Big Business

1
Big Business Labor
How do the Robber Barons make their fortunes?
2
Andrew Carnegie

• Immigrates from Scotland in 1848 at age 12

• Clerk for the Superintendent the Pennsylvania
  Railroad by age 18.

• Does great job, boss offers him stock in company

• Carnegie starts investing, makes it to
  Superintendent by age 24

• Forms a steel company in 1870s, most successful
  co. in US

• Sells steel company to US Steel in 1901 for a
  HUGE profit

3
Carnegies Business Strategy

• Vertical Integration Buy out suppliers of needed
  products and services so you control production
  top to bottom

• Horizontal Integration buy out competing
  producers so you are only co that offers that
  business

4
John Rockefeller Standard Oil Trust

• Rockefeller makes Standard Oil one of the biggest
  and most profitable American cos

• Rockefeller tactics

• Paid very low wages, lowered prices to force
  competition to sell

• Formed trusts with the bought out companies

5
The Robber Barons

• Businessmen and bankers who amassed huge personal
  fortunes, by using unfair business practices

2) Morgan
1) Carnegie
3) Rockefeller
4) Stanford
6) Gould
5) Vanderbilt
6
Government Reaction to robber barons
-Wanted to protect free market, feared big
business stifling competition -Passed Sherman
Anti-trust Act, 1890 tried to stop monopolies
by making it illegal to form a trust that
interfered with free trade - difficult to enforce
7
Problems in the workplace
1) Terms of employment 6-7 day weeks, 12 hour
days, no vacation, no sick leave
2) Poor physical conditions polluted and often
dangerous
3) Low Wages so bad that millions of
women/children forced to work
-Labor unions form to improve conditions
- Skilled workers form AFL under Samuel Gompers
-1905 radical unionists and socialists formed
the Industrial Workers of the World (IWW)
- Goal organize unskilled labor and semi-skilled
workers
8
Great Strike of 1877
-80,000 railroad workers strike
-Shut down most railroad traffic for week
-Joined by many other workers
-President Hayes authorizes use of federal troops
to stop the violence
9
Haymarket Riot, 1886
- 3,000 gather to protest police killing of
striker, police sent in to disperse crowd
-someone throws bomb into police line - 7 police
killed
-Public opinion begins to turn against unions and
strikes, connecting them to violence
10
Homestead Strike, 1892
-President of Carnegie Steel announces wage cut,
workers strike
- Supervisors call in Pinkerton detectives
protect strike breakers(scabs)
-Pinkerton detectives battle strikers and
townspeople- 12 die in violence, strike is
broken, Carnegie Steel lowers wages
Homestead Video Questions

1. What happened to leaders who led the strike
   against Carnegie steel?
2. What happened to the town of Homestead?
3. What happens to Carnegies company?
4. What does Carnegie say about the strike?
5. How does he try to makeup for what happened at
   Homestead?