Advanced technology along with the use of oil and electricity helped American businesses grow. Soon the shape of the American economy changed. Some companies grew so large that they began to dominate entire industries. Most towns had their own small factories to produce goods for local people…Along with the help of the railroad, big factories started to take over. They could mass produce things cheaper, so small factories began to close.
The steel industry started to prosper. Steel was stronger and not likely to rust like other metals being used. Used to create the new “skyscrapers” It created smog and waste that was thrown into rivers Pittsburgh = Steel Capital **Andrew Carnegie
Corporations, a business ran by investors, began growing. They would sell stocks, or portions of ownership in the business, and use the money to reinvest. Stockholders provided money and hoped to receive dividends, shares of the corporations profits. Corporations relied on banks to get money to start their investments. **J.P Morgan
The abundance of varied natural resources helped the US expansion of industry. Oil became a huge value and was turned to Kerosene for stoves and lamps. Rockefeller started the Standard Oil Company and performed practices such as forcing railroads to give him rebates to strengthen his company. **John D. Rockefeller Soon, monopolies became a component of business.
Corporation – businesses that sell portions of ownership called stock shares Dividends - profits Monopoly – total ownership of a product or service Vertical integration – ownership of businesses involved in each step of a manufacturing process Horizontal integration - owning all businesses in a certain field Trust – a legal arrangement grouping together a number of companies under a single board of directors Social Darwinism – a view of society based on scientist Charles Darwin’s theory of natural selection
Is this ruining free enterprise? Free enterprise is when a business is owned by private citizens. (To trust or not to trust) What companies today do you think hold a monopoly on business?
The Sherman Trust Act very weak Some states began passing laws to regulate business corporations worked around them Big Business Argued: Corporations and trusts brought lower production costs, lower prices, higher wages and a better quality of life for the people. Competition creates inefficiency and waste. Critics argued that changes were needed because trusts made it difficult for new companies to compete.
Who do you support? Create a protest sign for the “big business” Fox Books or the “privately owned” Shop Around the Corner.
Homework - Research Find out one new fact about each of the tycoons If you are curious about the life of a franchise…look one up.