1. Chapter 19, Section 2 Big Business

2. Corporations Corporations – businesses that sell portions of ownership
Stockholders in a corporation get a % of the profits
Limited liability – if a corporation fails, stockholders lose only the money they invested
Corporations encouraged more investment in business which made them more profitable
New York City Stock Exchange ca. 1900

3. Andrew Carnegie
Who? – poor Scottish immigrant who grew up working in the railroad business
What? – built up a huge steel mill business and became the world’s riches man when he sold his company
When? – late 1800s
Where? – US (Pennsylvania)
Why Important? –

4. Vertical integration Who? – businessmen like Andrew Carnegie
What? – ownership of businesses involved in each step of a manufacturing process
(example: Carnegie bought iron ore mines, coal fields, and railroads to lower his costs)
When? – late 1800s
Where? – US
Why Important? –

5. John D. Rockefeller
Who? – businessman who started an oil-refining company at age 21
What? – his Standard Oil Company became the country’s largest oil refinery company and slowly took control of the whole industry
When? – late 1800s
Where? – US
Why Important? –

6. Horizontal integration
Who? – businessmen like John D. Rockefeller
What? – owning or controlling all businesses in a certain field (as a trust or monopoly)
(example: Rockefeller’s company controlled 90% of the oil-refining business in his Standard Oil Trust)
When? – late 1800s
Where? – US
Why Important? –

7. Leland Stanford Who? – important business leader and politician
What? – became Governor of California, was one of the founders of the Central Pacific which helped build the transcontinental railroad, and founded Stanford University
When? – late 1800s
Where? – US
Why Important? –

8. Social Darwinism Who? – business leaders
What? – a view on society based on scientist Charles Darwin’s theory of natural selection that applies Darwin’s “survival of the fittest” theory to justify how some humans succeeded in business and others did not
When? – late 1800s
Where? – US
Why Important? –

9. Criticisms of Big Business
Child labor
Low wages
Poor working conditions
wiped out competition
Drove out smaller competitors to their businesses
Too much of the nation’s money in the hands of too few people

10. Robber Barons or Captains of Industry?
Philanthropy – giving money to charities
Robber Barons – nickname for the rich industrialists who greatly profited off of unfair or corrupt business practices and off the labor of their poorly treated workers
Captains of Industry – the same people but viewed positively as those who helped our nation’s economy and production grow and who gave a lot of money to charities
Carnegie Hall

11. Differences between Trusts and Monopolies
Trusts – a legal arrangement grouping together a number of companies under a single board of directors (or trustees)
Monopolies – total ownership of an industry, product, or service by a single company

12. Sherman Antitrust Act Who? – passed by members of Congress
What? – a law that made it illegal to create monopolies or trusts that restrained trade
When? – 1890
Where? – US
Why Important? – though it tried to reduce the influence of trusts it didn’t define a trust in legal terms and was hard to enforce; it was an important first step though