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The Rise of Big Business

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Presentation on theme: "The Rise of Big Business"— Presentation transcript:

1 The Rise of Big Business
…and robber –barons, unions, and more.

2 Background Info When? - 2nd Industrial Revolution/Gilded Age
- late 1800’s Marked by - rise of big business and corporations - disparity of wealth - ultra wealthy industrialists - monopoly Gilded Age: Gold plated but cheap on the inside

3 Background Info Capitalism
- economic system in which private businesses run most industries - competition determines price and wage

4 Background Info Corporation: Business organization that raises money by selling stock to the public Trust: merging of companies turning over control to a board of trustees

5 Big Business Vocabulary
Corporations – companies sell shares of ownership called stocks to raise money Entrepreneurs – people who take risks & organize new businesses Capitalism – private businesses dominate the economy & promote competition Laissez Fairre – govt. does not interfere in economic affairs (hands off big business) Patent – exclusive right to manufacture or sell an invention

6 III. Monopolies and Trusts
Monopolies - characterized by a lack of competition to produce a good or service - Goal is to control the market for a product by destroying the competition - Achieved by controlling production and distribution of a good or service Trust – consolidate corporations under a Board of Trustees to control the market

7 A Trust with complete control over an industry
What is a monopoly? A Trust with complete control over an industry

8 How do you create a monopoly?

9 Vertical Integration acquiring companies that supply your business

10 Horizontal Integration: buying out the competition

11 How did Industrial Tycoons create monopolies?
Vertical Integration: acquiring companies that supply your business Horizontal Integration: buying out the competition

12 Robber Barons powerful industrialists who amassed huge personal fortunes, typically as a direct result of unfair business practices Carnegie Ford Morgan Rockefeller Vanderbilt

13 Andrew Carnegie Steel industry
Horizontal integration: bought out his competitors Vertical Integration: bought coal mines, iron ranges, shipping, and railroads Controlled from mine to market

14 John D. Rockefeller Oil Industry: Standard Oil
Horizontal Integration: bought out competitors Vertical Integration: built barrel factories, warehouses, pipelines. Owned freight cars and developed own marketing Controlled 90% of oil in US

15 What do you think the cartoonist was trying to communicate with this image?

16 How about this image? What was the cartoonist trying to communicate here?

17 Owned interests in all parts of the industry, including drilling, refining, and storage of oil
Received special rates from railroad companies, lowering his transport costs His fortune rests on Standard Oil

18 What a Funny Little Government

19 Let’s talk about this as a class!
How did men like Carnegie and Rockefeller (robber barons) justify ownership of monopolies and the lavish lifestyle their wealth provided for them? Let’s talk about this as a class!

20 “And while the law of competition may be sometimes hard for the individual, it is best for the race, because it ensures the survival of the fittest in every department.” Andrew Carnegie

21 Social Darwinism (SD) SD - idea that “survival of the fittest” determines success of people in society & marketplace Strong survive & the weak fail “Survival of the fittest” strengthens society as a whole Justification for industrialists Social Darwinists and capitalists agree that competition promotes progress



24 Review 1. Describe laissez-faire economic policies.
2. A monopoly can best be characterized as ________ 3. Horizontal integration is _______________________ 4. Vertical integration is _________________________ 5. Describe three aspects of a monopoly. 6. What is a trust? 7. Describe “Robber Barons.” 8. Social Darwinists believed in the idea that _________

25 Were the Robber Barons good guys or bad guys?

26 Carnegie believed the wealthy should give back to the community
By the time he died, Carnegie had given away $350,695,653 (approximately $4.3 billion, adjusted to 2005 figures). At his death, the last $30,000,000 was likewise given away to foundations, charities, and to pensioners. Rockefeller gave away over ½ of his $900 million including over $80 million to the University of Chicago

27 Funded the building of over 300 libraries

28 Labor Unions Advantages of unions
Greater bargaining power (pay, hours & conditions) Strength in numbers Main purpose of a union is collective bargaining Negotiations between management and a union about pay and work conditions on behalf of all the workers in the union 2011: NFL & NBA

29 Knights of Labor Welcomed unskilled laborers including blacks, immigrants & women 1869 first major national labor organization Opened to all who “toiled” Accepted all workers Encouraged collective bargaining

30 American Federation of Labor
Represented skilled labor only; most effective & enduring union Main purpose was collective bargaining Negotiated for better pay, fewer hours & safer conditions 1886-present: most powerful leader was Samuel Gompers & strike was a ready tool

31 Strikes Haymarket Square Riot (Chicago, IL 1886) strikers clashed w/ police: several killed, 100's hurt May 1, 1886 – Strikes & demonstrations were held nationwide, to demand an eight-hour workday for industrial workers May 3, McCormick Reaper Works factory went on strike; unarmed strikers, police clash; several strikers were killed Evening of May 4, A meeting of workingmen is held near Haymarket Square, Chicago. Police arrived to disperse the peaceful assembly; a bomb is thrown into the ranks of the police; the police open fire; workingmen evidently return fire; police and an unknown number of workingmen killed; the bomb thrower is not identified Significance: Americans linked unions w/ radicals

32 Carnegie Steel Homestead Strike
Wages were cut & workers went on strike in 1892 Amalgamated union workers went on strike 300 Pinkertons called in - 3 guards & 10 strikers killed Significance: state govt. supported corporation (big business) Carnegie Steel

33 Governor sends National Guard
State militia entered Homestead, PA to put down the strike of July 1892 Governor sends National Guard

34 Pullman Strike (1894) Pullman Palace Car Co. (Chicago) cut wages but did not reduce workers rent Largest strike in US history had interrupted US mail service Eugene V. Debs (future Socialist Party of America) got involved Significance: President Cleveland sent in the national guard & sided w/ corporation

35 Govt. favored business in most disputes w/ labor in late 19th century

36 Industry Advantages of US in world market - Raw materials, expanding markets & favorable govt. policies (LF) Growth of manufacturing - Natural resources, investment capital and cheap labor People left farms and moved to cities for jobs in industry

37 also Boston, Chicago, Capital grounds in DC and Stanford Univ.
Frederick Olmsted Landscape architect - designed Central Park (Manhattan) and Prospect Park (Brooklyn) also Boston, Chicago, Capital grounds in DC and Stanford Univ.

38 Cities created forms of mass transit such as the subway and cable car

39 Inventions Nikolaus Otto invented the horseless carriage by using an internal combustion engine Orville & Wilbur Wright were bicycle makers who invented the airplane after a 12 second flight

40 Inventions Alexander Graham Bell invented the telephone which transmitted voices using electricity Thomas Edison-invented the light bulb and brought electricity to NYC

41 Gold Standard - money was backed by gold in the treasury (1882-1933)
Free Silver - some people wanted $ to be backed by silver as well to get more $ flowing in the economy

42 Review 9. The main purpose of a labor union is ________________.
10. Unions negotiate about _______ and ________________. 11. The American Federation of Labor (AFL) represented ______________ and was the most _________________. 12. What type of workers did the Knights of Labor accept? 13. What was the significance of the Homestead strike? 14. The Pullman Strike ended when President Grover Cleveland ____________________. 15. What was the significance of the Haymarket bombing? 16. The govt. would usually support (business / labor) during strikes in the Industrial Revolution.

43 Questions?

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