Chapter 18: Big Business and Organized Labor

The Rise of Big Business

• Ingredients for rapid economic growth

• Unparalleled natural resources (forests, minerals, rivers)

• Expanding population

• Innovative and bold leadership

• Role of tariffs

• High tariffs to blunt out competition from other countries

• Provided land and cash to fund railroads and other modes of transportation

• Regulations of businesses: none

• Big business influence on government: business leaders spent time and money to ensure the government stayed out of their businesses

• Growth of farm industry: commercial cattle industries - slaughtering and packing of meat became an industry

• Role of railroads

• Connected East and West

• Interconnected national market for goods and services

• Key parts of the 2nd Industrial Revolution

• Interconnected transportation and communication networks

• The widespread application of electrical power

• Systematic application of scientific research to industrial processes

• Undersea telegraph: laying of undersea telegraph cables, which spanned the Atlantic Ocean and connected the United States with Europe

• Electricity

• Accelerated the pace of industrial change

• Advances in power and efficiency of machinery

• Electric trolleys and subways

• Enhanced steel and chemical productions

• Influence of science

• Refine kerosene and gasoline from crude oil

• Improve steel production

• New products (telephones, typewriters, adding machines, sewing machines, cameras, elevators, and farm machinery)

• Railroads

• Symbol of the urban industrial revolution

• Moved masses of people and goods faster and farther

• Time zones

• Trains prompted the creation of the time zones

• Spurred the use of watches

• Trains were supposed to be on time

• Transcontinental railroad

• Helped populate the West

• Expensive to maintain

• 2 sides meet in Utah → Leland Stanford >> Promontory Summit, UT

• Downside to railroads

• Wrong places

• Dangerous working conditions

• Shoddy construction

• Poorly and criminally managed - bankrupt

• Corrupt the political system

• Lobbying - lying, cheating, stealing ∽ Charles Francis Adams Jr

• Pacific Railway Act (1862): authorized the construction of a rail line along a north-central route - Union Pacific Railroad from Omaha, Nebraska → west and Central Pacific Railroad from Sacramento, California → east

• Money and land sources

• Land taken from the Indians

• Lavish cash subsidies from the federal government

• Executives and financiers often cut corners, bribes legislators, and manipulated accounts to line their own pockets

• Federal troops to suppress Plains Indians

• The workers

• Union Pacific crew → former Union and Confederate soldiers, former slaves, and Irish and German citizens

• Central Pacific crew → Chinese workers

• Post-Civil War inventions

• About 235,000 new patents

• Barbed wire, farm implements, air brakes for trains (1868), steam turbines, electrical devices, and more

• Typewriters (1867)

• Vacuum cleaners (1869)

• The internal-combustion engine

• The motion pictures

• Alexander Graham Bell

• The telephone (1876)

• Promote the new device transmitting voices over wires

• The Bell Telephone Company

• Thomas Alva Edison

• Menlo Park, New Jersey

• Phonograph (1877)

• First light bulb (1879)

• Created and perfected hundreds of new devices and processes

• Storage battery, dictaphone, and mimeograph

• Electric motor, electric transmission, motion picture camera, and projector

• (1882) Edison Electric Illuminating Company supplied electrical current to 85 customers in New York

• Electric motors transform factories and lead to street cars and elevators

Entrepreneurs

• John D. Rockefeller

• Obsessed with precision, order, and tidiness

• Oil industry

• Cleveland, Ohio

• 90% of oil refining

• Philanthropist

• Oil

• First oil well in US at Titusville, Pennsylvania (1859)

• Pennsylvania oil rush of 1860

• Could be refined to kerosene - used in lighting, heating, and cooking

• Refineries in Pittsburgh and Cleveland (Cleveland had rail service)

• Vertical Integration

• Buying your competitors and companies that made other things like barrels for oil

• Standard Oil Company of Ohio made their own oil, barrels, and other needs

• Standard OIl’s control over the railroad: Standard Oil controlled tank cars and oil storage facilities it was able to dissuade railroad from serving eastern competitors

• Trusts

• Standard OIl trusts

• Holding stocks in a business for some in return

• (1892) Ohio supreme court says trusts are illegal

• Standard Oil of New Jersey

• Andrew Carnegie

• Scotland

• (1848) to Allegheny County, Pennsylvania

• (13 years old) bobbin boy in a textile mill

• (1853) personal secretary and telegrapher to Thomas Scott (District superintendent of Pennsylvania railroad and later President)

• Scott moved and Carnegie becomes President

• Scott became assistant secretary of war - Carnegie follows him - develops a military telegraph system

• Telegraphy → railroad → bridges → steel making and investments

• Intelligent

• Energetic and practical

• Ferociously ambitious

• Abuse his power

• Compulsive liar

• “Gospel of Wealth”

• Social Darwinism

• “Distributer of wealth”

• Bessemer process

• Sir Henry Bessemer (1855 - Briton)

• Steel made from pig iron (crude ion)

• Adds oxygen

• Steel

• Miracle material of post-Civil War era

• Bessemer Process made it cheap

• Price ↓ use ↑

• By 1880 - 1.4 million tons produced

• Promoted by Carnegie

• J. Piermont Morgan

• Born wealthy

• Boarding school in Switzerland and University in Germany

• (1857) sent to New York

• (1860) J. Piermont Morgan and Company - channeled European capital into the US

• Investment banker

• Acquired railroads (controlled ⅙ of railroads)

• Consolidated steel industry

• United States Steel Corporation - first billion-dollar corporation

• Investment bankers: buy corporate stock and bonds wholesale and sell them to make profit

The Working Class

• Wages and working hours

• Long-term decline in prices and cost of living, real wages and earnings ↑

• Average - 59 hours of work or 6 ten hours days

• Steelworkers about 12 hours/day

• Many worked 7 days or 84 hour/week

• Kids: operating machines, sorting coal, stitching clothes, shucking oysters, peeling shrimp, canning food, blowing glass, and tending looms

• Why kids worked: parents desperate for income

• Working conditions

• Dangerous

• Lack of safely devices, ventilating fans, and fire escapes

• Likelihood of becoming an adult: 50%

• Why protest: wage cuts and other grievances

• The Great Railroad Strike of 1877

• 10% wage cut → walkouts and sympathy demonstrations

• (Pittsburgh) striking workers burned 39 buildings and destroyed thousands of railcars and locomotives

• Nonstiking rail workers were harassed and assaulted

• Federal troops quell the violence

• Strike failed

• Demonstrated union strength

• Sand-lot incident

• (California) San Francisco sand lot intended to express sympathy for the railroad strike ends with violent attacks on passing Chinese

• Chinese became handy scapegoats for frustrated white laborers

• Denis Kearney and the working men’s party of California which called for no more Chinese immigration

• Kearney didn’t succeed to create a durable movement

• Anti-Chinese becomes a national issue → prohibition of Chinese immigration for 10 years

• Craft Unions: job-conscious unions

• National Labor Union (NLU)

• Delegates from labor and reform groups more interested in political and social reforms

• 8 hours work days, workers’ cooperative, greenbackism, and equal rights for women and African Americans

• After head died it disbands (1872)

• 1864 Contract Labor Act:

• Passed during the Civil War to encourage the importation of laborers by allowing employers to pay for their passage to America

• Repealed thanks to influence from National Labor Union

• Knights of Labor

• Founded by Uriah S. Stephens - a Philadelphia tailor and Mason

• Started in 1869

• (1878) established Knights of Labor as a national organization, creation of bureau of labor stats and mechanics’ lien laws, elimination of convict-labor competition, establishment of 8 hours work day, and use of paper currency

• Equal pay for equal work by men and women

• Emphasized reform measures and preferred boycotts to strikes as a way to put pressure on employers

• Proposed to organize worker cooperatives

• All members who worked for wages except lawyers, doctors, bankers, and liquor sellers

• The Noble Order of the Knights of Labor (full name)

• Creation of the federal bureau of labor statistics

• The Foran Act of 1885

• 1880 federal law providing arbitration of labor disputes

• Terence V. Powderly

• 31 years old mayor of Scranton, Pennsylvania who succeeded Stephens

• Born of Irish immigrants

• (16 years old) worked for a railroad

• Unsuited to lead Knights of Labor

• Frail, sensitive to criticism, and indecisive at critical movements

• Opposed strikes

• Knights of Labor had greeted growth during his time

• Anarchism

• Europe generated the doctrine of anarchism

• Believed the government was an abusive device used by the rich and powerful to oppress and exploit the working poor

• Dreamed of eventual disappearance of government

• Promoting revolutionary actions

• Use of dramatic violence against representatives of the government

• 1 May 1886

• Knights of Labor organizers set 1 May as the deadline for adopting an 8-hours work day

• Deadline passed = striked (40,000 people in Chicago)

• “Scab”

• Non-union workers who defied the strike

• Clashed with striking union workers outside the McCormick Reaper Works plant

• McCormick’s Reaper strike

• Plant that made farm equipment

• Clashing of union striker and scabs

• Police arrived → shots rang out → 2 strikers killed

• Haymarket square bombing

• 4 May 1886

• Mass demonstration in Haymarket Square to protest killings

• Someone threw a bomb at the police

• First terrorist bombing

• Chaos and police firing at crowd killing and wounding others (including other policemen)

• All labor meetings baned across the city

• Samuel Gompers

• Founding president of the American Federation of Labor (AFL)

• “I abhor anarchy, but I also abhor injustice…”

• Born in England of Dutch Jewish Ancestry

• (1864) cigarmakers union

• Presidents of New York City’s local union in 1877 

• Died in 1924

• Goals of American Federation of Labor 

• Higher wages

• Shorter hours

• Better working conditions

• Avoided involvement with utopian ideas or politics

• Affiliates ⇒ the United Mine Workers, the International Ladies Garment Workers, and the Amalgamated Clothing Workings

• Homestead Plant

• A steel plant near Pittsburgh

• Henry Clay Frick becomes president in 1889

• Frick cuts number of skilled workers 

• Company announced a negotiation date of 25 June

• Stike begins

• Frick builds a barrier

• 14 hours battle between Pinkerton Detectives and Union strikers

• Pinkertons surrender

• ⅕ strikers hired back

• Carnegie and Frick quelled and eliminated the Union (Amalgamated Association of Iron and Steel (1876))

• Henry Clay Frick

• President of Homestead Works

• Failed assassination by Lithuanian immigrant Alexander Berkman - shot 2 times in neck and stabbed 3 times - 23 July

• Pinkerton Detective Agency

• Union busting men

• 300 hired by Frick

• Surrendered and were marched away subjected to taunts and beatings

• Fort Frick

• Frick, in no mood to negotiate, build a 12 ft high fence around the entire fence

• Equipped with watchtowers, searchlights, and barbed wire

• Dubbed Fort Frick

• Alexander Berman

• Lithuanian immigrant

• Tried to assassinate Frick

• Outcome of the Homestead Stike

• ⅕ of strikers rehired

• Strikers are penniless and demoralized

• Accepted company terms

• Pullam, Illinois

• Pullman strike paralyzed 27 states and territories

• Pullman Palace Car Company

• Company town

• A town where a companies workers were required to live

• Rents and utilities cost more than neighboring towns

• Pullman stikes causes

• During the depression of 1893, George Pullman laid off 3,000/5,800 employees and cut wages 25-40%, but rent and other changes remained the same

• Pullman then fired 3 members of a workers grievance committee

• Strike begins 11 May 1894

• Eugene V. Debs

• Founder of American Railroad Union - Pullam’s workers were joining his union

• Gangly

• Towering influence and charismatic

• Child of immigrants

• (14 years old) work for Indiana railroad

• Socialist post-jail

• Social Democratic Party

• More successful than De Leon

• American Railway Union: founded by Debs

• Railroad executives want Pullman cars connected with mail cars

• Pullman refuses to negotiate with Debs

• Railroad executives hire strikebreakers to hook Pullmans cars to mail cars (federal property) to end strike if strikers clashed with federal cars (feds said mail cars must be running)

• President Cleveland’s involvement

• (3 July 1894) Cleveland sent troops into the Chicago area to geet Illinois governor to keep mail running

• Few days later district court cited Debs for violating the injunction → served 6 months in jail - Debs gets into socialist literature

• Marxisms in the US

• A strain of socialism

• German imports

• Karl Marx’s International Workingmen’s Association (First Internation) founded in 1864 moves from London to New York

• Socialist Labor Party - German-dominated

• Daniel De Leon

• Editor of a Marxist newspaper, the people, he became a dominant figure in the Socialist Labor Party

• Propose socialist industrial unions and to build political power to rid of government

• Socialist Trade and Labor Alliance

• Preached revolution not by violence

• Socialist Party of America

• Debs followers and secessionists from De Leon’s party set up the Socialist Party of America

• DEbs polled over 400,000 votes (1904) and 900,000 or 6% popular vote in 1912

• (1910) Milwaukee elected a socialist mayor and congressman

• Reached its peak in 1912

• Split after disagreements over America’s participation in WWI

• IWW Wobblies (Industrial Workers of the World)

• Parallel efforts during the years of the socialist party to revive industrial unionism

• Chief base was the Western Federation of Miners organized at Butte, Montana in 1893

• Violent confrontations with unyielding mine operators who mobilized private armies against it in Colorado, Idaho, and elsewhere

• Opposed American Federation of Labor’s philosophy

• “One big union” for workers skilled or unskilled

• Destroy government and replace with one big union

• Split by sectarian disputes

• William D. “Big Hill” Haywood

• Western Federation

• Leader figure/type

• Hardrock miner, union organizer, and socialist from Salt Lake city despised the American Federation of Labor

• IWW and Haywood

• Engaged in battles with employers, strike at Lawrence, Massachusetts (1912)

• Strike of silk workers at Paterson, New Jersey

• Most leaders jailed for conspiracy due to militant opposition as America enters WWI

• Haywood flees to Soviet Union and married a Russian and died in 1928 → honored burial in the Kremlin Wall

Extra

• Elizabeth Gurley: chained herself to a lamppost at 18 years old

• Joe Hill

• “Goodbye Bill. I die like a true rebel. Don’t waste time mourning. Organize”

• Swedish America Singer

Chapter 19