two column notes chapter 5 2010-2011

8/8/2019 Two Column Notes CHAPTER 5 2010-2011

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Corporations WHAT: business owned by many investors (stockholders) who buy shares of stock and risk only the

amount of their investment.

WHY:

Businesses are expensive to start and maintain!

Reduce the potential loss if a business fails!

TYPES BEFORE: Sole proprietorship, Partnership

Stock

WHAT: A share of ownership in a businessBUSINESS METHODS

Monopoly

Trusts

Cartels

Pool

Interlocking Directorates

MONOPOLY

One company controls an entire industry

TRUSTS

business organization meant to control act like a monopoly

One company controls the stock of a majority of other companies in the same industry

That one company then makes all decisions for that industry

CARTELS

A group of independent producers whose goal it is to fix prices, to limit supply and to limit

competition POOL hurt consumers!

An agreement to divide the business in a given area and share the profits

Rail lines would not waste money competing against one another so they could concentrate on other

areas

INTERLOCKING DIRECTORATES

Practice of members of corporate board of directors serving on the boards of multiple corporations.

Holding Company WHAT: a form of business which does not create anything itself

WHAT DOES IT DO: it owns stock of companies that do produce goods

EXAMPLE: GE OWNS - RCA, NBC, MSNBC, Universal Pictures and Studios

ROBBER BARONS? Built their fortunes by stealing from the public

Drained natural resources, Abused and mistreated workers

Rockefeller, Vanderbilt, Carnegie, etc

CAPTAINS OF INDUSTRY? Helped make the country better

Built businesses, Provided jobs, Founded museums and universities

Rockefeller, Vanderbilt, Carnegie, etc

BESSEMER Process:

a new process to make steel removed impurities from iron by shooting hot air through it!


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lighter, stronger, cheaper steel made mass production possible

Andrew Carnegie

CARNEGIE STEEL

Vertical or Horizontal?

Poor boy from Scotland, made a $1.20 a week

Largest steel maker, produced of nations steel, Company brought in $40 million a year, Carnegie

got $25 million

Business model: - Vertical consolidation

LATER LIFE:

became a philanthropist and gave millions of dollars away

Sold his company to J.P. Morgan in 1900 for $400 million

Gospel of Wealth

Carnegie Libraries (over 2,500)

Vertical consolidation/integration combined all phases of manufacturing a product from start to finish

mine the ore, ship the ore in his ships, deliver the ore on his railroads, turn the iron ore into steel

EXAMPLE Carnegie Steel

J. P. Morgan WHAT: wealthy Wall Street banker

saved federal government in 1895 by loaning the Treasury more than $60 million

U.S. Steel Corporation

Morgan purchased Andrew Carnegies steel company for nearly $400 million

used it to form the U.S. Steel Corporation in 1901.

First billion dollar corporation (1.4 billion)

John D. Rockefeller

STANDARD OIL

Vertical or Horizontal?

FORMED BY: John D. Rockefeller

WHAT: Trust

Rockefeller formed an oil trust when smaller oil companies turned over their stock to the board of

directors of Standard Oil

controlled the oil refinery business

Business Model:

Horizontal consolidation

one company allies itself with other companies in the same industry to control that industry

LATER LIFE:

Became a philanthropist

Horizontal consolidation one company allies itself with other companies in the same industry to control that industry

DUPONT CHEMICALS WHAT: Monopoly that controlledExplosives, Gun powder, Dynamite


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OTHER BUSINESS LEADERS??

Cyrus McCormick

George Pullman

Milton Hershey

Gustavus Swift/Philip Armour

Cyrus McCormick - mechanical reapers

George Pullman -designed Pullman sleeping car for r&r

Milton Hershey Chocolate, gave much to charities

Gustavus F. Swift and Philip Armour - meat packers

Working in the U.S.

Conditions?

STAT: 1900 average worker made 22 cents/hour and worked 59 hours a week!

PROBLEMS: Terrible conditions

long hours, low pay, dangerous working conditions, few safety mechanisms, no health care or

benefits

Tactics used against unions?

Scabs

Lockouts

Blacklists

Yellow dog contracts

Pinkertons

Court injunctions

strikebreakers/scabs (replacement workers)

lockout - (close the factory to stop organizing workers)

blacklists (lists of those who tried to organize so they wouldn't be hired)

yellow dog contracts (an agreement not to become join unions)

private guards - Pinkertons (think rent-a-cop) and state militia

court injunctions - (orders to end strikes)

Unions WHAT: organization of workers seeking to improve their wages, working conditions, and benefits.

Labor Unions

Knights of Labor

Haymarket Square Incident

American Federation of Labor

National Labor Union (1866) 1st attempt to organize all workers (skilled/unskilled), higher wages,

8 hour day

Knights of Labor (1869)

Led by Terence Powderly

Included African Americans and women

Used boycotts and arbitration (negotiating with help)

Haymarket Square Incident (1886) labor violence in Chicago over McCormick Harvester plant, a bomb killed 7 police officers

RESULT:

Knights of Labor blamed and lost membership American Federation of Labor (1886)-

Led by Samuel Gompers

skilled workers only

wanted higher wages and improved working conditions, used strikes, collective bargaining, and

closed shops (Businesses who could only employ unionized labor)


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Strikes - EXAMPLES:

Great Railroad Strike

Homestead Strike

Pullman Strike

Eugene V. Debs

Great Railroad Strike (1877)

caused by cut wages, shut down 2/3 of railroads, Rutherford B. Hayes sent in federal troops to end

the strike over 100 dead

Homestead Strike (1892)

Carnegie Steel plant near Pittsburgh

Henry Frick (manager) cut wages by 20 percent in 1892 Frick used lockout, Pinkertons, and scabs to break the strike, major setback for union movement

Pullman Strike (1894) - 1894

wage cut and firing of workers who attempted to bargain

workers went on strike,

railroad owners linked Pullman Palace cars to mail trains,

ended by a federal court injunction!

Eugene V. Debs - head of American Railway Union - imprisoned for 6 months, turned to socialism

RESULT - by 1900, only 3 percent of American workers belonged to unions!In re Debs (1895) WHAT: Supreme Court case that backed the use of court injunctions against strikes!

Other Unions - IWW IWW Industrial Workers of the World

Called the Wobblies

Goal - unite all workers (skilled/unskilled) in an industry - ONE BIG UNION

Women and unions

Mother Jones

WOMEN: 1/3 domestic servants, 1/3 teachers, nurses, sales clerks, 1/3 industrial workers

PROBLEM:

women paid less than of men

couldnt join unions!

Mother Jones:

Mary Harris Jones great speaker and organizer - the most dangerous woman in America

Impacts of Industrialization WHAT: standard of living rose, cities grew, agriculture declined

from independence to dependence (on wages)

lives dominated by factory whistle

women affected by new industry

new opportunities and discrimination

greater class division - rich get richer

Growth of the middle class


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two column notes chapter 5 2010-2011

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