ECONOMIC CONFLICT IN NINETEENTH

CENTURY AMERICA

The Rise of Industry and Organized Labor

*Population growth in the United States created a large pool of cheap industrial laborers.

*A rich supply of natural resource: timber, coal, iron ore, precious metals.

*Entrepreneurial spirit reflected in legal code: protecting private property, low taxes.

*J.P. Morgan dominated banking industry: liberal lending practices; easy credit.

* Railroad systems stimulate the economy in the West.

The Growth of Corporations

Because corporations main goal is just to make money, they don’t always act in the most responsible manner. Some corporations used unfair methods to eliminate competition and raise prices on consumers – a move which hurts free enterprise, and hurts consumers, but benefits the corporation and its shareholders. Corporations have used the profit motive to justify poor working conditions, unfair business practices like trusts, pools, or monopolies, and other forms of corruption.

In addition, corporations are a have a collective mindset which can, at times, discourage the taking of personal responsibility: the board of directors can justify many of its decisions by citing the need for shareholder to make money. If others are influenced negatively, but the ends justify the means, then so be it.

The Amoral Disposition of Corporations

The Case Against CorporationsThe Consolidation of Economic and Political Power in 19th Century Thought

While the Communist

Manifesto was not

strictly intended for an

American audience, it did

resonate with more

radical labor unions in

the 19th Century – and it

still does today in certain

circles. By and large,

though, Americans

commitment to the

maintenance of property

rights and the peaceful

exchange of power

prevented any

widespread endorsement

of Marxism.

The Communist Manifesto, 1848

Abraham Lincoln warned in the 1860s that Corporations were a threat to American Liberty

“I see in the near future

a crisis approaching

that unnerves me and

causes me to tremble

for the safety of my

country. As a result of

the war, corporations

have been enthroned

and an era of corruption

in high places will

follow, and the money

power of the country

will endeavor to prolong

its reign by working

upon the prejudices of

the people until all

wealth is aggregated in

a few hands and the

Republic is destroyed.”

Corporations Built the United States Economy

On the other hand,

companies like

Andrew Carnegie’s

US Steel company

and Rockefeller’s

Standard Oil

provided the

resources to build

much of the United

States – creating

jobs for a growing

populations,

establishing the

modern economy,

and unifying the

nation.

James Pierpont Morgan

By using his banks

to invest in

troubled railroads –

then merging the

railroads with rival

companies to

decrease

competition and

increase prices –

J.P. Morgan was

able to make an

enormous fortune.

His companies

were known for

unfair business

practices.

Railroads Stimulated the Economy by Facilitating Regional Trade

Railroads influenced

major industries

across the United

States – mining,

ranching, farming,

steel, coal, and real

estate speculation

were all bound to the

industry throughout

the 19th Century.

Anti-competitive

practices like pools

hurt consumers, and

small businesses,

though. Everyone

had to settle up with

the Rails.

Monopolies are

companies which

have eliminated all

competition in their

particular field of the

economy. Without

competitors,

companies can

charge extremely

high prices, hurting

consumers and

workingmen. If

rivals attempt to

emerge, monopolies

can usually strangle

them out of the

market by

undercutting them.

MONOPOLIES, MONOPOLIES, MONOPOLIES.

John D. Rockefeller

The Standard Oil Trust of John D. Rockefeller

The Standard Oil Trust

Carnegie Steel

helped to build

America – from the

railroads spanning

the country to the

skyscrapers

touching the sky to

the Brooklyn

Bridge, connecting

the major

population centers

of New York and

Brooklyn in 1883.

Andrew Carnegie’s Steel Company

Cornelius Vanderbilt, Railroad Baron

Cornelius

Vanderbilt

consolidated most

of the Railroads in

the state of New

York and created a

vast fortune for

himself and his

family. Like many

other aristocrats

of the Gilded Age,

he became a great

philanthropist

after accumulating

great wealth.

In this political cartoon, Vanderbilt, Jay Gould, Cyrus Field, and Russell Sage are portrayed as living a life of luxury at the expense of the masses.

Trusts are

combinations of

businesses which join

together in order to

decrease or eliminate

competition and raise

prices. The most

notorious of these was

the Standard Oil Trust,

which had a strangle

hold on the petroleum

industry for decades.

To maximize profits,

competition was

undermined and

employees were poorly

compensated.

Trusts

The Exploitation of WorkersCorporations, trusts, and interstate business models who were driven by the profit motive were willing to allow:

• Low wages

• Dangerous Conditions

• Long hours

• Child labor

Women outnumbered men in a number of workplaces, including the ones below:

The Textile Mills – of the Cotton Industry

The Tobacco Factories of the South

Garment Factories of New York City

Women in the Workplace

Women at the Textile Mills – Lowell Mills, Massachusetts

Women in the Tobacco IndustryNorth Carolina

Garment Industry of New York City

Children were forced to work in a variety of fields, including all of the following:

textiles, tobacco factories, coal mines,

garment sweatshops.

Because of the exploitation of children in the workplace, reform minded individuals like Florence Kelley and Horace Mann began to advocate for compulsory education in the United States.

Child Labor

Children Working in the Coal Mines

Children of the Textile Mills

The dangers faced on the job were numerous, depending on the type of work men and women did.

Coalminers could face cave-ins or air quality issues that caused immediate dangers or long-term concerns like emphysema or “black lung.”

Textile workers often faced lung disease from exposure to tiny cotton fibers.

Steelworkers were in danger of burns or crushing injuries constantly.

Dangerous Working Conditions

Dangers in Textile Mills

Women faced

issues with their

lungs from

working in textile

mills as well,

breathing in

cotton and fiber

filaments all day.

Many women and

children lost

fingers and toes

in the high

velocity machines

as well.

Steel Mills were extremely dangerous work environments.

Due to the open

cauldrons of

molten steel, and

the heavy

mechanized tools

which could

crush limbs, steel

mills were

notoriously

dangerous. And

most companies

offered no

compensation to

workers injured

on the job.

The Meatpacking Industry

Due to the de-

assembly line

methods used in

meat packing

plants – requiring

hasty knife work,

many workers

were injured on

the job – losing

fingers, or worse!

Labor Incidents of the 19th and Early 20th Centuries

Turmoil and Conflict between Organized Labor and Industry.

Terence V. Powderly, Knights of Labor

America’s first major

labor union, this

group accepted both

skilled and unskilled

employees and

protested low wages

and unsafe conditions

at public rallies. In

1886, at a meeting

against the

McCormick

Harvesting Company

in Chicago, IL, an

anarchist threw a

bomb into the crowd

killing several police

officers and

protesters. The

Knight reputation

soon declined – blame

by association.

The Knights of Labor

Samuel Gompers, leader of the AFL

The American Federation of Labor

When Andrew

Carnegie attempted

to slash his workers

wages, they walked

out on strike.

When he hired

strikebreakers, or

“scabs” to replace

them, they fought

violently to prevent

the mills from re-

opening.

Eventually, the

Pennsylvania State

Militia forced and

end to the conflict

using violent force

of their own.

The Homestead Strike of 1892

“Mother” Jones

was one of the

many women

involved with

supporting labor

unions. She was

especially

interested in the

plight of working

children –

fighting for child

labor laws – but

also very much

involved with

supporting

strikers and

leading protest

rallies.

Mother Jones: Mary Harris Jones

In one of the saddest

and most well

publicized disasters

of the early 20th

Century, a group of

approximately 150

immigrant laborers

were trapped –

literally locked in by

their employers – in a

burning building in

New York City.

Changes to fire codes

and improvements to

the working

conditions were soon

passed to protect

employees and

factory workers.

The Triangle Shirtwaist Fire of 1911

Eugene V. Debs

The leader of the American Railway Union and a tireless advocate for the rights of labor, Debs would be imprisoned for his role in the Pullman Strike and later as a violator of the Sedition Act during World War I. He was a confirmed member of the Socialist Party, and ran for President several times – once from prison. Although he always lost, he garnered close to 5% of the vote.

When workers at

George Pullman’s

sleeping and dining

car companies went

on strike to protest

a wage cut, Eugene

V. Debs of the

American Railroad

Workers Union

directed him men

not to load or

unload any train

with a Pullman car

attached – the

result was

deadlock, then

intervention by the

President, Grover

Cleveland.

The Pullman Strike

The Industrial Workers of the World: “The Wobblies”

The Wobblies

Describing

themselves as

“One Big Union”

and engaging in

singing and public

demonstrations as

well as outright

violent acts, this

union was feared

for its radical and

ideological agenda

– they fought for

higher wages and

safer working

conditions.

Joe Hill: The Wobblies Singing Martyr

Joe Hill, the songwriter and protester who lead dozens of strikes in the miner’s camps of the West, was eventually convicted of a murder which took place at one of the protesters sites. He was put to death in Utah during the 1910s. Wallace Stegner’s historical fiction on his life gives a thorough account of the Wobblies activities.

William “Big Bill” Haywood“Big Bill” Haywood was a founding member of the Industrial Workers of the World and a member of the Socialist Party of the United States. Because he preferred direct action – read: violence – instead of political maneuvering, he was frequently in conflict with the Socialists (who preferred political demonstrations) and the owners of companies (who preferred to make more money!). He played a key role in both the Colorado Labor Wars of the 1910s and the Lawrence Textile Strike of 1912 in Massachusetts. After being accused of murdering the Governor of Idaho – and acquitted – Haywood eventually emigrated from the United States and became a resident of the Soviet Union.

Unions – through their direct actions campaigns and their educational programs – put heavy pressure on corporations and political bodies to reign in the excesses of capitalism. Unions would eventually establish minimum wage laws, reduce labor hours and increase leisure time, improve safety conditions in the workplace, and ban child labor.

The Sherman Anti-Trust Act was a passed in 1890 – although judges willfully misinterpreted the law for years in order to disrupt unions.

Theodore Roosevelt and his successors – William Howard Taft and Woodrow Wilson – enforced the Sherman Anti-Trust Act more vigorously, ending unfair business practices by railroads and breaking up the Standard Oil Trust.

In 1914, the Clayton Anti-Trust Act was passed to allow even more vigorous prosecution of unfair business practices.

Resolving Unfair Business Practices