1. Robber Barons & Business in the Gilded Age

2. Bell Ringer #4
Complete summary from last class if you haven’t done so.
In your groups, discuss who had the best shoe. Do not anything down.
Content Vocab
Corporation
Horizontal Integration
Vertical Integration
Robber Baron
Monopoly
JP Morgan
J.D. Rockefeller
Andrew Carnegie
Gilded Age
Gospel of Wealth
Social Darwinism
Academic Vocab
Business
Ruthless

3. The Gilded Age
In 1873 Mark Twain and Charles Warner co-wrote the novel, The Gilded Age
The term “gilded” refers to something being gold on the outside while the inside is made of cheaper material.
beneath the surface were corruption, poverty, and a huge difference between rich and poor.

5. Individualism “Rags to Riches”
A strong belief during the Gilded Age was the idea of individualism.
This is the belief that regardless of your background, you could still rise in society.
“Rags to Riches”

6. Laissez-Faire
In the late 1800s, state and federal government had a laissez-faire attitude by keeping taxes and spending low and by not imposing regulations on industry.
The government did not control wages or prices. It adopted policies to help industry.

7. High Competition
By the early 1900s, American industries were larger and highly competitive.
Many business leaders began to encourage free trade, believing they could compete internationally and succeed.
Free enterprise: Businesses are competitive without government control

8. Free Enterprise How does free enterprise work?
Businesses are owned by private citizens
Companies compete to win customers by making the best products at the lowest prices

9. Corporation
A corporation is an organization owned by many people but treated by law as though it was a single person.
Stockholders, the people who own the corporation, own shares of ownership called stock.
Issuing stock allows a corporation to raise large sums of money but spreads out the financial risk.

10. Corporation
Big corporations had an advantage over small manufacturing companies.
Big corporations could produce more cheaply, and they could continue to operate even in poor economic times by cutting prices to increase sales.
Many small businesses with high operating costs were forced out of business. VS

11. Robber Barons
Entrepreneurs who used ruthless tactics to build their fortune
They wanted to get as much money as they possibly could
What were some of these tactics?
Child Labor
Extremely low and unfair wages
Buying out competition

12. Checking for Understanding
What was Mark Twain claiming by calling this age, The Gilded Age?
Beneath the surface lays corruption

13. Checking for Understanding
Some business leaders were called Robber Barons because they _____________?
Used ruthless tactics to build their fortune

14. Checking for Understanding
During the Gilded Age Industrialists liked ______________ because the government interfered as little as possible in the nation’s economy
Laissez-Faire

15. Checking for Understanding
What is it called when businesses are owned by private citizens and companies compete by making the best products at the lowest prices
Free Enterprice

16. Andrew Carnegie Grew Rich from Shrewd Investments
Invested in RR Sleeping Cars
Then Sold to George Pullman
Plunged into Steel Making in 1872
Built Huge Plant in Pittsburgh
Hired Managers & Paid Them Well
Average Workers’ Wages Kept Low
Disliked Unions & Crushed Strikes
Andrew Carnegie Used Vertical Integration to Build Carnegie Steel Corp. to dominate the steel industry

17. A vertically integrated company owns all the different businesses it depends on for its operation. This not only saved money but also made the big company bigger.
Vertical integration

18. John D Rockefeller
Dominated the oil industry with his company Standard Oil
Create extremely efficient techniques to save money

19. Standard Oil
In 1882 Standard Oil formed the first trust, which merged businesses without violating laws against owning other companies.
A trust allows a person to manage another person’s property.
Trusts were formed to eliminate competition

20. Horizontal Integration
Business leaders also pushed for horizontal integration, combining many firms doing the same type of business into one large corporation.
J.D. Rockefeller would do this.
These business practices will lead to …

21. Monopoly
A monopoly occurs when one company gains control of an entire market.
In the late 1800s, Americans became suspicious of large corporations and feared monopolies.

24. Checking for Understanding
When a company controls all stages of production from start to finish it is called?
Vertical Integration

25. Checking for Understanding
Which industrialist dominated the oil industry?
J.D. Rockefeller

26. Checking for Understanding
Which industrialist dominated the steel industry?
Andrew Carnegie

27. Checking for Understanding
Both horizontal and vertical integration were designed to lead to?
Monopolies

28. Checking for Understanding
Total Control of a type of industry by one company is called?
Monopolies

29. Checking for Understanding
Why were trusts formed?
Eliminate competition

30. Social Darwinism
Charles Darwin’s theory of evolution and natural selection applied it to human society
Like Darwin’s theory—that a species that cannot adapt to the environment will eventually die out— human society evolved through competition.
Society progressed and became better because only the fittest people survived.
Industrial leaders (Robber Barons agreed with Social Darwinism.

31. Social Darwinism
Social Darwinism paralleled laissez-faire, an economic doctrine that was opposed to government interference with business.
Robber Barons would use this theory to justify their wealth.
Why were they rich?
They were the fittest

32. Gospel of Wealth
Andrew Carnegie believed in Social Darwinism and laissez-faire.
those who profited from society should give something back, so he softened Social Darwinism with his Gospel of Wealth.
This philosophy stated that wealthy Americans were responsible and should engage in philanthropy, using great fortunes to further social progress.

33. J. Pierpont Morgan J.P. Morgan – Head of NY Investment House
Most Powerful Figure in Finance
Morgan Used Trust to Refinance RRs
Also Took Control of RR Industry
Reorganized B&O, the Erie, and the Northern Pacific RR
By 1900, Morgan Dominated RR Industry

35. Checking for Understanding
Who believed that the rich should contribute to society through philanthropy and donating?
Andrew Carnegie

36. Checking for Understanding
Which theory was used by Robber Barons to justify their wealth?
Social Darwinism