THE RISE OF INDUSTRY AND THE GROWTH OF UNIONS IN THE GILDED AGE Industrialization
Reasons for rapid spread of industry after the Civil War Resources Expanding population Favorable government policies Capital New technology Transportation and communication improvements
New types of business combinations Methods of combining companies? Pool: competing businesses combine to eliminate competition Trust: one large group holds in interest of another Holding company: owns controlling interests in other companies Merger: combines 2 or more organization Emergence of new combinations Horizontal Corporation: buy all competition Vertical Corporation (Carnegie Steel)
Impacts industry has on American life? National wealth increases Longer life expectancy Standard of living improves Widening gap between upper and lower class New leisure time Educational advances Agricultural Revolution Unionization begins Immigration spurred Urbanization
Railroads: The First Big Business End of Civil War: less than 35,000 miles of track. 1900: 193,000 miles of track Cornelius Vanderbilt, NY Central; Thomas A. Scott, PA RR; Jay Gould, Kansas Pacific in SW; Henry Villard, Northern Pacific, etc. Standardization for travel = time zones, 1883
Iron, Oil, and Electricity Bessemer Process: cheaply made steel. Pittsburgh, Cleveland Petroleum refineries grow Competition and Monopoly: RR Competition cut into RR profits: rebates for bulk shipping, road suffered (especially during Panic of 1893) Financiers: J. P. Morgan, controlled many RR companies
Bell and Edison
Competition and Monopoly Carnegie Steel: Pittsburgh Standard Oil: Cleveland and John D. Rockefeller (controlled 90% of nation’s oil by 1879!), cut prices locally to force small businesses to close. Stake in RR, bribery. “Meticulous attention to detail.” Retailing and Utilities: Electric companies
Americans are AMBIVILENT… Laissez-faire attitudes Rising materialism Carnegie’s defense: Gospel of Wealth Reformers: George 1879 Progress and Poverty, Bellamy’s Looking Backward, , H. D. Lloyd’s “Wealth Against Commonwealth” attacks Standard Oil
Labor Movement Reasons unions form? Major Early Unions Knights of Labor, AFL, CIO (Gompers, Debs) Types of peaceful settlements Collective bargaining, mediation, arbitration Weapons used by Labor if negotiations break down Picketing, boycott, strikes
Unions, cont’d Types of strikes Sitdown Wildcat: union members walk off job despite union leaders Slowdown Sympathy General Tactics used to gain strength Closed/union shop, checkoff (automatic payroll deduction), union label (fight to place label in manufactured product)
Unions, cont’d Weapons used by management if negotiations break down Lockouts, strikebreakers, injunctions Tactics used by management to weaken unions Open shop, blacklist, “yellow-dog” contracts, company unions, labor spies (Pinkertons) Laws that have aided Labor Chinese Exclusion Act 1882, Contracts Labor Law 1885, Bureau of Labor 1884: Department of Labor 1913 Major Labor Strife Railroad Strike 1877, Haymarket Affair 1886, Homestead Strike 1892, Pullman Strike 1894
Anti-Chinese Cartoons, Thomas Nast
Court Cases Munn v. Illinois, 1877: Any business that served a public interest was subject to state control Wabash v. Illinois, 1886: led to creation of Interstate Commerce Act all charges by RR “shall be reasonable and just” and ICC supervises RR Not particularly effective Sherman Antitrust Act 1890: any trust in restraint of trade or commerce among states or with foreign nations ILLEGAL Rarely followed: U.S. vs. E.C. Knight Company (1895) 98% of sugar refining NOT a monopoly?!?!