Big Business- Industrialization

The Rise of American Business, Industry, and Labor (1865 - 1920)

• Civil War changed everything!

• North was already industrializing (bullets, railroads, etc)

• South was ruined! (NEW SOUTH)

RAILROADS!!!!!

Before the Civil War….

• …most businesses were sole proprietorships (single owners). Factories need more

start-up capital($$) then a single person business.

The birth of corporations!

What is a corporation?

What do these terms mean? (homework)

• 1) Monopoly• 2) Conglomerate• 3) Merger• 4) Trust• 5) Holding Company• 6) Capitalism• 7) Communism• 8) Entrepreneurs

•9) Laissez-Faire•10) Social Darwinism•11) Robber Barons•12) Philanthropists•13) Labor Union•14) Collective Bargaining•15 Sherman Antitrust Act

Entrepreneurs!

• Andrew Carnegie

• John D. Rockefeller

• J.P Morgan

• Henry Ford

Entrepreneurs!

• Andrew Carnegie Scottish Immigrant who

started working in a factory at age 12.

Invested wisely and entered the steel industry at age 38.

By 1901 sold his steel company for $250,000,000!

Gave hundreds of millions to charities (libraries)

Wrote the book: Gospel of Wealth

Entrepreneurs!

• John D. Rockefeller Entered the oil-refining

business during the Civil War. Used ruthless means to

eliminate his competition. By 1882 his company,

Standard Oil Company, controlled 90% of all American oil refining.

Created the Standard Oil Trust to control more aspects of oil production.

Gave hundreds of millions to charities.

Rockefeller Center

Entrepreneurs!

• J.P Morgan Banker who made many

loans to up and coming businesses.

Purchased and reorganized many bankrupt businesses (profit).

Bought Carnegie Steel and reorganized it into the United States Steel Corporation (the world’s largest).

Entrepreneurs!

• Henry Ford Ford Motor Corp

(cars)

Created the assembly line

Paid laborers a good wage

Laissez-Faire (hands off)

• The government largely kept “hands off” towards American business. Businesses were

booming! The economy was doing well. Foreign trade reached new heights.

Why did this change around the end of the 1800’s?

HANDS ON

• Why? 1) The economy took a

turn for the worse

2) Growing criticism that big business made profits on the backs of the American poor/immigrant

3) Growing political pressure for change

RAILROADS!!! (again)

• In the late 1800’s, railroads developed a number of business practices that hurt farmers and small businesses (pricing). These small business

lobbied to have the government change these policies.

Railroads lobbied to allow them to stay the same

Please research the following

Supreme Court Cases from this era: (homework)

1) Munn v. Illinois (1877)

2) Wabash, St. Louis & Pacific Railway v. Illinois (1886)

3) United States v. E.C. Knight Company (1895)

4) In re Debs (1895)

RAILROADS!!! (again)

• List several reasons why railroads were so important to so many people.

• What was it about railroads? How did they effect American society?

• How did railroads effect other businesses? Did railroads create a market for other businesses? Like what?

Public Pressure: ICC

• Public pressure forced Congress to pass the Interstate Commerce Act Created the ICC

which regulated railroads and ended abuses like rebates.

(precedent)

Public Pressure: Sherman

• Late 1800’s: some business had no competition (monopoly) Public outcry was

significant Politicians passed the

Sherman Antitrust Act (see vocabulary)

Business combination Illegal: “in restraint of trade or commerce”

US v. E.C. Knight Company

Precedent

Labor Rising

• Conditions for working people had slowly improved with time However, wages were

still low,unemployment was uncertain and could end suddenly.

Business owners had tremendous power over employees!

Labor Rising

• Union Tools: Collective Bargaining Strikes Pickets

Knights of Labor

• Formed in 1869 - Terence Powderly

• Haymaker Riot ended their influence in 1886

• Welcome skilled, unskilled, and African-Americans

• Fought for broad social reforms 8 hour work day end to child labor equal opportunities for

women

American Federation of Labor

• AFL - Samuel Gompers• 1886 • A collection of craft unions. • Fought for “bread and

butter” issues Higher wages, better

hours, better working conditions

• Extremely powerful with over 1,000,000 members by 1900

Labor Conflict

• Describe the following events for homework:

Great Railway Strike of 1877

Haymaker Riot Homestead Strike Pullman StrikeGive details, who - what -

when - why - results?

Great Railway Strike of 1877

Great Railway Strike of 1877

- Railroad workers went on strike after several pay cuts. (several states)

- President Rutherford B. Hayes sent federal troops to end the strike

- Workers got very little

Haymaker Riot

Haymaker Riot- Labor Rally (organized by

Knights of Labor) that ended in a bomb blast- 7 police died

- Chicago- 1886- Public blamed Knights of

Labor despite the fact they had nothing to do with the violence.

Homestead Strike

Homestead Strike- 1892 - Union members

went on strike (pay cuts) at the Carnegie steel plant

- Homestead, Pennsylvania

- Violence ensued- 16 people died- fewer

then 25% of the strikers got their jobs back

- Set the steel labor movement back 20 years

Pullman Strike

Pullman Strike- 1894 - Railroad

workers went on strike in Illinois

- Tied up other rail lines.

- President Grover Cleveland sent in troops to end the strike

- In re Debs