1. The Second Industrial Revolution
Section 2: The Rise of Big Business

3. The Rise of Big Business
Learning Goals
Describe the economic developments that transformed the United States into a major industrial power and identify the factors necessary for industrialization. (USH 2.1)

4. Favorable Climate for Business
Belief in free Markets
Entrepreneurs
Competition sets prices and wages
Laissez-faire capitalism
Social Darwinism
Inequalities are part of the natural order
“survival of the fittest” strengthened society as a whole

5. Business Structures Change
Proprietorships and partnerships
Corporations
Need for expert management
Owned by stockholders
Board of directors
Advantages
- raise money by selling stock
- stockholders have limited responsibility
- non-dependent on single owner

6. Business Structures Change
Trusts and monopolies
Trusts formed to gain dominance
Ran as a single corporation
Monopolies
Corporate leaders amassed staggering fortunes

7. Industrial Tycoons Rockefeller and oil Standard Oil
Vertical integration
Horizontal integration
1879 – 90% of all US oil
Limited competition
Philanthropy

8. Industrial Tycoons Carnegie and steel Scottish immigrant
Carnegie Steel
Vertical integration
1900 dominated the US steel industry
Sold for $480 million
Philanthropy
Gospel of Wealth

9. Industrial Tycoons Railroad tycoons Vanderbilt 4,500+ miles
Steamship lines
Few charities

10. Industrial Tycoons George Pullman
Pullman Palace Car Company – Chicago 1867
Company town
Pullman controlled

13. Industrial Tycoons A mixed legacy “Robber Barons”
- Profited unfairly
- Ill-gotten rewards
“Captains of Industry”
- used business skills to
improve economy
- praise for their generosity

14. Mass Marketing New ways to maximize profits Innovative & new products
Advertisements
Department Stores
Mail order companies