Attempted Regulation and the Rise of Labor. Business Consolidation TRUSTS: a combination of corporations that agreed to turn over their stock to a central.

Attempted Regulation and the Rise of Labor

Business Consolidation

TRUSTS: a combination of corporations that agreed to turn over their stock to a central board of trustees in return for trust certificates. The certificates then pay DIVIDENDS.

Rockefeller had made Standard Oil a Trust or what we know as a MONOPOLY.

With total control over an industry the company controlled the price.

Rockefeller

The Standard Oil Trust

Cornelius Vanderbilt

The Commodore was famous for

his railroad trust.

Vanderbilt Trust

FREE ENTERPRISE

• The actions taken by Rockefeller and Vanderbilt violated the concept of free enterprise. Free enterprise is a society in which individuals have the right to compete freely.

• In 1892, The Supreme Court of Ohio declared that the Standard Oil Trust to be illegal under anti-trust laws.

Finding ways around the trusts

• HOLDING COMPANIES: a company that bought controlling interest in other corporations. Standard Oil controlled the price and production of 20 different oil companies.

• POOL: an agreement by competing companies to eliminate competition by dividing their business.

• INTERLOCKING DIRECTORATE: an arrangement in which some or all of the directors of one company were directors for other companies as well.

Attempts at regulation• In the competitive, laissez-faire climate of the 1800s,

government did not care about workers. Many workers scraped by on less than $500 per year while tycoons got very, very rich.

• In 1887, the government passed the INTERSTATE COMMERCE ACT. It required railroads to publish railroad rates, outlawed pools, outlawed discrimination on rates (short v. long hauls). It also set up the Interstate Commerce Commission. At first it was almost useless, but would be important in time.

• The government grew worried about the power of corporations, and in 1890 Congress passed the SHERMAN ANTITRUST ACT, which made it illegal to form trusts that interfered with free trade, though they only enforced the law with a few companies.

• Factory workers were mostly Europeans immigrants, children, and rural Americans who came to the city for work.

• Workers often worked 12-to-16-hour days, six days a week, in unhealthy conditions without paid vacation, sick leave or compensation for common workplace injuries.

• By the late 1800s working conditions were so bad that more workers began to organize, trying to band together to pressure employers into giving better pay and safer workplaces.

The Rise of Labor

Why had the labor force grown?

• General migration from farms to cities. In 1870, 53% of Americans were farmers. In 1910, 37% were farmers. It was difficult to make money on farms.

• Immigration from Europe. From 1870 to 1900, 13 million people came to the US. By 1890, ¼ of all Americans were foreign born.

• Women entered the workforce. Lower class had to work. They did jobs such as clerks, secretaies, teachers, social workers, in textile miles, and tobacco factories. In 1900, 5.3 million women worked outside the home (12% of the workforce).

Working Conditions

• Work was monotonous, there was little pride in the work, and most felt like a “cog in a wheel”.

• The problem of “real wages”• Company towns• Continued effects of the business cycle• Long hours: 1800s- 65-70 hours per week• Accidents: The Jungle by Upton Sinclair• Sweatshops and piece work

Sweatshops: 1.75 million children under the age of 15 worked. Twenty percent of all children between the ages of 10 and 15 had jobs.

The Union Movement

Types of Unions:

1) trade unions-same type of job skills

2) regional organization-believed in an 8 hour day

3) national/federal unions

The First Unions

National Labor Union (NLU) 1866Tried to unite groups together to gain leverage.

William Sylvis was the leader.Their goals were: 1) to develop workers

cooperatives and 2) currency reform.In 1872, it became the National Labor Reform

Party. They even ran a person for president.Results: Congress did adopt an 8 hour day for

federal employees. The NLU also helped in the creation of the Department of Labor.

Early Unions

The Knights of LaborThey were founded in 1869 by Uriah Stephens and later by

Terence Powderly.The had multiple causes:1) temperance2) currency reform3) 8 hours days4) an end to child labor5) safety inspections6) cooperativesThey opened their union to blacks and women (Frank

Farrell and Leona Barry)

Their methods:1) boycotts2) arbitration3) strikes4) political pressureResult of their work?1) they failed to win a number of battles2) they became associated with violence3) conflict within the group

The Knight of Labor

Early Unions

The American Federation of Labor

Founded in 1866 by Samuel Gompers

It was a federation of trade unions of skilled workers and some industrial workers

Early Unions

Causes:

1) shorter hours

2) better pay

3) job security

4) injury benefits

Tactics:

1) collective bargaining

2) strikes

By 1900, they had 500,000 members

The Iowa Connection: John L. Lewis

John Llewellyn Lewis (February 12, 1880 – June 11, 1969) was an American leader of organized labor who served as president of the United Mine Workers of America from 1920 to 1960. He was a major player in the history of coal mining. He was the driving force behind the founding of the Congress of Industrial Organizations, which established the United Steel Workers of America and helped organize millions of other industrial workers in the 1930s. After resigning as head of the CIO in 1941, he took the Mine Workers out of the CIO in 1942, then back into the American Federation of Labor in 1944

Problems of the Labor MovementNo more than 10% of all workers ever belonged to the

union during this era.Why?1) joining a union was a sacrifice for individual workers

(dues)2) it could cost a person their job3) the unique American social patternsThe US population was far more heterogeneous than any

country ethnically and racially. There were language barriers, prejudices, and skilled workers did not like being associated with the unskilled.

Most Americans believed in CAPITALISM and the rights of the individual. Unions were viewed as promoting class warfare and SOCIALISM.

Problems of Labor Movement

Management found ways (tactics) to weaken unions:

1) threaten job loss

2) blacklists

3) yellow dog contracts

4) welfare capitalism- known today as benefits

After or during strikes?

1) lockouts

2) scabs (strikebreakers)

3) injunctions: the Sherman Anti-trust Act of 1890 allowed this provision if the union were involved in conspiracy in restraint of trade

4) open shops: today we call this right to work

Labor Clashes

The Railway Strike of 1877

In 1873, a financial panic occurred, so railroad companies had to make cutbacks.

What did they do?

1) cut workers pay as much as 35%

2) workdays were extended to 18 hours a day

3) free travel to and from work was eliminated

4) in 1877, another 10% of wages was cut by the Pennsylvania RR and Ohio (B+O) line.

The Railway Strike of 1877

July 16, 1877: 40 B+O workers held a work stoppage. Trains went anyway. At Martinsburg, West Virginia workers abandoned their trains and took over the town.

The result:The governor of W.Virginia

sent two companies of state militia to regain control.

It starts a chain reaction nationwide.

The Railway Strike of 1877

Troops take on workers in Pittsburgh, Buffalo, San Francisco and Toledo

In Philadelphia, 20 are killed; 11 are killed in Reading

For 2 weeks, nearly 2/3 of the nations trains were stopped.

Most companies hired new workers, and strikers and the union looked like dangerous radicals.

The Haymarket Riot

In Chicago at McCormick Harvester Company a strike had been going on for a long time and replacements (scabs) had been hired.

On May 3, 1886, the strike breakers were attacked by a group of about 200 workers with sticks and stones. Police came and four die.

The Haymarket RiotAnother rally followed on May 4,

1886.At Haymarket Square 3000

people including many there called ANARCHIST protested for striking workers.

During the rally a bomb was thrown at the police. The blast and gunfire resulted in the death of 7 and approximately 66 hurt.

August Spies and 7 other anarchists will be tried and convicted of murder. Another will be put in jail for 15 years. Those murder convictions resulted in the execution of 5. It became a major set back for all strikes and strikers.

The Homestead Steel Strike

This strike took place at the Carnegie’s Steel Plant in Pennsylvania.

25,000 members of the Amalgamated Association of Iron and Steel Workers in 1889 had negotiated a contract for Homestead Workers.

The Union tried to renew the contract in 1892 and the company refused.

The company said the new Amalgamate had no right to negotiate.

The company counters the proposal by refusing the pay raise and offers an 18 to 26 percent cut.

The result was a massive strike.

The company responses through its manager Henry Frick. They order a lockout and begin to hire strike breakers.

Picket lines begin and the strike it on.

The Homestead Steel Strike

The company hired a private investigators the Pinkerton Private Detective Agency to insure the safety of strikebreakers.

Angry workers battle the guards resulting in 3 guards and 7 strikers killed.

Henry Frick

The Homestead Steel Strike

After conflict and violence escalated between the Pinkerton guards with the guards taken prisoner by the strikers. The National Guard was sent to clean up the problems.

Amalgamate (AA) is crushed and unions take another hit.

The Pullman StrikeIn Pullman, Illinois, a company

town was built by George Pullman near Chicago for his car factory.

The town was nice and advanced including a school.

The problem? Workers resented the company control over their lives.

Rules: alcohol was prohibited, they had to shop at company stores and banks, and, they had to rent, pay taxes and dues out of their salary

You did have to live there, but would be the first fired or layoff if you didn’t.

The Pullman Strike

In 1893, a depression occurs and 6000 workers are laid off.

Workers pay was cut by ¼ however, rent stayed the same.

In May of 1895, a committee of workers asked for rent and tax reductions.

Although the committee had been promised no reprisals for asking, 3 were laid off.

The next day, 10,000 walked off the job.

The Pullman Strike

After the walkout, Eugene V. Debs request arbitration. Pullman refuses and the strike spreads.

By June 30, 1895, most of the major rail centers were tied up.

July 4, 1895, Grover Cleveland (President), ordered federal troops into Chicago saying the strike interfered with federal mail service.

Violence spreads.

The Pullman Strike

The result:An injunction is filed and a judge

ordered the end of the strike. Debs, a socialist, and other strike leaders will be jailed.

During the course of the strike, 13 strikers were killed and 57 were wounded. An estimated 6,000 rail workers did $340,000 worth of property damage (about $6,800,000 adjusted for inflation to 2007).

Eugene Debs

The Pullman Strike• At the time of his arrest, Debs was not

a Socialist. However, during his time in prison, he read the works of Karl Marx. After his release in 1895, he became the leading Socialist figure in America. He ran for President for the first of five times in 1900.

• A national commission formed to study causes of the 1894 strike found Pullman's paternalism partly to blame and Pullman's company town to be "un-American." In 1898, the Illinois Supreme Court forced the Pullman Company to divest ownership in the town, which was annexed to Chicago.

• Pullman thereafter remained unpopular with labor, and when he died in 1897, he was buried in Graceland Cemetery at night in a lead-lined coffin within an elaborately reinforced steel-and-concrete vault. Several tons of cement were poured to prevent his body from being exhumed and desecrated by labor activists. George Pullman

Conclusions• By 1900, working

conditions, wages and hours of work were little improved. Only 3% of all workers belonged to unions at this time.

• Unions were seen as ineffective and violent.

• However, the AFL would survive to fight later.

What are labor rules that affect you today?

Iowa child labor laws