Presentation on theme: "Robber Barons vs. Captains of Industry"— Presentation transcript:
1Robber Barons vs. Captains of Industry U.S. HistoryMr. Trivette
2Warm Up: Complete the following to the best of your knowledge: In a capitalist economy, how are prices determined?Explain the difference between a corporation and a regular company.Why is a monopoly illegal?Define the terms “Robber Baron” and “Captain of Industry”
3Terms to knowCapitalism: An economic system in which industries are privately owned, and the prices, production, and distribution of goods are determined by competition on a free market.Corporation: A large company that can generate capital (money) by selling stock on the stock market.Monopoly: A situation in which one company has eliminated its competition.Trust: An alliance of companies, run by a board of trustees, that function as one company.Reduces competitionIllegal if it forms a monopoly
5Opposing View Points Captains of Industry Robber Barons Created Jobs Increased productionProvided cheap productsGave money back to the communityRobber BaronsExploited workersCorrupted the governmentGreedy
6Large corporations developed in two major ways: horizontal or vertical integration Horizontal integration is the growth of a business through acquiring additional business activities in the same industry.J.D.Rockefeller’s Standard OilVertical integration is the growth of a business through the acquisition of the materials that make the product, the factories that manufacture the products including the machines needed to produce the product, as well as the distribution channels to take the product to market.Andrew Carnegie's steel company
8John Rockefeller and Standard Oil Trust To monopolize the oil industry he forms the Standard Oil TrustA trust is an organization of businesses designed to operate like a monopolyHis corporation Standard Oil owned about 88% of the oil industry in the US in 1890
10John Rockefeller and Standard Oil Made deals with the railroads to charge competitors moreLowers prices to force other companies out of business-then raised pricesLow pay for workersSabotaged competitorsPaid government officials in the SenateRecognized the potential of the oil industryVery hard workerSpent all profits from the company to improve productionPhilanthropy- gave over $500 million to charities
11Andrew Carnegie ( )Andrew Carnegie came to U.S. as a poor immigrant from Scotland in 1848Built the Carnegie Steel Corporation through vertical consolidationRetired a millionaire and gave much of his money to education (Carnegie-Mellon University)
13Cornelius Vanderbilt 1794-1877 Shipping tycoon- millionaire by 1846Nicknamed “Commodore”Built the first railroad line connecting New York City and Chicago. He also built New York’s Grand Central stationMost historians estimate that when he died he was worth $100 million ($1.7 billion in today’s dollars)Vanderbilt UniversityBiltmore House
14John Pierpont Morgan 1837-1913 Born into a wealthy family Made a huge amount of money by financing railroad companies that were in financial troubleIn 1901, he bought Carnegie Steel. He turned that into U.S. Steel, the world's first billion-dollar corporationBy the early 1900s, Morgan controlled almost all of the major industries in the U.S. and had a large stake in the financial and insurance industriesThe Pierpont Morgan Library in New York was donated by Morgan in 1924.
15How rich were the “robber barons” compared to Microsoft founder Bill Gates?
16Justifications for Industrialists’ Extreme Wealth Gospel of WealthAndrew CarnegieGod gave wealth to the most capable peopleIt is the duty of the wealthy to give money to help the poorCarnegie gave millions of dollars away to establish libraries, colleges, and museumsSocial DarwinismHerbert SpencerBased on Charles Darwin’s theory of evolutionThose who are rich are more fit, than those who are poorAttempted to use science to explain social classes
18Working ConditionsLaborers were immigrants, African Americans, women, and children12 hour days, six days a weekAccidents were frequent, deaths occurred oftenLow wages
19Anti-Trust Movement The public began to dislike trusts Prices were high on important productsTrusts were responsible for a corrupt governmentAlthough Congressmen liked trusts they needed to please the publicPassed the Sherman Antitrust ActMade it illegal to form a trust or monopolyAct was not effective because the act did not clearly define a trust