BIG BUSINESS AND LABOR CHAPTER 6 SECTION 3 PAGES A New Industrial Age

Effects of Industrialization Because of the advances made in technology and the expansion in industry, there was a huge amount of growth in big businesses! It also prompted laborers to form unions and better their lives over all

Andrew Carnegie Andrew Carnegie: one of the first industrial moguls to make his own fortune. He rose from rags to riches Entered the steel business in 1873 after touring England and seeing the Bessemer process in action By 1899, Carnegie steel manufactured more steel than all the factories in Great Britain combined.

New Business Strategies Carnegie was an innovator. He continually found new and better ways to produce goods.  Used new machinery  Incorporated new tracking systems to keep track of goods and materials  Attracted talent to his companies by offering stock and other incentives He also improved manufacturing techniques  Vertical integration: a process that cuts out suppliers in order to control raw materials and transportation materials  Horizontal integration: combining competing or similar companies

Defining Success Many were trying to rationalize Carnegie’s success (he chalked it up to working hard)  Social Darwinism: some individuals flourish and pass down their traits to the next generation-is a theory of “natural selection” that weeds out those who are unable to produce  This idea promoted the business world and the idea that it was okay for businesses to raise and succeed, and to fail. This idea encouraged many to push themselves  According to Social Darwinism, riches were a sign of favor and hard work  Those who were lazy or who didn’t work hard couldn’t expect riches  “laissez faire” was the idea that the marketplace should not be regulated-closely connected with Social Darwinism

Growth and Consolidation Other business leaders took the approach of mergers-joining businesses together that had similar practices and products (this allowed monopolies to form) Another way to create a monopoly was to form a holding company (a corporation that ONLY bought out other companies)-J.P. Morgan was one of these! John D. Rockefeller: Head of Standard Oil Company; led mergers by creating trust companies  Companies joined a trust with other companies and were managed by a group of trustees  All profits were shared in dividends

The “Robber Barons” By 1880, Rockefeller controlled 90% of the oil production in the U.S.  He bought out other companies, then hiked up prices  He drove many competing companies out of practice His practices alarmed many-along with other industrialists, he was called a “Robber Baron.” However, most industrialists, like Carnegie and Rockefeller, donated a lot of money to worthy causes

Measures Against Industrialists Because of the growth of massive companies, action was taken against them  Sherman Antitrust Act: passed in 1890, it made it illegal to form a trust that interfered with free trade between states and countries  It was really difficult to take any action underneath that act Problems between North and South:  The north industrialized faster than the south-had more population and resources  The South was still rebuilding after the war-lacked manpower and capital for investments

Labor Unions Form… Exploitation, low wages, unsafe working conditions, and more prompted the creation of labor unions among workers  Many worked 7 day work weeks, 12 hour days, no vacation or sick leave…  Injuries were also common in unsafe factories

Labor Organizing Skilled (trade) workers had small unions dating back to late 1700s First big union was formed in 1866 by William H. Sylvis  Called the National Labor Union  Tried to link existing labor unions  Pushed for unity and 8 hour work days  Excluded anyone who wasn’t white A different branch-the Colored National Labor Union-also operated

Knights of Labor The Knights of Labor was another early union  Unlike the NLU, it allowed anyone to join  Shared similar goals with the NLU  Were against strikes (unless it was the last option) and promoted mediation between workers and their employers  Collapsed after a failed strike

Union Movements Diverge As labor unions grew, they diverged to help in different ways Craft Unionism:  Included skilled and trade workers  Samuel Gompers: led the Cigar Makers’ International Union to join with other unions in 1886  American Federation of Labor (AFL): led by Gompers, it focused on collective bargaining (negotiations) to find solutions between workers and their employers  Unlike KOL, the AFL used strikes  Brought the work week from 55 hours to 49 in 25 years

Industrial Unionism:  Represented all workers- skilled and unskilled-in a specific industry  Eugene V. Debs: attempted to form an industrial union –The American Railway Union (ARU)  Contained both skilled and unskilled workers  Like the KOL, it collapsed after a failed strike attempt

Turning to Socialism While attempting to solve the problems of workers, some unions turned to socialism  Socialism is a political and economic system based on government control of business, property, and equal distribution of wealth  Many didn’t go to this extreme, but felt the principles were valid  Industrial Workers of the World (IWW): a socialist group in Chicago who unionized miners, lumberers, and cannery/dock workers There were some other smaller strikes out west that represented miners, etc, but they were never big unions

Strikes Become Violent… There were varying responses to union organizing-many industries and government offices saw them as a threat to the capitalist system. The Great Strike of 1877:  In July 1877, union workers for the Baltimore and Ohio Railroad struck to protest another wage cut  Eventually, federal troops had to end the strike and send the workers back to work.

Haymarket Affair May 4, 1886: 3,000 people gathered in Chicago’s Haymarket Square to protest police brutality  A striker had been killed by the police prior to the event The police eventually arrived and violence broke out  7 police officers died, as did several workers  The speakers at the rally were arrested-some were executed for their part in the violence

The Homestead Strike Even though there was growing hostility against the labor movement, unions continued to form After wages were cut at the Homestead Plant in Pennsylvania, the workers went on strike  Company president hired a security company to protect the scabs (people who work during a strike)  This caused more violence and deaths until the National Guard stepped in to restore order

Pullman Company Strike During a low economic period in 1893, the Pullman company laid off thousands of workers and cut wages  A strike began and soon turned violent  President Cleveland had to send in troops to break it up.  Eugene Debs was arrested  Most of the strikers were fired, and many were blacklisted

Women Organize Women were barred from joining most unions, but they did unite to:  Demand better working conditions  Equal pay for equal work  End child labor Mary Harris Jones: most prominent organizer in the women’s labor movement  Worked with and supported some of the major strikes of the era  Marched injured children to the White House to help fix child labor laws The International Ladies’ Garment Workers’ Union formed in 1909 to protect women working in the garment industries

Triangle Shirtwaist Fire Working conditions were reevaluated after the Triangle Shirtwaist Fire in  Emergency doors were locked or blocked off  Fire escape collapsed  146 women died  Owners of the company were acquitted on charges of manslaughter! This did force working conditions to be altered

Unions Under Pressure As more strikes began, there was a large amount of pressure on management of big businesses  Many refused to accept union leaders as negotiators for their workers  Others fired people who went to union meetings Eventually, all a business leader had to do was declare that an impending strike would hurt interstate trade for the federal government to intervene This did NOT stop unions from forming…they only grew. By the eve of WWI, the AFL had 1,700,000 million members!