1. Big Business &Big Business &
Government PolicyGovernment Policy
(1870-1900)(1870-1900)
How did government &How did government &
big business interactbig business interact
during the late 1800’s?during the late 1800’s?

2. Big Business & Government PolicyBig Business & Government Policy
 During the 1870’s & 80’s big industrialistsDuring the 1870’s & 80’s big industrialists
attempted to formattempted to form monopoliesmonopolies..
 (Carnegie & Rockefeller)(Carnegie & Rockefeller)
 What is a monopoly?What is a monopoly?
 AA monopolymonopoly is when a producer has total controlis when a producer has total control
over an industry.over an industry.
 Were the great industrialistsWere the great industrialists Captains ofCaptains of
IndustryIndustry oror Robber BaronsRobber Barons ??
 They could be consideredThey could be considered Captains ofCaptains of
IndustryIndustry because they risked capital tobecause they risked capital to
make business growmake business grow
 They could also be consideredThey could also be considered RobberRobber
BaronsBarons because of the unfair businessbecause of the unfair business
practices they used to increase the size ofpractices they used to increase the size of
their businessestheir businesses
 Industrialists used the theory ofIndustrialists used the theory of SocialSocial
DarwinismDarwinism to justify their unfair businessto justify their unfair business
practices.practices.

3. Three Methods of Business ConsolidationThree Methods of Business Consolidation
 Rail Road companies developRail Road companies develop poolingpooling agreements to fix rail road faresagreements to fix rail road fares
at high rates (scheme does not work because companies cheat on theirat high rates (scheme does not work because companies cheat on their
agreements).agreements).
 TrustsTrusts are developed by Rockefeller to bring control to formerare developed by Rockefeller to bring control to former
competitors. If competitors refuse to join the “Trust” Rockefeller wouldcompetitors. If competitors refuse to join the “Trust” Rockefeller would
put them out of business. Other industries begin to follow example andput them out of business. Other industries begin to follow example and
also start “Trusts”.also start “Trusts”.
 Holding CompaniesHolding Companies hold the stocks of several firms in the samehold the stocks of several firms in the same
industry. Holding Companies owned the majority of stocks within anindustry. Holding Companies owned the majority of stocks within an
industry & where able to dictate policy within the industry.industry & where able to dictate policy within the industry.
 What effecting didWhat effecting did consolidationconsolidation have onhave on
business?business?
 Business became less competitive and moreBusiness became less competitive and more
consolidated, leaving business power & nationalconsolidated, leaving business power & national
economics in the hands of a few big businessmeneconomics in the hands of a few big businessmen

4. Federal Regulation of Business BeginsFederal Regulation of Business Begins
 Congress becomes alarmed about “unfair” Business/labor practices,Congress becomes alarmed about “unfair” Business/labor practices,
enacts laws to deal with situation.enacts laws to deal with situation.
 Interstate Commerce Act (1887)Interstate Commerce Act (1887) to regulate railroad companies.to regulate railroad companies.
Congress created Interstate Commerce Commission (Congress created Interstate Commerce Commission (ICC)ICC) toto
regulate interstate regulations.regulate interstate regulations.
 ICC acts to regulate railroads (eliminates pools/rebates & regulates rates)ICC acts to regulate railroads (eliminates pools/rebates & regulates rates)
 Sherman Antitrust Act (1890)Sherman Antitrust Act (1890) act attempted to outlaw trustsact attempted to outlaw trusts..
 How did antitrust legislation impact business?How did antitrust legislation impact business?
 Limited impact (at first)Limited impact (at first)
 anti trust act was weakly worded/none of the trusts wereanti trust act was weakly worded/none of the trusts were
successfully broken.successfully broken.
 anti trust act does establish the principle that theanti trust act does establish the principle that the
government can regulate industry & break up monopolies.government can regulate industry & break up monopolies.
 Business would be better regulated later on during theBusiness would be better regulated later on during the
Theodore Roosevelt administrationTheodore Roosevelt administration

5. Organization of LaborOrganization of Labor
 Industry creates problems (poor conditions) for workersIndustry creates problems (poor conditions) for workers
 in response to poor conditions--workers begin to unionizein response to poor conditions--workers begin to unionize
 early unions are small/ineffective in dealing with worker issuesearly unions are small/ineffective in dealing with worker issues
(wages/hours)(wages/hours)
 Industrial workers face long hours/low wages/dangerous workingIndustrial workers face long hours/low wages/dangerous working
conditionsconditions
 workers fear joining unions (fear of being fired)workers fear joining unions (fear of being fired)
 immigrants are eager to fill in for striking workers.immigrants are eager to fill in for striking workers.
 Government unemployment insurance does not exist during this timeGovernment unemployment insurance does not exist during this time
periodperiod
 How have unions changed since early days?How have unions changed since early days?
 Unions have gained more political powerUnions have gained more political power ($)($) , and, and
have secured better working conditions forhave secured better working conditions for
membersmembers

6. Formation of Labor UnionsFormation of Labor Unions
 Unions develop in spite of worker’s fearsUnions develop in spite of worker’s fears
 Knights of LaborKnights of Labor (labor union) first union to become a major economic force(labor union) first union to become a major economic force
 No worker was excluded (skilled/unskilled)No worker was excluded (skilled/unskilled) --open membership----open membership--
 Knights avoid strikes throughKnights avoid strikes through arbitration/cooperativesarbitration/cooperatives are formed (workersare formed (workers
operate their own companies)operate their own companies)
 Knights attempt to win 8 hour work/Knights win major strike against rail roadKnights attempt to win 8 hour work/Knights win major strike against rail road
companies (membership increases)companies (membership increases)
 differences between skilled & unskilled workers--problems with workers ofdifferences between skilled & unskilled workers--problems with workers of
differing races begin to hurt union membership numbersdiffering races begin to hurt union membership numbers
 union became more focused on political issues/rather than worker issues (pay &union became more focused on political issues/rather than worker issues (pay &
wages)wages)
 Haymarket riotHaymarket riot occurred when violence (bomb thrown into the crowd) tookoccurred when violence (bomb thrown into the crowd) took
place during a pro union rallyplace during a pro union rally
 What impact did the Haymarket riot have onWhat impact did the Haymarket riot have on
unionism in America?unionism in America?
 Public mistrust of unions grew, membership in unionsPublic mistrust of unions grew, membership in unions
decreased,decreased, the incident was a set back for the laborthe incident was a set back for the labor
movementmovement

7. American Federation of LaborAmerican Federation of Labor
 2nd national union (still in existence today)2nd national union (still in existence today)
 membership was limited to skilled workersmembership was limited to skilled workers
 Union focused on worker issues/so called “bread & butter” issuesUnion focused on worker issues/so called “bread & butter” issues
(wages/hours/conditions)(wages/hours/conditions)
 A.F. of L. tended to discriminate against African American workers.A.F. of L. tended to discriminate against African American workers.
 African American workers, turned away from the union, are hired asAfrican American workers, turned away from the union, are hired as
strike breakersstrike breakers by employersby employers
 Women discriminated against in the male dominated A.F. of L.Women discriminated against in the male dominated A.F. of L.
 Women work under poor conditions (sweatshops)Women work under poor conditions (sweatshops)
 Women begin to form their own unions (Women’s Trade UnionWomen begin to form their own unions (Women’s Trade Union
League)League)
 How did discrimination by AF of L impact raceHow did discrimination by AF of L impact race
relations?relations?
 African Americans were hired as strike breakers (littleAfrican Americans were hired as strike breakers (little
other work available) this helped to cause an increase ofother work available) this helped to cause an increase of
tension between racestension between races

8. Radicals in the Labor MovementRadicals in the Labor Movement
 AnarchistsAnarchists believe that capitalist system could not bebelieve that capitalist system could not be
reformed/called for violent overthrowreformed/called for violent overthrow
 Socialists oppose capitalist system/seek peacefulSocialists oppose capitalist system/seek peaceful
means of changing system/call for governmentmeans of changing system/call for government
ownership of companies & industry.ownership of companies & industry.
 How did Anarchism and SocialismHow did Anarchism and Socialism
impact public opinion of unions?impact public opinion of unions?
 in some cases, fear of union membershipin some cases, fear of union membership
grows, especially later on (1920’s) duringgrows, especially later on (1920’s) during
thethe REDRED scare.scare.

9. Violent Clashes Between Business & LaborViolent Clashes Between Business & Labor
 Pay decrease causesPay decrease causes Great Railway StrikeGreat Railway Strike. Warfare breaks out. Warfare breaks out
between workers and PA state militia.between workers and PA state militia. President HayesPresident Hayes sends federalsends federal
troops in totroops in to break the strikebreak the strike..
 Homestead StrikeHomestead Strike at Carnegie steel company. Pinkerton detectiveat Carnegie steel company. Pinkerton detective
agency called in by management. Many on both sides are killed/strikeagency called in by management. Many on both sides are killed/strike
crushes steel workers union.crushes steel workers union.
 Pullman StrikePullman Strike called in protest to reduction of wages.called in protest to reduction of wages. PresidentPresident
ClevelandCleveland uses troops to bust strike stating that US mail was delayeduses troops to bust strike stating that US mail was delayed
by striking workers.by striking workers. Railway union is broken.Railway union is broken.
 The 1800's is marked byThe 1800's is marked by government use of troops to side withgovernment use of troops to side with
business over unions.business over unions.
 Why did the government side with business overWhy did the government side with business over
labor during the late 1800’s?labor during the late 1800’s?
 Government was over influenced by the power and moneyGovernment was over influenced by the power and money
of the big industrialists, union members lacked politicalof the big industrialists, union members lacked political
power….power….how has this changed?how has this changed?

10. Conclusion:Conclusion:
 How did government & big businessHow did government & big business
interact during the late 1800’s?interact during the late 1800’s?
 Government did little to regulate businessGovernment did little to regulate business
(regulatory laws lacked substance)(regulatory laws lacked substance)
 Government was influenced by power &Government was influenced by power &
money of the big industrialistsmoney of the big industrialists
 Government sided with big business overGovernment sided with big business over
the workers during strikes (used militarythe workers during strikes (used military
to break strikes)to break strikes)