Corporation – stocks, shares sold to raise capital for expansion Purchase competitors, etc…

1. The Rise of Corporations • Corporation – stocks, shares sold to raise capital for expansion • Purchase competitors, etc… • Monopoly(eliminate competition) • CARTEL / TRUST - forms of monopoly

2. Carnegie explained his success by pointing to his hard work, shrewd investments, and innovative business practices. Late 19th century scientists explained his achievements thru a new scientific theory called Social Darwinism. • In his book, On Origins of the Species, Charles Darwin had speculated that some individuals flourish and pass their traits along to the next generation, while others do not. He explained that a process of NATURAL SELECTION weeded out less suited individuals and enabled the best-adapted to succeed. ( successful traits creates success ) • Because the theory supported the idea of individual responsibility and blame, it appealed to the Protestant work ethic of many Americans… Success comes from these individual traits… (Frugality, Hard Work, Perseverance, Honesty )

3. Robber Barons or Captains of Industry? • Andrew Carnegie -Steel Robber Baron • Scotland Immigrant • Story of HARD WORK – PERSONAL RISK • Vertical Integration • Horizontal Consolidation • Philanthropist (3,000 libraries, other…) $350 million given away – 90% of wealth • John D. Rockefeller (Standard Oil) • TRUSTS Consolidation • Rockefeller Foundation ( $500 million) • Vanderbilt’s and others • Vanderbilt / Wake Forest

4. Social DarwinismNatural Selection • Survival of the Fittest • What Personal Characteristic Traits Create Success? • Strong Survive – Weak Die (traits/species) • the ‘most fit’ businesses will succeed and the weak will fail. (Individual Responsible) • Protestant Work-Ethic (Laissez-Faire) • YOU Create your life not depending on others to take care of you! • INDIVIDUAL INITIATIVE

5. Horatio Alger – American success stories“pulling yourself up by your own bootstraps” • Corporation –stocks, shares sold to raise capital for expansion • Monopoly(eliminate competition) • CARTEL / TRUST - form of monopoly

6. Many industrialists pursued horizontal integration in the form of mergers. A firm that bought out all of it’s competitors could form a MONOPOLY. One way to set up a monopoly was to form a holding company. J.P. Morgan will create a steel holding company, and when it will buy out Carnegie in 1901, it became the world’s largest business. • JOHN D. ROCKEFELLER and Standard Oil took a different approach. They will join with competing companies in a TRUST agreement. These were not legal mergers, however Rockefeller will use a trust to gain control of the oil industry in the United States. In 1890 Standard Oil Company will control 90 % of the oil refining in the United States. Alarmed at the tactics of these industrialists, critics began to call them ROBBER BARONS. But industrialists were also philanthropists.

7. Rockefeller will give away over $500 millionand establishing the Rockefeller Foundation providing funds to found the University of Chicago, and creating a medical institute that helped find a cure for yellow fever. Andrew Carnegie donated about 90 % of his wealth during his lifetime. His fortune still supports the arts and learning today.

8. Post Civil War Millionaires (4,000) • Millions of NEW JOBS are created • LAND of OPPORTUNITY • (1890) Sherman Antitrust Act - outlawed combination of companies that limit interstate trade or commerce (Monopoly)

9. Despite the defense of millionaires, the government was concerned with expanding corporations stifling free competition. In 1890, the SHERMAN ANTITRUST ACT made it illegal to form a trust that interfered with free trade. • It was difficult to prosecute companies, and eventually the government stopped trying. Industrial growth concentrated in the North. • The south remained mostly agricultural, with farmers at the mercy of railroad rates. • Northern businesses already owned 90% of all stock in most profitable southern businesses – railroads.

10. What were conditions like in these factories? Pay / Safety / Hours • What were living conditions like for most working families? High costs / with Low Pay (children) • What type of Urban problems existed in these rapidly growing cities in the North East? • Water & Sanitation / Overcrowding / Transportation / Competition for Resources / Crime / Services

11. As business leaders merged and consolidated their forces, it seemed necessary for workers to do the same. Steel mills demanded a 7 day work week. Seamstresses, like factory workers in most industries, worked 12or more hours a day, six days a week. Employees were not entitled to vacation, sick leave, unemployment, or reimbursement for injuries on the job. Twenty percent of the boys and 10 percent of the girls under age 15 – some as young as five years old – also held full-time jobs. • In SWEATSHOPS, or workshops in tenements rather than in factories, workers had little choice but to put up with conditions.

12. Workers Organize Workers Have Cause for Complaints • -Loss of Freedom • -Loss of Identity • -Long Hours,Low Wages • -Dangerous Working Conditions • -Child Labor • -Sweatshop System

13. The first large scale national organization of laborers the NATIONAL LABOR UNION (NLU) was formed in 1866 by William H. Sylvis. Their refusal by some to admit African Americans led to the creation of the Colored National Labor Union. • In 1868, the NLU persuaded Congress to legalize an EIGHT hour day for government workers. • In 1869 Uriah Stephens focused attention on individual workers and organized the Noble Order of the Knights of Labor. Membership was officially open to all workers, regardless of race, gender, or degree of skill. In 1886 they had about 700,000 members.

14. The Rise of Labor Unions • Knights of Labor - Philadelphia 1869 Uriah Stephens – ALL types of workers • American Federation of Labor (AFL) -Samuel Gompers(craft unionism) only skilledworkers • Collective Bargaining: workers negotiate as a group with employers – STRIKE • SCABS – cross picket line as workers • Employers React to Workers -Injunction • Eugene Debs (Industrial Unionism) American Railway Union (Socialist)

15. As labor activism grew, it diversified. Two major types of unions emerged. One approach was CRAFT UNIONISM which included skilled workers from one or more trades (Skilled ONLY NO unskilled). • The AMERICAN FEDERATION of LABOR with SAMUEL GOMPERS as its president focused on Collective Bargaining or negotiation between representatives of labor and management, to reach agreements. Unlike the Knights of Labor, they used Strikes as a major tactic. Between 1890 and 1915 the average weekly wages in unionized industries rose from $17.50 to $24, and the average workweek fell from 54.5 hours to 49 hours.

16. Some leaders believed that unions should include all workers – skilled and unskilled—in a specific industry. This concept of Industrial Unionism caught the imagination of EUGENE V. DEBS who made the first attempt with the American Railway Union (ARU) • To some the problems faced by workers, Eugene Debs and others union activists turned to SOCIALISM, an economic and political system based on government control of business and property and equal distribution of wealth (share the wealth) – carried to its extreme form – Communism would result in the overthrow of the Capitalist system. • In 1905, a group of radical unionists and socialists in Chicago organized the Industrial Workers of the World( IWW) or the Wobblies. In 1903, about 1,000 Japanese and Mexican workers organized a successful strike in the sugar-beet fields of California.

17. ECONOMIC THEORIES • CAPITALISM - individuals own & control the means of production (Free Enterprise) • SOCIALISM - Government owns & controls the LARGE industries (examples) • COMMUNISM - Government owns & controls ALL means of production / business (individual ownership is NOT ALLOWED) • ANARCHISM – NO government, NO structure, NO laws, Law of Jungle (Class Warfare) • Used by Extreme Groups (Socialist/Communist) to create chaos to push for reforms • Today: Islamic Extremism excusing killing innocent women / children in the name of their cause

18. Industry and government responded forcefully to union activity, which they saw as a threat to the entire capitalist system. • In July of 1877, workers for the Baltimore and Ohio Railroad struck to protest wage cuts, and the strike spread to other lines. President Hayes will intervene with federal troops because the strike was impeding interstate commerce. • Encouraged by the 1877 strike, 3,000 people gathered in Chicago’s HAYMARKET SQUARE on May 4, 1886. When a bomb was tossed into the police line, they fired into the crowd. The 3 Speakers at the event and 5 Radical leaders were arrested for inciting a riot. All 8 were convicted – 4 were hanged – 1 committed suicide in prison. After this event, the public began to turn against the labor movement..

19. Steel workers called a strike on June 29, 1892 and the Carnegie Steel Company plant in HOMESTEAD Pennsylvania. The president, Henry Frick, hired armed guards from the PINKERTON detective agency to protect the plant. Strikes continued in other industries. During the Panic of 1893 and the economic depression that followed, the Pullman company laid off more than 3,000 of its employees and cut wages for others and a ARU strike and boycott ensued. After Pullman hired strikebreakers, the strike turned violent and President Grover Cleveland sent in federal troops to end the strike. Eugene Debs was JAILED and Pullman fired most of the strikers.

20. Women in the Labor Movement • Mother Jones (Miners, Mill Women) • Pauline Newman (Garment Industry) • 1911 NYC Fire PRESSURE on UNIONS • Yellow Dog Contracts • Public FEAR/ANGER • 1910 8.3 only industrial workers

21. Although women were barred from many unions, they united behind powerful leaders to demand better conditions, pay and an end to child labor. Perhaps the most prominent organizer in the women’s labor movement was MARY HARRIS JONES. She supported the Great Strike of 1877 and later organized the United Mine Workers of America (UMW). • She endured death threats and jail with coal miners, who gave her the nickname MOTHER JONES She led 80 mill children on march to the home of President Teddy Roosevelt to expose the cruelties of child labor. • In 1909, PAULINE NEWMAN, just 16 years old became the first female organizer of the International Ladies Garment Workers Union. After a fire broke out in the TRIANGLE SHIRTWAIST FACTORY in New York City on March 25, 1911 – the public could no longer ignore conditions in garment factories. In all, 146 women died; some were found huddled with their faces raised to a small window. • The more powerful unions became, the more employers feared them. Many employers forbade union meetings, fired union members, and forced new employees to sign YELLOW DOG contracts, swearing they would not join a union.