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Big Business & Labor How do the “Robber Barons” make their fortunes?

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Presentation on theme: "Big Business & Labor How do the “Robber Barons” make their fortunes?"— Presentation transcript:

1 Big Business & Labor How do the “Robber Barons” make their fortunes?

2 The Robber Barons 1) A. Carnegie - Steel 3) J. Rockefeller - Oil 2) JP Morgan- Banking 6) J. Gould - banking 5) C. Vanderbilt – Ships, railroad 4) L. Stanford - railroad Businessmen and bankers who amassed huge personal fortunes, by using unfair business practices

3 Andrew Carnegie Immigrates from Scotland in 1848 at age 12 Clerk for the Superintendent the Pennsylvania Railroad by age 18. Does great job, boss offers him stock in company Become Superintendent of RR at age 24, starts investing money in other companies (oil, metal, cables) Forms a steel company in 1870s, most successful co in US Sells steel company to US Steel in 1901 for a HUGE profit

4 1.Vertical Integration: 1.Vertical Integration: Buy out suppliers of needed products and services so you control production top to bottom Carnegie’s Business Strategy Horizontal Integration: 2. Horizontal Integration: buy out competing producers so you are only co that offers that business 3. Pay workers low wages

5 John Rockefeller & Standard Oil Trust Rockefeller makes Standard Oil one of the biggest and most profitable American cos Rockefeller tactics: Paid very low wages, lowered prices to force competition to sell Formed trusts, trusts bought out companies (avoids monopoly laws)

6 Government Reaction to “robber barons” - Govt wants to protect free market, but feared big business is hurting competition -Sherman Anti-trust Act, 1890: tried to stop monopolies, making it illegal to form a trust that interfered with free trade/competition - difficult to enforce

7 Problems in the workplace 1) Terms of employment: 6-7 day weeks, 12+ hour days, no vacation, no sick leave 2) Poor physical conditions: polluted and often dangerous 3) Low Wages: so bad that millions of women/children forced to work -Eugene V. Debs forms American Railway Union - Samuel Gompers forms AFL for skilled workers - Goal: organize unskilled labor and semi-skilled workers -1905: radical unionists and socialists formed the Industrial Workers of the World (IWW)

8 Great RR Strike of 1877 -80,000 railroad workers strike - President Hayes authorizes use of federal troops to stop the violence, end the strike -Shut down most railroad traffic for week -Joined by many other workers, property damage begins

9 Haymarket Riot, 1886 - Chicago Police kill a striker. 3,000 gather to protest the police killing of striker, Chicago Mayor sends in Police to breakup the protest -someone throws bomb into police line, 7 police killed -Public opinion begins to turn against unions and strikes, connecting them to violence

10 Homestead Strike, 1892 -President of Carnegie Steel announces wage cut, workers strike - Carnegie to hire strike breakers(“scabs”), call in Pinkerton Detectives to protect the scabs -Pinkertons strikers and townspeople, 12 die in violence, strike is broken, Pullman Strike, 1894 4K workers at Pullman Rail go on strike due to wage & job cuts Strike led by Eugene Debs Am. Railway Union Strike shuts down all freight delivery west of Michigan Pullman hires strike breakers, violence ensues, President sends in Army, Debs jailed

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