Transcript Big Business and Organized Labor

THE RISE OF BIG BUSINESS AND
ORGANIZED LABOR
Eliseo Lugo III
OBJECTIVES: BY THE END OF CLASS, STUDENTS
WILL BE ABLE TO:
Describe how new business methods helped
American industry grow.
 Identify the leaders in “big business” and
describe their influence on the development of
the nation.
 Summarize how working conditions changed as
industry grew.
 Describe workers efforts to organize during the
late 1800’s.

NEW INDUSTRIES EMERGE
 New
technologies
Electrical
power replaced steam
and water power.
Larger
factories produced more
and more goods.
Faster
transportation moved
people and goods more cheaply.
NEW INDUSTRIES EMERGE CONTINUED
Steel Industry

The Bessemer process of
purifying steel helped to make
America the world’s top
producer o f steel and
transformed the U.S. into a
modern industrial economy.

Construction companies could
build bigger bridges and taller
buildings.

The low cost of steel made
ordinary items affordable.
Oil industry
Oil
was a key
commodity as a fuel
source and for
lubrication.
Major
sources of
energy from oil
fueled a revolution
in transportation
and industry.
THE RAILROADS EXPAND
•
Between 1865 and 1890, the number of miles of
railroad track increased nearly fivefold.
•
Aiding the growth, the federal government gave
thousands of acres of land to railroad companies.
More tracks
• The two major railroad
companies were the Union
Pacific and the Central Pacific.
• The Union Pacific laid tracks
west from Omaha, Nebraska
• The Central Pacific laid tracks
east from Sacramento,
California.
IMPORTANT EFFECTS OF THESE NEW INDUSTRIES
•Creation of rail network promoted trade and provided jobs.
•Demand for rails and railcars boosted the steel industry
and train manufacturers.
•Settlement of the West was easier, and lightly populated
areas began to fill with residents.
•With railroads, new towns were founded and existing ones
expanded.
•Railroads led to the adoption of standard time.
•Before, each area had its own local time based on the
position of the sun.
•Accurate timekeeping was needed for the trains to keep to
their schedule.
•C. F. Dowd proposed dividing the earth into time zones,
setting the clocks alike in each zone.
•Railroad officials used this idea in 1883, and by 1918
standard time was adopted for the nation as a whole.
FAVORABLE CONDITIONS FOR BUSINESSES
The American ideal was one of self-reliant individualism. In other
words, success was dependant on the individual. A strong work
ethic made one successful, and entrepreneurs risked their money
and talents in new ventures.
Free markets



With capitalism, competition
determines prices and wages, and
most industries are run by private
businesses.
In the 1800s, business leaders
believed in laissez-faire ( hands off)
capitalism with no government
intervention.
They believed government
regulation would destroy selfreliance, reduce profits, and harm
the economy.
Social Darwinism

Many thinkers believed that
inequalities were part of the natural
order.

Charles Darwin believed that
members of a species compete for
survival in a natural selection
process.

Applied to society, stronger people,
businesses, and nations would
prosper, and weaker ones would fail
in a “survival of the fittest.”
THE STRUCTURES OF THE BUSINESS WORLD BEGIN TO CHANGE

Proprietorships and partnerships


Corporations


Small businesses were run by individual proprietors or had more than one owner in a
partnership. In either case, owners are personally responsible for all business debts
and obligations.
As industries grew, the structure of ownership changed. Businesses were owned by
stockholders; decisions made by a board of directors, with day-to-day operations run
by corporate officers. Investment money was raised by selling stock, and investors
were bound only by the amount of their investment.
Trusts and Monopolies

Some companies merged and turned their stocks over to a board of trustees who ran
the group of companies as a single entity. Sometimes a trust gained a monopoly,
having complete control of an industry. With no competition, prices could be raised or
lowered at will.
INDUSTRIAL TYCOONS TAKE OVER THE BUSINESS WORLD
Rockefeller
and oil
•Starting with an oil refinery and superb business
sense, John D. Rockefeller used both vertical and
horizontal integration to capture 90 percent of
the U.S. oil refinery business by 1879.
•Rockefeller gave away over half of his fortune to
charity. He donated millions to education and good
works through his Rockefeller Foundation.
Carnegie
and steel
•Andrew Carnegie rose from immigrant child to
steel magnate. He used profits from various
business investments to found his own company.
By the end of the century the Carnegie Steel
Company dominated the U.S. steel industry.
•After retiring, Carnegie devoted his time to
charity, supporting education and building public
libraries.
INDUSTRIAL TYCOONS TAKE OVER THE BUSINESS WORLD
CONTINUED
Cornelius
Vanderbilt
•Vanderbilt began investing in railroads during the Civil
War.
•By 1872, he owned the New York Central Railroad. At the
height of his career he controlled 4,500 miles of track.
•He supported few charities, but gave money to what
would come to be Vanderbilt University. He died leaving
an estate of $100 million.
George
Pullman
•George Pullman made his fortune designing and
building sleeper cars that made long-distance
travel more comfortable.
•He built a town south of Chicago to house workers
in relative comfort, believing happy workers were
more productive.
•The Pullman Company controlled aspects of life in
the town, and criticism was not tolerated.
MIXED REACTIONS BY SOCIETY FOR
THESE BUSINESS TYCOONS
Critics (Against)

Business tycoons were “robber barons” who profited
unfairly by squeezing out competitors. They lived lavish
lifestyles from their ill-gotten rewards.
Proponents (For)

Business tycoons were “captains of industry” who used
their business skills to make the American economy
more productive. That in turn made the American
economy stronger.
MASS MARKETING’S EFFECT ON
THE NATION
Retailers looked for new ways to maximize their profits.
•Household goods were targeted toward women, who made most
of those purchasing decisions.
•Wholesome images were used to convey a sense of purity. Brand
names helped customers remember products.
•The convenient department store emerged, providing a variety of
goods.
•The stores bought in bulk, passing the savings on to the
customers.
•Mail-order companies gave rural dwellers access to a huge variety
of goods.
•The Sears, Roebuck and Company catalog was 507 pages.
•Customers made their selections, sent in the payments, and
waited for the merchandise to arrive.
WORKERS BEGIN TO ORGANIZE AS A RESULT OF THE RISE OF
BIG BUSINESS
The Main Idea
Grim (Poor)working conditions in many industries led
workers to form unions and stage labor strikes.
Key questions to keep in mind:
• What was the relationship between government and business in
the late 1800s?
• What were working conditions like for industrial workers?
• How did workers seek change?
THE FEDERAL GOVERNMENT AND BIG BUSINESS

Hands-off policy



Government did not interfere with business in the late 1800s, but as
corporations expanded and gained power, that policy began to change.
Controlling the giants

The Sherman Antitrust Act was passed in 1890, making it illegal to form
trusts that interfered with free trade. It prohibited monopolies and activities
impeding competition.

The law was vague, however, and it was seldom enforced.
Workers

The government paid less attention to workers, who scraped by on small
wages. By 1890, 10 percent of the population controlled 75 percent of the
nation’s wealth. The rich were very rich, and many industrial workers made
less than $500 per year.
INDUSTRIAL WORKERS
The workforce




Many factory workers were
immigrants or rural Americans
moving to the cities for jobs.
The best jobs went to nativeborn whites or European
immigrants.
Less well-paying jobs were open
to African Americans, as
household help or laborers.
By 1900, one in six children
between the ages of 10 and 15
held factory jobs.
Working conditions

Most unskilled laborers worked
10-hour days, six days a week.

They had no paid vacation and
no sick leave.

Speed of production led to
terrible accidents. Injured
workers were replaced.

Sweatshops were common.
These cramped workshops set
up in shabby tenement
buildings were common in the
garment industry.
WORKERS ARE SEEKING CHANGES
Early
organizing
Nation
Unions
The Great
Railroad
Strike
In 1794, Philadelphia shoemakers formed a trade
union. Over decades, unions formed for skilled
trade workers, but they remained small and local.
After the Civil War, things changed. The Knights of
Labor formed in 1869. Under the leadership of
Terence V. Powderly in the 1880s, they began to
accept unskilled workers, women, and African
Americans as members. They campaigned for
reforms, such as eight-hour workdays and the end
of child labor through boycotts and negotiations.
After wage cuts, the first railroad strike occurred in
1877. Initial strikes quickly spread, and state
militias were called out. Violence ensued, lives were
lost, and costly damage was done. The arrival of
U.S. Army troops put an end to the strike.
STRIKES AND TURMOIL REAR THEIR HEADS
The Haymarket Riot

One of the worst clashes was at
Haymarket Square in Chicago in 1886

A bomb was thrown in a crowd gathered
to protest violent police action.

Gunshots rang out, and eleven people
were killed and hundreds injured before
it was over.

Foreign-born unionists were blamed for
the violence, and the press fanned
xenophobia.

Xenophobia is an unreasonable fear of
foreigners or strangers.

Eight men were charged with
conspiracy, but no evidence connected
them to the crime.

All eight were convicted and sentenced
to death. After four hangings and one
suicide, the last three were pardoned.
The American Federation of Labor

Employers struck back at organized
labor, forcing employees to sign
documents saying they would not join a
union.

Blacklists of people deemed
troublemakers were made and shared
by employers, who refused to hire
anyone listed.

Striking workers were replaced with
“scabs,” or strikebreakers.

Samuel Gompers led a group of skilled
workers to form the American
Federation of Labor in 1886.

Using strikes and other tactics, the AFL
won wage increases and shorter
workweeks.
The Homestead Strike
Unions made some gains, but conflicts continued. Carnegie
Steel workers in Homestead, Pennsylvania, refused to work
faster, and the manager tried to lock them out. The workers
seized the plant. Gunfire erupted when private guards hired by
the company tried to take control. After a 14-hour battle and
fourteen deaths, the governor called out the state militia. The
steelworkers’ union withered within months.
The Pullman Strike
After laying off a third of its employees in 1893, the Pullman
Company cut the wages of remaining workers by 25 percent
without lowering their rents. Workers went on strike with the
support of Eugene V. Debs, the leader of the American
Railway Union. The government ordered the strike be called
off, but the union refused. President Grover Cleveland called
in federal troops, and the strike collapsed. The late 1800s
would remain an era of big business.
THE AGE OF INVENTION CONTINUES WITH THE
SECOND INDUSTRIAL REVOLUTION
The Main Idea
Important innovations in transportation and communication
occurred during the Second Industrial Revolution.
Key questions to keep in mind:
• What advances in transportation were made in the late 1800s?
• What inventions led to a communications revolution?
• How did Thomas Edison help shape the modern world?
ADVANCES IN TRANSPORTATION

Streetcars were horse-drawn vehicles placed on rails on the
street to make the ride smoother.

Streetcars needed more power than horses could provide,
and cable cars were invented in San Francisco to get cars up
the steep hills there. The cars latched on to a moving cable
underground.

Subways developed as a result of increased traffic from
horses and electric streetcars competing for space.

Boston built the first subway line in 1897, with New York City
following in 1904.
ADVANCES IN TRANSPORTATION CONTINUED

Automobiles—inventors were experimenting with vehicles for
personal use. A breakthrough came with the invention of the
internal combustion engine in 1867. The first practical
motorcar in the U.S. was built in 1893. Automobiles were
only for the wealthy early on ; a new car cost about $2,500.
It wouldn’t be until Henry Ford’s invention of the Assembly
Line that automobiles would be inexpensive enough for the
general population

Airplanes—Ohio bicycle makers Wilbur and Orville Wright
were the first to successfully fly an airplane–for 12 seconds
in 1903. They followed this success with even longer flights.
COMMUNICATIONS REVOLUTION
The telegraph



Samuel F. B. Morse patented his
method of communicating by
sending messages over wires with
electricity, calling it the telegraph.
Operators tapped out patterns of
long and short messages that
stood for letters of the alphabet.
The system was known as Morse
code.
After the Civil War, the telegraph
grew with the railroads. Telegraph
wires were strung along the tracks,
and train stations had telegraph
offices in them.
The telephone

Two men were working on devices
that could transmit voices using
electricity.

Alexander Graham Bell patented his
device hours before his competitor,
and he gets the credit for the
invention of the telephone in 1876.

Companies found the telephone to
be an essential business tool.
People wanted to have them in their
homes as well.

By 1900, more than a million
telephones had been installed
across the nation.
THE TYPEWRITER
Inventors in many nations made attempts to create a
writing machine.
•Christopher Latham Sholes, a Milwaukee printer, developed
the first practical typewriter in 1867.
•He later improved upon his machine by designing the
QWERTY keyboard, still the standard on keyboards today.
•The most frequently used letters were placed far apart so
they would not jam when they were struck.
•The typewriter could produce legible documents very
quickly.
•Businesses began to hire women as typists to manage
company correspondence, opening up new job opportunities
for women.
THOMAS EDISON

Obsessed with progress


Hard work


As a child, Thomas Edison was curious about
everything. Nearly deaf by twelve, he declared
himself an inventor by age twenty-two. In 1886,
he opened his own research laboratory in Menlo
Park, N.J.
Edison said, “Genius is 1 percent inspiration,
99 percent perspiration.” He worked alongside
his assistants and spent long hours tinkering
with designs. Inventions poured out of the lab,
and Edison became known as the Wizard of
Menlo Park.
Electric lighting

Edison developed the practical electric lighting.
With the incandescent bulb came the need for
widely available electricity. Edison would bring
electricity to New York City, designing and
producing all of the parts necessary for an
electricity network. Electric power plants spread
across the country.

Over his lifetime, Edison earned over 1,000 U.S.
patents.