Transcript Big Business & Government Policy (1870-1900)

Big Business &
Government Policy
(1870-1900)
How did government &
big business interact
during the late 1800’s?
Big Business & Government Policy
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During the 1870’s & 80’s big industrialists
attempted to form monopolies.
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What is a monopoly?
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(Carnegie & Rockefeller)
A monopoly is when a producer has total control
over an industry.
Were the great industrialists Captains of
Industry or Robber Barons ?
 They could be considered Captains of
Industry because they risked capital to
make business grow
 They could also be considered Robber
Barons because of the unfair business
practices they used to increase the size of
their businesses
 Industrialists used the theory of Social
Darwinism to justify their unfair business
practices.
Three Methods of Business Consolidation
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Rail Road companies develop pooling agreements to fix rail road fares
at high rates (scheme does not work because companies cheat on their
agreements).
Trusts are developed by Rockefeller to bring control to former
competitors. If competitors refuse to join the “Trust” Rockefeller would
put them out of business. Other industries begin to follow example and
also start “Trusts”.
Holding Companies hold the stocks of several firms in the same
industry. Holding Companies owned the majority of stocks within an
industry & where able to dictate policy within the industry.
What effecting did consolidation have on
business?
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Business became less competitive and more
consolidated, leaving business power & national
economics in the hands of a few big businessmen
Federal Regulation of Business Begins
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Congress becomes alarmed about “unfair” Business/labor practices,
enacts laws to deal with situation.
Interstate Commerce Act (1887) to regulate railroad companies.
Congress created Interstate Commerce Commission (ICC)
to
regulate interstate regulations.
ICC acts to regulate railroads (eliminates pools/rebates & regulates rates)
Sherman Antitrust Act (1890) act attempted to outlaw trusts.
 How
did antitrust legislation impact business?
Limited impact (at first)
 anti trust act was weakly worded/none of the trusts were
successfully broken.
 anti trust act does establish the principle that the
government can regulate industry & break up monopolies.
 Business would be better regulated later on during the
Theodore Roosevelt administration
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Organization of Labor
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Industry creates problems (poor conditions) for workers
in response to poor conditions--workers begin to unionize
early unions are small/ineffective in dealing with worker issues
(wages/hours)
Industrial workers face long hours/low wages/dangerous working
conditions
workers fear joining unions (fear of being fired)
immigrants are eager to fill in for striking workers.
Government unemployment insurance does not exist during this time
period
 How
have unions changed since early days?
 Unions
have gained more political power ($) , and
have secured better working conditions for
members
Formation of Labor Unions
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Unions develop in spite of worker’s fears
Knights of Labor (labor union) first union to become a major economic force
No worker was excluded (skilled/unskilled) --open membership-Knights avoid strikes through arbitration/cooperatives are formed (workers
operate their own companies)
Knights attempt to win 8 hour work/Knights win major strike against rail road
companies (membership increases)
differences between skilled & unskilled workers--problems with workers of
differing races begin to hurt union membership numbers
union became more focused on political issues/rather than worker issues (pay &
wages)
Haymarket riot occurred when violence (bomb thrown into the crowd) took
place during a pro union rally
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What impact did the Haymarket riot have on
unionism in America?
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Public mistrust of unions grew, membership in unions
decreased, the incident was a set back for the labor
movement
American Federation of Labor
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2nd national union (still in existence today)
membership was limited to skilled workers
Union focused on worker issues/so called “bread & butter” issues
(wages/hours/conditions)
A.F. of L. tended to discriminate against African American workers.
African American workers, turned away from the union, are hired as
strike breakers by employers
Women discriminated against in the male dominated A.F. of L.
Women work under poor conditions (sweatshops)
Women begin to form their own unions (Women’s Trade Union
League)
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How did discrimination by AF of L impact race
relations?
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African Americans were hired as strike breakers (little
other work available) this helped to cause an increase of
tension between races
Radicals in the Labor Movement
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Anarchists believe that capitalist system could not be
reformed/called for violent overthrow
Socialists oppose capitalist system/seek peaceful
means of changing system/call for government
ownership of companies & industry.
 How
did Anarchism and Socialism
impact public opinion of unions?
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in some cases, fear of union membership
grows, especially later on (1920’s) during
the RED scare.
Violent Clashes Between Business & Labor
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Pay decrease causes Great Railway Strike. Warfare breaks out between
workers and PA state militia. President Hayes sends federal troops in
to break the strike.
Homestead Strike at Carnegie steel company. Pinkerton detective
agency called in by management. Many on both sides are killed/strike
crushes steel workers union.
Pullman Strike called in protest to reduction of wages. President
Cleveland uses troops to bust strike stating that US mail was delayed
by striking workers. Railway union is broken.
The 1800's is marked by government use of troops to side with
business over unions.
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Why did the government side with business over
labor during the late 1800’s?
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Government was over influenced by the power and money
of the big industrialists, union members lacked political
power….how has this changed?
Conclusion:
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How did government & big business
interact during the late 1800’s?
 Government
did little to regulate business
(regulatory laws lacked substance)
 Government was influenced by power &
money of the big industrialists
 Government sided with big business over
the workers during strikes (used military
to break strikes)