Big Business & Big Business & Government PolicyGovernment Policy

(1870-1900)(1870-1900)

How did How did government & big government & big business interact business interact during the late during the late

1800’s?1800’s?

Big Business & Government Big Business & Government PolicyPolicy During the 1870’s & 80’s big During the 1870’s & 80’s big

industrialists attempted to form industrialists attempted to form monopoliesmonopolies. . (Carnegie & Rockefeller)(Carnegie & Rockefeller)

What is a monopoly?What is a monopoly? A A monopolymonopoly is when a producer has total is when a producer has total

control over an industry. control over an industry. Were the great industrialists Were the great industrialists

Captains of IndustryCaptains of Industry or or Robber Robber BaronsBarons ?? They could be considered They could be considered Captains Captains

of Industryof Industry because they risked because they risked capital to make business growcapital to make business grow

They could also be considered They could also be considered Robber BaronsRobber Barons because of the because of the unfair business practices they unfair business practices they used to increase the size of their used to increase the size of their businesses businesses

Industrialists used the theory of Industrialists used the theory of Social DarwinismSocial Darwinism to justify their to justify their unfair business practices. unfair business practices.

Three Methods of Business Three Methods of Business Consolidation Consolidation

Rail Road companies develop Rail Road companies develop poolingpooling agreements to fix agreements to fix rail road fares at high rates (scheme does not work rail road fares at high rates (scheme does not work because companies cheat on their agreements).because companies cheat on their agreements).

TrustsTrusts are developed by Rockefeller to bring control to are developed by Rockefeller to bring control to former competitors. If competitors refuse to join the former competitors. If competitors refuse to join the “Trust” Rockefeller would put them out of business. Other “Trust” Rockefeller would put them out of business. Other industries begin to follow example and also start “Trusts”.industries begin to follow example and also start “Trusts”.

Holding CompaniesHolding Companies hold the stocks of several firms in hold the stocks of several firms in the same industry. Holding Companies owned the majority the same industry. Holding Companies owned the majority of stocks within an industry & where able to dictate policy of stocks within an industry & where able to dictate policy within the industry.within the industry.

What effecting did What effecting did consolidationconsolidation have have on business?on business? Business became less competitive and Business became less competitive and

more consolidated, leaving business power more consolidated, leaving business power & national economics in the hands of a few & national economics in the hands of a few big businessmenbig businessmen

Federal Regulation of Business Federal Regulation of Business BeginsBegins

Congress becomes alarmed about “unfair” Business/labor Congress becomes alarmed about “unfair” Business/labor practices, enacts laws to deal with situation.practices, enacts laws to deal with situation.

Interstate Commerce Act (1887) Interstate Commerce Act (1887) to regulate railroad to regulate railroad companies. Congress created Interstate Commerce Commission companies. Congress created Interstate Commerce Commission ((ICC)ICC) to regulate interstate regulations. to regulate interstate regulations.

ICC acts to regulate railroads (eliminates pools/rebates & ICC acts to regulate railroads (eliminates pools/rebates & regulates rates)regulates rates)

Sherman Antitrust Act (1890) Sherman Antitrust Act (1890) act attempted to outlaw trustsact attempted to outlaw trusts.. How did antitrust legislation impact How did antitrust legislation impact

business?business? Limited impact (at first)Limited impact (at first) anti trust act was weakly worded/none of the trusts anti trust act was weakly worded/none of the trusts

were successfully broken.were successfully broken. anti trust act does establish the principle that the anti trust act does establish the principle that the

government can regulate industry & break up government can regulate industry & break up monopolies.monopolies.

Business would be better regulated later on during Business would be better regulated later on during the Theodore Roosevelt administrationthe Theodore Roosevelt administration

Organization of Organization of LaborLabor Industry creates problems (poor conditions) for workersIndustry creates problems (poor conditions) for workers

in response to poor conditions--workers begin to in response to poor conditions--workers begin to unionize unionize

early unions are small/ineffective in dealing with worker early unions are small/ineffective in dealing with worker issues (wages/hours)issues (wages/hours)

Industrial workers face long hours/low Industrial workers face long hours/low wages/dangerous working conditionswages/dangerous working conditions

workers fear joining unions (fear of being fired)workers fear joining unions (fear of being fired) immigrants are eager to fill in for striking workers.immigrants are eager to fill in for striking workers. Government unemployment insurance does not exist Government unemployment insurance does not exist

during this time periodduring this time period How have unions changed since How have unions changed since

early days?early days? Unions have gained more political Unions have gained more political power power ($)($) , and have secured better , and have secured better working conditions for membersworking conditions for members

Formation of Labor UnionsFormation of Labor Unions Unions develop in spite of worker’s fearsUnions develop in spite of worker’s fears Knights of LaborKnights of Labor (labor union) first union to become a major (labor union) first union to become a major

economic forceeconomic force No worker was excluded (skilled/unskilled) No worker was excluded (skilled/unskilled) --open membership----open membership-- Knights avoid strikes through Knights avoid strikes through arbitration/cooperatives arbitration/cooperatives are are

formed (workers operate their own companies)formed (workers operate their own companies) Knights attempt to win 8 hour work/Knights win major strike Knights attempt to win 8 hour work/Knights win major strike

against rail road companies (membership increases)against rail road companies (membership increases) differences between skilled & unskilled workers--problems with differences between skilled & unskilled workers--problems with

workers of differing races begin to hurt union membership workers of differing races begin to hurt union membership numbersnumbers

union became more focused on political issues/rather than worker union became more focused on political issues/rather than worker issues (pay & wages)issues (pay & wages)

Haymarket riotHaymarket riot occurred when violence (bomb thrown into the occurred when violence (bomb thrown into the crowd) took place during a pro union rally crowd) took place during a pro union rally

What impact did the Haymarket riot have What impact did the Haymarket riot have on unionism in America?on unionism in America?

Public mistrust of unions grew, membership Public mistrust of unions grew, membership in unions decreased,in unions decreased, the incident was a set the incident was a set back for the labor movement back for the labor movement

American Federation of American Federation of Labor Labor 2nd national union (still in existence today)2nd national union (still in existence today)

membership was limited to skilled workersmembership was limited to skilled workers Union focused on worker issues/so called “bread & Union focused on worker issues/so called “bread &

butter” issues (wages/hours/conditions)butter” issues (wages/hours/conditions) A.F. of L. tended to discriminate against African A.F. of L. tended to discriminate against African

American workers.American workers. African American workers, turned away from the union, African American workers, turned away from the union,

are hired as are hired as strike breakers strike breakers by employers by employers Women discriminated against in the male dominated A.F. Women discriminated against in the male dominated A.F.

of L.of L. Women work under poor conditions (sweatshops)Women work under poor conditions (sweatshops) Women begin to form their own unions (Women’s Trade Women begin to form their own unions (Women’s Trade

Union League)Union League) How did discrimination by AF of L impact How did discrimination by AF of L impact

race relations?race relations? African Americans were hired as strike breakers African Americans were hired as strike breakers

(little other work available) this helped to cause (little other work available) this helped to cause an increase of tension between races an increase of tension between races

Radicals in the Labor Radicals in the Labor Movement Movement AnarchistsAnarchists believe that capitalist system believe that capitalist system

could not be reformed/called for violent could not be reformed/called for violent overthrowoverthrow

Socialists oppose capitalist system/seek Socialists oppose capitalist system/seek peaceful means of changing system/call for peaceful means of changing system/call for government ownership of companies & government ownership of companies & industry.industry.How did Anarchism and Socialism How did Anarchism and Socialism impact public opinion of unions?impact public opinion of unions? in some cases, fear of union in some cases, fear of union membership grows, especially later membership grows, especially later on (1920’s) during the on (1920’s) during the REDRED scare. scare.

Violent Clashes Between Business Violent Clashes Between Business & Labor& Labor

Pay decrease causes Pay decrease causes Great Railway StrikeGreat Railway Strike. Warfare . Warfare breaks out between workers and PA state militia. breaks out between workers and PA state militia. President HayesPresident Hayes sends federal troops in to sends federal troops in to break the break the strikestrike..

Homestead Strike Homestead Strike at Carnegie steel company. Pinkerton at Carnegie steel company. Pinkerton detective agency called in by management. Many on both detective agency called in by management. Many on both sides are killed/strike sides are killed/strike crushes steel workers union.crushes steel workers union.

Pullman StrikePullman Strike called in protest to reduction of wages. called in protest to reduction of wages. President Cleveland President Cleveland uses troops to bust strike stating that uses troops to bust strike stating that US mail was delayed by striking workers. US mail was delayed by striking workers. Railway union is Railway union is broken.broken.

The 1800's is marked by The 1800's is marked by government use of troops to government use of troops to side with business over unions.side with business over unions. Why did the government side with business Why did the government side with business

over labor during the late 1800’s? over labor during the late 1800’s? Government was over influenced by the power Government was over influenced by the power

and money of the big industrialists, union and money of the big industrialists, union members lacked political power….members lacked political power….how has this how has this changed?changed?

Conclusion:Conclusion: How did government & big How did government & big

business interact during the late business interact during the late 1800’s?1800’s? Government did little to regulate Government did little to regulate

business (regulatory laws lacked business (regulatory laws lacked substance)substance)

Government was influenced by power Government was influenced by power & money of the big industrialists& money of the big industrialists

Government sided with big business Government sided with big business over the workers during strikes (used over the workers during strikes (used military to break strikes) military to break strikes)