THE RISE OF BIG BUSINESS AKA MONOPOLIES AKA
THE RISE OF BIG BUSINESS AKA MONOPOLIES AKA TRUST
CORPORATIONS DEVELOP • • • Until 1900’s families owned small businesses that were local Corporations form that are owned by many people instead of one man Corporations increase their profits by: Paying low wages…upsets workers ● Broadened their advertising base ● Invested in inventors ● Many corporations formed monopolies in which they controlled the entire market (no competition) ●
TWO WAYS TO CREATE A MONOPOLY/TRUST • Horizontal Integration: ● ● ● used commonly by Rockefeller One company buys out all of its competitors … creates monopoliesthat will later be banned by the federal government • Vertical Integration: ● ● Buying up all the businesses that contribute to a final product Used commonly by Carnegie (steel company): • • • Owned iron mines Owned RR that transported the iron to factories Owned the coal mines that extracted the coal to power his steel mills and railroads
“Robber Barons” • Entrepreneurs who built monopolies that were unfair to consumers ● ● Swindled the poor Bought out competitors Seen as bad for the economy Rockefeller “Captains of Industry” • Entrepreneurs that were seen as serving the nation in a positive way ● Creating jobs ● Stimulated innovation ● Were charitable ● Carnegie
SOCIAL DARWINISM • • “Survival of thefittest” promoted by Charles Darwin wealth was a measure of one’s inherent value and those who had wealth were most fit Only the wealthy should rise to the top ● Don’t use publicfunds to help the poor ● Said that the impoverished were unfit to reproduce ●
JOHN D. ROCKEFELLER • • Established the Standard Oil Company which held a monopoly on the oil industry Bought up smaller oil companies to create his own company (horizontal integration) ● Bought the oil wells, pipelines, retail outlets and railroads
ANDREW CARNEGIE • • ● Steel tycoon Used the Bessemer process (purifyingiron into steel so that it was lightweight but still strong) to mass produce steel With so many skyscrapers going up steel in is huge demand Teamed up with J. P. Morgan to find investors in RR so that the demand for steel would increase Helped Carnegies create the industrial giant US Steel
OTHER ENTREPRENEURS • Cornelius Vanderbilt: ● ● Made millions from the shipping and railroad business Became a symbol of the excessesduring the Gilded Age • George Westinghouse: ● Developed air brakes and a device that allowed trains to switchfrom one track to another
HORATIO ALGER • • • In his books, Alger told stories of young men who won wealth and fame through honesthard work Advised Americans to seek success based on values Success through the strengths of their own efforts
GILDED AGE • • coined by Mark Twain describes the last decade of the 19 th century America had a rottencore but was coveredwith gold paint (gilded) the gap between the rich and the poor was too wide
GOVERNMENT REGULATION OF BIG BUSINESS • Laissez-faire: little government interferencein the economy ● • • “An American tradition” But the stronghold that these capitalists had on the economy worried the government Sherman Antitrust Act outlawed monopoliesand trusts (companies owned by stockholders)…but not really enforced
TECHNOLOGICAL REVOLUTION WITH IMMIGRATIONAND URBANIZATIONCOMES THE NEED FOR BETTER TRANSPORTATION/CONSTR UCTION MORE EFFICIENT COMMUNICATIONAND QUICKER PRODUCTION
INVENTION INVENTOR light bulb Thomas Edison power lines allows people to work longer hours George Westinghouse sends electricity over long telephone Alexander Graham Bell Bessemer process Henry Bessemer safety elevator Elisah Otis time zones Government electric trolley Stephen Field luxury car for train George Pullman typewriter EFFECT Many investors distances more jobs for women (operators) purifies iron to steel-lightweight skyscrapers made skyscrapers a reality with the modern elevator brake regulates RR schedules dangerous and ineffective, but a sign of things to come attracts travelers travel made easier fuels business, more jobs for women (typists)
INNOVATIONS ● ● Patents: grant giving the inventor exclusive rights to develop, use and sell an invention Number if patents sky rockets due to urbanization ◦ Promoted by the government and investors to improve industry and create new ones
TELEPHONE OPERATORS
THE BESSEMER PROCESS
SKYSCRAPERS/BRIDGES
ELECTRIC TROLLEY
PULLMAN LUXURY RAILCAR
TYPEWRITER/LIGHT BULB
LABOR UNIONS THE PROBLEM ❑employers get rich ❑workers barely survive on their low wages ❑long hours (12 hour shifts) ❑ 6 days a week in hot, dark and dirty factories ❑dangerous work ❑ Injuries were common due to improper training and faulty equipment ❑poor ventilation and loud machines
SWEATSHOPS ✕ The worst working environment ✕ Employed thousands of people ✕ Worked for long hours on machines + Repetitiveand boring ✕ Productivity + + was ensured through strict regulations Clock in and out, even for break time Workers were fined for breakingrules or working slowly
CHILD LABOR both parents worked meant the children worked in factories to stay out of trouble ✕ allowed children to make money (neededby family) ✕ had some of the most dangerous jobs…climb into machinesand fix them ✕ stunted physical and mental growth ✕ eventually child labor laws were passed ✕
COMPANY TOWNS Owned by the businessand rented to employees ✕ Some employeeswere forced to live in these isolated communities ✕ Company controlled the company store where employees had to buy their goods…expensive ✕ Company wages pay the company rent and other bills ✕ Wage slavery ✕
LABOR UNIONS FORM • Complaints from workers are ignored by the employer complaints = threat to their business ● Government is on the side of the employer/business ●
TACTICS – USED BY EMPLOYERS • • • Scabs: temporaryworkers to replace workers who strike Lockout: lockout employees until they agree to terms Injunction: court order to stop a strike Blacklist: list of workers who supported labor union and were kept from employmentbecause of it Yellow dog contract: employee promises to not join a union in order to get hired
TACTICS – USED BY EMPLOYEES ✕ Collective bargaining: negotiate as a group ✕ Strike: refuseto work ✕ Mediation: negotiate with employer ✕ Arbitration: having a third party decide for the union and employer…the last hope ✕ Boycotts: refuseto buy
THE KNIGHTS OF LABOR ✕ Accepted skilled or unskilled workers (trade union) ✕ Actively recruited African Americans ✕ Encouraged boycotts and strikes ✕ Wanted increased wages, shorter hours and improved working conditions
AMERICAN FEDERATION OF LABOR Formed by Samuel Gompers ✕ a craft union (from a specific craft or skill) ✕ Did not accept women or AA ✕ Aimed to increase wages, lower working hours and better working conditions ✕ Wanted closed shopsin which workers had to join the union to be hired ✕
THE GREAT STRIKE ✕ Workers response wage cuts ✕ A nationwidestrike ✕ Would not allow the train to move until wages were increased ✕ National Guard was called in, killed 10 strikers ✕ American sympathy for unions
HAYMARKET RIOT • • • Workers strike for an 8 hour day Fights broke out and police were called A radical threw a bomb that killed a policeman and dozens of others Radicals are tried and executed Result: Americans are fearfulof labor unions, Knights of Labor are blamed for the violence and their membership declines
HOMESTEAD STRIKE ✕ Carnegie Steel plant ✕ workers were striking against a wage cuts ✕ Pinkerton’s ( successful at breaking up strikes) are called into break up the strike, kill several strikersin a two week standoff ✕ American sympathy for unions
PULLMAN STRIKE ✕ George Pullman reduced wages at his luxury railcar factory ✕ did not lower rent within the company town ✕ Workers that tried to negotiate were fired ✕ Ask the American Railway Union under Eugene Debsto help in their strike…entire RR went on strike + + Railroad traffic stops Luxury cars are not needed if RR’s are not moving ✕ President Cleveland ordered (injunction) the strike to end…Debs was arrested + + Proof that the government favored business over employees Hinders support due to the disruption in business/trade
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