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Big Business and Labor
Section 14-3pp. 447 – 455
January 13, 2010
Preview Questions
• How did Carnegie take control of the steel industry?
• How did entrepreneurs try to control competition?
• What were the two major types of unions?
Carnegie’s Innovations
• Industrial mogul who made his fortune in steel companies
Carnegie’s Innovations
• Vertical Integration: – Company buys out its suppliers– Control quality and cost of product– Created monopolies
• Horizontal Integration: – Company merges with similar companies– Created monopolies
Social Darwinism
• Theory that taught “only the strong survive”
• Promoted competition, hard work, and responsibility
• Used as justification for exploitation of workers and immense wealth
Fewer Control More
• Monopoly: – Complete control over an industry’s production,
quality, wages, and prices– Eliminated competition and increased profits
• Holding Company:– Corporation that buys out the stock of other
companies– Helped create monopolies – Ex: J.P. Morgan and U.S. Steel
Fewer Control More
• Trusts: – A large corporation made
up of many companies that receive dividends on profits earned by all the companies combines
– Helped to create monopolies
– Ex: John D. Rockefeller and Standard Oil
– “Robber Barons”
Fewer Control More
• Sherman Antitrust Act– Made it illegal to form trusts– Not effective
Labor Unions
• National Labor Union– Won 8 hour work days in
1868
• Knights of Labor – Open to all workers – Promoted negotiation
over strikes
Union Movements Diverge
• American Federation of Labor – Led by Samuel Gompers – Used strikes and collective bargaining
• Industrial Workers of the World – Based on the work of Eugene Debs – Made up of Socialists and political radicals – Wanted to include skilled and unskilled workers
Strikes Turn Violent
• Strike Breakthroughs – Great Strike of 1877 – President Hayes used
federal troops to break up the strike
– Haymarket Square Riot – Caused public opinion to turn against workers and strikes
– Pullman Strikes - After strikers turned violent, President Cleveland sent in troops.
Strikes Turn Violent
• Trends in Labor Organization – Women began to
organize – Employers refused to
recognize union leaders – “Yellow Dog” Contracts
forbid union membership
– Government break-ups of strikes