Throughout the age of industrialization, businesses grew from small family owned companies to large corporations in just a matter of years. This exhibition will focus on how exactly these businesses grew, and how they affected those directly involved. Those directly involved were the people who became subject of the businesses, including women and children. This exhibit will examine what exactly caused this rise of big businesses and how they became so industrial. Additionally, it will look at how robber barons acquired all their power and how they obtained so much of the nation’s wealth. The primary way that robber barons were able to acquire so much wealth was that there were no laws or regulations preventing these gains. These powerful male figures gaining all of this power and wealth had very detrimental effects on minority groups.
Throughout the early years of American history, large corporations similar to ones of today were non-existent, with wealth was distributed fairly evenly. The years following the Civil War, show the United States’ first dramatic and rapid increase of resources and industrial development. The economy of the United States outrageously boomed; by 1913, the US produced one-third of the worlds’ industrial output (Foner 2017, 609). This rapid increase of resources and industrialization caused an even more rapid increase in business. These businesses became known as trusts or monopolies. Paul Sweezy, in his Quarterly Journal of Economics defines monopoly as a seller who, “Deals with a product the demand curve for which is independent of the price he charges, and of the profit he makes” (Sweezy 1937, 362). In simpler words, monopolies eliminated all of their competition and became the top and sole sellers of a product. Prior to monopolies being recognized and identified, the railroad industry was exhibiting extreme monopolistic tendencies. These businesses were a result of mass movements out west. Railroad companies were revolutionary because they, “brought new methods of management, new forms of corporate finance, different dimensions in labor relations, new ways of competition, and a new relationship between business and government.” (Porter 2006, 35). Standard Oil and the Carnegie Steel Company were two of the first and more well-known monopolies. Between the 1870s and 1890s, rapid business growth caused the national economy to suffer as they were seeing a major decline of prices; this became known as the nations’ first depression (Foner 2017, 608). Businesses engaged in brutal competition with each other. Andrew Carnegie and his process of vertical integration played a huge role in the development of monopolies. This was a process in which a corporation secured control of its’ customers and suppliers with, “means of both maximizing profits and minimizing vulnerabilities and risks” (Olson and Mendoza 2015, 605). Asides from Carnegie, John Rockefeller implemented this strategy as well. Rockefeller started out with horizontal expansion, where competitors are bought out, but then realized vertical expansion fit his needs better. Seeing the effects of these monopolies, the US government began to pass legislation in order to prevent these toxic businesses. Alabama became the first state to enact an anti-trust law on February 23, 1883 (Riggs 2015). Seven years later, the Sherman Anti-Trust Act was passed. This was the first large piece of legislation to ban trusts, which was based on Congress’ constitutional power to regulate commerce and interstate business. Yet, this was dismantled five years later (Our Documents).
While this massive industry increase certainly benefited robber barons, the other 99% of the nation was not as lucky. Millions of workers lost their jobs or faced wage deductions. The workers who were still employed worked in horribly dangerous conditions; most were factory workers who worked up to sixty hours per week with no injury protection. Women especially suffered in extremely dangerous factory conditions. Events such as the Triangle Shirtwaist Fire showcased how large companies were treating their workers.
Theodore Roosevelt’s presidency between 1901 and 1909, showed further support for the anti-trust movement. His movement was unique, for he did not support the complete dismantling of businesses, he just wanted to place them under governmental regulation (Dorsey 1995, 726). He called his program the Square Deal, and it aimed to distinguish between positive and negative corporations. One of his first big victories was the Supreme Court having the Northern Securities Company, owned by J.P. Morgan, dissolved in 1904. (Foner 2017, 725). By the end of his Presidency, Roosevelt did not dismantle as many corporations as his predecessors, yet what he did do was lead, “a symbolic crusade against impersonal and amoral forces” (Dorsey 1995, 727). He was one of the first figures for Americans who put up an undivided front of determination to dismantle these operations. Following the Roosevelt presidency, there were multiple pieces of legislation passed to help further the anti-trust cause.
This exhibit will primarily focus on the Gilded Age and the Progressive Era. It will chronologically go through each time period each time period where developments were made in terms of the rise of big business or the effects. The Second Industrial Revolution will be another key area examined. It will additionally show how, as the 20th century began to progress, businesses changed in terms of regulation and wealth management. Key figures include previously mentioned Robber Barons, such as Carnegie, Morgan and Rockefeller. Additionally, how other key figures, such as women, children and immigrants who were at a disadvantage in terms of this economic growth will be examined. In terms of women, key events such as the triangle shirt waist fire will be examined. Many different groups of people and more than one time period will be examined during this project, but the concept linking all of them is how and why they were affected by Big Business and Robber Barons.
Bibliography:
“Chronology.” In Development of the Industrial United States, 1878-1899, edited by Rebecca Parks, 55-58. Vol. 1 of American Eras: Primary Sources. Detroit, MI: Gale, 2013. Gale eBooks (accessed December 18, 2019). https://link.gale.com/apps/doc/CX2737200029/GVRL?u=carl22017&sid=GVRL&xid=9d8bd894.
Dorsey, Leroy G. “Theodore Roosevelt and Corporate America, 1901-1909: A Reexamination.” Presidential Studies Quarterly 25, no. 4 (1995): 725-39. www.jstor.org/stable/27551508.
Foner, Eric. Give Me Liberty!: an American History. New York: W.W. Norton & Company, 2017.
“Monopolies, History of.” In Gale Encyclopedia of U.S. Economic History, edited by Thomas Riggs. 2nd ed. Gale, 2015. https://envoy.dickinson.edu/login?url=https://search.credoreference.com/content/entry/galegue/monopolies_history_of/0?institutionId=2613
Morawetz, Victor. “The Sherman Anti-Trust Act.” American Economic Association Quarterly, 3rd Series, 11, no. 1 (1910): 321-27. www.jstor.org/stable/3000036.
Olson, James S., and Mendoza, Abraham O. 2015. American Economic History: A Dictionary and Chronology. Englewood: ABC-CLIO, LLC. Accessed December 18, 2019. ProQuest eBook Central.
Porter, G. (2006). The rise of big business, 1860-1920 (3rd ed.). Wheeling, Illinois: Harlan Davidson, Inc.
“United States v. Standard Oil (1911).” In Gale Encyclopedia of U.S. Economic History, edited by Thomas Riggs. 2nd ed. Gale, 2015. https://envoy.dickinson.edu/login?url=https://search.credoreference.com/content/entry/galegue/united_states_v_standard_oil_1911/0?institutionId=2613
“Sherman Anti-Trust Act (1890).” Sherman Anti-Trust Act (1890). Our Documents. Accessed December 19, 2019. https://www.ourdocuments.gov/doc.php?flash=true&doc=51.
Sweezy, Paul M. “On the Definition of Monopoly.” The Quarterly Journal of Economics 51, no. 2 (1937): 362-63. www.jstor.org/stable/1882094.