the rise of big business. corporations!!!!!!! a form of group ownership by a number of different...
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The Rise of Big Business
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Corporations!!!!!!!• A form of group ownership by a number of
different people
• Took advantage of expanding markets
• Investors lose no more than original investment
• Good for risky industries like RR or mining
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Advantages of a Corporation• Access to huge amounts of
money• Funded new technology • Ran large plants across the
country• Operated in several
different regions• Same rights as an
individual– Buy & sell property– Sue in courts
• Maximized profits• Decreased cost of
production• Established Research labs
to improve products• Paid lowest possible wages
to works• Paid little for raw materials• Widely advertised
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MONOPOLIES/OLIGOPOLIES• Attempted monopolies– Complete control of a product or service– Bought out or ruined competitors
• Oligopolies – a few, two or three, businesses control an entire market
Examples today – Fast Food, Cars, Drug stores and Supermarket chains
• Cartels—businesses making same product limit production and keep prices high – work together
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CorporationsIntegration – Growth
• Horizontal: Combining many firms in the same business
• Vertical: Gaining control of the many different businesses that make up all phases of a product’s development– Standard Oil Co. : oil
wells/pipelines, tank cars/railroads, retail outlets
Trust
• Companies assign their stock to a board of trustees
• Board combines stock into new organization & runs the organization
• Rockefeller used this to get around an Ohio law that said he couldn’t buy out competitors or own their stock
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“Robber Barons” v. “Captains of Industry”
• Feeling that trusts, cartels, & monopolies gave an unfair advantage
• Small businesses bought out or destroyed
• Unfair high prices for consumers
• Poor were being swindled
• Businessmen served the country positively
• Provided jobs for the large & growing workforce
• Developed efficient business practices
• Developed technology, stimulated economy, & innovation
• Philanthropists– Universities, museums,
libraries—help poor rise
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John D. Rockefeller• Oil tycoon• Standard Oil Company• World’s first billionaire• Gave 10% of each
paycheck to the church• Used horizontal & vertical
integration• Made deals with railroads
to increase profits
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Andrew Carnegie• Steel Tycoon—Carnegie Steel
Company• From Rags to Riches-Scottish
immigrant• Second richest man in history• Donated to establish Libraries,
schools, universities• Donated over 80% of his
fortune • “Gospel of Wealth”– Responsibility of wealth
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OTHER GREAT ENTERPRENEURS
VANDERBILTS - Transportation PULLMAN – Railroad Cars
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ENTREPRENEUR USE OF WEALTH?
BILTMORE ESTATE - ASHEVILLE PULLMAN’S ESTATE
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Social Darwinism• Darwinism applied to
American capitalism• Theory developed by Charles
Graham Sumner• Wealth is a measure of a
person’s inherent value– The wealthy were the most
“fit”
• Argued for laissez-faire policies– Intervention would disrupt
natural selection—wrong to use public funds to aid poor
Used for discrimination!
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The Organized Labor Movement
Workers & Big Business Clash
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Workers• Low wages• Immigrants—large % of workforce• Desperate for any work• 12 hour days/6 days a week• Worked long hours on machines• Dangerous working conditions
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Worker Hardships• Sweatshops– Dirty, Dangerous,
overheated, bad ventilation, poor lighting
• Accidents—faulty equipment & lack of proper training
• Strict regulation to ensure productivity
• Fines for breaking rules & working slowly
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Child Labor• Most women worked in
factories• Both parents worked• Brought children to work
– Kept them off streets, and they could earn a wage
• Nearly 1 in 5 children between 10-16 ages worked– Mines, factories, textiles,
canneries, newsboys/messengers,
• Harsh conditions • Stunted physical & mental
growth
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Company Towns • Many workers lived in
communities owned by business & rented to employees
• Forced to buy goods at the “company store”– Goods sold on credit with high
interest• Most of wages owed back to
employer• “Wage slavery”
– Employees couldn’t leave until they repaid loans, or they would be arrested
• Created a workforce that was forced to be loyal
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NATIONAL LABOR UNION1. leader William Sylvis2. made up of individual unions from across the country3. 300 local union chapters4. urged to admit women and AfricanAmericans 5. huge membership 6506. success: 8 hour work day for government employees7. Labor Reform Party - ran a Candidate8. Only lasted for a few yearsfor President.
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National Colored Labor UnionLed by Isaac Meyers
Had to be created becauseSoutherners refused to join the union if blacks were accepted
Met in large churches to plan their strategies
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INTERNATIONAL LADIES GARMENT WORKERS UNION
1. leaders- Pauline Newman- Mary Harris Jones 2. Issues - working conditionsTriangle Shirtwaist fire in New York – 145 workers died in alocked work area- fought for fire codes - 54 hour work week for women and minors, - prohibition of Sunday work- abolition of child labor
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The Railroad Strikes• 1877--Workers went on strike in response to wage cuts – B&O railroad began the strike-Violence and massive destruction in several cities• Strikebreakers hired to perform jobs of striking workers and needed protection• State and federal government sent in troops to restore order• Set the stage for following violent strikes
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Homestead Strike• Carnegie Steel plant cut
wages• Union called a strike• Henry Frick, Carnegie’s
partner, brought in the Pinkerton agents – a private police force
• Pinkertons and strikers engage in standoff for two weeks
• killed several strikers & wounded many others
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Pullman Strike of 1893• Workers laid off and wages cut by
25%• Workers tried to negotiate with
Pullman, but he shut down the plant
• Workers turned to the American Railway Union
• Eugene V. Debs• A.R.U. called for a nationwide
strike• By June of 1894, 300,000 rail
workers had walked off the job• Strikers were able to disrupt
railroad traffic and mail delivery
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Innovation & Industry
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American Industrial Growth• Factories increase production– New tools and production methods for larger numbers
of goods– Mass production – Assembly lines– Long work days
• Transformation of the food Industry– Methods of processing food for shipping
• Railroads expand markets and shipping for resources
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Natural Resources—Coal • Abundant resources
help fuel growth
• Coal mines on Eastern Seaboard –fuel for powering steam locomotives and factories
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Discovery of Oil• World’s first oil well
drilled in 1859–Titusville,
Pennsylvania–Edwin Drake
• Drilled Oil cheap to produce/easy transport
• Oil industry grew quickly—encouraged growth in kerosene & gasoline industries
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Oil before Drake
• Oil used for light and fuel
• Oil obtained from boiled down whale blubber– Time consuming– Scarcity of whales
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Entrepreneurs• Flourished in system of Capitalism & Free
Enterprise
• Fueled industrialization by investing in products or ideas to make a profit
• Invested in factories, railroads, & mines
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Government & Business
• Gave free land to railroad builders • Use of protective tariffs• Laissez-faire policies• Patent—granted by the federal
government to an inventor for exclusive rights over their invention• Encourages invention and
innovation
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• 1876—Established research lab at Menlo Park, NJ
• Received more than 1,000 patents for new inventions– Battery for electric car– Mechanical voice recorder– Motion Picture Camera– Improved the Light Bulb
THOMAS EDISON
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George Westinghouse
• Technology for sending electricity over long distances• Powered homes,
factories, and city streets• Patent for train air
brakes in 1869
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Alexander Graham Bell• 1876—patented the
telephone• Spread quickly• By 1881, more than 34,000
miles of wire strung• Long distance lines connected
cites in the Northeast & Midwest
• More than 1 million telephones in the United States by 1900
• 1896—Guglielmo Marconi invented wireless telegraph
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Henry Bessemer & Steel
• Bessemer Process - developed in the 1850s in England by Henry Bessemer
• Process for purifying iron—resulted in strong and lightweight steel!
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Steel and Innovation• Quickly adapted by
Americans– out producing British in steel
manufacture by 1890
• Steel used for skyscrapers, elevators, suspension bridges – roadway suspended by steel
cables
• Brooklyn Bridge (1883)• Flatiron building(1902)– one of first skyscrapers
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ELISHA OTIS
Worked on the elevator system in the U.S.
Created a system for abraking system for the elevator
His invention made skyscrapers practical
Steel made them possible!!!!
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C.F. Dowd’s Time Zones
• Throughout the 1800s, most towns set clocks independently
• Time differences made it hard to set train schedules
• In 1884, delegates from 27 countries divided the globe into 24 time zones.
• Railroads adopted this system
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Mass Production
• Growing demands from the American and European consumer
• Need for quickly and cheaply developed products
• Machinery and systems for making many products once done by hand
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Exports• By the 1880s,
Americans dominated international markets with grain, steel, and textiles
• Fueled the expansion of American economy