A change in business origination was brought on by the growth of heavy industry and the creation of vast nationwide markets. Large businesses were able to afford to set up huge factories, install modern machinery, and employ hundreds of workers. These large enterprises required large amounts of money and new methods of management. There were great competition and greediness throughout the country. The wealth generated by industrial capitalism and big business led to “robber barons” which led to poor conditions for the workers.
These robber barons tried to purchase as many competing companies as possible. The idea of horizontal integration was often accompanied by vertical integration. A firm would seek to control all aspects of production from gain of raw materials to final delivery of finished products. One example of this is Rockefeller’s standard Oil Company. By the early 1880’s Rockefeller’s company controlled almost all the oil refineries across the nation. Rockefeller took advantage of this by demanding rail shipping rates of 10 cents a barrel as compared to his competitors’ 35 cents.
Andrew Carnegie, another robber baron, bought up coal mines and iron ore deposits for his steel mills, then bought railroads and ships to transport raw materials and send his products to markets. By owning every aspect of steel production he could limit risk and gain a guaranteed profit. The struggle for wealth became a way of life for the most aggressive Americans. Herbert Spencer accepted Social Darwinism to explain the evolution of human society. It expresses that progress occurred through competition in which the weak fall and the strong forge ahead. During this time skilled workers such as printers, tailors, and carpenters formed city wide organizations to try to get better pay.
On 18 March 1859 several months before his 20 th birthday - Rockefeller goes into business for himself forming a partnership with a neighbor, Maurice Clark. Each man put up $2000 and formed Clark & Rockefeller commission merchants in grain, hay, meats, and miscellaneous goods. At the end of the first year of business, they had grossed $450, 000 making a profit of $4400 in 1860 and a profit of ...
Many workers in the late 1800’s worked ten hours a day, six days a week. Factory production replaced skilled labor after the Civil War. Along with the change in the workplace there was a change in labor movement. Employers cut the cost of wages by hiring women and children. The workers decided to organize to maintain control over their wages and working conditions. To express their madness workers took part in boycotts, riots and rallies. The public outcry against labor organizers in general helped employers defeat the eight-hour workday reform. Boot and shoemakers formed the Knights of St. Crispin to try to block competition from unskilled workers. But like many other early unions it could not survive the high unemployment of the 1870s.
The Knights of Labor was the first national labor union to remain active for more than a few years. The union proposed new laws, including one to cut the workday down to eight hours and equal pay for both men and women. The greediness of the robber barons which led to unfair working conditions was counteracted by the creation of labor unions.