Building Context: Impact of Railroads

Students will compare and contrast three maps to analyze the impact of railroads on the United States after the Civil War.  

Building Context: Gilded Age Graphs

Students will examine graphs detailing various aspects of the Gilded Age to make claims about changes in American population and economy.  

Differentiated version of Gilded Age Graphs Curricular Resource 

Industrialization & the Gilded Age See 10 items Hide 10 items

These curricular resources explore the impact of the post-civil war industrial revolution as well as the birth of the Gilded Age.  

Industrialization & the Gilded Age: Industrialization in the Gilded Age

Students will study how technology, natural resources, and transportation fueled the post-civil war industrial revolution by completing a graphic organizer and responding to a prompt.   

Industrialization & the Gilded Age: Causes and Effects of Industrialization (1870 - 1910)

Students will examine the various causes and effects of industrialization between 1870 - 1910 through group work. 

Industrialization & the Gilded Age: Labor Movement

Analysis: Students will compare and contrast  the Haymarket Riot, the Homestead Strike, the Pullman Strike, and the Ludlow Massacre.  

Industrialization & the Gilded Age: Media Bias and Labor Unions

Students will compare and contrast newspaper accounts of the Haymarket Riot and Pullman Strike.  

Students will compare and contrast newspaper accounts of the Haymarket Riot and the Pullman Strike. 

Industrialization & the Gilded Age: Immigration and Urbanization

Students will examine primary and secondary source documents to analyze the cause and effect relationship between immigration and urbanization in the gilded age.  

Industrialization & the Gilded Age: Immigration: Arriving in America

Students will compare and contrast a primary (photograph) and secondary (poem) source to evaluate immigrant experiences upon arrival in America during the gilded age.  

Industrialization & the Gilded Age: Robber barons or Captains of Industry?

Students will use the evidence gathered from the primary and secondary sources to draft an essay describing the Gilded Age businessman.

Industrialization & the Gilded Age: Political Cartoons of the Gilded Age

Students will analyze various political cartoons from the gilded age, learning to use a cartoon analysis protocol that can be applied to any political cartoon or image.  

Industrialization & the Gilded Age: Triangle Shirtwaist Factory Fire

Students will analyze a primary source document, view a video clip, and analyze a second primary source document to learn about causes of the Triangle Shirtwaist Factory Fire.  

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These curricular resources explore Progressive Era reforms and associated social movements.  

Reform Movements: Progressive Era Reform Movements

Students will analyze social and federal reforms of the Progressive Era, focusing on cause and effect.  Students will complete a graphic organizer, answer reflection questions, and respond to a written task. 

Reform Movements: Booker T. Washington and W.E.B. Du Bois

Students will analyze a secondary source (poem) and three primary sources (Souls of Black Folks, Talented Tenth, and the Atlanta Compromise).  This will help them understand the responses of Booker T. Washington and W.E.B. Du Bois to the Jim Crow era and Gilded Age.  

Reform Movements: Pure Food and Drugs Act

Students will analyze artifacts from the progressive era to learn about the causes and effects of the Pure Food and Drugs Act as well as the Meat Inspection Act.  

Reform Movements: Populist Party Platform

How did industrialization impact farmers? What reforms did the Populist Party propose?  

Reform Movements: Living Wage

What is a living wage? Why was it a suggested reform during the Gilded Age? Students will analyze a primary source document related to this topic and compare it to modern day living wage debates. 

Reform Movements: 19th Amendment

Students will use evidence from the documents to compare and contrast the National Woman's Party & the National American Woman Suffrage Association.

Reform Movements: How the Other Half Lives

Students will analyze the historical context of the gilded age in order to study an important progressive era movement - muckraking journalism.  Students will read excerpts and review images from Jacob Riis's How the Other Half Lives. 

Reform Movements: DBQ: Women's Suffrage

Students will analyze various documents from the women's rights movement and analyze arguments for and against women's suffrage.

Students will use evidence from the documents to discuss the conditions that led Progressive Reformers to address their goal and the extent to which the goal was achieved.

Unit Synthesis Task See 1 item Hide 1 item

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The Gilded Age

63 pages • 2 hours read

The Gilded Age: A Tale of Today

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Summary and Study Guide

The Gilded Age , by Mark Twain and Charles Dudley Warner, is a satirical work of fiction originally published in 1873. Notable for being the only novel Twain co-authored with a collaborator, The Gilded Age satirizes greed and corruption in America’s post–Civil War era. Mark Twain, best known for his celebrated classic The Adventures of Huckleberry Finn , was a pioneer in American literary Realism and vernacular writing. Charles Dudley Warner was a writer, editor, and close friend of Twain.

Written in the wake of the Civil War, The Gilded Age lampoons the racism , sexism , and unchecked avarice of the Antebellum South alongside the corruption of the federal government in Washington, DC. The book’s title, a play on the idea of a golden age, refers to the process of gilding—covering non-precious metals or other materials with a thin, cosmetic layer of gold. This metaphor for the era’s illusory promise of wealth, disguising an economy of fraud and exploitation, gave the era its nickname. The historical period in the US from approximately 1870 to 1900 is now referred to as the Gilded Age.

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Plot Summary

The Gilded Age begins in the mid-19th century in Tennessee. Silas Hawkins is the patriarch of a poor Southern family. Despite having followed his charismatic friend Beriah Sellers into numerous speculative ventures, each failing to produce the promised riches, Silas hasn’t lost confidence in his friend or in his family’s future prosperity. Silas’s purchase of 75,000 acres of land in Tennessee, which he assures his wife will someday make their children rich beyond measure, marks the narrative’s inciting incident. At Beriah’s encouragement, Silas moves to Missouri with his wife, Nancy Hawkins, and two children, Washington and Emily Hawkins. He adopts two orphaned children, Clay and Laura, along the way. In the ensuing twelve years, Silas endures several financial catastrophes. Each takes a toll, and Silas dies a broken man.

A second storyline follows Philip Sterling and Harry Brierly, two men living in New York City who decide to seek their fortune out west, accompanying a railroad surveying team to Missouri. There they meet and befriend Beriah, who inspires Harry to partner in his schemes. Philip dedicates himself to studying engineering and railroad science while hoping to win the heart of the woman he loves, Ruth Bolton . Ruth, who lives in Philadelphia, longs to leave her Quaker community and defy society’s gender norms by becoming a doctor. Laura Hawkins is betrayed by a confederate soldier named Colonel Selby, who marries then deserts her. After the war, Senator Dilworthy visits the Missouri town where the Hawkins family is living along with Beriah, Philip, and Harry. Senator Dilworthy takes Washington Hawkins back to DC as his personal secretary and invites Laura Hawkins to visit during Congress’s winter session.

Beriah and Harry’s plan to found a great city in rural Missouri goes awry when money allocated to the project by Congress doesn’t come and the unpaid workers revolt. Harry’s investigation into the matter reveals such profound corporate financial corruption that he and Beriah now owe thousands of dollars. Ruth’s father hires Philip to survey land he owns in Pennsylvania. Confident there’s an abundant coal vein on the land, he begins a costly mining operation. Senator Dilworthy develops a plan with Washington and Laura to sell their Tennessee land to the government, via an appropriations bill, as a location for a university open to all races. They use bribery, blackmail, and any other tactic necessary to get the bill passed.

Philip’s mining project runs out of money and has to be shut down. The Tennessee land bill passes in the House of Representatives. Laura runs into Col. Selby, who is in DC on business with his family. Her plans for revenge falter with his renewed declarations of love, and she insists he leave his wife. He agrees, but when he and his family abruptly leave town, Laura follows and kills Col. Selby with a gun belonging to her brother. She is arrested and charged with murder. Ruth continues studying medicine and finally declares her love for Philip. Harry gets over an infatuation with Laura and starts a new venture out west.

Amidst an epic bribery scandal, Senator Dilworthy loses his bid for re-election. The Tennessee land bill fails to pass in the Senate. Laura’s defense lawyer successfully portrays her in court as a victim of past traumas that led to insanity, and she’s acquitted. Newly freed, she accepts an offer to go on a lecture tour but is jeered off the stage at her first appearance. She’s found dead shortly after. Washington finally lets go of the Tennessee land and his financial expectations of it. He heads home to Missouri to marry his sweetheart. Beriah goes with him, scheming new ways to achieve fame and fortune. Philip reopens the coal mine with a loan from a family friend. After a great deal of disappointment, his perseverance pays off when he finds enough coal to make him quite rich. Ruth pulls through a grave illness, and the two happily start their lives together.

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Home — Essay Samples — History — Gilded Age — The Gilded Age And How It Shaped America

The Gilded Age and How It Shaped America

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Source: Emmanuel Saez and Gabriel Zucman • Note: Tax rates shown include levies paid at all levels of government. Government transfers such as Social Security benefits have not been subtracted.

In the 1960s, the 400 richest Americans paid more than half of their income in taxes. Higher tax rates for the wealthy kept inequality in check and helped fund the creation of social safety nets like Medicare, Medicaid and food stamps.

Today, the superrich control a greater share of America’s wealth than during the Gilded Age of Carnegies and Rockefellers. That's partly because taxes on the wealthy have cratered. In 2018, America's top billionaires paid just 23 percent of their income in taxes.

For the first time in the history of the United States, billionaires had a lower effective tax rate than working-class Americans.

Guest Essay

It’s Time to Tax the Billionaires

By Gabriel Zucman

Gabriel Zucman is an economist at the Paris School of Economics and the University of California, Berkeley.

Until recently, it was hard to know just how good the superrich are at avoiding taxes. Public statistics are oddly quiet about their contributions to government coffers, a topic of legitimate interest in democratic societies.

Over the past few years, I and other scholars have published studies and books attempting to fix that problem. While we still have data for only a handful of countries, we’ve found that the ultrawealthy consistently avoid paying their fair share in taxes. In the Netherlands, for instance, the average taxpayer in 2016 gave 45 percent of earnings to the government, while billionaires paid just 17 percent.

Billionaires avoid taxes outside

the United States, too

United States

Netherlands

Lower earners

0-50th percentile

Middle earners

51-90th percentile

High earners

90-99.99th percentile

Billionaires

Billionaires avoid taxes outside the United States, too

50% total tax rate

Sources: Demetrio Guzzardi, et al., Journal of the European Economic Association; Emmanuel Saez and Gabriel Zucman; Institut des Politiques Publiques; Netherlands Bureau for Economic Policy Analysis

Note: Data is from 2015 for Italy; 2016 for the Netherlands and France; 2018 for the United States.

Why do the world’s most fortunate people pay among the least in taxes, relative to the amount of money they make?

The simple answer is that while most of us live off our salaries, tycoons like Jeff Bezos live off their wealth. In 2019, when Mr. Bezos was still Amazon’s chief executive, he took home an annual salary of just $81,840 . But he owns roughly 10 percent of the company , which made a profit of $30 billion in 2023.

If Amazon gave its profits back to shareholders as dividends, which are subject to income tax, Mr. Bezos would face a hefty tax bill. But Amazon does not pay dividends to its shareholders. Neither does Berkshire Hathaway or Tesla. Instead, the companies keep their profits and reinvest them, making their shareholders even wealthier.

Unless Mr. Bezos, Warren Buffett or Elon Musk sell their stock, their taxable income is relatively minuscule. But they can still make eye-popping purchases by borrowing against their assets. Mr. Musk, for example, used his shares in Tesla as collateral to rustle up around $13 billion in tax-free loans to put toward his acquisition of Twitter.

Jeff Bezos arriving for a news conference after flying into space in the Blue Origin New Shepard rocket on July 20, 2021.

Getty Images

Outside the United States, avoiding taxation can be even easier.

Take Bernard Arnault, the wealthiest person in the world. Mr. Arnault’s shares in LVMH, the luxury goods conglomerate, officially belong to holding companies that he controls. In 2023, Mr. Arnault’s holdings received about $3 billion in dividends from LVMH. France — like other European countries — barely taxes these dividends, because on paper they are received by companies. Yet Mr. Arnault can spend the money almost as if it were deposited directly into his bank account, so long as he works through other incorporated entities — on philanthropy , for instance, or to keep his megayacht afloat or to buy more companies .

Historically, the rich had to pay hefty taxes on corporate profits, the main source of their income. And the wealth they passed on to their heirs was subject to the estate tax. But both taxes have been gutted in recent decades. In 2018, the United States cut its maximum corporate tax rate to 21 percent from 35 percent. And the estate tax has almost disappeared in America. Relative to the wealth of U.S. households, it generates only a quarter of the tax revenues it raised in the 1970s.

The falling U.S. corporate tax rate

Reagan tax cuts

Trump tax cuts

Source: Internal Revenue Service

Note: Tax rates are for each year’s highest corporate income bracket.

So what should be done?

One obstacle to taxing the very rich is the risk they may move to low-tax countries. In Europe, some billionaires who built their fortune in France, Sweden or Germany have established residency in Switzerland , where they pay a fraction of what they would owe in their home country. Although few of the ultrawealthy actually move their homes , the possibility that they might has been a boogeyman for would-be tax reformers.

There is a way to make tax dodging less attractive: a global minimum tax. In 2021, more than 130 countries agreed to apply a minimum tax rate of 15 percent on the profits of large multinational companies. So no matter where a company parks its profits, it still has to pay at least a baseline amount of tax under the agreement.

In February, I was invited to a meeting of Group of 20 finance ministers to present a proposal for another coordinated minimum tax — this one not on corporations, but on billionaires. The idea is simple. Let’s agree that billionaires should pay income taxes equivalent to a small portion — say, 2 percent — of their wealth each year. Someone like Bernard Arnault, who is worth about $210 billion, would have to pay an additional tax equal to roughly $4.2 billion if he pays no income tax. In total, the proposal would allow countries to collect an estimated $250 billion in additional tax revenue per year, which is even more than what the global minimum tax on corporations is expected to add.

Bernard Arnault watching the men’s singles final at the French Open on June 8, 2014.

Abaca Press

Critics might say that this is a wealth tax, the constitutionality of which is debated in the United States. In reality, the proposal stays firmly in the realm of income taxation. Billionaires who already pay the baseline amount of income tax would have no extra tax to pay. The goal is that only those who dial down their income to dodge the income tax would be affected.

Critics also claim that a minimum tax would be too hard to apply because wealth is difficult to value. This fear is overblown. According to my research, about 60 percent of U.S. billionaires’ wealth is in stocks of publicly traded companies. The rest is mostly ownership stakes in private businesses, which can be assigned a monetary value by looking at how the market values similar firms.

One challenge to making a minimum tax work is ensuring broad participation. In the multinational minimum tax agreement, participating countries are allowed to overtax companies from nations that haven’t signed on. This incentivizes every country to join the agreement. The same mechanism should be used for billionaires. For example, if Switzerland refuses to tax the superrich who live there, other countries could tax them on its behalf.

We are already seeing some movement on the issue. Countries such as Brazil, which is chairing the Group of 20 summit this year and has shown extraordinary leadership on the issue, and France , Germany, South Africa and Spain have recently expressed support for a minimum tax on billionaires. In the United States, President Biden has proposed a billionaire tax that shares the same objectives.

To be clear, this proposal wouldn’t increase taxes for doctors, lawyers, small-business owners or the rest of the world’s upper middle class. I’m talking about asking a very small number of stratospherically wealthy individuals — about 3,000 people — to give a relatively tiny bit of their profits back to the governments that fund their employees’ educations and health care and allow their businesses to operate and thrive.

The idea that billionaires should pay a minimum amount of income tax is not a radical idea. What is radical is continuing to allow the wealthiest people in the world to pay a smaller percentage in income tax than nearly everybody else. In liberal democracies, a wave of political sentiment is building, focused on rooting out the inequality that corrodes societies. A coordinated minimum tax on the superrich will not fix capitalism. But it is a necessary first step.

More on tax evasion and inequality

This Is Tax Evasion, Plain and Simple

By Gabriel Zucman and Gus Wezerek

The Tax Pirates Are Us

By Binyamin Appelbaum

How to Tax Our Way Back to Justice

By Emmanuel Saez and Gabriel Zucman

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Gabriel Zucman is an economist at the Paris School of Economics and the University of California, Berkeley, and a co-author of “The Triumph of Injustice: How the Rich Dodge Taxes and How to Make Them Pay.”

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