1. The Rise of Big Business
Ch. 4 Sec. 2

2. Fighting for Profits Most businesses were run by one person or family
Businesses were local
Industrialization changed this

3. The Corporation Develops
Corporation- group ownership of a business
Investors lose no more than they originally invested in the business
If one person leaves, the others can buy his interests

4. Gaining a Competitive Edge
Maximize profit
Pay lowest wages possible
Paying little as possible for materials
Advertise widely
Some corporations tried to gain a monopoly
Complete control of a product or service
Buy out competitors or put them out of business
Cartel- limit production numbers to keep high prices

5. Horizontal and Vertical Integration
Horizontal Integration- consolidating many firms in the same business
Rockefeller was one of the first to use this
Trust- assign company’s stock to a board of trustees who combine them into a new organization
Vertical integration- companies reduce costs and charge higher prices to competitors

6. “WHAT A FUNNY LITTLE GOVERNMENT
“WHAT A FUNNY LITTLE GOVERNMENT.” Horace Taylor drew this political cartoon of John D. Rockefeller holding the White House and Treasury department in the palm of his hand for the September 25, 1899 issue of The Verdict. Notice the smoke from the United States Capitol in the background? It has essentially become an oil refinery, itself demonstrating the power big business held over government. 6

7. The Tycoons - Carnegie Andrew Carnegie Carnegie Steel
(later US Steel)
Vertical integration
The Gospel of Wealth
Philanthropist 7

8. The Tycoons - Rockefeller
John D. Rockefeller in 1885
Standard Oil
At one point controlled 90% of US oil refinery production
Railroads
Horizontal and Vertical Integration 8

9. The Tycoons - Gould
Railroad tycoon and Wall Street speculator Jay Gould 9

10. The Tycoons - Morgan Financier J.P. Morgan Banking Railroads Steel
Stock speculation 10

11. A political cartoon from Puck “A helping hand.”
The Tycoons - Morgan
A political cartoon from Puck “A helping hand.” 11

12. Social Darwinism Catches On
Charles Darwin
On the Origin of Species
Natural Selection
Survival of the fittest
People applied this theory to society- Social Darwinism
Wealth/race measured how “fit” people were

13. Government Regulations
Interstate Commerce Commission
Oversee RR operations
Investigated unfairness
Sherman Antitrust Act
Outlawed any trust that restrained trade or commerce
Focused on large corporations