or Captains of Industry Panic of 1893 corporation abuses mismanagement over building and competition pushed many railroad to brink of bankruptcy panic was worst depression up to that time 500 banks and 15000 businesses failed ID: 221952
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Slide1
Robber Barons
or
Captains of Industry?Slide2
Panic of 1893
corporation abuses, mismanagement, over building, and competition pushed many railroad to brink of bankruptcy
panic was worst depression up to that time
500 banks and 15000 businesses failed
3 million people lost jobs
large firms seized many railroads
began trend of big businessSlide3
One view glorified their abilities and contributions
"Captains of Industry” Industrial leaders were viewed as ingenious and industrious capitalists who transformed the American economy with their business skills. These "Captains" were the heroes of their day who embodied the American dream of rags to riches.
A second view questioned their tactics and ethics 2. "Robber Barons” Industrial leaders were viewed as immoral, greedy, and corrupt, using bribery, illegal business practices, and cruelty to workers to get ahead. Many of the most respected industrialists were also feared and hated. While not all of these men were unethical, many used questionable tactics to achieve their goals of wealth and power.
Wealthy business leaders in the 19
th
century were glamorized
and
villianized
Slide4
How rich were the “robber barons” compared to Microsoft founder Bill Gates?
Created by Katherine LacksSlide5
Contemporary political cartoon comparing robber barons of the 19
th
century with robber barons from the Middle Ages
Created by Katherine LacksSlide6
The millions made by the robber barons is at the expense of the workers
Created by Katherine LacksSlide7
1835 – 1919
Federal Steel Co. (Pittsburgh), and many more
Sold FSC to Morgan and it became US Steel
2nd richest man in historyAndrew CarnegieSlide8
Andrew Carnegie
Created by Katherine LacksSlide9
Created by Katherine LacksSlide10
Carnegie Hall and Carnegie Hall Tower, Seventh Street,
New
York, NYSlide11
Carnegie attacks the rich, presumably because of his belief that the rich have a duty to help the poor, as he advocated in
Gospel of Wealth.
Created by Katherine LacksSlide12
J.P. Morgan
1837 – 1913
US
SteelBanking IndustrySlide13
J.P. Morgan lived his life on a large scale, spending massive amounts of money, gambling, on “toys” like yachts, huge parties, palatial homes and art. One of his famous quotes, “If you have to ask how much it costs you can’t afford it”, typifies his beliefs about money.
Created by Katherine LacksSlide14
Morgan as the piper that people of various professions & nationalities, including some countries in the distance, are following.
Created by Katherine LacksSlide15
1839 – 1937
Standard Oil
Considered richest man of all time
John D. RockefellerSlide16
John D. Rockefeller
Standard OilSlide17
The Standard Oil
Octopus
reaching out it’s tentacles
Created by Katherine LacksSlide18
Cornelius Vanderbilt 1794-1877 Slide19
Vanderbilt and his descendents, like many other robber barons, built massive mansions and spent huge amounts of money known as conspicuous consumption (spending money to show off one’s wealth).
This bedroom is a reproduction of a French Queen's chamber from the Louis XV period.
William Vanderbilt took over the family business
Vanderbilt mansion today in Hyde Park, NYSlide20
Big Business Emerges
Principles of Social Darwinism
Charles Darwin’s - theory of evolution
"survival of the fittest“natural selectionDarwinism agreed with Protestant principles of work - riches a sign of God's favor and poverty a sign of laziness or inferiorityLaissez Faire - "allow to do" - absence of regulation to ensure free competition (little government interferenceIndividualism – it is up to you to make something of yourself; use of personal talents and ideas
Created by Katherine LacksSlide21
Major terms defined
Capital
: the amount and type of resources a person or a company has access to including money, property, and other valuables
Corporation
: a type of business organization created when a group of individuals apply for a license or charter from a state legislature
Dividends
: a share of the profits issued to investors from a corporation
Pool
: a group of companies in the same industry would get together to fix prices and otherwise manipulate the industry to their advantage
Trust
: major stockholders of many different corporations give their stock to “trustees” who promise dividend payments in return. This allowed the trust to operate on a large scale on behalf of several companies at once and entire industries
Monopoly
: domination of all aspects of an entire industry by a trust, individual, or corporation
Created by Katherine LacksSlide22
Large corporations developed in two major ways: horizontal or vertical integration
Horizontal integration is the growth of a business through acquiring additional business activities in the same industry.
A business either combines with other similar companies or buys them, called “mergers and acquisitions”.
The benefits to the firms that horizontally integrate include cheaper operating costs because production is on a larger scale, increased market control of the product including over suppliers and distributors, and greater control over treatment of workers.
An example of this form of expansion would be Standard Oil’s acquisition of almost all oil refineries around the U.S.Slide23
Vertical integration is the growth of a business through the acquisition of the materials that make the product, the factories that manufacture the products including the machines needed to produce the product, as well as the distribution channels to take the product to market.
This allows the business to control all aspects of the industry and provides large profits.
An example would be Carnegie Steel’s control of raw materials, production of steel, transportation, and companies that made products out of steel.
Large corporations developed in two major ways: horizontal or vertical integration Slide24
The South gets Left Behind
industry still concentrated in the north - south still mostly agriculture
south still trying to recover from Civil War devastation
north owned 90% of southern railroadsCreated by Katherine LacksSlide25
The South gets Left Behind
southern entrepreneurs suffered at hands of high transportation costs, tariffs on raw materials and manufactured goods
skilled workers attracted to the north
south did have growth in forestry, mining, tobacco, furniture, textilesCreated by Katherine LacksSlide26
The Sherman Anti-Trust Act
The government attempted to intervene to prevent the “Barons” from “Robbing”
the wealth!
any attempt to interfere with free trade among states or internationally by forming a trust was illegalenforcement nearly impossiblenot supported by the Supreme CourtCreated by Katherine LacksSlide27Slide28
Organized LaborSlide29
Workers of the Nation Unite
exploitation of workers
work day: 6-7 days/week, 12+ hours/day
no sick time, vacation, unemployment compensation, compensation for job-related injurieshigh rate of accidentspoor working conditions: dirty, poorly lit or ventilatedrepetitive work - boringequipment often dangerous and faultywhole families forced to work because of low wagesnumber of women working doubled 1890-1910kids as young as 5 worked all day for very low pay
Created by Katherine LacksSlide30
Labor Unions Emerge
National Labor Union (NLU)
1866 - William Sylvis
formed Labor Reform Party (political party)convinced Congress to legalize 8-hour work day for gov. workersColored National Labor Union (CNLU)1869 - Isaac Meyersavoided strikes-preached cooperation between management and laborcommitted to political reformsupport the Republican party
Created by Katherine LacksSlide31
Labor Unions Emerge
Knights of Labor
1868 - Uriah Stephens - expanded under Terence Powderly
open to all workers (women, blacks, skilled, unskilled)support 8-hour workday, equal pay for equal workstrikes were last resortadvocate arbitration (settlement thru impartial 3rd party)Created by Katherine LacksSlide32
Many professions were represented by the Knights of Labor
Created by Katherine LacksSlide33
Labor Unions Emerge
American Railway Union (ARU)
Eugene Debs
unskilled and semiskilled laborers plus skilled engineers and firemen -no women or blacksused strikesgot higher wages
Created by Katherine LacksSlide34
American Railway
Union
Eugene V.
Debs
Created by Katherine LacksSlide35
Labor Unions Emerge
American Federation of Labor (AFL)
1886 - Samuel Gompers
joining of trade and craft unionsstrikes were a major tactic usedearned higher wages and shorter work week (just under 49 hours)Created by Katherine LacksSlide36
Labor Unions Emerge
Industrial Workers of the World (IWW) - "Wobblies"
1905 - William Haywood
radical unionists and socialists in the Westminers, lumberers, cannery and dock workerswelcomed women and African AmericansSlide37
Samuel Gompers,
A.F.L.
Haywood,
Industrial Workers of the WorldSlide38
Strikes Turn Violent
Haymarket Affair - May 4, 1886
workers protest killing of striker by police
police arrive and bomb is tossed at police police fire guns into crowd7 cops and several workers diedpeople begin turning against the unionsSlide39Slide40Slide41
Strikes Turn Violent
Homestead Strike
Carnegie's Homestead Plant - wage cuts lead to strike
Pinkerton armed guards hired so scabs could keep plant goingbattle left 3 Pinkertons and 6 workers deadworkers took over plantNational Guards sent in - plant reopened and union lost supportCreated by Katherine LacksSlide42
Strikes Turn Violent
Pullman Strike
Pullman company laid off 3000 employees and cut wages of the rest by 25-40% but did not cut cost of housing
after depression company hired back 2000 workers but didn't restore wages or lower rentworkers call strike - spring 1894Created by Katherine LacksSlide43
Strikes Turn Violent
Pullman Strike
Pullman refused to negotiate with Debs so ARU began boycotting Pullman trains
Pullman hired strikebreakers - violence broke outPres. Grover Cleveland sent federal troops to end strikeDebs was put in jailPullman fired most strikers and railroads blacklist othersCreated by Katherine LacksSlide44
Created by Katherine LacksSlide45
Women in the Labor Movement
Mary Harris "Mother" Jones
most prominent organizer in women's labor movement
1903 - led children (many disfigured) on a march to home of Pres. T. Roosevelt to expose cruelties of child labor - influenced passing of child labor lawsInternational Ladies' Garment Workers' Union (ILGWU)1909 - Pauline NewmanSlide46
Actions Against Unions
management refused to recognize or negotiate with unions as the representatives of the workers
many employers forbid union meetings, fired union members, and force new employees to sign "yellow-dog contracts" (swear not to join union/strike)
Created by Katherine LacksSlide47
Actions Against Unions
turned Sherman Antitrust Act against labor by calling actions interference with interstate trade
public angry if strikes cause shortage of goods
legal limitations makes organizing more difficultmany fear disorder, chaos, socialist revolutionunions begin losing membersCreated by Katherine LacksSlide48
ONE REASON THERE ARE SO MANY IDLE YOUNG MEN
CAUSE
Skilled Workman, “ Want to learn the trade, eh? No, no we can’t encourage apprentices. The Union won’t allow it. They would cheapen the price of labor.”
EFFECT
Ignorant, Intemperate, and dishonest young men. Inferior work through the employment of incompetent workmen.
Unions are blamed for juvenile delinquency and shoddy workmanship
Created by Katherine LacksSlide49
A common theme of anti-labor publications was that of showing union leaders as selfish, wealthy “businessmen” out for their own gain.
AN AMERICAN AUTOCRAT
He Ties Up Railroads and Exposes the Public to Inconveniences and Danger whenever He is Obligated to DO Something to Earn his Salary
Union leaders salary is shown as $5,000 a year at a time when the average worker was making $300 to $400
Knights of Labor leader Terrence Powderly
Created by Katherine LacksSlide50
Industrialization Review
Technological change spurred growth of industry primarily in northern cities.
This growth resulted in great changes throughout every avenue of our nation! Slide51
Industrialization Review
Inventions/Innovations
Corporation (limited liability)
Bessemer steel processLight bulb (Thomas Edison) and electricity as a source of power and lightTelephone (Alexander Graham Bell)Airplane (Wright Brothers)Assembly line manufacturing (Henry Ford)Slide52
Industrialization Review
Industrial leaders
Andrew Carnegie (steel)
J.P. Morgan (finance/banking)John D. Rockefeller (oil)Cornelius Vanderbilt (railroads)Slide53
Industrialization Review
Reasons for economic transformation
Government policies of laissez-faire capitalism and special considerations (e.g., land grants to
railroad builders).The increasing labor supply (from immigration and migration from farms).America’s possession of a wealth of natural resources and navigable rivers.Technological advancements that lead to new industries and changes in old industries.