Transcript Types of Monopolies

Types of Monopolies
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Monopoly-A situation in which a single company
owns all or nearly all of the market for a given type of
product or service. This would happen in the case that
there is a barrier to entry into the industry that allows
the single company to operate without competition
 Cartel- loose association of businesses making the
same product, that agree to share certain business
practices, such as same pricing.
 Trust- (invented by Rockefeller) different businesses
that agree to be run by a common Board of Trustees,
who got a profit from each of the businesses they
oversaw
 Rockefeller set up his businesses this way because
the government did not allow for one company
owning stock in another.
Why monopolies developed
Various
factors allowed for monopolies to
develop and exist during the Gilded Age
Government
of policy of laissez-faire allowed for
monopolies to develop in late 1800’s
Unlimited resources
Basically no early competition for the original big
businessmen
Technological advances in that field gave them
superior advantage over any possible competition
Andrew Carnegie
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“American Dream” rags to riches story
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Pittsburg Steel Co.
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Scottish immigrant, worked as telegraph messenger boy, eventually
bought the company, then went into steel industry
Combination of Bessemer process, desperate need for steel (RR, cities),
and Carnegie’s business acumen made him one of the richest men in the
world
In 1900, Carnegie was 66 years old, wanted to retire,
forced J.P. Morgan to buy his company or he would
threaten Morgan’s similar business
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Sold company, which Morgan renamed US Steel, for $400 million
Carnegie’s share was $226 million, which translates to $120 billion in
today’s dollars
 To put in proper perspective,,,,, Bill Gates, the richest man in the
world, has a net worth of $81 billion
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Recent study put Carnegies wealth at $300 billion, Rockefeller $318 billion
Carnegie spends retirement as philanthropist,
giving away 90% of all his wealth to charity
(gospel of wealth)
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Schools, libraries, hospitals/ the arts etc.
10 Richest Individuals All time
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10. Cornelius Vanderbilt $185 billion
9. Henry Ford $199 billion
8. Muammar Gadafi $200 billion
7. William the Conqueror $209 billion
6. Jakob Fugger $221 billion
5. Mir Osman Ali Khan $230 billion
 And 147 kids!!!
4. Czar Nicholas II $300 billion
3. Andrew Carnegie $310 billion
2. John D. Rockefeller $318 billion
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1. Mansa Musa $400 billion
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John D. Rockefeller
 Started
his 1st company at 19 years
old.
 Eventually buys out almost all of the
competition
 Standard Oil Company
 By
1870’s, Standard was refining 90% of US
petroleum
 2/3rds of world oil shipping!!!
 Creates
the trust form of business
 Gives away ½ of his wealth throughout
his life
Biographer Allan Nevins, answering Rockefeller's enemies,
concluded:
 “The rise of the Standard Oil men to great wealth was not
from poverty. It was not meteor-like, but accomplished over a
quarter of a century by courageous venturing in a field so
risky that most large capitalists avoided it, by arduous labors,
and by more sagacious and farsighted planning than had
been applied to any other American industry. The oil fortunes
of 1894 were not larger than steel fortunes, banking fortunes,
and railroad fortunes made in similar periods. But it is the
assertion that the Standard magnates gained their wealth by
appropriating "the property of others" that most challenges
our attention. We have abundant evidence that Rockefeller's
consistent policy was to offer fair terms to competitors and to
buy them out, for cash, stock, or both, at fair appraisals; we
have the statement of one impartial historian that Rockefeller
was decidedly "more humane toward competitors" than
Carnegie; we have the conclusion of another that his wealth
was "the least tainted of all the great fortunes of his day."[73]
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Biographer Ron Chernow wrote of
Rockefeller:
 “What makes him problematic—and why
he continues to inspire ambivalent
reactions—is that his good side was every
bit as good as his bad side was bad.
Seldom has history produced such a
contradictory figure
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Vanderbilt
NY Central RR
 We already did his story
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J.P Morgan
 Banker
and consolidator
 JP Morgan (Chase)
 Bought out Edison
 Bought out Carnegie to form US Steel
 Loaned the US government $52 million
of his own gold to bail out government
after Panic of 1893
Captains of Industry or Robber
Barons?
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“Robber Barons”
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Stealing from public wealth
Exploited workers- low wages
“international scouts”- recruited immigrants- why?
Corruption in business and of political leaders
Drained US of its natural resources
Damaged environment
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River pollution, air, garbage etc.
Drove competitors out of business
“Captains of Industry”
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Increased national output-GNP
Gave jobs
Created new products/technology
Gave back with charity- museums, libraries, etc.
Big Businessmen Quotes
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The growth of large business is merely survival
of the fittest- Rockefeller
What do I care about the law, havent I got the
power?-Vanderbilt
I believe with $200,000 we can get the bill we
want passed- Collis Huntington RR owner
The public be damned. I am working for my
stockholders- William Vanderbilt
Well, I don’t know if I want a lawyer to tell me
what I cannot do. I hire him to tell me how to
do what I want to do- JP Morgan
You have undertaken to cheat me. I won't sue you, for the law is too slow. I'll ruin you.
Cornelius Vanderbilt
The way to make money is to buy when blood is running in the
streets.
John D. Rockefeller
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I always tried to turn every disaster into
an opportunity.
John D. Rockefeller
Gilded Age Philosophies
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Laissez-faire economics
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Social Darwinism
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An ambitious person will succeed if he works hard, is thrifty, has integrity,
follows the rules and has a little bit of luck
Materialism
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the strongest business will survive, the weak be damned, its natural. The
weak go bankrupt and the strong thrive
Algerism- based on Horatio Alger.
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“HANDS OFF”- government does not get involved in business. Interference
by government would decrease productivity and weaken economic
foundations
the idea that acquiring goods or wealth is one of the most positive pursuits in
life. The desire to acquire wealth is a true “American” value
Gospel of Wealth
The belief that the wealthy have a responsibility to combine their economic
power with Christian charity. Acquire wealth during your business life, then
do philanthropy during retirement.
 According to this theory,, who is not responsible for caring for the poor???
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The rich do the charity, NOT THE GOVERNMENT!!
“New Immigrants”
 Post Civil
 About 30
War-1920
million immigrants came to
US
 Where they came from
 Now
South and eastern European
 Italians/Greeks/Turkish/
 Still Ireland
 Asia
 Chinese
 Japanese
Polish/Russia/ethnic Jews
Why they left Europe
Poor/no $$
 Famines/crop failures/disease
 Land/job shortages
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New machinery/agricultural techniques hurt European laborers
Religious/political persecution
 Escape military conscription
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Overpopulation
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US fish/grain/potato increased population, forced them over here
Better interior transportation systems
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Mandatory in most European countries
RR’s stretched into inland Europe
Cheap rates across Atlantic by steamship
companies
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steerage
Steerage
 Level
below sea level
 No windows/ no fresh air
 Crowded/ no privacy
 Steerage
passengers outnumbered
cabin passengers 10-1
 Few
toilets
 Leftover food
 BUT,,, TICKETS ONLY $15!!
Why they came to America
 Free/cheap
land (Homestead Act)
 Political/religious freedoms
 $$$$$$$$
 “American Letters”
 Relatives
 Big
who write saying how great US is
Business Recruiters
 “Golden Door”
 NYC
“Golden Door”
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NYC
“Door”
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NY was main entrance to US
Ellis Island
“Golden”
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Land of opportunity
“streets paved in gold”
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Have you seen any???? So who makes up this lie??
Steamship companies
70% of immigrants during this time came
through NYC (Ellis Island)
Ellis Island
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1892-1954
Operated by US government.. Why?
Who are you?
Are you healthy? Doctors/Nurses would inspect while they waited in linesticking and probing, chalk on clothing
 What are you doing here?
 Any skills? Job lined up?
 How many are there (Census)?
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Who was turned away?
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Criminals/insane
Sick/disease
People without $5 in pocket
Must have US sponsor
Quick trials for questionables
Only 2% were turned away
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1st/2nd class passengers didn’t have to go through Ellis Island, they
had brief inspection onboard ship.. Why????
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If they could afford that ticket, they must be OK!
Polish Immigrant Child
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We just arrived in America, and they are writing
down our names. Papa is coming to get us in a
few hours...We just got to our home, and
tomorrow, I get to go to school for the first time
because in Poland, school wasn't free...I went to
school for the first time today. I really liked it but
the kids made fun of me for the way I talked...I
have been going to school for many days, but
when I got home father was hurt and he had to
quit his job so I got my own job to help my
mother pay rent...And now we are not as poor as
we were, and now I'm happy to be in America.
- K. I.
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I just moved to America. The journey was long
and hard. there were Jews, Italians, Scottish,
Polish, and many more groups. On my first day of
school, I was made fun of. I didn’t know the
customs here. I got very confused by all the
differences in culture. My dad got a broken hip
and now we don’t have a way to get money. The
owner replaced my dad with another worker. He
said, “boatloads come in every day with men just
like your father.” After my dad hurt himself, I had
to quit school and go work. That's what happened
to a lot of people. Their parents would get hurt,
and children would have to work. But the day I
got my pay check, I felt like I had accomplished a
lot. My family was so proud.
Problems that the New Immigrants
faced
Labor competition
 Language barriers/illiterate
 Poverty
 Overcrowded ghettos
 Religious differences- Catholic/Jewish
 “American” Resistance
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Nativist Movement
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Who were they?
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Some wealthy elite
Mainly the working class already here… why this group?
Reasons they hated immigrants
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Immigrants took their jobs
Immigrants lowered the pay scale
“new” immigrants (SE Europe) were poor “stock”
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Urban blight
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They were poor
Urban ghettos/overpopulating the country
Influence of alcohol
Pollution
crime
High birthrate among immigrants
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Different culture, language, religion
More future voting power, more Catholics in power
Led to corruption in government
Brought anarchism, socialism, communism to US
Organizations
Know-Nothing Party (American Party) 1850s
 American Protective Association (APA)1887-1897
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Claimed 3.5 million members
Mainly anti-Catholic- initiation was swearing to not hire
Catholics, not vote for Catholics, etc.
Promoted literature about sexy nuns and priests who
abused children
Orange Order- British and Protestant Irish against
Irish and Italian Catholics
 2nd wave of KKK in 1920s
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They now hate everyone that’s not a WASP!!
Immigration Restriction League- Henry Cabot
Lodge (US Senator)
Nativist Laws
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Literacy tests for immigrants- IRL
sponsored
 1st
passed by Congress in 1896, but multiple
Presidents vetoed it
 1917-Congress overrode Wilson’s veto and
literacy test of 30 words in any language to
become US citizen
1882- banned pauper immigrants
 1885- banned contract labor importers
 many after WWI- we will do them later……
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Ethnic Specific Nativism
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1882- Chinese Exclusion Act
Banned basically all Chinese immigrants
 Every 10 years must be re-issued
 If any Chinese in US leave, they cannot return
 Chinese couldn’t marry whites (1948 overturn)
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Repealed by 1943 Magnuson Act
 Side effect!!! – Japanese immigration increased
 Gentlemen’s Agreement 1907
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Informal (never passed by Congress) arrangement
between US and Japan
US would be nice to Japanese students already here,
allow them integration in the public schools
BUT Japan would not allow their citizens to come to USA
Immigration Act 1924- banned all Asian immigration
Working Conditions
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Problems that the urban factory worker faced
 Piecework- pay based on how much you produce
 10-12 hour work day
 Poor air/ventilation/poor lighting
 Low wages/competition from labor surplus
 Capitalist/anti-worker sentiment in early US history
 No insurance/job stability
 35,000 deaths in year in factories
 Child labor
Child Labor
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“There is a certain class of labor in mills where there is not as much
muscular exercise required as a child would put forth in play, and a child
can do it about as well as a grown person…There is such thing as too
much education for working people sometimes. I have seen cases where
young people are spoiled for labor by…too much refinement.”
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Children started to work at age 5
Up to 19 hour days with 1 hr break (usually 12 hrs day/ 6
days a week)
Over 50% under 10 worked full time job in cities during
Industrial Era
2 million under 15 by 1911
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What does it say about the US now that most
children do not work and go to school?
10 and 12 year old working
immigrants
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How come I can’t work for more than ten hours.?
My family is going to starve earning only seven
dollars a week. It is not going to be enough.
There are a lot of people in the streets most
trying to make a living, but sometimes annoying
people are yelling. I feel kind of lost mostly, and I
don’t know what to do next.
I work in the sweat house with my dad. He is
always sick. My mom and my sisters stay home
and sew clothes. My mom gets depressed because
of the heat and the fact that we have to sleep on
the roof. My big brother is a good peddler and my
dad is proud. My dad has to work nineteen hours
a day, but I only work for fourteen hours.
Keating-Owen Act (1916)
Banned products made by child labor from
being sold in interstate commerce
 Declared unconstitutional by Supreme
Court in Hammer vs. Dagenhart
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Lochner vs. New York (1905)
NY state law (1896 Bakeshop Act) banned
bakers from working more than 10 hrs a
day or 60 hrs/week to protect the health
of the workers
 Supreme court overturns decision.. Why?
 An individual has a general right (14th) to
make contracts…. Government cannot
deprive an individual the right to make $$
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Rise of Unions
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1st nationwide union was the National Labor
Union (1866)
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600,000 members
Combined skilled and unskilled laborers
This eventually causes problems… why?
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Skilled can get jobs easier, causes issues
Knights of Labor (1869)
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Terrence Powderly/ Mother Jones
All workers except non-producers
Almost 1 million members
Downfall
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Wabash strike failed
Haymarket Affair
Rise of AFL
AFL
American Federation of Labor
 Founded by Samuel Gompers
 Goals
 Economic, not political
 “closed shops”- all union workers
 Pool funds for strikes
 Mostly skilled laborers
½ million members 1900
Won ½ of their strikes,,,, pretty good % for the time
period
But only 1 out of 20 workers belonged to a union in
1900
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Purpose of Unions
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Protect workers rights
Higher wages
Health insurance
Working conditions
Retirement benefits
Job security
Ways to accomplish goals
Mediation/negotiations
 Arbitration
 Strikes!
 Pressure to prevent scabs
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Major Strikes
Great
Haymarket
Haymarket
Railroad
Strike 1877
 Homestead
Cause of the
 Pullman
Strike
 Great RR Strike of 1877
Company or
 Hw
person the
Name
 of
Strike
strike targeted
 Make
Leader/Union
organizing the
strike
Outcome/
Success/Failure
of Strike
Pullman
Homestead
a chart for each of the strikes above
Rise of Cities
1900, NYC 2nd largest in the world,,, 3.5
million
 Ghettos
 Appeal of the cities over rural
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 Electricity
 Excitement
 Various
 Jobs
entertainment
Entertainment
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Dime novels/libraries
Newspapers- Hearst and Pulitzer
More free public schools
Sports- baseball/boxing/ horseracing
Cooney Island/circus/”Wild West” shows
Vaudeville
Jazz/Ragtime
“Modern Values”
South during Industrialization
Textiles from the North moved South after
Civil War as industrial factories in North
took over
 “mills to the cotton”
 Cheaper labor in South is nice side effect
for the Southerners
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7/15
Mark Twain, the most popular literary figure of the Gilded Age
Ironworkers: Noontime
The Gross Clinic
Winslow Homer's The Veteran In A New Field
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Newspaper design and layout changed from 1877 to 1901
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Newspapers and magazines vied for attention in newsstand displays
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Newspapers helped to popularize the bicycling craze of the 1890's
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One of the Gilded Age "dime" (or "nickle", in this case) novels
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Places like Coney Island became resort destinations, and railroads advertised vacation getaways
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Ballparks were also places where leisure time could be spent
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As baseball became a more popular attraction, the dominant National League had ownership arrangements as complex as those of industrial trusts
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A "summer cottage" in Newport
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A "robber baron" diiner gathering, and a cartoon poking fun at the "bow-wow's banquet"
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7/13
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An 1880 cartoon contrasting treatment of the South under Reconstruction and under Hayes' policies (note the "carpetbag" being plowed under)
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Comparison of the Southern and non-Southern economies (numbers are indexes, not actual production figures)