Chapter 14, Section 2Big Business & Organized Labor

p. 488-493

As businesses grow in size & power, workers organize to demand better

conditions.

New Ways of Doing BusinessMain Idea: Business leaders develop new ways to raise money needed for expansion.

• entrepreneur - someone who sets up new businesses to make a profit

• corporations - businesses owned by many investors– Shares of stock are sold to

investors. – Investor runs risk of profit or loss.

• Banks loan big $ to corporations– Industry grows faster

• Bankers like J.P. Morgan make huge profits and have tremendous political influence in the early 20th century.– Does he look familiar?

John Pierpont (J.P.) Morgan One of the richest and most powerful men in

the U.S.

STOCKS AND BONDS

Describe how buying & selling shares of stock helps investors & corporations make (or lose) money.

Table Question:

Growth of Big Business

Andrew Carnegie (1835-1919)

-Steel magnate

Main Idea: By the late 1800s, many major industries are dominated by a few giant companies.

• monopoly - a company that controls most or all business in a particular area

• Andrew Carnegie: Self-made man– Born poor, works for his money

• Starts U.S. Steel Company– Produces more steel than the

entire nation of England.– Owned mines, mills, rail & shipping

lines – (vertical monopoly)

• Ruthless businessman but practices the “Gospel of Wealth”– Gives almost all his $ to charity– “I started life as a poor man and I

wish to end it that way.” –A. Carnegie

John D. Rockefeller• Also born poor• Founder of Standard Oil Trust

– Largest Oil Refinery in the nation– a legal arrangement grouping a

number of companies under a single board of directors

• Trusts are seen as a threat to free enterprise – the system in which privately

owned businesses compete freely

• Justifies business success due to “Social Darwinism”.– As in nature, businesses survive

because of adapting to change– “survival of the fittest” John D. Rockefeller

-Oil Magnate

Is America really the “Land of Opportunity”?

• Did our natural resources & system of government set us up for success?

• Here is a list of the richest people in the History of the world:– 4 are monarchs– The rest AMERICANS– ALL born in the middle of

the 19th century– List obtained from the book Outliers -by Malcolm Gladwell (2008)

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Here is the rest of the top 30: - 7 more Monarchs (including Queen Elizabeth & Cleopatra) - 11 more Americans (including Sam Walton & a few Jrs.)And the rest of the top 50… - 15 more Americans - some from the 20th Century

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• 51 out of 75 (68%) • of the wealthiest people EVER • made their MONEY in the U.S.

– And we’re less than 250 years old• Do you think Rockefeller & Carnegie

could have shared some of their $600 BILLION with their workers?

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Changes in the Workplace

Main Idea: As industry grows, working conditions often get worse.

Sweatshop: New York early 20th Century

• Post Civil War factories become large, impersonal

• Many women & children work in sweatshops -– manufacturing workshops

where workers toil long hours under horrible working conditions for low pay

– No school = dismal future• Dangerous working conditions:

- Fibers & dust in textile mills, coal mines, & tobacco factories

• 1911 - Fire destroys Triangle Shirtwaist Factory in New York – Kills 146 people, mostly women

Workers Organize

Terence V PowderlyPresident of the Knights of Labor

Main Idea: Despite many obstacles, organized labor begins to grow in the late 1800s.

• Knights of Labor: one of the 1st unions in the U.S.

• Founded by Uriah Stephens as a secret organization– Allows women and minorities to

become members• Led by T. Powderly, the Knights of

Labor establish the modern-day goals of future labor unions: – 8-hour work day– equal pay for equal work – government regulation of trusts – end to child labor

• Violent strikes weaken influence

American Federation of Labor (AFL)• Forms local unions into one

national union• Limits membership to skilled

laborers• Believes in collective bargaining

– unions negotiate with management for workers as a group

• Organizes mineworkers and steelworkers– “accomplish the best results in

improving conditions of the working people…today and tomorrow.”

• Women play major role in union building– “Mother” Jones fights for kids

Samuel Gompers Founder of the AFL

Workers Strike!• George Pullman cuts wages of

his workers– Raises rents for the housing in

his company town

• Workers go on strike shutting down rail hub, stop all rail lines through the Midwest.– Cut off the East coast from the

West Coast

• President Cleveland orders federal troops to Chicago

• U.S. Attorney general breaks strike with a court order– Claims the strike violates the U.S.

Constitution because the union’s actions are restricting interstate trade. TRUE?

Federal troops protect train from striking workers.

The Homestead Strikefrom: Ten Days That Unexpectedly Changed America

July 6, 1892“Darkest day in American labor history”

• Steel mill near Pittsburgh, owned by Carnegie

• Run by union • Frick wants to break union,

hires non-union when contract expires

• Workers attack, take over – 6 workers, 3 Pinkertons die

• National Guard called in• SCABS take union jobs• Union destroyed for 40 years.• Sets gap between labor and

management in America• By 1900, only 3% of American

workers belong to unions.

Andrew Carnegie

Henry Clay Frick

Steel worker keeping watch on Pinkertons

“ROBBER BARONS” OR “CAPTAINS OF INDUSTRY”?

Choose a side: Were industrial giants like Rockefeller and Carnegie good guys or bad guys?

“Philosophical Chairs”