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

2. The Robber Barons
Businessmen and bankers who amassed huge personal fortunes, by using unfair business practices
They see themselves as “Captains of Industry” and justified their actions using Social Darwinism – survival of fittest!
2) JP Morgan- Banking/Steel
3) John Rockefeller - Oil
1) Andrew Carnegie - Steel

3. Andrew Carnegie
Carnegie immigrates from Scotland in at age 12, becomes Clerk for the Superintendent the Pennsylvania Railroad by age 18
Become Superintendent of RR at age 24, starts investing money in other companies (oil, metal, cables)
1870: Buys many steel cos, combines them into Carnegie Steel
Sells Carnegie Steel to JP Morgan for HUGE profit & gives Morgan monopoly on steel (US Steel)

4. 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

5. John Rockefeller’s Standard Oil Trust
Rockefeller’s Standard Oil one of the biggest & profitable cos.
Rockefeller’s tactics:
1. paid very low wages
2. lowered prices to force competition to sell
3. avoid monopoly laws by forming trusts
A trust is a group of people that buys a company. However, Rockefeller actually controlled the trust

6. Government Reaction to “robber barons”
-Dilemma: Govt wants to protect free market, but feared “trusts” are hurting competition
-Congress passes Sherman Anti-trust Act, makes it illegal to form a trust that interfered with free trade/competition
- Result: Nearly impossible to enforce

7. Rise of Unions
Robber Barrons take advantage of millions of American workers:
1) 6-7 day weeks, 12+ hour days, no vacation/sick leave, low pay
2) Poor physical conditions: polluted and often dangerous
3) Use child labor because its cheaper!
Discuss: Govt has no laws to help, what should you do?
Govt does nothing to help workers, so many form unions that use strikes and collective bargaining
- Ex: AFL (craft unionism), CIO (industrial unionism), IWW (Socialists accepting all workers)

8. Unions Fight Back 1. Great RR Strike of 1877
-80K strikers shut down most railroad traffic for week
-When others join strike it becomes violent, Pres Hayes sends in army
2. Haymarket Riot, 1886
- 3,000 gather to protest police killing of a striker
-Anarchist throws bomb into police line, killing 7 police, public turns against unions, equates them with violence

9. 3. Homestead Strike, 1892
-President of Carnegie Steel Henry Frick announces wage cut
- Workers strike, Frick hires strike breakers(“scabs”) and brings in the Pinkerton Detectives to protect the scabs
-Pinkertons, strikers & townspeople clash, 12 die
4. Pullman Strike, 1894
Pullman Rail announces wage & job cuts, so union strikes & shuts down freight delivery west of Michigan
Pullman hires strike breakers (scabs), violence ensues, union leader Eugene V. Debs sent to prison