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Major Changes to American Life

Vertical and Horizontal Integration


There are two types of integration that companies would use to gain complete power of their
industry. One of these was vertical integration, where a company buys out suppliers, distributors,
manufacturers, and transportation systems to have complete ownership of their business. Vertical
integration allowed companies to have very close control over their products and their cost. An example of
vertical integration in our world today is Ford, as they own their own sales, steel plant, tires, and
manufacturing. The other type of integration is horizontal, or when companies buy out their competitors.
For example, Disney uses horizontal integration by buying other companies such as ESPN and ABC. In the
1800’s, businessmen would use both styles of integration in hopes of having control over entire industries.
One man known for these integration styles was Andrew Carnegie of the steel industry. He bought out
competing steel producers and bought
out everything he needed to supply his
business, such as railroad lines, coal
fields, iron mines, and more. This
allowed him to become one of the
most successful businessmen of his
time.

Social Darwinism
Social Darwinism was a philosophy that stemmed from Charles Darwin’s theory of evolution and
natural selection. Darwin explained how the species best fit to survive would adapt to circumstances, and
the least fit would die off. Herbert Spencer applied this to the human race and claimed that certain races
were superior to others. Social philosophers used social Darwinism as an explanation for Andrew Carnegie’s
success. They didn’t believe that his success was a result of hard
work, innovative business strategies nor intelligent
investments, but it was a result of him being a white male.
This led to racism that can still be observed in today’s society.

Early Labor Unions

● American Federation of Labor- The American Federation of Labor was a craft union that had

Samuel Gompers as its president. It was organized in 1886. This labor union focused on collective

bargaining, or negotiation between employer and employee to have fairer wages, hours, and

working conditions. The AF of L used strikes

as their main protesting method.

Successful strikes led to the

shortening of the average work week by about

five hours, and the raise in weekly wages

by about $6.
● National Labor Union- The first large labor union was the National Labor Union. This was formed

by William Sylvis in 1866. However, some chapters of the NLU did not admit African Americans, so

the Colored National Labor Union was created. This labor union grew

to have over six hundred thousand

members. In 1868, the National Labor

Union even convinced Congress to

legalize an eight hour work day for

government workers.

● Knights of Labor- The Knights of Labor was a labor union open to all workers, no matter their

skill level, race, or gender. Uriah Stephens helped organize it in 1869. The Knights supported an

eight hour work day, similar to the NLU. The slogan for the Knights of Labor was “an injury to one is

the concern of all”. Also, the Knights promoted equal pay for equal work, meaning that race nor

gender affect how much one individual is paid for a certain

amount of work. Lastly, the Knights

tried to stay away from strike, and only

use it as a last resort. Instead, they

would use arbitration and reach an

agreement through the mutually

approved judge.
Labor Strikes

1. Great Strike of 1877- Railroad workers of the Baltimore and Ohio Railroad turned to protesting
after experiencing their second cut in wage in only the past two months. Their refusal to work
spread to other lines of the railroad, causing most freight and some passenger traffic to be stopped
for over a week. State governors were desperate to get
the railroads back on track, so after many of them
asked, President Hayes stepped in. He claimed that
the strikers were obstructing commerce between
states, and federal troops had to come in to end the
strike. This strike went on to inspire other laborers to
fight for what they think is right, leaving a lasting
impression on the world.

2. Haymarket Square Affair of 1886- On May fourth, many people gathered at Haymarket square
in Chicago, to protest police brutality. This was an effect of the
death of one striker at the McCormick Harvester plant earlier
that week. An unknown person tossed a bomb into police line,
causing the police to fire at the strikers. The night became pure
chaos, and both several police officers and workers were killed.
Eight people were
convicted of the crime,
with either a consequence
of death by hanging, or jail
time. The tragedies of this strike made the public begin leaning away from the labor movement.
3. Pullman Strike of 1894- During the economic depression that came after the Panic of 1893, the
Pullman Company cut workers wages by up to fifty percent, but left their employee housing at its
previous price. This caused outrage among the workers. Eugene Debs of the American Railway
Union asked for arbitration, in hopes of a more peaceful solution. However, Pullman refused to
negotiate, so the boycotting began. The strike turned very violent after Pullman
hired strikebreakers, and federal
troops had to be sent in to maintain
everything. After the strike, Eugene Debs
was put into jail and Pullman fired
almost all of those that were on strike.

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