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 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

3. 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

4. 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 competition, not Rockefeller directly. However, Rockefeller controlled the trust

5. 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

6. Rise of Labor Unions
In addition to low wages, workers also dealt w/:
1) 6-7 day weeks, 12+ hour days, no vacation, no sick leave
2) Poor physical conditions: polluted and often dangerous
To improve conditions, labor unions formed to help workers
- AF of L (skilled), Knights of Labor (industrial/unskilled), IWW (everyone – socialist ideals)

7. Strikes & Violence Plague the Nation
1) Great Railroad Strike of 1877
-Shut down most RR traffic for week, violence ensued when outside groups joined strike, Pres Hayes sent in Fed troops
2) Haymarket Riot of 1886
- Union member killed by police, show up to protest, anarchist throws bomb into police line killing seven, union blamed

8. 3) Homestead Strike, 1892
-President of Carnegie Steel Henry Frick locks out workers, hires “scab workers” and Pinkerton Detectives to protect them
-Pinkertons, strikers & townspeople clash, 12 die in violence
4) Pullman Strike, 1894
Eugene V. Debs leads 4K in strike against Pullman Rail
Pullman hires strike breakers (scabs), violence ensues, & Debs is jailed