Presentation on theme: "The Rise of Big Business"— Presentation transcript:
1 The Rise of Big Business …and robber –barons, unions, and more.
2 Background Info When? - 2nd Industrial Revolution/Gilded Age - late 1800’sMarked by- rise of big business and corporations- disparity of wealth- ultra wealthy industrialists- monopolyGilded Age: Gold plated but cheap on the inside
3 Background Info Capitalism - economic system in which private businesses run most industries- competition determines price and wage
4 Background InfoCorporation: Business organization that raises money by selling stock to the publicTrust: merging of companies turning over control to a board of trustees
5 Big Business Vocabulary Corporations – companies sell shares of ownership called stocks to raise moneyEntrepreneurs – people who take risks & organize new businessesCapitalism – private businesses dominate the economy & promote competitionLaissez Fairre – govt. does not interfere in economic affairs (hands off big business)Patent – exclusive right to manufacture or sell an invention
6 III. Monopolies and Trusts Monopolies - characterized by a lack of competition to produce a good or service- Goal is to control the market for a product by destroying the competition- Achieved by controlling production and distribution of a good or serviceTrust – consolidate corporations under a Board of Trustees to control the market
7 A Trust with complete control over an industry What is a monopoly?A Trust with complete control over an industry
10 Horizontal Integration: buying out the competition
11 How did Industrial Tycoons create monopolies? Vertical Integration:acquiring companiesthat supply yourbusinessHorizontal Integration:buying out thecompetition
12 Robber Baronspowerful industrialists who amassed huge personal fortunes, typically as a direct result of unfair business practicesCarnegieFordMorganRockefellerVanderbilt
13 Andrew Carnegie Steel industry Horizontal integration: bought out his competitorsVertical Integration: bought coal mines, iron ranges, shipping, and railroadsControlled from mine to market
14 John D. Rockefeller Oil Industry: Standard Oil Horizontal Integration: bought out competitorsVertical Integration: built barrel factories, warehouses, pipelines. Owned freight cars and developed own marketingControlled 90% of oil in US
15 What do you think the cartoonist was trying to communicate with this image?
16 How about this image? What was the cartoonist trying to communicate here?
17 Owned interests in all parts of the industry, including drilling, refining, and storage of oil Received special rates from railroad companies, lowering his transport costsHis fortune rests on Standard Oil
19 Let’s talk about this as a class! How did men like Carnegie and Rockefeller (robber barons) justify ownership of monopolies and the lavish lifestyle their wealth provided for them?Let’s talk about this as a class!
20 “And while the law of competition may be sometimes hard for the individual, it is best for the race, because it ensures the survival of the fittest in every department.”Andrew Carnegie
21 Social Darwinism (SD)SD - idea that “survival of the fittest” determines success of people in society & marketplaceStrong survive & the weak fail“Survival of the fittest” strengthens society as a wholeJustification for industrialistsSocial Darwinists and capitalists agree that competition promotes progress
24 Review 1. Describe laissez-faire economic policies. 2. A monopoly can best be characterized as ________3. Horizontal integration is _______________________4. Vertical integration is _________________________5. Describe three aspects of a monopoly.6. What is a trust?7. Describe “Robber Barons.”8. Social Darwinists believed in the idea that _________
26 Carnegie believed the wealthy should give back to the community By the time he died, Carnegie had given away $350,695,653 (approximately $4.3 billion, adjusted to 2005 figures). At his death, the last $30,000,000 was likewise given away to foundations, charities, and to pensioners.Rockefeller gave away over ½ of his $900 million including over $80 million to the University of Chicago
28 Labor Unions Advantages of unions Greater bargaining power (pay, hours & conditions)Strength in numbersMain purpose of a union is collective bargainingNegotiations between management and a union about pay and work conditions on behalf of all the workers in the union2011: NFL & NBA
29 Knights of LaborWelcomed unskilled laborers including blacks, immigrants & women1869 first major national labor organizationOpened to all who “toiled”Accepted all workersEncouraged collective bargaining
30 American Federation of Labor Represented skilled labor only; most effective & enduring unionMain purpose was collective bargainingNegotiated for better pay, fewer hours & safer conditions1886-present: most powerful leader was Samuel Gompers & strike was a ready tool
31 StrikesHaymarket Square Riot (Chicago, IL 1886) strikers clashed w/ police: several killed, 100's hurtMay 1, 1886 – Strikes & demonstrations were held nationwide, to demand an eight-hour workday for industrial workersMay 3, McCormick Reaper Works factory went on strike; unarmed strikers, police clash; several strikers were killedEvening of May 4, A meeting of workingmen is held near Haymarket Square, Chicago. Police arrived to disperse the peaceful assembly; a bomb is thrown into the ranks of the police; the police open fire; workingmen evidently return fire; police and an unknown number of workingmen killed; the bomb thrower is not identifiedSignificance: Americanslinked unions w/ radicals
32 Carnegie Steel Homestead Strike Wages were cut & workers went on strike in 1892Amalgamated union workers went on strike300 Pinkertons called in- 3 guards & 10 strikers killedSignificance: state govt. supported corporation (big business)Carnegie Steel
33 Governor sends National Guard State militia entered Homestead, PA to put down the strike of July 1892Governor sends National Guard
34 Pullman Strike (1894)Pullman Palace Car Co. (Chicago) cut wages but did not reduce workers rentLargest strike in US history had interrupted US mail serviceEugene V. Debs (future Socialist Party of America) got involvedSignificance: President Cleveland sent in the national guard & sided w/ corporation
35 Govt. favored business in most disputes w/ labor in late 19th century
36 IndustryAdvantages of US in world market - Raw materials, expanding markets & favorable govt. policies (LF)Growth of manufacturing - Natural resources, investment capital and cheap laborPeople left farms and moved to cities for jobs in industry
37 also Boston, Chicago, Capital grounds in DC and Stanford Univ. Frederick OlmstedLandscape architect - designed Central Park (Manhattan) and Prospect Park (Brooklyn)also Boston, Chicago, Capital grounds in DC and Stanford Univ.
38 Cities created forms of mass transit such as the subway and cable car
39 InventionsNikolaus Otto invented the horseless carriage by using an internal combustion engineOrville & Wilbur Wright were bicycle makers who invented the airplane after a 12 second flight
40 InventionsAlexander Graham Bell invented the telephone which transmitted voices using electricityThomas Edison-invented the light bulb and brought electricity to NYC
41 Gold Standard - money was backed by gold in the treasury (1882-1933) Free Silver - some people wanted $ to be backed by silver as well to get more $ flowing in the economy
42 Review 9. The main purpose of a labor union is ________________. 10. Unions negotiate about _______ and ________________.11. The American Federation of Labor (AFL) represented ______________ and was the most _________________.12. What type of workers did the Knights of Labor accept?13. What was the significance of the Homestead strike?14. The Pullman Strike ended when President Grover Cleveland ____________________.15. What was the significance of the Haymarket bombing?16. The govt. would usually support (business / labor) during strikes in the Industrial Revolution.