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John D. Rockefeller

John D. Rockefeller. America’s first billionaire: Creator of Standard Oil Trust, controlled 95% of oil refining by 1885; drove or bought out competitors. The Trust (“Horizontal Integration”). Holding company that owns majority stock in all the businesses in a particular industry.

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John D. Rockefeller

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  1. John D. Rockefeller America’s first billionaire: Creator of Standard Oil Trust, controlled 95% of oil refining by 1885; drove or bought out competitors

  2. The Trust (“Horizontal Integration”) Holding company that owns majority stock in all the businesses in a particular industry

  3. The Standard Oil Trust“Horizontal Integration”

  4. Standard Oil Co.

  5. Andrew Carnegie Owned largest steel producer in US by 1890 Creator of “vertical integration”: ownership of all the steps involved in an industrial process, from raw materials to delivery of finished product

  6. Vertical Integration

  7. J.P. Morgan “Financier of America” Owned largest bank; acted as unofficial Bank of US controlled banking in America able to create new industries with massive financial capital ($$$)

  8. Wall Street – 1867 & 1900

  9. Morgan and the “Interlocking Directorate” Member of Morgan’s bank on the Board of Trustees of the major industries in America Goal: to eliminate wasteful competition from the marketplace Coordinated activities of the various industries Acted as an arbitrator between industries

  10. The Interlocking Directorate

  11. The Protectors of Our Industries

  12. Social Darwinism • British economist. • Advocate of laissez-faire. • Adapted Darwin’s ideas from the “Origin of Species” to humans. • Notion of “Survival of the Fittest.” Herbert Spencer

  13. Social Darwinism in America • Individuals must have absolute freedom to struggle, succeed or fail. • Therefore, state intervention to reward society and the economy is futile! William Graham SumnerFolkways (1906)

  14. New Business Culture:“The American Dream?” Protestant (Puritan) “Work Ethic” • Horatio Alger [100+ novels]

  15. “On Wealth” • The Anglo-Saxon race is superior. • “Gospel of Wealth” (1889). • Inequality is inevitable and good. • Wealthy should act as “trustees” for their “poorer brethren.” Andrew Carnegie

  16. The Gospel of Wealth:Religion in the Era of Industrialization • Wealth no longer looked upon as bad. • Viewed as a sign of God’s approval. • Christian duty to accumulate wealth. • Should not help the poor directly. Should provide means for self-improvement. Russell H. Conwell

  17. Unions Conditions of the Working Class: low pay, averaged $1 per day dangerous work conditions, no safety standards 70+ hours weekly, 6 to 7 days a week no unemployment, disability, sick leave

  18. Difficulty in Organizing Unlimited immigration Skilled vs. unskilled Government opposition American opposition to unions; foreign element and nativist reactions

  19. Difficulty in Organizing Children and women in labor force

  20. Difficulty in Organizing Homestead, PA “company towns” town owned by company from housing to stores Pullman, Illinois

  21. Government Opposition to Unions Injunctions: court orders banning strikes “yellow-dog contracts” Open immigration Strike-breakers/use of military

  22. First Labor Unions The National Labor Union: First labor union to cross industries Problems: skilled vs. unskilled difficulty in organizing Panic of 1873 Fell apart after 1878 William Sylvis and Isaac Myers

  23. The Knights of Labor Largest labor union; crossed industrial and racial lines Became powerful force in early 1880s

  24. Haymarket Square May, 1886 – a riot during a rally results in several deaths, including police Knight leaders blamed

  25. Haymarket Square Charges never proven; four executed, four jailed later pardoned Knights destroyed Unions tainted

  26. American Federation of Labor Founded by Samuel Gompers (1890) Formed along industrial lines, not trade (occupation) lines No radicals or anarchists allowed Use of boycotts rather than strikes

  27. Similar to Morgan’s interlocking Directorate format Based on Industrial lines, not trade (or occupation) lines

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