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Era Of Big Business


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Era Of Big Business

  1. 1. Era of Big Business <ul><li>Essential Questions: </li></ul><ul><li>Who were the leaders of industry in the early 1900s? </li></ul><ul><li>How did the leaders of industry acquire their fortunes? </li></ul><ul><li>What was Social Darwinism? </li></ul><ul><li>How did laborers respond to their working and living conditions and treatment by leaders of industry? </li></ul><ul><li>What was the Great Strike of 1877, the Haymarket Affair, and the Homestead Strike? </li></ul>
  2. 2. Captain of Industry or Robber Baron? <ul><li>Robber Baron </li></ul><ul><ul><li>An American capitalist of the 19th century who became wealthy via ethically questionable tactics through use of natural resources , governmental influence , or low wage scales </li></ul></ul><ul><li>Captain of Industry </li></ul><ul><ul><li>An American business leader whose means of amassing a personal fortune contributes positively to the country in some way </li></ul></ul>
  3. 3. Vertical and Horizontal Integration <ul><li>Horizontal Integration </li></ul><ul><li>Vertical Integration </li></ul><ul><li>A strategy used by a business that seeks to sell a type of product in numerous markets </li></ul><ul><li>Horizontal integration occurs when a company in the same industry and in the same stage of production is being taken-over or merged with another company at the same stage of production </li></ul><ul><li>Example: when one steel company takes over another steel company </li></ul><ul><li>Vertically integrated companies are united through a hierarchy and share a common owner </li></ul><ul><li>Each member of the hierarchy produces a different product or service, and the products combine to satisfy a common need </li></ul><ul><li>Carnegie used Vertical Integration </li></ul>
  4. 4. Vertical Integration: Carnegie Coal Mines Ovens where coal was coked Railroads used to transport Coal Steel Mills that Manufactured Steel Ships used to transport Iron Ore Iron Ore Mines
  5. 5. <ul><li>Used vertical integration </li></ul><ul><li>Controlled railroads and banks </li></ul><ul><li>Disliked monopolies </li></ul><ul><li>By 1900s was creating a 25% of the nation’s steel </li></ul><ul><li>Made his fortune through control of oil </li></ul><ul><li>In 1877 he controlled 95% of refineries nation </li></ul><ul><li>Hiked oil prices far above original levels </li></ul><ul><li>Gave over $500 million to charity </li></ul><ul><li>Bought out Carnegie for $400 million </li></ul><ul><li>Dedicated his life to donating money to charity </li></ul><ul><li>By his death, in today's figures, he gave away about $4.3 billion dollars </li></ul>
  6. 6. A New Level of Wealth <ul><li>The wealthy proclaimed they were justified by God to have so much wealth </li></ul><ul><li>God gave them their money or they were a product of natural selection </li></ul><ul><li>Many fear a plutocracy would eventually form, or a government that is controlled by the wealthy </li></ul>
  7. 7. Social Darwinism <ul><li>Took Darwin’s theory of biological evolution and applied it to the social classes </li></ul><ul><ul><li>Said there were certain species , or individuals , that flourished and passed their traits along to the next generation </li></ul></ul><ul><ul><li>Those that failed, died out , or did not succeed </li></ul></ul><ul><li>The wealthy used it to justify why they were so rich and others were so poor </li></ul>
  8. 8. Gospel of Wealth by Andrew Carnegie <ul><li>Wealthy must distribute their fortune in a way that it will be put to good use </li></ul><ul><li>Poverty in a society could be eliminated by wealthy men and women </li></ul><ul><li>Softened his theory of Social Darwinism </li></ul><ul><li>Said ostentatious living and amassing private treasures was wrong </li></ul><ul><li>Said the wealthy were responsible for the recirculation of money back into society where it could be used to support the greater good </li></ul>
  9. 9. In 1882 675 laborers were killed on the job Employers demanded 12 hour days; 7 day work weeks No sick or vacation days Women made $267 a year Men made $498 a year In 1900 Carnegie made $23 million dollars
  10. 10. Great Railroad Strike of 1877 <ul><li>Response to wage cuts for second time in a year by the Baltimore & Ohio Railroad </li></ul><ul><li>Strike spread over 50,000 miles in the East </li></ul><ul><li>Pittsburgh strikers clashed with militia </li></ul><ul><ul><li>20 people died and 29 were wounded </li></ul></ul><ul><li>This infuriated Pittsburgh strikers </li></ul><ul><ul><li>They forced the militiamen to take refuge in a railroad roundhouse </li></ul></ul><ul><ul><li>They set fire to buildings and trains </li></ul></ul><ul><ul><li>Militia mounted an assault on strikers </li></ul></ul><ul><li>After a month President Hayes sent in federal troops to end the strikes </li></ul>
  11. 11. Haymarket Affair <ul><li>Took place in Chicago (1886) </li></ul><ul><li>A rally in support of striking workers </li></ul><ul><li>Person threw a bomb at police as they dispersed the gathering </li></ul><ul><li>The blast and gunfire resulted in the deaths of 7 police officers and a number of civilians </li></ul><ul><li>In the legal proceedings that followed 8 anarchists were tried and convicted </li></ul><ul><ul><li>5 were sentenced to death and 3 were sent to jail </li></ul></ul><ul><li>Considered to be the origin of international May Day , or the day to observe the achievements of workers </li></ul>
  12. 12. Homestead Strike <ul><li>1892 strike culminating in a battle between strikers and private security agents </li></ul><ul><li>One of the most serious labor disputes in U.S. history </li></ul><ul><li>Between Iron and Steel Workers and Carnegie Steel Company </li></ul><ul><li>Carnegie won and the Iron and Steel Labor Union lost power and influence </li></ul>
  13. 13. The Aftermath <ul><li>More powerful unions became the more the company leaders refused to recognize them </li></ul><ul><li>Employers forbade union meetings , fired union members , and forced new employees to sign “ yellow-dog contracts ” swearing they would not join a union </li></ul><ul><li>Unions did emerge to protect workers but the powerful forces of industry prevented them from gaining real power to implement change </li></ul>