Captains of Industry or Robber Barons?

Corporations and Monopolies  A Corporation is a form of ownership where a number of people (Investors) share the ownership of a company (low risk, huge amounts of capital)  Where a single corporation gains primary control of an industry, market, or service. Usually leads to higher prices.

Vertical Integration  When a company owns all of the phases of production, from raw materials, to processing, to shipping and sale of products…and so can cut costs significantly. Horizontal Integration  When one company owns all of the different businesses of a kind of industry(like a monopoly, but multiple businesses) and can therefore set prices at will.

Trusts and Cartels  Trusts -where a group of companies assign their stock to a board of trustees for a given industry (like a whiskey trust would be the combination of all the whiskey makers in a given area) - Like a monopoly except that companies are cooperating rather than everything being owned by one person – used in horizontal Integration.  Cartels- when competing companies in an industry work together to keep supplies low and prices high.

 ENTRY #14 Explain the meaning of the political cartoon. What are your hints? Then…How would you define the term “Robber Baron”?

Cornelius and William Vanderbilt  Cornelius(Commodore) started in steamships, but made his big fortune in railroads, consolidating a number of lines into the New York Central and Hudson River Trunk Lines.  William Henry inherited a $100 million company in 1877, and turned it into a $194 million co., by his death in

Andrew Carnegie  Owner of Carnegie Steel Company  At one point the Richest man in the World  Relied on Vertical Integration as a way to profit from business  Wrote “The Gospel of Wealth” about being a Philanthropist

John D Rockefeller  Owned Standard Oil (1863) – by 1881 the Company owned 90% of the US Refinery Industry  Was also probably the richest man in the world at some point in his life.  Used incredibly ruthless business practices  Used both Horizontal and Vertical Integration of his businesses

J.P. Morgan  In 1892 Morgan arranged the merger of Edison General Electric and Thomson-Houston Electric Company to form General Electric.Edison General ElectricThomson-Houston Electric Company General Electric  After financing the creation of the Federal Steel Company, he merged in 1901 with the Carnegie Steel Company and several other steel and iron businesses,, to form the United States Steel Corporation, and turned it into the US’s first billion dollar business Carnegie Steel CompanyUnited States Steel Corporation

Driving Idea Behind the Grown of Industrial Giants: Social Darwinism  Based on the theories of biologist Charles Darwin (“natural selection and survival of the fittest”)  Only the strong survive in American capitalism as well  The best and smartest people will succeed and thus make society better.  Social Darwinism used to justify all sorts of beliefs and social conditions

ENTRY # 15  Is Social Darwinism a valid idea? Why or why not? Please support your answer.  How do you think that the idea of Social Darwinism influenced the time period that we are studying? Support your answer with specific information.