How do the “Robber Barons” make their fortunes? Big Business & Labor How do the “Robber Barons” make their fortunes?

The Robber Barons Businessmen and bankers who made huge personal fortunes by using unfair business practices They claim to be “captains of industry” and justify their actions using Social Darwinism – survival of fittest! 3) JP Morgan- Banking/Steel 2) J. Rockefeller - Oil 1) A. Carnegie - Steel

Andrew Carnegie Carnegie was a Scottish immigrant who worked his way up to Superintendent of Pennsylvania railroad by age 24 Begins investing in & buying other companies (oil, cable & steel) Carnegie Steel becomes one of most successful companies in US Carnegie’s Business Strategy Vertical Integration: Buy out suppliers of needed products and services so you control production top to bottom 2. Horizontal Integration: buy out competing producers so you are only company that offers that service 3. Pay workers low wages & no unions

John Rockefeller Rockefeller makes Standard Oil one of the biggest and most profitable American cos Rockefeller tactics: 1. paid very low wages 2. lowered prices to force competition to sell 3. formed trusts to avoid monopoly laws A trust bought out companies, not Rockefeller directly. However, Rockefeller controlled the trust

JP Morgan & Govt Response -Morgan was a master of using of the banking system to kill competition and to form monopolistic trusts -Discuss: How can US gov stop monopolistic trusts while keeping a “free market” system? -1890: Congress passes Sherman Anti-trust Act makes it illegal to form a trust that interfered with free trade/competition - Goal: to stop trusts but difficult to enforce

Rise of Labor Unions In addition to low pay employees also dealt with: 1) 6-7 day weeks, 12+ hour days, no vacation, no sick leave 2) Poor physical conditions: polluted and often dangerous To fight the robber barons, labor unions formed to help workers - AF of L: Craft unions that represented skilled workers - Knights of Labor: Industrial unions that covered those the AFL would not accept - IWW: union of socialists who wanted workers of world to unite

Strikes & Violence Plague the Nation 1) Great Railroad Strike of 1877 -Shut down most RR traffic for week, when other people joined strike violence ensued, Pres Hayes used fed troops to end strike 2) Haymarket Riot of 1886 - Union member killed by police, 3000 show up to protest, anarchist throws bomb into police line killing seven -Unions blamed for violence, public opinion turns against unions

3) Homestead Strike, 1892 -President of Carnegie Steel Henry Frick announces wage cut - When workers strike, Frick hires strike breakers(“scabs”) and brings in the Pinkerton Detectives to protect the scabs -Pinkertons, strikers & townspeople clash, 12 die in violence 4) Pullman Strike, 1894 4K workers led by union leader Eugene V. Debs strike against Pullman Rail due to wage & job cuts Pullman hires strike breakers (scabs), violence ensues, President Cleveland sends in Army, Debs jailed