The initial stages of big business
The initial stages of big business
While the initial stages of big business trace back to pre-Civil War America, it was not until the post-Civil War time period that large corporations effected on American society. From Rockefeller to Vanderbilt to Carnegie and all in between, these men and their businesses had unprecedented influence on American life. John Rockefeller created the Standard Oil Trust, with the intention of his business, Standard Oil Company, becoming the oil monopoly; short after, The Homestead Strike against Carnegie Steel aroused massive public support for unions.
Likewise, big businesses’ growth and influences brought about a decline in the cost of living and the birth of a new political party. As a whole, the rise of big business in post-Civil War America caused a downward economic spiral while simultaneously increasing American hostility toward government and corporations, ultimately leading to the birth of new political and philosophical movements.
The growth of corporations in post-Civil War America led to economic deflation which subsequently widened the gap between the rich and the poor, paving the way for a change in labor and the relationships between social classes. The chart form Historical Statistics of the United States depicts the connection of the increase in big business with the improved innovations of mass production in agriculture. While improved farming equipment increased the crop production, the demand for produce declined, creating economic deflation.
In response to the farmer’s plight, Charles Macune came up with the idea of the subtreasury plan, a plan that would allow farmers to store their nonperishable commodities in government warehouses until the market prices rose. Also, as a response to the farmer’s struggle the Farmer’s Alliance was created with the intention of alleviating farming hardships. Similar to agricultural mass production, Theodore Dreiser’s Sister Carrie demonstrates how the rise in big business contributed to the mass production that spurred department stores.
Department stores like Macy’s and Wanamaker’s sold mass amounts of the same product for rock-bottom prices. As opposed to the few that could afford the pricey handmade garments in years prior, these prices allowed the masses to engage in commercial activity. The growth of big businesses clearly goes hand-in-hand with consolidation, where there is an increase availability of consumer goods for society. In order for there to be department stores and an increase in agricultural innovations, there need to be a transition from specialized labor to mass production.
David Well’s, Recent Economic Changes… asserts the opinions of a corporation leader on the switch to mass production by comparing its effectiveness and necessity to that of a military. While Wells believes specialization of labor left workers unskilled and useless, mass production stripped the worker of his independence and decreased the worker’s pride in his craft. The economic demands for mass production created sweatshops as opposed to the one-man-owned small businesses that operated prior.
The rise of big business changed labor production and impacted the economy with mass production; it also changed the labor force, allowing more opportunity for employment. Prior to this time, women generally were not active in the work force, yet the picture of female typists depicts a slew of women preforming the same task. Mass production allows for more labor opportunities because unspecialized labor entails little skill. By requiring more workers, big businesses have opened the doors for women in the workplace.
Andrew Carnegie’s, “Wealth” displays how the general population felt the impact of big business through the theories of “Social Darwinism” and “Social Gospel. ” Carnegie believed that the wealthy were fit for success and money which is why they should handle the finances as opposed to the poor, who were subject to elites’ decisions. However, the rich needed to use their surplus funds to better the community and the lives of the less fortunate because, “He who dies rich dies in disgrace. Carnegie was a model of “Social Gospel,” considering munificent donations to parks, universities, and museums. Due to these theories, the poor experienced a new financial relationship with the wealthy, where they received generous luxuries. The impacts of big business influenced the economy and lead to deflation, a larger economic gap between the rich and the poor, a change in labor, alterations in relationships between social classes, and ultimately contributed to shifts in government that spawned new political ideals.
Similar to the economic alterations brought about by the growth of corporations, big businesses contributed to a corrupt government and a wave of unprecedented political movements. The cartoon, “Big Bosses of the Senate illustrates the public’s view of government being run by the leaders of large corporations and senators aligned with trusts. The issue with the senate was that senators were not directly elected by the people and the senate was close to less powerful citizens. This allowed men with their own financial goals ahead of the welfare of the people to be elected.
Cartoonist Thomas Nast earned fame with a portrayal of senator “Boss” Tweed, New York City’s wealthy convicted fraud and extortionist, as a vulture devouring the city’s bones. In 1869, Tweed proved he was a corrupt politician when used his power to ensure his protege, John Hoffman won governor, bribed Republicans, and was convicted of forgery and larceny. Due to the corruption in government, the Sherman Anti-Trust act was created; this legislation outlawed trusts and monopolies that fixed prices.
In response to the corruption the Congress passed the Pendleton Civil Service, where candidates for federal positions were thoroughly examined, and the Interstate Commerce Act, where the Interstate Commerce Commission oversaw the interstate practices of the railroad industry. Another issue with government that was directly related to big business was the lack of organized labor. George McNeil’s, The Labor Movement, explains how helpless laborers felt about the excess power of those in charge of large companies.
To challenge the unrestrained power, Oliver Kelley founded the Grange, an organization intended to help farmers, “buy less and produce more, in order to make famers more self-sustaining. ” The Grange focused their wrath on attacking railroads which charged higher rates for short runs as opposed to long hauls. In 1877, the Grange brought the court case Munn V. S. Illinois to the Supreme Court; the Supreme Court declared the “Granger Laws” (there appeals to the railroads) as constitutional and upheld the law that set a maximum rate for the storage of grain.
While the Grange targeted some of the public’s issues with leader’s unrestrained power, most people felt like they were being exploited by large firms and wanted a way to stand up to the leaders. Samuel Gomper’s, What Does Labor Want addresses the public’s desire for unions that will ensure adequate wages and compensation for company’s negligence. Since so many American’s desired the right to directly elect senators and have the right to organize, the political party, the Populist Party, was formed with a platform containing the direct election of senators, civil service reform, and an eight-hour workday.
The document, “People’s Party Platform,” discusses how the Populist Party was dedicated to returning the government to the people, ending oppression, injustice, and poverty, and strengthening central government. The Populist Party supported referendum, the policy where voters could enact a law or express their views a proposed measure, and the subtreasury plan. Major advocates of the Populist Party included James Weaver who was the president of the party and a presidential candidate in 1892, galvanized supporters, and forefront speaker Mary Lease who spoke about big businesses making Americans “wage slaves.
Henceforth, the growth of big businesses’ contributions to a corrupt unrestrained government and newfound political movements consequently produced a plethora of sentiments from the American people. The effects of big business in post-Civil war America roused avid opinions from citizens in response to the third-class population and corporation leader’s excessive power. Carnegie’s “Wealth” exhibits the prominent turn-of-the-century philosophy of “Social Gospel,” the belief that great wealth comes with great responsibilities.
The belief came about in response to the unprecedented surplus of wealth the wealthy acquired through their profitable business endeavors. Carnegie warned the public the, “The man who dies thus rich dies disgraced,” because men have the duty to regard their surplus fortunes as a trust to be administered for the benefit of the community. Despite the fact that Carnegie responded positively to the impacts of growing corporations, many people found themselves dissatisfied with their new working conditions.
McNeil’s, Labor Movement, demonstrates the laborer’s belief that the leaders of big business obtain too much power and control over the workers. The leaders placed unfair monopolies on the food and fuel industries, corrupted the government, withheld lawful wages, and discharged and employee without cause. If employers tried to organize, corporation leaders could resort to blacklisting, a method in which he would close a factory to break a labor movement before a union could form. The majority of citizens did not respond well to the unrestrained power;
Gomper’s, What Does Labor Want, documents labor’s demands for the right to organize, adequate wages, and compensation for company’s negligence. In response to the people’s demands, Terrence Powderly founded the Knights of Labor, an organization which attempted to unify all working men and women. The Knights of Labor denounced “wage-slavery” and encouraged workers to combine their wages so that they could collectively purchase mines, factories, and stores. After declining in national importance, the American Federation of Labor (AFL), an alliance of skilled workers in craft unions, began to grow.
The AFL opposed political activity not directly related to the union and advocated its “bread and butter” goals such as higher wages, shorter hours, and better working conditions. Over time, the AFL grew to be America’s most powerful labor union and in 1904, Samuel Gompers was recognized as the national spokesman for American laborers. While many people’s plights were alleviated by these organizations, some people still were devastated by the expansion of big business.
George Rice’s “How I was ruined by Rockefeller,” demonstrates how Rockefeller’s monopoly on oil poked major holes in Rice’s wallet. Rice could only by the Standard Oil Company’s oil, as opposed his prior oil that was not only the same quality oil, but also, it was three cents cheaper. This practice exemplified the “American Rose Theory,” where in order for a gardener to have the best rose, he needs to cut all the other roses; in order for a company to be the best, it needed to eliminate all of its competition.
This theory also plays into vertical integration, where a company buys out its competitors in order to ensure that it is the greatest. As a whole, the growth of corporations’ effects on the economy and politics were the main reasons for new philosophies pertaining to the social classes and new political demands and ideals. From the severe economic deflation, to the increased political tensions, to the birth of new political and philosophical movements, the impacts of growing big business on all aspects of post-Civil War American life are truly evident.
Had mass production not contributed to agricultural innovations, then the economic deflation would not have had such a profound effect on farmer’s livelihoods. If the government was not controlled by large corporation leaders and senators aligned with trusts, then there is a large possibility that the Populist Party would have never been born. If the people were not perturbed by leader’s power, then labor movements such as the American Federation of Labor would not have occurred. Overall, the rise of big business completely changed the face and functions of American society.
University/College: University of Chicago
Type of paper: Thesis/Dissertation Chapter
Date: 29 September 2016
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