The Rise of Big Business

Horizontal Integration Corporations Complete control of a product or service Monopolies Businesses making the same product limit the production, keeping prices high Cartels Horizontal Integration Consolidating many firms into the same business Stock is assigned to a board of trustees, who then combines the different businesses into a new organization Trust Vertical Integration System of gaining control of many different businesses that make up all the different phases of production

Debates about Big Business Robber Barons? – some business leaders had capacity to swindle the poor Captains of Industry? – business leaders can help serve the nation The rise of big business provides jobs Some business leaders help establish museums, universities and libraries Social Darwinism – the theory that only the strongest in society survive

Railroad industry controls economy Interstate Commerce Commission (ICC) created in 1887 ICC begins to monitor railroad operations within the states Congress begins to investigate unfair business practices Senate passes the Sherman Anti-Trust Act in 1890

Important Definitions Interstate Commerce Act (1887) First federal agency monitoring business operations, to oversee interstate railroad procedures Sherman Anti-Trust Act (1890) Law banning any trust that restrained interstate trade or commerce (often used against labor unions)

Labor Unions

American Federation of Labor International Workers of the World Knights of Labor American Federation of Labor International Workers of the World Founder/Date 1869 – Uriah Stephens 1900 – Samuel Gompers 1905 – “Big Bill” Haywood Members Skilled and unskilled Skilled workers migrant workers, miners, lumber, textile, African Americans, Hispanic Goals Improve working conditions, eliminated child labor Same as Knights of Labor Overthrow capitalism Successes 1885 – forced Jay Gould to give up wage cuts – membership rose to 700, 000 1909 – “Uprising of 30,000” - women walked off the job 1912 – 20,000 workers on strike against textile mill in Massachusetts Problems As strikes became more violent, popularity dropped Very radical, scared people off

Haymarket Square (1886) Demonstrations for an 8 hour workday Someone threw a bomb – killed a policeman 8 anarchists tried for murder, 4 executed

Union on strike in response to a cut in wages Homestead Strike (1892) Union on strike in response to a cut in wages Pinkertons (private police force) brought in to end the strike Several strikers killed Strike lasts two weeks

Pullman Strike (1893) Pullman Railroad Car Company laid off workers, reduced wages by 25% Workers went on strike Mail delivery halted Federal government had to break up strike, jailed leader Eugene Debs

Weapons of Organized Labor Strikes – work stoppage intended to force an employer to meet certain demands Sitdown strike: labor protest where workers stop working but don’t leave Wildcat strike: going on strike without union permission Sympathy strike: groups go on strike in sympathy with another union Jursidictional strike: only certain groups go on strike, ex. Carpenters or artists union

Picketing: holding signs (without sticks) in protest of management Boycotts: refusal to buy a certain product or to use a service Union Label: buying only union made goods Closed Shop: workplace open only to union members Slow Down: when workers slowdown on purpose Sick Call: when all workers call in sick on a certain day

Weapons of Management Open Shop: union membership is an option, but not required Lockouts: when employers lockout employees from a workplace Blacklist: list containing names of people who shouldn’t be hired Injunctions: court order prohibiting a certain activity “Yellow-Dog Contract”: contract where an employee promises not to join a union Strikebreakers: people who cross a picket line Welfare Capitalism: approach to labor relations where companies meet some of their workers needs without the union asking for it – this prevents strikes and keeps workers happy