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Railroad Corruption

Warm Up: Identify a company that you think has unfair practices (to either its workers or customers). Explain why they are able to be unfair and how this should be changed. . Railroad Corruption. The worst case was the Crédit Mobilier

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Railroad Corruption

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  1. Warm Up:Identify a company that you think has unfair practices (to either its workers or customers). Explain why they are able to be unfair and how this should be changed.

  2. Railroad Corruption • The worst case was the CréditMobilier • Jay Gould boomed and busted railroad stock, making profit for himself all the way along. • “Stock Watering" where railroads would artificially talk up the companystockwould increase.

  3. Railroad Corruption • “Pools:" competitors agreed to cooperate as if they were one company. • Rebates were given to large companies that shipped large quantities of goods.

  4. Interstate Commerce Act/Commission (1887) • Outlawed Rebates and Pools

  5. Vertical Integration • Ex. Sears, Roebuck and Company

  6. Horizontal Integration

  7. Andrew Carnegie • Son of Scottish immigrantsclassicrags-to-riches story. • Carnegie entered the steel industry. • Carnegie's U.S. Steel Corp. • U.S. Steel produced 1/4 of the nation's Bessemer steel. • Carnegie made $25 million, tax free. • Gospel of Wealth: rich had a moral duty to spread the wealth

  8. John Rockefeller • Standard Oil Company • Used vertical integration • Controlled 90-95% of the oil in the U.S. • “Let us prey" (on the little companies). • Interlocking directorates own men would be placed on the board-of-directors for "competitors.".

  9. J.P Morgan • Banker/Financer • Insider Trading • Disregarded Workers • Gold Speculation • J.P. Morgan bought Carnegie Steel and built U.S. Steel into the world's first billion dollar company ($1.4 billion).

  10. Cornelius Vanderbilt • Railroads and Shipping • Built Grand Central Station • Gave money for Vanderbilt University

  11. Sherman Anti-Trust Act • Enacted in attempt to outlaw trusts or monopolies. • Effected Labor Unions • Didn’t become as effective until 1914

  12. Formation of Labor Unions • Low Wages • Unsafe Conditions • Long Hours • Management lack of concern for workers • Unions formedoften got entangled in violent strikes

  13. Knights of Labor • skilled and unskilled, women and blacksonly banned "non producers" • The Knights sought workers' cooperatives, better working conditions, and the 8 hour workday. • Got 8 hour day in several places • BUT the Haymarket Square Incident damaged them.

  14. American Federation of Labor • The AF of L was made up of skilledcraftsmen, made up of small, independent unions.

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