American History Industrial America
Westward Expansion


As businesses grew more money was needed to run them than 1 or 2 people could furnish. A new form of business was developed called a corporation. In the corporation, the people who started the business would sell stocks.  A stock was part of the company. This raised money to run the company. People who buy the stock have some say in how the company is run. Stock owners get a share of the company's profits. The share is paid in dividends. Stockholders pick a group of people to run the business called the board of directors. The board of directors hires a president and managers to run the business. If the company does well, the stockholders make money. If the company does badly, the stockholders can lose all the money that they have put into the business. By 1900 the oil, steel, and meat industries were controlled by giant corporations.

Some corporations grew so large and powerful that they controlled entire industries. Some of these were the Standard Oil Company begun by  John D. Rockefeller  and the steel industry started by  Andrew Carnegie. As owners grew richer, workers became unhappy with the conditions in the factories and shops.

Many worked 15 to 16 hours a day, 6 or 7 days a week. These people earned only $30. or $40. a week. The workplaces were dangerous and hot.

Unions were formed to help the workers. A union is a group of workers who come together to help each other. In 1869, the first nationwide union was formed. It was called the Knights of Labor. This union was had secret membership until 1878. The Knights called many strikes. A strike is when a group of workers decide not to work until they get what they are asking for. The Knights lost most of their strikes. They were not strong enough against the large corporations. The only people who could not join a union were saloon keepers, gamblers, lawyers, and bankers.

In May of 1886, the Knights held a big rally at Haymarket Square in Chicago. About 3000 workers went to the meeting. When the meeting was breaking up, a bomb was thrown into a group of policemen. Some of the policemen were killed. Seven people were arrested. Although none of  these were Knights, people still blamed the Knights. Membership in the Knights dropped.

In 1886 a stronger group led by Samuel Gompers was formed. They were called the American  Federation of  Labor. Only skilled workers could join. This group made some small gains for the workers.

Samuel Gompers

In 1893 the company that made the Pullman sleeping cars for the railroads fired  2/3 rds of its workers and cut the pay of the others by 1/3. The American Railway Union called a strike against the Pullman Company. The federal government took action against the strikers since the trains carried the U.S. mail. The government took the union to court. The court said the union had no right to strike. Eugene V. Debs, the man who started the American Railway Union, was sent to prison because he did not obey the ruling of the court. The strike stopped without its leader.

In 1902, coal miners in Pennsylvania went on strike. President Roosevelt sent troops to help keep the mines open.

It was not until the 1930's when new laws were passed that workers began getting much of what they wanted.


Return to the History Pages