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

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

Andrew Carnegie 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 Carnegie steel company in 1870s, most successful co in US Sells Carnegie Steel to JP Morgan for HUGE profit, Morgan forms US Steel in 1901

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

John Rockefeller & Standard Oil Trust Rockefeller makes Standard Oil one of the biggest and most profitable American cos Rockefeller tactics: 1. paid very low wages 2. lowered prices to force competition to sell 3. to avoid monopoly laws he formed trusts A trust bought out companies, not Rockefeller directly. However, Rockefeller actually controlled the trust

Government Reaction to “robber barons” -Dilemma: Govt wants to protect free market, but feared big business & “trusts” are hurting competition -Big business says were not “robbers” but “captains of industry” -Congress passes Sherman Anti-trust Act, 1890, makes it illegal to form a trust that interfered with free trade/competition - Goal: to stop monopolies but difficult to enforce

Problems in the workplace Employees also faced harsh conditions: 1) 6-7 day weeks, 12+ hour days, no vacation, no sick leave, low wages 2) Poor physical conditions: polluted and often dangerous “Robber Barons” also take advantage of millions of women/children who work for even lower wages Reaction of Labor - Craft Unionism: Samuel Gompers forms AFL for skilled workers, use strikes and collective bargaining - Industrial Unionism: Knights of Labor form (for everyone else – unskilled, Af. Ams, women) - International Workers of the World (IWW) was union formed of socialists and labor leaders (all workers worldwide)

Great RR Strike of 1877 -80,000 railroad workers strike in West VA -Shut down most railroad traffic for week -Other workers join strike, strikers become violent, property damage begins -President Hayes authorizes use of federal troops to end the strike

Haymarket Riot, 1886 - 3,000 gather to protest the police killing of striker, Chicago Mayor sends in extra police to breakup the protest -Anarchist throws bomb into police line, 7 police killed -Most blame unions for violence, public opinion turns against unions, connecting them to violence

Homestead Strike, 1892 Pullman Strike, 1894 -President of Carnegie Steel Henry Frick announces wage cut - When workers strike, Frick hires strike breakers(“scabs”) and brings in the Pinkerton Detectives to protect the scabs -Pinkertons, strikers & townspeople clash, 12 die in violence, strike ends Pullman Strike, 1894 4K workers at Pullman Rail strike due to wage & job cuts Strike led by Eugene V. Debs’ Am. Railway Union shuts down freight delivery west of Michigan Pullman hires strike breakers (scabs), violence ensues, President Cleveland sends in Army, Debs jailed