Why Big Business developed in the late 1800s Civil War [industrialization for war materials] Social changes [end of slavery, Native Americans, immigration] Mineral resources [iron ore, coal, lumber] Transportation [Railroads]

Inventions Bessemer Process

- Edison’s Light Bulb

- Bell’s Telephone

Corporations Capital sell stock to create capital use capital to produce goods pay investors through dividends

The Entrepreneurs of Big Business Men who innovated to create new industries and products which created jobs to help create the Middle Class Out to improve & enhance society

Robber Barons Business owners who exploited workers and other businesses Primary goal was personal gain, not improving society

Andrew Carnegie – created and owned Carnegie Steel Company Horizontal or Vertical Integration? Bought out competing firms Bought out suppliers of ore and coal Bought out transportation of raw materials

John D. Rockefeller created the Standard Oil Company Horizontal or Vertical Integration? Bought out 39 oil companies

Cornelius and William Vanderbilt Staten Island, New York & Harlem Railroads Horizontal or Vertical Integration? Bought ferry and steamship companies Bought other railroad

J.P. Morgan Financier [investment banker] Horizontal or Vertical Integration? Bought out Carnegie’s steel plants combined them with other steel plants to form the largest steel plant in the world called: US Steel Corporation

Herbert Spencer and Social Darwinism - "Society advances, where its fittest members are allowed to assert their fitness with the least hindrance… the unfit should not be prevented from dying out." - The idea that the poor are poor because they are “unfit” and the rich are rich because they are “fit”

Economic and Social beliefs Adam Smith wrote “Wealth of Nations” In 1776 US gov’t followed Doctrine of “Laissez-Faire” Economics

Laissez-faire means “leave it be” or “leave it alone” - refers to the government staying out of (not regulating) businesses How does the philosophy of “Social Darwinism” support the notion of Laissez-faire?

Gospel of Wealth Belief that great wealth had a responsibility to better society Donated huge sums of money to improve society • Rockefeller & Carnegie Example: Built schools, libraries, museums, theaters

d. Sherman Anti-Trust Act, 1890 Prevent corporations from creating monopolies/trusts or trying to hinder free trade Ineffective until Teddy Roosevelt

Some of Standard Oil’s workers

Effects of Industrialization Increased Immigration - Need for cheap labor, plenty of opportunities

Working conditions deteriorate New immigration drops wages and increases rampant poverty [causes increase in nativism] Child labor common in factories and cities Dangerous working conditions common Workers required to work up to 60 hours per week

Growth of Unions to protect workers Samuel Gompers American Federation of Labor 1886 Skilled craft workers Used strikes to gain $6.50/wk in wages and reduce hours from 55 to 49 hrs/wk Eugene V. Debs American Railway Union Skilled and unskilled workers in one industry Strikes failed

Immigration/Urbanization Issues (late 1800s/early 1900s) Industry needs cheap labor Immigrants want better life East Coast More immigrants from Southern and Eastern Europe Enticed by industrialization West Coast More immigrants from China Enticed by work on railroads and mining

Other Unions “Big Bill” Haywood and the International Workers of the World [IWW] “Wobblies” Ideas of Socialism, Marxism Marginally successful Mary Harris Jones and the United Mine Workers Union 1877 Mine workers in the east and west Influenced child labor laws

Violence between business and unions Hire private security firms such as the “Pinkertons” to break strikes Beatings, killings, and intimidation of union leaders and members used to end strikes and attempt to break unions Unions Commit violent acts against “scabs” [strike-breakers] Block strike-breakers from entering business under threat of violence Property distruction of businesses

Map of Ellis Island

Map of Angel Island

Growth of Cities Urbanization centered around industrial factories

Horatio Alger Author who wrote books about people like Carnegie About people going from “Rags to Riches” by working hard This creates the American Dream of working hard to achieve unparalleled success:you have a chance to make it “BIG”

Monopoly Company that has exclusive control in a given trade

- Trust Group of companies with one central Board of Directors Able to control member companies, prices and destroy competition Sherman Anti-trust Act of 1890 attempted to remove trusts Ineffective because trusts could break up before trials

Business formations Type Owner decisions advantages/disadvantages Partnership joint owners owners owners control/ each responsible Corporation stockholders Board of raise $ from investors/ Directors investors have little say elected horizontal markets can lead to monopoly Trust stockholders trustees massive $-control market/ monopoly

Mass Culture New Middle Class Mid-level management Disposable income Free Time Popular Fiction Mass-circulation Newspapers Bicycling, Tennis Baseball Department Stores Catalog shopping Photography Amusement Parks