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A New Industrial Age

Section 3

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197 Guided Reading Workbook

Big Business and Labor

CARNEGIE’S INNOVATIONS;

SOCIAL DARWINISM AND

BUSINESS (Pages 447–449)

How did Carnegie take control of the

steel industry?

Andrew Carnegie attempted to

control the entire steel industry. Through

vertical integration he bought

companies that supplied his raw materials

such as iron and coal, and railroads

needed to transport the steel. He used

horizontal integration by buying out or

merging with other steel companies.

Carnegie’s success helped popularize

the theory of Social Darwinism. This

theory, based on the ideas of biologist

Charles Darwin, said that “natural

selection” enabled the best-suited people

to survive and succeed. Social Darwinism

supported the ideas of competition, hard

work, and responsibility.

1. Describe two ways in which Carnegie

tried to control the steel industry.

_______________________________

Terms and Names

Andrew Carnegie Scottish immigrant who became a giant in the steel industry

vertical integration Process in which a company buys out its suppliers

horizontal integration Process in which companies producing similar products merge

Social Darwinism Theory that taught only the strong survived

John D. Rockefeller Head of the Standard Oil Company

Sherman Antitrust Act Law that outlawed trusts

Samuel Gompers Union leader

American Federation of Labor (AFL) Name of union led by Gompers

Eugene V. Debs Leader of the American Railway Union

Industrial Workers of the World (IWW) Union of radicals and socialists nicknamed the

Wobblies

Mary Harris Jones Organizer for United Mine Workers

Before You Read

In the last section, you read about the growth of the railroad industry in

the United States. In this section, you will read about the growth and

power of big business in America and how workers united to improve

conditions in the nation’s growing industries.

As You Read

Use a time line to take notes on the achievements and setbacks of the

labor movement between 1876 and 1911.

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Section 3, continued

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198 Guided Reading Workbook

FEWER CONTROL MORE; LABOR

UNIONS EMERGE (Pages 449–451)

How did entrepreneurs try to control

competition?

Most entrepreneurs tried to control

competition. Their goal was to form a

monopoly by buying out competitors or

driving them out of business. John

D. Rockefeller used the Standard Oil trust to

almost completely control the oil industry.

Rockefeller’s ruthless business practices

earned him huge profits, but caused people to

label him a robber baron. In 1890, the

Sherman Antitrust Act made it illegal to

form a trust, but many companies were able

to avoid prosecution under the law. The

business boom in the United States bypassed

the South which continued to suffer

economic stagnation.

Workers responded to business

consolidation by forming labor unions. Many

workers worked long hours under dangerous

conditions for low wages. Women, children,

and workers in sweatshops worked under

especially harsh conditions. The National

Labor Union (NLU) was an early labor union

that persuaded Congress to legalize an eight- hour day for government workers in 1868.

The NLU excluded African-American

workers who formed the Colored National

Labor Union (CNLU). The Knights of Labor

also enjoyed success but declined after the

failure of a series of strikes.

2. Why did entrepreneurs form trusts?

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UNION MOVEMENTS DIVERGE;

STRIKES TURN VIOLENT

(Pages 451–455)

What were the two major types of

unions?

Two major types of unions made great

gains. One was craft unions. Samuel

Gompers formed the American

Federation of Labor (AFL) in 1886.

Gompers used strikes and collective

bargaining— negotiations between labor

and management to win higher wages and

shorter workweeks. Eugene V. Debs

believed in industrial unionism—a union

of all workers, both skilled and unskilled

in a single industry. He formed the

American Railway Union (ARU). Debs

and other workers turned to socialism. In

1905, a union of radicals and socialists

was formed called the Industrial

Workers of the World (IWW) or the

Wobblies. In the West, Japanese and

Mexican farm workers formed a union to

improve conditions.

Unions used strikes to improve

conditions. In 1877, workers for the

Baltimore and Ohio railroad went out on

strike. The strike was broken up when the

railroad president persuaded President

Rutherford B. Hayes to bring in federal

troops to end the strike.

Later strikes turned violent. The

Haymarket Affair took place in 1886. A

bomb exploded at a demonstration in

Chicago’s Haymarket Square in support of

striking workers. Several people were

killed. Labor leaders were charged with

inciting a riot and four were hanged

although no one knows who actually set

off the bomb. In 1892, steel workers and

Pinkerton Guards fought a battle at

Homestead, Pennsylvania, near Pittsburgh,

that left dead on both sides. Two years

later a strike against the Pullman

Company led by Eugene Debs and his

American Railway Union turned violent

when federal troops were called out to

break the strike.

Mary Harris Jones, known as Mother

Jones, gained fame as an organizer for the

United Mine Workers. The unions’

struggle for better conditions was hurt by

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Section 3, continued

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199 Guided Reading Workbook

government intervening on the side of

management. Courts used the Sherman

Antitrust Act against the workers. Despite

the pressures of government action, unions

continued to grow.

3. What were the two types of unions?

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Section 3, continued

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200 Guided Reading Workbook

As you read this section, answer the questions below about government’s

attempts to regulate big business.

a. What is it?

b. How did it help businesses such as the Carnegie Company and tycoons like Andrew

Carnegie?

c. How did it harm businesses such as Standard Oil and tycoons like

John D. Rockefeller?

1. Vertical integration a.

2. Horizontal integration a.

3. Social Darwinism a.

4. Monopoly a.

5. Holding company a.

6. Trust a.

7. The perception of tycoons as “robber

barons”

8. Sherman Antitrust Act