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UA HIST 150C3 - Big Business and the Rise of Organized Labor

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HIST 150C3 1st Edition Lecture 6Big Business and the Rise of Organized LaborThe Rise of the Modern CorporationJay Gould-Railroad industry-Railroads received 200 billion acres of land-use of pools helped to him acquire much of his wealth-expert at manipulating business practices so he could maximize his own profits even at the expenses of his own workers and stockholders-known to bribe state officials and legislatures in order to acquire more railroad tracksPools-a pools was a business arrangement, which divided competitive businesses, sometimes by dividing traffic but usually by dividing income-pools also set prices for shipping rates in order to increase profits-these business arrangements adversely affected those attempting to ship goods (ex. Farmers and small business owners)Laissrez-faire economics-limited federal regulationInterstate Commerce Commission-sought to regulate the railroad industry-sought to police the practice of poolsAndrew Carnegie-immigrated to the U.S. in 1948 with his family from ScotlandThese notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.-moved and settled in Alabama/Pennsylvania-got his start in business here-young boy job: telegraph operator for Pennsylvania railroad company-eventually gets a loan which he can use to invest in railroads in Pennsylvania-early wealth is born through insider trading -1875: starts first business (Pennsylvania steel plant)-leading exporter of steel-eventually reorganizes his company and it becomes Carnegie Steel Company-engaged in harsh business practicesInsider Trading-tactic used by Carnegie that uses inside information given to him by people at the railroads in Pennsylvania to help further his success Henry Clay Frick-built a large corporation with Carnegie-founder of a coke companyCarnegie Steel Company-most influential firm of its time-made Carnegie very wealthy“The Gospel of Wealth” -obligation of executive: modesty in living, family, charityJohn D. Rockefeller-his name is associstaed with wealth, economically affluence America-At the age of 16 he went to work as a bookkeeper in Cleveland, Ohio-After 4 years he started his own company-believed in social Darwinism-ruthless business man who used harsh and unethical methods to succeed-drove individuals out of competition-1882: established Standard Oil Company“Social Darwinism”-individuals who were the fittest economically would survive the bestIndustrial Trust-a way of getting around the stipulations and regulations to once more have a monopoly-standard oil innovated this practice-1st step in this process: stockholders in 30 companies turned over their stocks to this trust-primary entity for governing all 30 of these businesses-pays out dividends out of this larger trust-no one individual owned a trust, and circulated regulations of the ICCStandard Oil Trust-example of industrial trust-established by John D. Rockefeller in 1882Sherman Anti-Trust Act (1890)-sought to outlaw the use of the Industrial Trust-not enough authority to work-limited powerLabor and the Late 19 th CenturyRailroad Strike of 1877-“great upheaval”-local and state militias had to take it down (opened fire on workers because they were throwing rocks at them)-workers retaliated and set fire to locomotive engines and freight cars-President Hayes is called upon to help stop this-Marines end up stopping this (40 deaths, 29 injured in all)Panic of 1873-caused by overinvestment in the railroad industry-by 1870’s there was a rapid expansion in the railroad system-this caused speculation and overinvestment in railroad industry-individuals began to invest in unprofitable will lines -lasted 6 years: one of the more devastating economic timesCoinage Act (1873)-U.S. government overhauled money -ended the practice of using silver to make coins-lowers the amount of money in circulation-calls a rise in interest rates-individuals find it harder to gain credit-adverse affect on railroad industryJay Cooke & Company-Railroad business that attempted to benefit from a 2nd expansion of the transcontinental railroad-Needed to sell $2 million worth of bonds in order to get a government loan-Cooke was unable to raise this much money and went bankrupt-Bankruptcy caused the collapse of several banks and shut down NY stock exchange July 14, 1877-national strike that emerged-workers all went on strike-In West Virgina, striking workers refused to run the trains caused a suspension of railroad tracks throughout the U.S.-militias refused to be involved with these workersKnights of Labor (KOL)-formed in late 1860’s-after railroad strike, there was a significant expansion in membership-allowed ANYONE to join regardless of their race, gender, or occupation-by 1880’s: largest labor union in the U.S.-by late 1880’s announced that they were going to have an 8 hour work day-announced there would be a national series of demonstrations: very effective, many people went on strike due to these


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