1. Big Business Models and Mentality1

2. After this lesson, you will be able to…
Identify new business practices that aided in the rise of big business in the late 1800s
Identify the most noted benefactors of these new models
Analyze the terms Captains of Industry and Robber Barons
Explain how the rise of big business forced new ideas about wealth in the American culture
Evaluate the differing philosophies related to wealth prior to the Progressive era 2

3. Main Idea- New Business Models helped grow markets and wealth over a short period of time
The Corporation
What is a Corporation?
What were the impacts of corporations?
Managers, hired by the board of directors run the company
The Business is its own entity, not an individual
Entrepreneurship expands with growing markets
Investors buy shares in a company
Helped Expand Markets
Instead of an owner boards of directors make decisions
Small businesses become large businesses 3

4. Main Idea- Captains of Industry pioneered new business tactics by trying to maximize profits and minimize cost
Rockefeller
Carnegie
Swift 4

5. Cornering the Market Oil company A Trust Monopoly Trust Oil company A
company B
Oil market
Oil market
Monopoly
Trust
Oil company A
Trust
Oil market
Oil market
Oil company C
Oil company D
A business model where a
Single firm controls 90% or
More of any market
Stockholders of several competing corporations turn in their stock to trustees in exchange for a trust certificate entitling them to a dividend. 5

6. The Benefactors of Big Business
The man of steel:
Andrew
Carnegie
The Backer:
John Pierpont Morgan
The Transporter:
Cornelius Vanderbilt
The Oil man:
John D. Rockefeller
(worth $240 billion) 6

7. Were these men Captains of Industry or Robber Barons?
“In 1870, when Rockefeller founded Standard Oil, kerosene was 30 cents a gallon. Twenty years later, Rockefeller had almost a 90 percent market share and kerosene was only eight cents a gallon. Customers were the real winners here, because Rockefeller’s size allowed him to cut costs…”- Burton W. Folsom, Jr.
“To organize and exploit the resources of a nation upon a gigantic scale…and to do this only in the name of an uncontrolled appetite for private profit- here surely is the great inherent contradiction whence so much disaster outrage and misery has flowed.”- Matthew Josephson
Captain of Industry- one who’s vision and work ethic creates wealth for all!
Robber Baron- one who’s obsession with gaining wealth used their power to swindling the poor and cheat their competitors

8. US History Quizdom
Choose which of the following statements best describes the political cartoon to the right?
This cartoon shows the social benefits of vertical integration
This cartoon is meant to criticize John Rockefeller’s business tactics
This cartoon illustrates the importance of steel to American industry
This cartoon shows the control Cornelius Vanderbilt had over the railroads

9. US History Quizdom
Which of the following captains of industry was so successful in transportation of goods, he was actually known as “The Commodore”
Rockefeller
Ford
Morgan
Vanderbilt

10. US History Quizdom Investment banker The clues to the right point to…
Entrepreneur who backed other capitalists like Thomas Edison
Bought out Carnegie steel
The clues to the right point to…
JP Morgan
Cornelius Vanderbilt
John D Rockefeller
Henry Ford 10

11. US History Quizdom The quote to the right is…
Condemning the business practices of the Robber Barons
Calling for greater regulation on fuel prices
Promoting the benefits of “big business”
Proposing laissez faire, and more socialism
“In 1870, when Rockefeller founded Standard Oil, kerosene was 30 cents a gallon. Twenty years later, Rockefeller had almost a 90 percent market share and kerosene was only eight cents a gallon. Customers were the real winners here, because Rockefeller’s size allowed him to cut costs…”- Burton W. Folsom, Jr. 11

12. Main Idea- Big Business success challenged the cultural and moral views of Americansvs
Social Darwinism
The Gospel of Wealth 12

13. William Graham Sumner Folkways (1906)
Social Darwinism
Individuals must have absolute freedom to struggle, succeed or fail.
Therefore, state intervention to reward society and the economy is futile!
William Graham Sumner Folkways (1906) 13

14. The Gospel of Wealth:
Definition- the idea that wealth is a blessing to be used to better all lives .
Viewed wealth as a sign of God’s approval.
Christian duty to accumulate wealth.
Russell H. Conwell 14

15. “On Wealth” by Andrew Carnegie
Backed the idea of the “Gospel of Wealth”
The Wealthy should act as “trustees” for their “poorer brethren.”
Started the trend of philanthropy- giving excess wealth to charitable causes or projects
Andrew Carnegie 15

16. Wall Street – 1867 & 1900
Wall Street – 1867 & 1900 16

17. U. S. Corporate Mergers 17

18. Main Idea- A new movement known as “progressivism” or the era of “reform” forced government to take token steps to regulate trusts
1887  Interstate Commerce Commission- created an agency to investigate “unfair” rates on railroads
1890  Sherman Antitrust Act- outlawed “bad trusts” or trusts that operated in restraint of commerce or trade among the states”- (can you say LOOP HOLE??) 18

19. Government Loans and Subsidies
Government Aids Big Business and immigration
Homestead Act 1862
Government Loans and Subsidies
Protective Tariffs 19

20. US History Quizdom
Which of the following represented the greatest contribution corporations made to expanding businesses?
They offered access to huge amounts of capital
They offered an opportunity at creating cartels
They linked business and government directly
They limited businesses to specialize in one industry alone

21. US History Quizdom
Chris Kanmore, wishing to not seem too tyrannical, buys a majority stock in multiple firms, forces those firms to turn their stock over to a board of trustees
The description to the right is describing…
A corporation
A Trust
A cartel
A monopoly 21

22. US History Quizdom Social Darwinism…
Championed the idea that those who are blessed with wealth are care-takers of the poor
Promoted government intervention to protect consumers
Proposed that there are those who are meant to be wealthy and those who were not
Rallied many to fight back against unfair trusts 22

23. US History Quizdom
Which movement is most related to the idea of the “gospel of wealth”
Philanthropy
Socialism
Anarchism
Laissez faire 23

24. US History Quizdom
What did the Interstate Commerce Commission and the Sherman Anti-Trust Act have in common?
Both were specifically aimed at railroads
Both promoted monopolies amongst industrialists
Neither were strong enough to effectively regulate big corporations
In the case of Munn v. Illinois, the Supreme court declared both laws unconstitutional 24

25. US History Quizdom
“Individualism will continue, but the millionaire will be but a trustee for the poor; instrusted for a season with a great part of the increased wealth of the community, but administrating it for the community far better than it could or would have done for itself.”
Who is the likely source of the quote to the right?
John D. Rockefeller
Cornellius Vanderbilt
Andrew Carnegie
Frederick Taylor 25

26. US History Quizdom
“Everyone in society has the absolute freedom to succeed or fail in accordance to their own struggles. Some are destined to succeed and some will inevitably fail according to natural selection. Any government intervention is useless given that this is a matter of nature.”
The quote to the right reflects the ideas of…
William Graham Sumner
Benjamin Franklin
Andrew Carnegie
Nelley y’all 26

27. US History Quizdom
The Business model to the right most closely reflects which business model?
Corporations
Cartels
The Gospel of Wealth
Monopolies 27

28. US History Quizdom
???????????????
Strategy
Action
Cut Costs
Increase production lower wages
Maximize Profits
Reinvest in Advertisement
Stay on the Edge
Research and development
Which of the following would be the best heading for the table above?
The Gospel of Wealth c. Social Darwinism
Corporate Strategies d. Vertical Integration 28

29. US History Quizdom
Which of the following WAS NOT an ideology relating to the growth of big business?
Those who gain wealth deserve to keep it because they are products of “natural selection”
The attainment of wealth means we have an obligation to give to those less fortunate
Business is a matter of cutting costs, maximizing profits and looking into new products for future growth
Big Business should be owned by state and federal governments
Investors
Board of directors
Managers
Employees 29

30. US History Quizdom
Which of the following best describes the author’s likely intent for the cartoon above?
To promote the benefits of corporations
To promote increased government regulation of big businesses
To criticize the philosophy of Social Darwinism
To criticize “Robber Barons” 30