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Causes and reaction to the homestead strike
Homestead strike in economics
Causes and reaction to the homestead strike
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The singular event of the Homestead Strike turned a highly profitable and mutually beneficial relationship into a series of disagreements which only concluded with the sale of Carnegie Steel to the J.P. Morgan creation, United States Steel Corporation for $480 million dollars, approximately $329 billion dollars in 2006 dollars. That final transaction occurred only after Carnegie’s attempt to impose the terms of the Iron Clad Agreement on Frick. The Iron Clad Agreement required any shareholder of Carnegie Steel to sell his stock back to the Company at book value if so requested by the holders of 75% of the outstanding stock Carnegie owned 45% of the stock. Carnegie demanded that Frick tender his stock which would have resulted in Frick being paid approximately $1.5 million dollars. A settlement was reached and less than three years later when Carnegie Steel was sold to United States Steel Corporation, Frick was paid $51 million dollars.
They did not accept any competition and would go through great lengths to remain the main steel producers. This meant lowering production costs and paying lower wages. Their controversial decision to take down the AAISW (Amalgamated Association of Steel Workers) in 1892 led to the most horrific, catastrophic event in history. The workers were furious at getting lower wages and refused to work. Carnegie inconveniently leaves to his home in Scotland leaving Frick with all the trouble.
Just like the treatment his workers endured Carnegie wasn't any nicer to his competitors. Andrew Carnegie was a phenomenal businessman. Much of his success is due to how he operated his business. He watched the costs of his business intently (Document C), always making sure that the steel was being produced at a lower price than what it was being sold for (Document D), and he watched his competitors even closer. In March 1889, when Allegheny Bessemer Steel built a mill directly across from Carnegie's mill it intimidated Carnegie.
Carnegie, saw a new method to produce steel;he came to the U.S and built a million-dollar steel plant. He made sure Congress passed tariffs keeping out foreign steel, and keeping its price to $28 a ton. Workers were looked down on because they were poor. These businessmen were very corrupt, they maintained high prices, but kept wages very low, and still used the government's subsidies. This act left 200,000 men working twelve hours and not winning enough money to keep their families alive.
The Homestead Strike In Homestead Pennsylvania, Andrew Carnegie, a Scottish man owned a steel plant. Carnegie had emigrated from Scotland as a young boy, and had had to work his way up the American work industry. He had a business partner named Henry Clay Frick who owned a coke manufacturing company. Carnegie and his friend had an individualistic opinion when it came to the matters of the workers union, and opposed any form of authority by anyone.
Viewing it as a possibility to improve the terrible work hours, extremely low wages, and dangerous work conditions. The Homestead Strike is an example of unhappy workers striking and revolting for better working conditions, which encapsulates the essence of the 1890s national crisis. The Homestead Strike taking place in 1892 at Homestead Steel Works in Homestead, Pennsylvania. The strike was called by the Alalmgated Association demanding better conditions for the labor workers; almost immediately the strike meet resistance from the hired Pinkerton strikebreakers and the national guard. As the workers meet harsh resistance, the strike had managed to turn into a violent battle, and the lasting defeat of the workers left 10 strikers and 3 Pinkerton strikebreakers dead.
The Knights of Labor, founded by Terence Powderly and Uriah Stephens in 1869, helped create a union contract with Carnegie’s Braddock Mill. While the Knights of Labor were trying to have broad social reform around the country, they created a lockout in the Braddock Mill. Workers like Kratcha did not care as much about the union’s goals, instead they wanted the mills to be open so that they could earn money (25). Large business owners, like Carnegie, tried, and usually succeed, at breaking strikes and unions in their mills. In Homestead and Braddock, Kratcha experienced the effects of strikes, and they were not positive.
Because of an economic stumble, Andrew Carnegie, a prominent businessman who was the head of the steel industry, had his company adversely affected. The price of steel-rolled products declined from $35 to $22 in early 1892. Henry H. Frick, a manager of the Homestead steel plant, which was largely owned by Carnegie, worked to combat the economic hiccup by cutting wages and attempting to end the Amalgamated Association of Iron and Steel Workers, one of the largest labor unions in the country. Once the union’s contract expired, Carnegie encouraged Frick’s efforts and instructed Frick to close the plant and wait for the workers to concede. Carnegie believed that the workers would end their union in order to hold on to their jobs.
Document 4 shows that Carnegie was able to cut costs by more than $20 per ton. The natural question that arises is this: how was he able to get costs so low? Document 5 suggests that the practice of vertical integration was essential to profits, as it enable Carnegie to own a monopoly on the entire industry of steel production, all the way from the iron ore mines to the ships that transported materials to the steel mill itself. Although ingenious, this strategy usually results in market monopolies, which can end up being harmful to both competitors and the consumer. In addition to the tactic of vertical integration shown in Document 5, Documents 6 and 7 reveal the extreme exploitation of workers that Carnegie used to increase his profits.
The strikers eventually won causing the company to stay closed. Then five days later the governor in Pennsylvania sent soldiers to restore order and re-open the the plant. Two months later the strike was called off, Carnegie was criticized for Fricks actions. Carnegie did a lot to achieve his large empire, he fought competitors and made good business
In Homestead, Pennsylvania the strike won the steelworker’s a three-year contract in 1889. 750 out of the 3,800 workers at the Homestead plant belonged to the union. In 1892, Andrew Carnegie broke the union. The union workers refused to accept the new plan, so the plant manager locked the workers out of the plant. (history.com) In the spring of 1892, Andrew Carnegie gave Frick, the plants manager, the okay to shut down the plant until the workers buckled. (pbs.org)
Amid the late nineteenth century and mid-twentieth-century, poor working conditions in numerous industrial facilities drove specialists to battle for a better working condition. One of the many fights for better working conditions was known as the 'Homestead Strike of 1892' and was one of the greatest movement for labor rights. The Homestead Strike consisted of a battle between the Carnegie Steel Company, and the Amalgamated Association. The owner of the Carnegie Steel Company, Andrew Carnegie wanted to bring down the wages of steel workers after the cost of steel dropped in 1890.However, they confronted resistance from the steel laborer's union, and a contradiction over wages turned into a fight for power between the men responsible for the
The Pullman Strike occurred at the Pullman Palace Car Company due to the Panic of 1893. The Panic of 1893 caused the car company to reduce the worker’s wages because the demand for luxury cars declined. George Pullman himself, who was a very successful businessman know for his innovation as an engineer (made the sleeping car), refused to negotiate, so the workers, and it eventually led to a boycott to the point that any train that transported Pullman cars were to refuse. The other major strike seen during this time period is the Homestead Strike. This strike took place at the Homestead Steel Plant run by Andrew Carnegie (one of the richest entrepreneurs in the Gilded Age).
Women in the Mills of Lowell, Massachusetts In 1810, Francis Cabot Lowell returned from England. He brought with him plans for the first power loom textile factory in the U.S. He built the factory beside a waterfall on the Merrimack River. He did this so he could use waterpower to operate large looms to weave cloth.
This is also known as the Homestead Strike. Carnegie then hired Pinkerton thugs to attack the workers. In the same excerpt, the author says, “he hired Pinkerton thugs to intimidate strikers. Many were killed in the conflict, and it was an episode that would forever hurt Carnegie's reputation and haunt the man.” He uses unfair ways to have a successful business through low wages, and using wealth to his
