2. Big Business vs. Labor Adapted from Fulton County School District

3. Main Idea and Key Terms Andrew Carnegie Vertical and Horizontal integration Social Darwinism John D. Rockefeller Sherman Anti-Trust Act Samuel Gompers American Federation of Labor (AFL) Eugene V. Debs Industrial Workers of the World (IWW) Mary Harris Jones The expansion of industry resulted I the growth of big business and prompted laborers to form unions to better their lives

4. Andrew Carnegie Bio: –B–Born in Scotland to poor parents –C–Came to the United States in 1848 –H–He was 12 years old –W–Within 6 years he was the private secretary of the local superintendent of the Pennsylvania Railroad –R–Rich enough by 1865 to quit

5. Carnegie continued Bio continued: –I–In 1873, Carnegie invests in his own steel company –B–By 1899 Carnegie Steel is producing more steel than every factory in England –H–How did he do this?

6. Integration AND Horizontal Integration Vertical Integration

7. Vertical Integration Moves up and down the ladder, meaning you buy the previous step, and next step of your business. If you own a steel company, you buy the mining companies to get resources for you cheaper, and buy the railroads to ship the finished products out later Vertical Integration

8. Horizontal Integration Horizontal Integration is another way to cut costs and increase profits H.I. involves buying out everyone who is direct competition with you. i.e. Carnegie buying out every other steel company in competition with him Horizontal Integration

9. Social Darwinism The theory of Social Darwinism grows out of the theory of evolution Means that the more fit in society will advance, weeding out the less able Used to support “Laissez Faire” which means “allow to do” in French Appealed to the Protestant work ethic

10. Consolidation Many industrialists tried to eliminate competition by creating holding companies to buy out other companies’ stock Others created Trusts What is a trust? –Ask John D. Rockefeller…

11. John D. Rockefeller Bio: –B–Born in 1839 in Richmond, N.Y. –S–Started a small business –S–Sold that business and invested in a new venture… –S–Standard Oil

12. Bio continued: –I–In 1870, Standard Oil controlled 2-3% of the U.S. crude oil –B–By 1880, Standard Oil controlled over 90% of the U.S. crude oil –D–Did this through selling below cost to run competitors out of business, and then raised prices higher than normal –P–Paid extremely low wages

13. The Robber Barons Carnegie, Rockefeller, and others became known as the “Robber Barons” Take from the poor, give to the rich…well…at least themselves But were they all bad? Rockefeller did give away a small portion of his wealth…something to the tune of $500 million

14. What is a “Trust” …an illegal combination of industrial or commercial companies in which the stock of the constituent companies is controlled by a central board of trustees, thus making it possible to manage the companies so as to minimize production costs, control prices, eliminate competition, etc.

15. Reactions to Industrialization Many people began to question and challenge economic and social inequities Laws Labor unions New philosophies

16. Philosophies Socialism Communism

17. Sherman Anti-Trust Act The Sherman Anti-Trust Act is designed to make trusts illegal which interfered in interstate commerce It is ineffective for reasons as simple as not supplying a definition of the word “trust”

18. Labor Unions Labor Unions emerge to protect workers from long hours, low wages, and unsafe conditions

19. Labor Unions take action Samuel Gompers—American Federation of Labor Eugene Debs—American Railway Union ‘Big Bill’ Haywood- IWW

20. Union Strikes Great Strike of 1877 Haymarket Affair 1886 Homestead Strike 1892 Pullman Strike 1893

21. In the end…. Unions lost support due to violence Big Business uses laws—Sherman Anti trust Act-against them Unions are generally weak until the 1910s