Chapter 6.3—Big Business and Labor
I) Andrew Carnegie’s Innovations—A true ‘rags
To riches’ story.
A) Came to America from Scotland at age 12
with his penniless parents.
1) Started with Pennsylvania RR at 18.
Bought stock—made money. Left RR to
enter steel business in 1873 age 35.
a) By 1899 Carnegie manufactured more
steel than England!
B) Business strategies
1) Make better products more cheaply
2) Track precise costs
3) Attracted talented people to work for him
4) Vertical integration—buy out suppliers
5)Horizontal integration-buyout competitors
II) Social Darwinism and Business
A) Survival of the fittest. The best run
companies would survive.
III Fewer Control More
A) “If you can’t beat ‘em join ‘em” –more
horizonatal integration—mergers
1) Monopolies formed
B) John D. Rockefeller—controlled entire
U.S. oil industry- Standard Oil Company
C) Rockefeller and the ‘Robber Barons’
1) from 1870- oil industry refining business
1880 Rockefeller’s share of the oil
business went from 3% to 90%!
a) Paid workers low wages
b) Drove competitors out of business by
selling low.
2) Controversial—did some good/bad
D) Sherman Antitrust Act (1890)-stop trusts
E) Business boomed in North/lagged in South
IV) Labor Unions Emerged
A) Result of long hours, poor working
conditions, low wages
1) National Labor Union (NLU)-1866-first
large-scale union. ‘Knights of Labor’
V) Labor Unions Diverge—Craft & industrial
A) Craft-American Federation of Labor (AFL)
1) Samuel Gompers—President
B) Industrial unions-Included skilled and
unskilled unions.
C) Socialism and the IWW—Distribute wealth
fairly. Industrial Workers of the World
(IWW)—wanted better working conditions
D) Unions fought poor working conditions.
VI) Strikes Turn Violent
A) Great Strike of 1877 –B & O Railroad.
affected other railways—stopped trains
for a week.
B) Other big strikes—Haymarket Affair/
Homestead Strike/Pullman Company
strike---Know about these.
C) Women Organize—work with labor
unions.
D) Unions helped employers and the
government provide better & more fair
conditions for workers