Big Business Labor Were Big Business leaders good
Big Business & Labor Were Big Business leaders good or bad for America?
The Robber Barons • Businessmen and bankers who made huge personal fortunes by using unfair business practices • They claim to be “captains of industry” and justify their actions using Social Darwinism – survival of fittest! 1) A. Carnegie - Steel 2) J. Rockefeller Oil 3) JP Morgan. Banking/Steel
Andrew Carnegie • Carnegie was a Scottish immigrant who worked his way up to Superintendent of Pennsylvania railroad by age 24 • Begins investing in & buying other companies (oil, cable & steel) • Carnegie Steel becomes one of most successful companies in US Carnegie’s Business Strategy 1. Vertical Integration: Buy out suppliers of needed products and services so you control production top to bottom 2. Horizontal Integration: buy out competing producers so you are only company that offers that service 3. Pay workers low wages & no unions
John Rockefeller • Rockefeller makes Standard Oil one of the biggest and most profitable American cos • Rockefeller tactics: 1. paid very low wages 2. lowered prices to force competition to sell 3. formed trusts to avoid monopoly laws • A trust bought out competition, not Rockefeller directly. However, Rockefeller controlled the trust Discuss: Carnegie and Rockefeller both created successful companies that employed thousands and helped US industry grow. Do you see them as helpful or harmful to America?
JP Morgan & Govt Response -Morgan was a master of using of the banking system to kill competition and to form monopolistic trusts -Discuss: How can US gov stop monopolistic trusts while keeping a “free market” system? -1890: Congress passes Sherman Anti-trust Act makes it illegal to form a trust that interfered with free trade/competition - Goal: to stop trusts but difficult to enforce
Rise of Labor Unions • In addition to low wages, workers also dealt w/: 1) 6 -7 day weeks, 12+ hour days, no vacation, no sick leave 2) Poor physical conditions: polluted and often dangerous • To improve conditions, labor unions formed to help workers - AF of L (skilled), Knights of Labor (industrial/unskilled), IWW (everyone – socialist ideals)
Strikes & Violence Plague the Nation 1) Several major strikes by unions during late 1800 s • Most resulted in violence as unions, replacement workers & police clashed, big business blamed unions for violence
2) Homestead Strike was one of most infamous strikes • Carnegie steel purchased Homestead Steel Mill and tried to destroy the union by locking out union members • Carnegie Steel also hired replacement workers & Pinkerton Detectives to protect them, 12 die in violent clash 3) Pullman Strike was when Eugene V. Debs leads 4 K in strike against Pullman Rail • Pullman hires strike breakers (scabs), violence ensues, & Debs is jailed
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