The Expansion of American Industry

1. The Expansion of American Industry “This, then, is held to be the duty of the man of Wealth: First, to set an example of modest, unostentatious living, shunning display or extravagance; to provide moderately for the legitimate wants of those dependent upon him; and after doing so to consider all surplus revenues which come to him simply as trust funds, which he is called upon to administer, and strictly bound as a matter of duty to administer in the manner which, in his judgment, is best calculated to produce the most beneficial results for the community -- the man of wealth thus becoming the mere agent and trustee for his poorer brethren, bringing to their service his superior wisdom, experience, and ability to administer, doing for them better than they would or could do for themselves.” - From “Wealth,” by Andrew Carnegie, North American Review (1889)

2. The Expansion of American Industry “Law? Who cares about the law. Ain’t I got the power? - Comment alleged to have been made by Cornelius Vanderbilt - “You have undertaken to cheat me. I won’t sue you, for the law is too slow. I’ll ruin you.” - Cornelius Vanderbilt -

3. The Expansion of American Industry Monopoly– Market structure with only 1 seller of a particular product Example: Orange & Rockland, U.S. Steel, Standard Oil Trust– Legally formed combination of different corporations or companies selling the same product. All corporations answer to a Board of Trustees. Example: Standard Oil

4. The Expansion of American Industry Cartel– Group of different producers or sellers who agree to regulate supply and demand to control prices. Done to eliminate smaller competition. Example: OPEC Economic Theories – Laissez-faire Social Darwinism “Gospel of Wealth”

5. The Impact of Big Business

6. The Business of Railroads

7. The Expansion of American Industry Horizontal Consolidation John D. Rockefeller – Used latest technology and practices to drive out competition. Received rebates from railroads to cut costs. Believed in Laissez-Faire Social Darwinism “Gospel of Wealth”

8. The Impact of Big Business Purchased by Rockefeller Horizontal Consolidation Standard Oil Company Independent Oil Refineries

9. The Expansion of American Industry Vertical Consolidation Andrew Carnegie & J.P. Morgan – Controlled ALL phases of production to eliminate competition, stabilize rates, and reduce debt (costs). Used the Bessemer Process to mass produce steel. Formed the U.S. Steel Corporation and later sold it to Morgan. Believed in Laissez-Faire Social Darwinism “Gospel of Wealth”

10. Purchased By Carnegie The Expansion of American Industry Vertical Consolidation

12. The Rise of Labor Unions The Workplace– Poor working conditions, low wages, child labor Quitting & Absenteeism Increased efficiency through piecework, scientific management, and time and motion studies Employees– Seeking wage reform and improved conditions Some turned to Socialism **Formation of unions

13. The Rise of Labor Unions Employers – Lockouts Blacklists Yellow-dog Contracts Scab workers Private militias – Pinkertons Assistance from the government and the courts

14. The Rise of Labor Unions Unions – NLU (1866) All workers Wage reform and an 8 hour day Social programs Knights of Labor (1869) Terrence Powderly All workers Social Reforms Arbitration

15. The Rise of Labor Unions Unions – AF of L (1886) Samuel Gompers Skilled workers Reform of wages, hours, and conditions Used strikes and boycotts in order to gain Collective Bargaining power. IWW - Wobblies (1905) Radical group