Big Business and Labor:

Transcription

1 Big Business and Labor: "God gave me money", and he did not apologize for it. He felt at ease and righteous following John Wesley s dictum, "gain all you can, save all you can, and give all you can. -John D. Rockefeller

2 Big Business leaders: Andrew Carnegie One of the first industrial moguls to make his own fortune Amassed a fortune from railroad dividends Entered the steel business in , the Carnegie Steel Company manufactured more steel than all the factories in Great Britain

3 Rise of the Steel Industry Always searched for new ways to make better products more cheaply Incorporated new machinery and techniques in accounting systems to track his costs Attracted talented people by offering them stock in the company and encouraged competition among his assistants Carnegie practiced vertical integration, a process in which he bought out his suppliers-coal fields and iron mines, ore freighters and railroad lines Carnegie also attempted to buy out competing steel producers. This process is known as horizontal integration, companies producing similar products merge By the time he sold his business in 1901, Carnegie owned almost the entire steel industry

4 J.P. Morgan Created holding companies dedicated to buying out stocks of other companies United States Steel holding company bought out Carnegie Steel and became the worlds largest most successful business This idea is represented by the corporations ability to maintain a monopoly, or complete control over an

5 John D. Rockefeller Established the Standard Oil Company Took a different approach to mergers: they joined with competing companies in trust agreements Participants in a trust turned their stock over to a group of trustees-people who ran the separate companies as one large corporation In return, the companies were entitled to dividends on profits earned by the trust Rockefeller used a trust to gain control of the oil industry in America

6 Philosophy Changes Business: Social Darwinism Grew out from the English naturalist Charles Darwin s theory of biological evolution He explained that a process of natural selection weeded out lesssuited individuals and enabled the best-adapted to survive Economists found Social Darwinism as a way to justify the doctrine of laissez faire (allow to do) According to this doctrine, the marketplace should not be regulated In other words, Social Darwinism created the notion that riches were signs of God s favor, and therefore the poor must be lazy or inferior people who deserved their lot in life

7 Robber Barons Corporations begin to hold more influence and power Alarmed at the tactics of industrialists, critics began to call them robber barons This was in response to these corporation s leaders accumulating vast amounts of money and paying their employees extremely low wages and driving competitors out of business Some big business leaders became philanthropists, donating large amounts of money to create charities and help the less fortunate

8 Regulating Business Alarmed by some of the tactics employed by these big business leaders, the government passed the 1890 Sherman Antitrust Act, which made it illegal to form a trust that interfered with free trade between states or with other countries Most of the Industry was accumulated in the north; this made it difficult for the Southerner to compete with the large corporations. Farmers in the South were hurt by the expensive costs of shipping their products to market on northern owned railroads

9 Labor Unions Emerge: Workers merged and consolidated to gain access to higher wages and safer working environments known as a union Laborers-skilled and unskilled, female and male, black and whitejoined together in unions

10 Reasons to Unionize: Reasonable work weeks Reasonable work hours per day Vacation time Unemployment compensation Reimbursement for injuries suffered on the job Clean working

11 Different Unions: Refer to Union Charts Each student will get a list of Unions

12 Strikes Turn Violent: The Great Strike of 1877 Workers from the B&O Railroad strike over wage cuts Governors complained that the strikes were impeding interstate commerce Federal troops end strike

13 Strikes Turn Violent continued The Haymarket Affair May 4, plus workers protest police brutality during early strikes at Chicago s Haymarket Square Confrontation between workers and police result in seven officers and several workers dead

14 Strikes Turn Violent continued The Homestead Strike: Announcements of wage cuts for steelworkers at the Carnegie Steel Company leads to strikes Company officials hired Pinkerton Detectives to guard the steel plant while they hired scabs, or strikebreakers Confrontation between detectives and strikers lead to the deaths of many Pennsylvanian National guard would eventually show up and end the strike Eventually, strikers and organizers would give in to management

15 Management and Government Pressures Union The more powerful unions became, the more employers feared them Management would forbid new hires to join the union Labors were forced to sign yellow-dog contracts, or a document that would swear them to never join a union Industrial leaders would invoke the help of the courts by turning the Sherman Antitrust Act against labor All a company had to do was say that the strike, picket line, or boycott would hurt interstate trade, and the state or federal government would issue