ECONOMIC CONFLICT IN NINETEENTH CENTURY AMERICA

The Rise of Industry and Organized Labor

*Population growth in the United States created a large pool of cheap industrial laborers.

*A rich supply of natural resource: timber, coal, iron ore, precious metals.

*Entrepreneurial spirit reflected in legal code: protecting private property, low taxes.

*J.P. Morgan dominated banking industry: liberal lending practices; easy credit.

* Railroad systems stimulate the economy in the West.

The Growth of Corporations

Because corporations main goal is just to make money, they don’t always act in the most responsible manner. Some corporations used unfair methods to eliminate competition and raise prices on consumers – a move which hurts free enterprise, and hurts consumers, but benefits the corporation and its shareholders. Corporations have used the profit motive to justify poor working conditions, unfair business practices like trusts, pools, or monopolies, and other forms of corruption.

In addition, corporations are a have a collective mindset which can, at times, discourage the taking of personal responsibility: the board of directors can justify many of its decisions by citing the need for shareholder to make money. If others are influenced negatively, but the ends justify the means, then so be it.

The Amoral Disposition of Corporations

The Case Against CorporationsThe Consolidation of Economic and Political Power in 19th Century Thought

While the Communist Manifesto was not strictly intended for an American audience, it did resonate with more radical labor unions in the 19th Century – and it still does today in certain circles. By and large, though, Americans commitment to the maintenance of property rights and the peaceful exchange of power prevented any widespread endorsement of Marxism.

The Communist Manifesto, 1848

Abraham Lincoln warned in the 1860s that Corporations were a threat to American Liberty

“I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country. As a result of the war, corporations have been enthroned and an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in a few hands and the Republic is destroyed.”

Corporations Built the United States Economy

On the other hand, companies like Andrew Carnegie’s US Steel company and Rockefeller’s Standard Oil provided the resources to build much of the United States – creating jobs for a growing populations, establishing the modern economy, and unifying the nation.

James Pierpont Morgan

By using his banks to invest in troubled railroads – then merging the railroads with rival companies to decrease competition and increase prices – J.P. Morgan was able to make an enormous fortune. His companies were known for unfair business practices.

Railroads Stimulated the Economy by Facilitating Regional Trade

Railroads influenced major industries across the United States – mining, ranching, farming, steel, coal, and real estate speculation were all bound to the industry throughout the 19th Century. Anti-competitive practices like pools hurt consumers, and small businesses, though. Everyone had to settle up with the Rails.

Monopolies are companies which have eliminated all competition in their particular field of the economy. Without competitors, companies can charge extremely high prices, hurting consumers and workingmen. If rivals attempt to emerge, monopolies can usually strangle them out of the market by undercutting them.

MONOPOLIES, MONOPOLIES, MONOPOLIES.

John D. Rockefeller

The Standard Oil Trust of John D. Rockefeller

The Standard Oil Trust

Carnegie Steel helped to build America – from the railroads spanning the country to the skyscrapers touching the sky to the Brooklyn Bridge, connecting the major population centers of New York and Brooklyn in 1883.

Andrew Carnegie’s Steel Company

Cornelius Vanderbilt, Railroad Baron

Cornelius Vanderbilt consolidated most of the Railroads in the state of New York and created a vast fortune for himself and his family. Like many other aristocrats of the Gilded Age, he became a great philanthropist after accumulating great wealth.

In this political cartoon, Vanderbilt, Jay Gould, Cyrus Field, and Russell Sage are portrayed as living a life of luxury at the expense of the masses.

Trusts are combinations of businesses which join together in order to decrease or eliminate competition and raise prices. The most notorious of these was the Standard Oil Trust, which had a strangle hold on the petroleum industry for decades. To maximize profits, competition was undermined and employees were poorly compensated.

Trusts

The Exploitation of WorkersCorporations, trusts, and interstate business models who were driven by the profit motive were willing to allow:

• Low wages

• Dangerous Conditions

• Long hours

• Child labor

Women outnumbered men in a number of workplaces, including the ones below:

The Textile Mills – of the Cotton Industry

The Tobacco Factories of the South

Garment Factories of New York City

Women in the Workplace

Women at the Textile Mills – Lowell Mills, Massachusetts

Women in the Tobacco IndustryNorth Carolina

Garment Industry of New York City

Children were forced to work in a variety of fields, including all of the following:

textiles, tobacco factories, coal mines,

garment sweatshops.

Because of the exploitation of children in the workplace, reform minded individuals like Florence Kelley and Horace Mann began to advocate for compulsory education in the United States.

Child Labor

Children Working in the Coal Mines

Children of the Textile Mills

The dangers faced on the job were numerous, depending on the type of work men and women did.

Coalminers could face cave-ins or air quality issues that caused immediate dangers or long-term concerns like emphysema or “black lung.”

Textile workers often faced lung disease from exposure to tiny cotton fibers.

Steelworkers were in danger of burns or crushing injuries constantly.

Dangerous Working Conditions

Dangers in Textile Mills

Women faced issues with their lungs from working in textile mills as well, breathing in cotton and fiber filaments all day. Many women and children lost fingers and toes in the high velocity machines as well.

Steel Mills were extremely dangerous work environments.

Due to the open cauldrons of molten steel, and the heavy mechanized tools which could crush limbs, steel mills were notoriously dangerous. And most companies offered no compensation to workers injured on the job.

The Meatpacking Industry

Due to the de-assembly line methods used in meat packing plants – requiring hasty knife work, many workers were injured on the job – losing fingers, or worse!

Labor Incidents of the 19th and Early 20th Centuries

Turmoil and Conflict between Organized Labor and Industry.

Terence V. Powderly, Knights of Labor

America’s first major labor union, this group accepted both skilled and unskilled employees and protested low wages and unsafe conditions at public rallies. In 1886, at a meeting against the McCormick Harvesting Company in Chicago, IL, an anarchist threw a bomb into the crowd killing several police officers and protesters. The Knight reputation soon declined – blame by association.

The Knights of Labor

Samuel Gompers, leader of the AFL

The American Federation of Labor

When Andrew Carnegie attempted to slash his workers wages, they walked out on strike. When he hired strikebreakers, or “scabs” to replace them, they fought violently to prevent the mills from re-opening. Eventually, the Pennsylvania State Militia forced and end to the conflict using violent force of their own.

The Homestead Strike of 1892

“Mother” Jones was one of the many women involved with supporting labor unions. She was especially interested in the plight of working children – fighting for child labor laws – but also very much involved with supporting strikers and leading protest rallies.

Mother Jones: Mary Harris Jones

In one of the saddest and most well publicized disasters of the early 20th Century, a group of approximately 150 immigrant laborers were trapped – literally locked in by their employers – in a burning building in New York City. Changes to fire codes and improvements to the working conditions were soon passed to protect employees and factory workers.

The Triangle Shirtwaist Fire of 1911

Eugene V. Debs

The leader of the American Railway Union and a tireless advocate for the rights of labor, Debs would be imprisoned for his role in the Pullman Strike and later as a violator of the Sedition Act during World War I. He was a confirmed member of the Socialist Party, and ran for President several times – once from prison. Although he always lost, he garnered close to 5% of the vote.

When workers at George Pullman’s sleeping and dining car companies went on strike to protest a wage cut, Eugene V. Debs of the American Railroad Workers Union directed him men not to load or unload any train with a Pullman car attached – the result was deadlock, then intervention by the President, Grover Cleveland.

The Pullman Strike

The Industrial Workers of the World: “The Wobblies”

The WobbliesDescribing themselves as “One Big Union” and engaging in singing and public demonstrations as well as outright violent acts, this union was feared for its radical and ideological agenda – they fought for higher wages and safer working conditions.

Joe Hill: The Wobblies Singing Martyr

Joe Hill, the songwriter and protester who lead dozens of strikes in the miner’s camps of the West, was eventually convicted of a murder which took place at one of the protesters sites. He was put to death in Utah during the 1910s. Wallace Stegner’s historical fiction on his life gives a thorough account of the Wobblies activities.

William “Big Bill” Haywood“Big Bill” Haywood was a founding member of the Industrial Workers of the World and a member of the Socialist Party of the United States. Because he preferred direct action – read: violence – instead of political maneuvering, he was frequently in conflict with the Socialists (who preferred political demonstrations) and the owners of companies (who preferred to make more money!). He played a key role in both the Colorado Labor Wars of the 1910s and the Lawrence Textile Strike of 1912 in Massachusetts. After being accused of murdering the Governor of Idaho – and acquitted – Haywood eventually emigrated from the United States and became a resident of the Soviet Union.

Unions – through their direct actions campaigns and their educational programs – put heavy pressure on corporations and political bodies to reign in the excesses of capitalism. Unions would eventually establish minimum wage laws, reduce labor hours and increase leisure time, improve safety conditions in the workplace, and ban child labor.

The Sherman Anti-Trust Act was a passed in 1890 – although judges willfully misinterpreted the law for years in order to disrupt unions.

Theodore Roosevelt and his successors – William Howard Taft and Woodrow Wilson – enforced the Sherman Anti-Trust Act more vigorously, ending unfair business practices by railroads and breaking up the Standard Oil Trust.

In 1914, the Clayton Anti-Trust Act was passed to allow even more vigorous prosecution of unfair business practices.

Resolving Unfair Business Practices