Big Business and Labor Section 14-3 pp. 447 – 455 January 13, 2010

Preview Questions How did Carnegie take control of the steel industry? How did entrepreneurs try to control competition? What were the two major types of unions?

Carnegie’s Innovations Industrial mogul who made his fortune in steel companies

Carnegie’s Innovations Vertical Integration: – Company buys out its suppliers – Control quality and cost of product – Created monopolies Horizontal Integration: – Company merges with similar companies – Created monopolies

Social Darwinism Theory that taught “only the strong survive” Promoted competition, hard work, and responsibility Used as justification for exploitation of workers and immense wealth

Fewer Control More Monopoly: – Complete control over an industry’s production, quality, wages, and prices – Eliminated competition and increased profits Holding Company: – Corporation that buys out the stock of other companies – Helped create monopolies – Ex: J.P. Morgan and U.S. Steel

Fewer Control More Trusts: – A large corporation made up of many companies that receive dividends on profits earned by all the companies combines – Helped to create monopolies – Ex: John D. Rockefeller and Standard Oil – “Robber Barons”

Fewer Control More Sherman Antitrust Act – Made it illegal to form trusts – Not effective

Labor Unions National Labor Union – Won 8 hour work days in 1868 Knights of Labor – Open to all workers – Promoted negotiation over strikes

Union Movements Diverge American Federation of Labor – Led by Samuel Gompers – Used strikes and collective bargaining Industrial Workers of the World – Based on the work of Eugene Debs – Made up of Socialists and political radicals – Wanted to include skilled and unskilled workers

Strikes Turn Violent Strike Breakthroughs – Great Strike of 1877 – President Hayes used federal troops to break up the strike – Haymarket Square Riot – Caused public opinion to turn against workers and strikes – Pullman Strikes - After strikers turned violent, President Cleveland sent in troops.

Strikes Turn Violent Trends in Labor Organization – Women began to organize – Employers refused to recognize union leaders – “Yellow Dog” Contracts forbid union membership – Government break-ups of strikes