Big Businessvs.

Labor

Corresponds with Chapter 14, section 3

Main Idea and Key Terms

• Andrew Carnegie• Vertical and

Horizontal integration

• Social darwinism• John D. Rockefeller• Sherman Anti-Trust

Act

• Samuel Gompers• American Federation

of Labor (AFL)• Eugene V. Debs• Industrial Workers of

the World (IWW)• Mary Harris Jones

•The expansion of industry resulted I the growth of big business and prompted laborers to form unions to better their lives. Can be found on Page 447

Create a Graphic Organizer!

Andrew Carnegie J.D. Rockefeller

– Origin?

– Major Industry?

– Interesting Fact

– Major Industry?

– Origin?

– Interesting Fact

Andrew Carnegie

• Bio:– Born in Scotland to poor parents– Came to the United States in 1848– He was 12 years old– Within 6 years he was the private secretary of the local superintendent of the Pennsylvania Railroad

– Rich enough by 1865 to quit

Carnegie continued

• Bio continued:– In 1873, Carnegie invests in his own steel company

– By 1899 Carnegie Steel is producing more steel than every factory in England

– How did he do this?

Integration

AND Vertical Integration

Horizontal Integration

Vertical Integration

• Moves up and down the ladder, meaning you buy the previous step, and next step of your business.

• If you own a steel company, you buy the mining companies to get resources for you cheaper, and buy the railroads to ship the finished products out later

Horizontal Integration

Horizontal Integration

• Horizontal Integration is another way to cut costs and increase profits

• H.I. involves buying out everyone who is direct competition with you.

• i.e. Carnegie buying out every other steel company in competition with him

Vertical Integration

Social Darwinism

• The theory of Social Darwinism grows out of the theory of evolution

• Means that the more fit in society will advance, weeding out the less able

• Used to support “Laissez Faire” which means “allow to do” in French

• Appealed to the Protestant work ethic

Consolidation

• Many industrialists tried to eliminate competition by creating holding companies to buy out other companies’ stock

• Others created Trusts

• What is a trust?– Ask John D. Rockefeller…

John D. Rockefeller

• Bio:– Born in 1839 in Richmond, N.Y.– Started a small business– Sold that business and invested in a new venture…

– Standard Oil

• Bio continued:– In 1870, Standard Oil controlled 2-3% of the U.S. crude oil

– By 1880, Standard Oil controlled over 90% of the U.S. crude oil

– Did this through selling below cost to run competitors out of business, and then raised prices higher than normal

– Paid extremely low wages

The Robber Barons

• Carnegie, Rockefeller, and others became known as the “Robber Barons”

• Take from the poor, give to the rich…well…at least themselves

• But were they all bad?

• Rockefeller did give away a small portion of his wealth…something to the tune of $500 million

What is a “Trust”

…an illegal combination of industrial or commercial companies in which the stock of the constituent companies is controlled by a central board of trustees, thus making it possible to manage the companies so as to minimize production costs, control prices, eliminate competition, etc.

Sherman Anti-Trust Act

• The Sherman Anti-Trust Act is designed to make trusts illegal which interfered in interstate commerce

• It is ineffective for reasons as simple as not supplying a definition of the word “trust”

Labor Unions

• Labor Unions emerge to protect workers from long hours, low wages, and unsafe conditions

• Different Unions Emerge

• Read “Labor Unions Emerge”, “Union Movements Diverge”, and “Strikes turn Violent” for homework

• These are on pages 450-455