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Big Business and Unions Notes. The Rise of Big Business. Big businesses exist because they can produce goods more cheaply and efficiently than small businesses This forced many small companies out of business

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the rise of big business
The Rise of Big Business
  • Big businesses exist because they can produce goods more cheaply and efficiently than small businesses
  • This forced many small companies out of business
  • Think Wal-Mart vs. a local store, what do you sacrifice in order to buy something for less money?
the self made man
The Self Made Man
  • Andrew Carnegie
    • emigrated to the US from Scotland in 1848
  • Worked his way from bobbin boy in a textile factory making $1.20 a week to making $50,000 a year with a railroad company and creating his own business investing in the steel industry
vertical and horizontal integration
Vertical and Horizontal Integration

Vertical Integration

  • Buying all of the different businesses that the operation of a company depends upon
  • Example:
    • A clothing company would own the trucks to distribute, the factory, the cotton farm, etc.
  • Buying several small businesses to create one large business
  • Example:
    • Independent oil companies combine to create the US Oil Company
  • When a single company controls an entire market it becomes a monopoly
  • Many Americans feared monopolies because they could charge whatever price they wanted to

Horizontal Integration

working in the united states
Working in the United States
  • Working conditions were not very regulated
    • Workers breathed in toxic fumes, lint, and dust
    • Average industrial worker in 1900 made 22 ¢ per hour and worked 59 hours per week ($12.98 per week, $51.92 per month)
early unions
Early Unions
  • Many workers wanted to form unions
    • What do unions ALWAYS want?
      • Better working conditions (safety)
      • Better pay
      • Better hours
  • Company owners didn’t like unions because they thought they interfered with their property rights
  • Companies required workers to sign contracts against unions, hired detectives to identify union organizers, and blacklisted workers who tried to unionize
    • Companies would lock workers out of their property and refuse to pay them until they broke up the union
  • Marxism (a set of ideas of Karl Marx) started to scare people in the capitalist US
    • Believed that workers could eventually revolt and seize control of factories
  • Many European immigrants had heard the ideas of Marx and when they came to the US nativism (anti-immigrant feelings) started to spread
the struggle to organize
The Struggle to Organize
  • The recession that started in 1873 continued into 1877
    • Railroad workers across the country walked onto the tracks and refused to move
    • After property had been destroyed and people killed, President Hayes sent the army out to stop the strike
the haymarket riot and the pullman strike
The Haymarket Riot and the Pullman Strike
  • Haymarket Riot
    • Movement for 8 hour workday
    • Nationwide strike on May 1, 1886
    • Chicago: clash between strikers and police left one striker dead.
    • Next day a protest was organized in Haymarket Square
    • Police entered the square and someone threw a bomb
    • Police opened fire and workers shot back
    • 8 German men were arrested
    • Evidence was weak but 4 were executed
  • Pullman Strike
    • Pullman (railroad cars) Factory workers had been required to live in a company town
      • Get paid, pay rent to company, buy food from company, nothing left to save
    • Went on strike because of slashed wages and the firing of 3 workers who complained
    • Workers across the U.S. boycotted Pullman cars and refused to handle them, tying up railroads and threatening to paralyze the economy
    • Railroad managers had US mail cars attached to Pullman cars so the workers would be interfering with the US mail (violation of federal law)
    • President Cleveland sent in troops