Gilded Age Robber Barons ROBBER BARONS ROBBER BARON

Gilded Age Robber Barons

ROBBER BARONS • ROBBER BARON – A BUSINESS OWNER/EXECUTIVE WHO ACQUIRED WEALTH THROUGH ETHICALLY QUESTIONABLE TACTICS • CAPTAIN OF INDUSTRY – THE HEAD OF COMPANY AND INDUSTRY • MONOPOLY – COMPANY THAT DOMINATES ONE INDUSTRY

Monopolies • Immigrants provide a huge source of cheap labor • Monopoly – company that dominates 1 industry • Some businessmen become wealth robber barons

POLITICAL CARTOON #1 • THE TRUSTS ARE DEPICTED AS KINGS AND NOBLES WIELDING SWORDS OF LEGISLATION • THE RICH ARE LARGE AND FAT AND TOWER OVER THE POOR. THIS SUGGESTS THAT THEY HAD LOTS OF POWER

ROBBER BARONS OR CAPTAINS OF INDUSTRY? • ROBBER BARONS LEAD TO PEOPLE HAVING A NEGATIVE VIEW OF BIG BUSINESS • THEY WERE CRUEL AND RUTHLESS • THEY WOULD STOP AT NOTHING TO ACHIEVE GREAT WEALTH

ROBBER BARONS OR CAPTAINS OF INDUSTRY? • SOME VIEWED THESE MEN AS INGENIOUS AND INDUSTRIAL LEADERS • THEY TRANSFORMED THE AMERICAN ECONOMY • THEY WERE PRAISED FOR THEIR CHARITY

Robber Barons o Wealthy and powerful businessmen o Use exploitative practices &government influence o Pay extremely low wages o Squash competition o Create monopolies & raise prices

Andrew Carnegie o SCOTTISH IMMIGRANT o FOUNDED CARNEGIE STEEL COMPANY o PHILANTHROPIST WHO GAVE AWAY MILLIONS OF $$$ o HIS STEEL COMPANY USED

PHILANTHROPIST • A PERSON WHO SEEKS TO PROMOTE THE WELFARE OF OTHERS BY DONATING LARGE SUMS OF MONEY TO A CHARITY

Cornelius Vanderbilt § Controlled shipping & railroads § Used vertical integration to control every part of the shipping industries

VERTICAL INTEGRATION • AN ARRANGEMENT IN WHICH THE SUPPLY CHAIN OF A COMPANY IS OWNED BY THAT COMPANY.

HORIZONTAL INTEGRATION • THE MERGER OF COMPANIES AT THE SAME STAGE OF PRODUCTION IN THE SAME OR DIFFERENT INDUSTRIES

POLITICAL CARTOON #2 • THE WORKMAN IS BURNED AT THE STAKE THAT IS LABELED MONOPOLY • THE WOOD THAT BREATHS FIRE ON THE WORKMEN DEPICTS DIFFERENT BUSINESSMEN AND INDUSTRIES • THE WORKMAN IS AT THE MERCY OF BOTH MONOPOLIES AND BUSINESSMEN

JP Morgan § Banker & Financier § Bought Carnegie Steel to form US Steel § Bailed out the US government § Created GE

POLITICAL CARTOON #3 • JP MORGAN IS MUCH BIGGER THAN UNCLE SAM. THIS MAKES IT LOOK LIKE HE HAS LOTS OF POWER AND INFLUENCE OVER THE GOVERNMENT

John D. Rockefeller § Founded Standard Oil § Became the richest man in history § Created an oil monopoly through Horizontal integration

POLITICAL CARTOON #4 • THE LARGE MAN IN ROCKEFELLER • HE IS HOLDING THE WHITE HOUSE IN HIS HAND • THIS SUGGESTS THAT HE HOLDS THE GOVERNMENT IN THE PALM OF HIS HAND. THIS MEANS HE HAS A LOT OF POWER OVER THEM

SOCIAL DARWINISM • CHARLES DARWIN • ORIGINS OF SPECIES (1859) • ALL ANIMAL LIFE HAD EVOLVED BY A PROCESS OF NATURAL SELECTION • ONLY THE STRONG SURVIVE TO REPRODUCE

SOCIAL DARWINISM • FREE COMPETITION IN THE ECONOMY, LIKE NATURAL SELECTION, WOULD ENSURE SURVIVAL OF THE FITTEST • SOCIETY SHOULD DO AS LITTLE AS POSSIBLE TO INTERFERE WITH PEOPLE’S PURSUIT OF SUCCESS

THE GOVERNMENT RESPONSE • 1890 SHERMAN ANTITRUST ACT – IN RESPONSE TO SOCIAL DARWINISM • OUTLAWED ANY COMBINATION OF COMPANIES THAT RESTRAINED INTERSTATE TRADE • WAS NOT EFFECTIVE AGAINST TRUSTS • PRO BUSINESS COURTS AND POLITICIANS DID NOT REALLY ENFORCE LAWS

GRADUATED INCOME TAX • PEOPLE PAY INCREASING AMOUNTS BASED UPON HOW MUCH THEY EARN • 16 TH AMENDMENT – “THE CONGRESS SHALL HAVE POWER TO LAY AND COLLECT TAXES ON INCOMES, FROM WHATEVER SOURCE DERIVED, WITHOUT APPORTIONMENT AMONG THE SEVERAL STATES, AND WITHOUT REGARD TO ANY CENSUS OR ENUMERATION. ”