1. The Growth of Big Business
The Rise of Big Business
The Growth of Big Business
Gilded Age
1870s-1900

2. The Rise of Big Business
Warm Up
Imagine you are Bill Gates – What would you do with your money? Write it down on a separate sheet of paper.
Read the “Gospel of Wealth” and answer the 3 questions.
Compare your response to question 1 and question 2. Would Carnegie approve of your decisions??? Why or why not.

3. Robber Baron or Captains of Industry
1: an American capitalist of the latter part of the 19th century who became wealthy through exploitation (as of natural resources, governmental influence, or low wage scales)
2: a business owner or executive who acquires wealth through ethically questionable tactics
Captain of Industry
: the head of a great industrial enterprise

4. Robber Barons or Captains of Industry
The Rise of Big Business
Robber Barons or Captains of Industry
Robber Barons – negative view of big business
As cruel and ruthless
Would stop at nothing to achieve great wealth

5. Robber Barons or Captains of Industry
The Rise of Big Business
Robber Barons or Captains of Industry
Captain of Industry – view that the same men were ingenious and industrial leaders
Transformed the American economy
Praised for their charity

6. The Rise of Big Business

7. Trust v Monopoly
Trust Stockholders of several competing corporations turn in their stock to trustees in exchange for a trust certificate entitling them to a dividend. Trustees ran the companies as if they were one.
Monopoly The natural goal of any business to make as much profit as it can and to eliminate its competition. When a corporation eliminates its competition it becomes what is known as a "monopoly."

8. Entrepreneurs Risk-Takers
Businessmen who took their money and talents to launch new ventures
Capitalism: 1800 businessmen believed in private businesses running industries without government intervention
Competition determines prices and wages
Market Economy: Supply & Demand

11. Social Darwinism Origins of Species 1859 Charles Darwin
The Rise of Big Business
Social Darwinism
Origins of Species 1859
Charles Darwin
All animal life had evolved by a process of Natural Selection
Only the strong survive to reproduce

12. The Rise of Big Business
Social Darwinism
Free Competition in the economy, like natural selection, would ensure survival of the fittest
Society should do as little as possible to interfere with people’s pursuit of success

13. Robber Barons or Captains of Industry
The Rise of Big Business
Robber Barons or Captains of Industry
Andrew Carnegie
Gospel of Wealth – people should be free to make as much money as they can. However, after they make it, they should give it away

14. Carnegie Steel Arrive in American as a penniless Scottish immigrant
The Rise of Big Business
Carnegie Steel
Arrive in American as a penniless Scottish immigrant
Began to work to assist his family
1865 Andrew Carnegie was making $50,000

15. Carnegie Steel Entered steel business
The Rise of Big Business
Carnegie Steel
Entered steel business
Stole Bessemer Process from Brits
1889 Established Carnegie Steel Company
Controlled suppliers and competition
1899 Carnegie Steel produced more than Great Britain
Carnegie Steel produced 80% of nation’s steel

16. Robber Barons or Captains of Industry
The Rise of Big Business
Robber Barons or Captains of Industry
Carnegie once stated, “I entered this life poor and I wish to leave it the same.”
Gave away $325 million = 90% of his wealth
Carnegie Hall in NY City
Carnegie Foundation
3,000 libraries across the US

17. The Rise of Big Business
Vertical Integration
Controlling all steps to change raw materials into finished products

18. Vertical Integration Own iron and coal mines
The Rise of Big Business
Vertical Integration
Own iron and coal mines
Bought railroads, trucking and shipping lines
Bought warehouses

19. Growth and Consolidation
The Rise of Big Business
Growth and Consolidation
Monopoly- complete control over production, quality, wages, and prices

20. Holding Company J.P. Morgan very successful banker
The Rise of Big Business
Holding Company
J.P. Morgan very successful banker
Bought Carnegie Steel in 1901 for $500 million
Changed name to US Steel
Became the largest business organization

21. Cornelius Vanderbilt Built his wealth in railroads and shipping
He began his business by ferrying freight and passengers between Staten Island and Manhattan
New York Central Railroad

22. Vanderbilt against Fisk

23. Standard Oil Trust Established by John D. Rockefeller
The Rise of Big Business
Standard Oil Trust
Established by John D. Rockefeller
Was able to undersell his competitors by charging less
Purchased oil refineries and created horizontal consolidation

24. Horizontal Consolidation
The Rise of Big Business
Horizontal Consolidation
Buy out competitors
Companies making similar products merge

25. The Rise of Big Business
Standard Oil Trust
Drove competitors out of business by selling oil lower than cost to make it
After competitor are driven out
prices skyrocketed to recoup loss

26. Horizontal Merger

27. John D. Rockefeller Rockefeller gave away $500 million
The Rise of Big Business
John D. Rockefeller
Rockefeller gave away $500 million
Founded the University of Chicago which found cure for yellow fever
Land for United Nations

28. The Rise of Big Business
Standard Oil Trust
Rockefeller was so successful at his death his personal fortune was estimated at
$815,647,796

29. The Government Response
The Rise of Big Business
The Government Response
1890 Sherman Antitrust Act
Outlawed any combination of companies that restrained interstate trade
Was not effective against trusts
Pro business courts had to interpret law
Federal officials rarely invoked it until after WWI