The Rise of Big Business

Corporations!!!!!!! A form of group ownership by a number of different people Took advantage of expanding markets Investors lose no more than original investment Good for risky industries like RR or mining

Advantages of a Corporation Access to huge amounts of money Funded new technology Ran large plants across the country Operated in several different regions Same rights as an individual – Buy & sell property – Sue in courts Maximized profits Decreased cost of production Established Research labs to improve products Paid lowest possible wages to works Paid little for raw materials Widely advertised

MONOPOLIES/OLIGOPOLIES Attempted monopolies – Complete control of a product or service – Bought out or ruined competitors Oligopolies – a few, two or three, businesses control an entire market Examples today – Fast Food, Cars, Drug stores and Supermarket chains Cartels—businesses making same product limit production and keep prices high – work together

Corporations Integration – Growth Horizontal: Combining many firms in the same business Vertical: Gaining control of the many different businesses that make up all phases of a product’s development – Standard Oil Co. : oil wells/pipelines, tank cars/railroads, retail outlets Trust Companies assign their stock to a board of trustees Board combines stock into new organization & runs the organization Rockefeller used this to get around an Ohio law that said he couldn’t buy out competitors or own their stock

“Robber Barons” v. “Captains of Industry” Feeling that trusts, cartels, & monopolies gave an unfair advantage Small businesses bought out or destroyed Unfair high prices for consumers Poor were being swindled Businessmen served the country positively Provided jobs for the large & growing workforce Developed efficient business practices Developed technology, stimulated economy, & innovation Philanthropists – Universities, museums, libraries—help poor rise

John D. Rockefeller Oil tycoon Standard Oil Company World’s first billionaire Gave 10% of each paycheck to the church Used horizontal & vertical integration Made deals with railroads to increase profits

Andrew Carnegie Steel Tycoon—Carnegie Steel Company From Rags to Riches-Scottish immigrant Second richest man in history Donated to establish Libraries, schools, universities Donated over 80% of his fortune “Gospel of Wealth” – Responsibility of wealth

OTHER GREAT ENTERPRENEURS VANDERBILTS - TransportationPULLMAN – Railroad Cars

ENTREPRENEUR USE OF WEALTH? BILTMORE ESTATE - ASHEVILLEPULLMAN’S ESTATE

Social Darwinism Darwinism applied to American capitalism Theory developed by Charles Graham Sumner Wealth is a measure of a person’s inherent value – The wealthy were the most “fit” Argued for laissez-faire policies – Intervention would disrupt natural selection—wrong to use public funds to aid poor Used for discrimination!

The Organized Labor Movement Workers & Big Business Clash

Workers Low wages Immigrants—large % of workforce Desperate for any work 12 hour days/6 days a week Worked long hours on machines Dangerous working conditions

Worker Hardships Sweatshops – Dirty, Dangerous, overheated, bad ventilation, poor lighting Accidents—faulty equipment & lack of proper training Strict regulation to ensure productivity Fines for breaking rules & working slowly

Child Labor Most women worked in factories Both parents worked Brought children to work – Kept them off streets, and they could earn a wage Nearly 1 in 5 children between ages worked – Mines, factories, textiles, canneries, newsboys/messengers, Harsh conditions Stunted physical & mental growth

Company Towns Many workers lived in communities owned by business & rented to employees Forced to buy goods at the “company store” – Goods sold on credit with high interest Most of wages owed back to employer “Wage slavery” – Employees couldn’t leave until they repaid loans, or they would be arrested Created a workforce that was forced to be loyal

NATIONAL LABOR UNION 1. leader William Sylvis 2. made up of individual unions from across the country local union chapters 4. urged to admit women and African Americans 5. huge membership success: 8 hour work day for government employees 7. Labor Reform Party - ran a Candidate 8. Only lasted for a few years for President.

National Colored Labor Union Led by Isaac Meyers Had to be created because Southerners refused to join the union if blacks were accepted Met in large churches to plan their strategies

INTERNATIONAL LADIES GARMENT WORKERS UNION 1. leaders - Pauline Newman - Mary Harris Jones 2. Issues - working conditions Triangle Shirtwaist fire in New York – 145 workers died in a locked work area - fought for fire codes - 54 hour work week for women and minors, - prohibition of Sunday work - abolition of child labor

The Railroad Strikes Workers went on strike in response to wage cuts – B&O railroad began the strike -Violence and massive destruction in several cities Strikebreakers hired to perform jobs of striking workers and needed protection State and federal government sent in troops to restore order Set the stage for following violent strikes

Homestead Strike Carnegie Steel plant cut wages Union called a strike Henry Frick, Carnegie’s partner, brought in the Pinkerton agents – a private police force Pinkertons and strikers engage in standoff for two weeks killed several strikers & wounded many others

Pullman Strike of 1893 Workers laid off and wages cut by 25% Workers tried to negotiate with Pullman, but he shut down the plant Workers turned to the American Railway Union Eugene V. Debs A.R.U. called for a nationwide strike By June of 1894, 300,000 rail workers had walked off the job Strikers were able to disrupt railroad traffic and mail delivery

Innovation & Industry

American Industrial Growth Factories increase production – New tools and production methods for larger numbers of goods – Mass production – Assembly lines – Long work days Transformation of the food Industry – Methods of processing food for shipping Railroads expand markets and shipping for resources

Natural Resources—Coal Abundant resources help fuel growth Coal mines on Eastern Seaboard –fuel for powering steam locomotives and factories

Discovery of Oil World’s first oil well drilled in 1859 – Titusville, Pennsylvania – Edwin Drake Drilled Oil cheap to produce/easy transport Oil industry grew quickly— encouraged growth in kerosene & gasoline industries

Oil before Drake Oil used for light and fuel Oil obtained from boiled down whale blubber – Time consuming – Scarcity of whales

Entrepreneurs Flourished in system of Capitalism & Free Enterprise Fueled industrialization by investing in products or ideas to make a profit Invested in factories, railroads, & mines

Government & Business Gave free land to railroad builders Use of protective tariffs Laissez-faire policies Patent—granted by the federal government to an inventor for exclusive rights over their invention Encourages invention and innovation

1876 —Established research lab at Menlo Park, NJ Received more than 1,000 patents for new inventions – Battery for electric car – Mechanical voice recorder – Motion Picture Camera – Improved the Light Bulb THOMAS EDISON

George Westinghouse Technology for sending electricity over long distances Powered homes, factories, and city streets Patent for train air brakes in 1869

Alexander Graham Bell 1876—patented the telephone Spread quickly By 1881, more than 34,000 miles of wire strung Long distance lines connected cites in the Northeast & Midwest More than 1 million telephones in the United States by —Guglielmo Marconi invented wireless telegraph

Henry Bessemer & Steel Bessemer Process - developed in the 1850s in England by Henry Bessemer Process for purifying iron—resulted in strong and lightweight steel!

Steel and Innovation Quickly adapted by Americans – out producing British in steel manufacture by 1890 Steel used for skyscrapers, elevators, suspension bridges – roadway suspended by steel cables Brooklyn Bridge (1883) Flatiron building(1902) – one of first skyscrapers

ELISHA OTIS Worked on the elevator system in the U.S. Created a system for a braking system for the elevator His invention made skyscrapers practical Steel made them possible!!!!

C.F. Dowd’s Time Zones Throughout the 1800s, most towns set clocks independently Time differences made it hard to set train schedules In 1884, delegates from 27 countries divided the globe into 24 time zones. Railroads adopted this system

Mass Production Growing demands from the American and European consumer Need for quickly and cheaply developed products Machinery and systems for making many products once done by hand

Exports By the 1880s, Americans dominated international markets with grain, steel, and textiles Fueled the expansion of American economy