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Mergers

Mergers. Most integration was done by mergers. This is when businesses consolidate. “If you can’t beat ‘ em , join ‘ em ” mentality.

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Mergers

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  1. Mergers • Most integration was done by mergers. This is when businesses consolidate. “If you can’t beat ‘em, join ‘em” mentality. • Also, competitors forced each other out by selling below value until the competitor went bankrupt. Then they hiked prices higher than before now that the competitors were gone.

  2. Government Response to Monopoly • The Sherman Antitrust Act is passed, outlawing the creation of a trust, but the Supreme Court rarely enforced the law. • Actually becomes harmful to the creation of labor unions because opponents can say that unions are harmful for interstate trade, making unions illegal.

  3. Worker Response to Monopoly • In response to so much industrial growth, which brought bad conditions for workers, many workers formed workers’ unions, called labor unions. • The labor unions wanted better pay and better working conditions.

  4. Worker Response to Monopoly • Labor unions began in the 1700’s with small groups of skilled workers. • Laborers begin to join forces to strike back against poor business practices in the late 1800’s. • Wanted eight hour work days and equal pay.

  5. Worker Response to Monopoly • What can unions do? • Organize • Spread information • Negotiate • Go on strike

  6. Worker Response to Monopoly • A split in labor unions was created between skilled workers and unskilled workers. • The Knights of Labor was created and was open to all workers. It didn’t want to use strike tactics. Its membership declined after failed strikes and other unions emerged.

  7. Labor Unions • The American Federation of Labor was then created by Samuel Gompers. It combined groups of skilled workers to join forces, and pushed for strikes. Raised pay and work hours successfully, through strikes. • Labor unions also emerged in the West as farm laborers went on strike.

  8. Social Darwinism • The idea that riches are a sign of God’s favor to the individual, therefore the poor are inferior. • Everything is destined, and divined to happen, and there should be no government intervention.

  9. Social Darwinism • Social Darwinism was basically the idea that business success was a part of natural selection. • It appealed to some wealthy Americans to justify business practices. • How is Social Darwinism similar to Manifest Destiny?

  10. Captains of Industry (Robber Barons) • Some people became exceptionally rich. Why? • Industry was booming • Government was not regulating very much • Should the government interfere? • Businesses say no, workers say yes • Why would businesses say no? • Why would workers say yes?

  11. Captains of Industry (Robber Barons) • By 1890, the top of 1% of wealthiest Americans owned approximately 50% of American wealth.

  12. Captains of Industry (Robber Barons) • Andrew Carnegie • Got rich in the steel industry • Used vertical and horizontal integration to his advantage • Vertical: Bought coal fields, iron mines, ore freighters, railroad lines • Horizontal: Bought out rival steel producers

  13. Captains of Industry (Robber Barons) • According to Andrew Carnegie in The Gospel of Wealth, wealthy industrialists were responsible for controlling and distributing the surplus wealth of society.

  14. Captains of Industry (Robber Barons) • John D. Rockefeller • Got rich in the oil industry • His company was called Standard Oil • Used horizontal integration to his advantage by creating trusts • Also used the trick of lowering, then hiking, prices • Controlled 90% of oil refining business

  15. Henry Ford In the early 1900s, Henry Ford relied on the assembly line for manufacturing his automobiles to decrease the cost of production.

  16. Henry Ford • Henry Ford decreased the number of working hours from a nine-hour day to an eight-hour day in 1914 because he could change from two shifts a day to three, and thus increase production.

  17. Henry Ford During the 1920s, the automotive industry impacted the Michigan economy by increasing the size of the middle class (through Henry Ford’s $5/day plan).

  18. Henry Ford • The Ford Motor Company’s $5 Day benefited the company by creating a highly motivated work force and raising workers’ wages to the point they could afford to buy Ford cars.

  19. Henry Ford • The Ford Motor Company’s $5 Day offer included employees being subjected to English-language classes, investigations into their financial records, and investigations into their moral character.

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