Big Business and Labor

Andrew CarnegieEntered the steel business in 1873Modeled his industry off of Great Britain’s

◦By 1899 he manufactured more steel than all companies in Great Britain combined

Business Strategies◦Vertical integration-a process in which he

bought out all his suppliers (ex: coal fields and iron mines, ore freighters, and railroad lines

◦Horizontal integration-having companies producing similar products merge to have a monopoly

Book Page 448

Social DarwinismGrew out of the English Charles

Darwin’s theory of evolutionHelped regulate economics with

laissez faire ◦Natural law governed business not

the government

“If ya can’t beat em, Join em!”Many industrialists pursued

horizontal integration in the form of mergers

Holding companies◦Set up monopolies by setting up a

company that did nothing but hold stocks

RockefellerJohn D. Rockefeller

◦Rockefeller’s Standard Oil Company of Ohio

◦Formed trust agreements◦People in the trust turned their stock

over to a group of trustees◦These companies were in turn

entitled to dividends on profits earned by the trusts

◦Not Legal Mergers!

Robber BaronsRockefeller earned high profits by

under paying his employees◦Then was able to sell oil at a lower

price◦Once he controlled the market he

would hike the price back upRockefeller, ruthless

businessman, heavy philanthropist

“What a funny little government”

Sherman Antitrust actMade it illegal to form a trust that

interfered with free trade between states or other countries

The act never defined the term “trust” and the government eventually quit trying to enforce the act

Labor Unions EmergeLong hours and Danger

◦12 hour work days◦Six days a week◦No vacation, sick leave,

unemployment compensation or workman’s compensation

1882 an average of 675 laborers were killed in work related accidents EACH WEEK!

FamilyBetween 1890-1910

◦Women working for wages doubled from 4 million to more than 8 million

◦20% of boys under the age 15 ◦10% of girls under the age 15

Some as young as 5 years old

Labor Organizing1866 first labor union formed National Labor Union (NLU)

◦Refused to admit African Americans lead to the creation of the CNLU

NLU wanted to link existing local unions◦Knights of Labor

“An injury to one is the conern of all”Both supported

◦8 hour workday◦“equal pay for equal work”

Union MovementsSamuel Gompers led the Cigar Makers’

International Union to join with other craft unions to form the American Federation of Labor (AFL)

Focused on◦Collective bargining on wages, hours and

working conditionsUsed strikes as a major tactic

◦Led to the average weekly wages to rise from $17.50 to $24

◦Work week from 55 hours to 49 hours

Strikes turn violentThe Great Strike of 1877

◦ B&O railroad workers protest wage cut◦ Federal troops had to be called in to end the strike

after several state governors' had to ask President Hayes to stop the strike

The Haymarket Affair◦ 3,000 people gather at Chicago’s Haymarket Square◦ Protesting police brutality after one striker had been

killed and several injured ◦ Someone tossed a bomb into the police line and the

police fired on the workers◦ Seven police officers and several workers died in the

following chaos

Strikes turn ViolentThe Homestead Strike

◦ Three detectives and nine workers died, steelworkers forced out the Pinkerton Detective Agency and kept the plant closed until the National Guard arrived

The Pullman Company Strike◦ More than 2,000 workers laid off and wages cut by

25 to 50% for the others◦ Many workers were taking home less than $6 a week◦ Pullman hired strikebreakers and federal troops were

sent in ◦ Pullman fired most of the strikers and blacklisted

many of them so they would never be hired again

Women Organize Marry Harris Jones- supported the Great Strike of

1877 and later organized for the United Mine Workers of America

Triangle Shirtwaist Factory◦ Fire broke out on March 25 in New York City◦ Doors had been locked to prevent theft◦ Only one door could be opened, but it was blocked by fire◦ The women were on the 8,9, and 10th floors and the New

York Fireman’s latter only reached 6 floors high 146 women died

◦ Public was outraged when the jury acquitted the factory owners of manslaughter

◦ Triangle Fire