Industrialization: Robber Barons or Captains of Industry?

Robber Barons or Captains of Industry?Panic of 1893corporation abuses, mismanagement, over building, and competition pushed many railroad to brink of bankruptcypanic was worst depression up to that time500 banks and 15000 businesses failed3 million people lost jobslarge firms seized many railroadsbegan trend of big businessOne 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 19th century were glamorized and villianized 3

How rich were the robber barons compared to Microsoft founder Bill Gates?Created by Katherine Lacks4

Contemporary political cartoon comparing robber barons of the 19th century with robber barons from the Middle Ages Created by Katherine Lacks5

The millions made by the robber barons is at the expense of the workersCreated by Katherine Lacks61835 1919Federal Steel Co. (Pittsburgh), and many moreSold FSC to Morgan and it became US Steel2nd richest man in history

Andrew Carnegie

Andrew CarnegieCreated by Katherine Lacks

Created by Katherine Lacks

Carnegie Hall and Carnegie Hall Tower, Seventh Street, New York, NY

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 Lacks11J.P. Morgan1837 1913US SteelBanking Industry

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 cant afford it, typifies his beliefs about money.

Created by Katherine Lacks13

Morgan as the piper that people of various professions & nationalities, including some countries in the distance, are following. Created by Katherine Lacks141839 1937Standard OilConsidered richest man of all time

John D. Rockefeller

John D. RockefellerStandard Oil

The Standard Oil Octopus reaching out its tentaclesCreated by Katherine LacksCornelius Vanderbilt 1794-1877

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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 ones wealth).

This bedroom is a reproduction of a French Queen's chamber from the Louis XV period. William Vanderbilt took over the family businessVanderbilt mansion today in Hyde Park, NY19Big Business EmergesPrinciples of Social DarwinismCharles Darwins - theory of evolution"survival of the fittestnatural 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 LacksMajor terms definedCapital: the amount and type of resources a person or a company has access to including money, property, and other valuablesCorporation: a type of business organization created when a group of individuals apply for a license or charter from a state legislatureDividends: 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 advantageTrust: 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 industriesMonopoly: domination of all aspects of an entire industry by a trust, individual, or corporation Created by Katherine Lacks21Large 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 Oils acquisition of almost all oil refineries around the U.S.22Vertical 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 Steels 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 The South gets Left Behindindustry still concentrated in the north - south still mostly agriculturesouth still trying to recover from Civil War devastationnorth owned 90% of southern railroadsCreated by Katherine LacksThe South gets Left Behindsouthern entrepreneurs suffered at hands of high transportation costs, tariffs on raw materials and manufactured goodsskilled workers attracted to the northsouth did have growth in forestry, mining, tobacco, furniture, textiles

Created by Katherine LacksThe Sherman Anti-Trust ActThe 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 Lacks

27Organized LaborWorkers of the Nation Uniteexploitation of workerswork day: 6-7 days/week, 12+ hours/dayno 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 payCreated by Katherine LacksLabor Unions EmergeNational 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 partyCreated by Katherine LacksLabor Unions EmergeKnights of Labor1868 - Uriah Stephens - expanded under Terence Powderlyopen 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 Lacks

Many professions were represented by the Knights of LaborCreated by Katherine Lacks32Labor Unions EmergeAmerican Railway Union (ARU)Eugene Debsunskilled and semiskilled laborers plus skilled engineers and firemen -no women or blacksused strikesgot higher wages

Created by Katherine Lacks

American Railway UnionEugene V.DebsCreated by Katherine LacksLabor Unions EmergeAmerican Federation of Labor (AFL)1886 - Samuel Gompersjoining of trade and craft unionsstrikes were a major tactic usedearned higher wages and shorter work week (just under 49 hours)Created by Katherine LacksLabor Unions EmergeIndustrial Workers of the World (IWW) - "Wobblies"1905 - William Haywoodradical unionists and socialists in the Westminers, lumberers, cannery and dock workerswelcomed women and African Americans

Samuel Gompers, A.F.L.Haywood, Industrial Workers of the WorldStrikes Turn ViolentHaymarket Affair - May 4, 1886workers protest killing of striker by policepolice arrive and bomb is tossed at police police fire guns into crowd7 cops and several workers diedpeople begin turning against the unions

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Strikes Turn ViolentHomestead StrikeCarnegie's Homestead Plant - wage cuts lead to strikePinkerton 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 LacksStrikes Turn ViolentPullman StrikePullman company laid off 3000 employees and cut wages of the rest by 25-40% but did not cut cost of housingafter depression company hired back 2000 workers but didn't restore wages or lower rentworkers call strike - spring 1894Created by Katherine LacksStrikes Turn ViolentPullman StrikePullman refused to negotiate with Debs so ARU began boycotting Pullman trainsPullman 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 Lacks

Created by Katherine LacksWomen in the Labor MovementMary Harris "Mother" Jonesmost prominent organizer in women's labor movement1903 - 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 Newman

Actions Against Unionsmanagement 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 LacksActions Against Unionsturned Sherman Antitrust Act against labor by calling actions interference with interstate tradepublic angry if strikes cause shortage of goodslegal limitations makes organizing more difficultmany fear disorder, chaos, socialist revolutionunions begin losing members

Created by Katherine Lacks

ONE REASON THERE ARE SO MANY IDLE YOUNG MENCAUSESkilled Workman, Want to learn the trade, eh? No, no we cant encourage apprentices. The Union wont allow it. They would cheapen the price of labor.EFFECTIgnorant, 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 Lacks48

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 SalaryUnion leaders salary is shown as $5,000 a year at a time when the average worker was making $300 to $400Knights of Labor leader Terrence Powderly Created by Katherine Lacks49Industrialization ReviewTechnological change spurred growth of industry primarily in northern cities.This growth resulted in great changes throughout every avenue of our nation! Industrialization ReviewInventions/InnovationsCorporation (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)Industrialization ReviewIndustrial leadersAndrew Carnegie (steel)J.P. Morgan (finance/banking)John D. Rockefeller (oil)Cornelius Vanderbilt (railroads)Industrialization ReviewReasons for economic transformationGovernment 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).Americas possession of a wealth of natural resources and navigable rivers.Technological advancements that lead to new industries and changes in old industries.