1. Section 2 – pg 488 Big Business and Organized Labor
Chapter 14
Section 2 – pg 488
Big Business and Organized Labor

2. New Ways of Doing Business
Pg 488
New Ways of Doing Business
Business expansion was led by entrepreneurs
Someone who set up new business to make a profit

3. Pg 488
The Corporation
Businesses became corporations (businesses owned by many investors)
Raise capital (money) by selling stock (shares)
Stockholders receive a share of the profits and pick directors to run the company
Investors only risked the money they put in
Business owners risked losing their savings, homes, and other property if the business failed

4. Banking Pg 488 - 489 Banks lent large amounts of money to corporations
Helped industry grow quickly
Banks made huge profits
J. Pierpont Morgan gained control of
key industries, railroads and steel
Would buy stock in troubled corporations
and would run them in a way to
eliminate competition and increase
profits

5. Pg 489
Growth of Big Business
The gov’t took a laissez-faire approach to business
Rarely made laws to regulate business practices
Entrepreneurs formed giant corporations and monopolies
Monopoly: a company that controls most or all business in a particular industry

6. Pg 489
Carnegie
Andrew Carnegie, a poor Scottish immigrant, worked his way up in the railroad business
Then entered the steel industry
Slowly gained control of every step of making steel
Owned iron mines, steel mills, railroads, and shipping lines
In 1892, combine everything into the Carnegie Steel Company

7. Carnegie was ruthless as a business leader but believed that the rich had a duty to improve society
Gospel of Wealth
Donated hundreds of millions to build libraries and support charities
“I started life as a poor man, and I wish to end it that way”
Set up a foundation that continued to fund worthy causes after his death
Pg 489

8. Rockefeller Pg 489 John D. Rockefeller was the son of a peddler in NY
At 23, invested in a oil refinery and used the profits to buy other oil companies
Was also ruthless in business
Often would crush competition by slashing prices to drive rivals out of business

9. Pg 489
Rockefeller
1882, Rockefeller ended all competition by forming the Standard Oil Trust
Trust: a group of corporations run by a single board of directors
Others followed and by 1990 trusts dominated many industries: meatpacking, refining sugar, manufacture of copper wire

10. Debate Over Trusts Some saw trusts as a threat to free enterprise
Pg 490
Debate Over Trusts
Some saw trusts as a threat to free enterprise
The system in which privately owned businesses compete freely
Saw Carnegie and Rockefeller as “robber barons” because they unfairly eliminated competition
Argued that they used their wealth to influence politics

11. Pg 490
Others saw big business leaders as bold “captains of industry” who built up the economy and created jobs
Argued that limiting costly competition allowed them to lower prices allowing Americans to afford more goods

12. Social Darwinism Social Darwinism: “survival of the fittest” Pg 490
Businesses drove out competition because they were the “fittest” and deserved to survive
Was also used to justify harsh working conditions

13. Changes in the Workplace
Before the Civil War, most factories were small
Bosses would know every worker
Industries grew attracting millions of workers
Most were white and immigrants
Some were African Americans who came North from Southern farms

14. Pg 491
Women and Children
In some industries, there were more women then men
Textile mills in New England
Tobacco factories in the South
Garment sweatshops in NY
Sweatshops: a manufacturing workshop where workers toil long hours under poor conditions for low pay

15. Children also worked in industry, often in dangerous jobs
Pg 491
Children also worked in industry, often in dangerous jobs
Worked in textile mills, tobacco factories, coal mines, and garment sweatshops
Could not go to school and had little chance to improve life

16. Dangerous Conditions Pg 491 Factory work was dangerous
Breathed in fibers and dust all day
Often came down with lung diseases
Factories were not required to pay compensation for injuries suffered on the job
Social Darwinists claimed harsh conditions were necessary to cut costs, increase production, and ensure survival of business

17. March 25, 1911 – fire broke out in the Triangle Shirtwaist Factory
Within minutes, the upper stories were on fire
Hundreds of workers rushed for the exits to find them locked
The company had locked the doors to keep workers at their jobs
Fire trucks rushed to the scene but their ladders were too short to reach those trapped on the top floors
Workers leaped to their deaths attempting to escape the flames
150, mainly young women, died
NY and other states approved safety laws to help protect factory workers
Pg 491

18. Workers Organize Most early efforts to form unions have failed
Pg 491
Workers Organize
Most early efforts to form unions have failed
Companies hired private security guards to attack strikers or union organizers
Laws made it illegal for workers to go on strike
Workers continued to try to form unions in secret
Sought safer working conditions, higher wages, and shorter hours

19. Pg 492
Knights of Labor
1869: a group of Philadelphia clothing workers formed a union called Knights of Labor
At first was small and secret
1879, Terence Powderly was elected president of the group
Rejected the use of strikes and tried to win support by holding public rallies
Also admitted women, African Americans, and unskilled workers
Became the biggest union in the country

20. Union successes were undercut by a series of violent labor disputes
May 4, 1886-Chicago: striking workers rallied in Haymarket Square, Chicago
Suddenly a bomb exploded, killing 7 policemen
Police sprayed the crowd with bullets
As a result, public opinion
turned against unions
Knight of Labor lost most
of their influence
Pg 492

21. Pg 492
Rise of the AFL
1886: same year as the Haymarket Riot, Samuel Gompers formed a new union in Columbus, Ohio
American Federation of Labor (AFL)
Replaced the Knights of Labor as the leading union
Admitted skilled workers only
Argued that their skilled made it costly and difficult to train replacements
Believed the most effective way to win was through collective bargaining
Unions negotiate with management for workers as a group
Believed in using strikes if all else failed

22. By 1904, the AFL had grown to more than a million members
Pg 492
By 1904, the AFL had grown to more than a million members
Still barred African Americans, immigrants, and unskilled workers
Only included a tiny fraction of the American workers

23. Women in the Labor Movement
Pg 493
Women in the Labor Movement
Women played an important role in building unions
Mary Harris Jones travelled the country campaigning for unions and giving support to striking miners
Called attention to the hard lives of children in textile mills
Due to her work with
children, she earned the
name Mother Jones

24. Bitter Strikes Pg 493 1893: severe economic depression
Business owners cut production, fired workers, and slashed wages
Wave of violent strikes swept the country
Chicago – George Pullman, manufacturer of railroad cars, cut his workers’ pay by 25% and refused to lower rents on company-owned housing
Workers walked off their jobs
forcing the rail lines to
shut down coast to coast
During the course of the strike, 30 strikers were killed and 57 were wounded. Property damage exceeded $80 million.

25. The public tended to side with the owners
Pg 493
President Grover Cleveland set federal troops to Chicago to end the strike
Joined by deputies paid by the railroads
Marshals fired on crowds, killing 2 protesters
The public tended to side with the owners
Saw unions as radical and violent
By 1900, only 3% of American workers belonged to a union