1. Big Business

2. Factors Supporting Industrialization:
Western Mining
Immigration
Government subsidies and tax concession to railroad
Advances in communication
Corporation Charters
Laissez faire attitude of government
Bessemer process
High tariffs
Entrepreneurs
Vertical and horizontal integration
National markets
Civil War profits and foreign investment

3. Industrialism and Big Business
Industrial expansion changed American after the Civil War.
HUGE businesses formed
Railroads, Oil and Steel
Industrialists (owners) bought up small companies and merged them into large corporations.
These business owners became known as Robber Barons.

4. Captains of Industry or Robber Barons?
Wealthy industrialists who used ruthless business tactics to drive competitors out and get rich.
Paid low wages
Did not allow strikes
Secret agreements
Big 4 Robber Barons:
Vanderbilt
Andrew Carnegie
John D. Rockefeller
J.P. Morgan

5. Robber Baron #1: Vanderbilt
Remember the transcontinental railroad?
Railroads
Lowered prices to drive people out of business
…then raised prices!

7. Robber Baron #2: Carnegie
Andrew Carnegie was a poor Scottish Immigrant who struck it rich!
Forms U.S. Steel Company
New machines made products more cheaply
Bessemer Process – mass production of steel
Horizontal and Vertical Integration
Buy out all of your competition

8. Companies like Carnegie Steel used vertical integration to buy companies in order to gain materials needed to make or deliver their products

9. Companies like Standard Oil used horizontal integration to buy similar companies to reduce competition

10. Gospel of Wealth
Andrew Carnegie wanted to give back to the people and wrote the “Gospel of Wealth”
It is the duty of rich people to give away their wealth
Gave away 90% of his money to the poor.
Set up schools, libraries, art centers.

11. Robber Baron #3: Rockefeller
Standard Oil Company
Unified many oil refineries in Cleveland
Gained control of 90% of the industry
How did he do it?

12. Rockefeller’s Riches Created Trusts
-Group of people who ran separate companies in one large corporation
Low wages for workers
Low prices drove competitors out of business raise prices

13. Oil
1859 Edwin Drake invented the oil well.
1859 produced 2,000 barrels of oil a year
By 1900 produced 64 million barrels of oil a year.
“Black Gold”
By 1880s US had surpassed Britain economically

14. Robber Baron #4: Morgan J.P. Morgan Investment Banking
Large corporations needed money to finance their growth.
“Holding companies” would buy up stock of other businesses to get their profits

15. Corporations became a more common business structure
Industrialists like Vanderbilt, Carnegie, Rockefeller changed the way businesses were organized
Businesses hired professional managers to oversee employees, improve efficiency, and manage finances
Corporations became a more common business structure
Corporations used boards of trustees (“trusts”) to manage the company…
Holding Company
Company A
Company D
Company E
Company B
Company F
Company C
Company G
Company H
Board of Trustees
Company Manager
Employees
…and holding companies to manage other subsidiary companies

16. Corporations used mergers to increase profits

17. Monopolies! Robber Barons created monopolies.
Rockefeller was criticized for being a monopolist.
Monopoly - Corporation that is so powerful it can block competition.
What are the advantages of being a monopoly?
Total Control!!
Set prices!!

18. Differences in Society
The Robber Barons were becoming VERY wealthy.
But, most people worked in mills and factories.
To justify the difference between the rich and poor, they turned to... VS

19. Darwin Darwin's Theory of Evolution - “Survival of the Fittest”
Social Darwinism
Whoever got rich deserved it
Poor people are lazy and undeserving
Wanted “laissez faire” government

20. Monopolists justified their wealth in a variety of ways
The “Gospel of Wealth” argued that it is God's will for some men to gain great wealth so they could serve the public
Social Darwinism taught that natural competition weeds out the weak and allows the strong to survive
The government used laissez faire policies toward big business…
…the lack of regulation allowed businesses to become very powerful and exploitive

21. Government Position Usually supported businesses
Protective tariff to help business grow and develop
Gave money and land to support railroad growth
Unlimited immigration
Made sure there was a cheap labor supply

22. Government eventually responded
Sherman Anti-Trust Act
Tried to break up monopolies and trusts to increase competition
-out lawed monopolies
-Vague and unclear
-Generally unsuccessful
-But does lay ground work for first attempt by gov’t to do something about monopolies and restrictions on free trade

23. Conclusions America was changed by the Industrial Revolution:
The United States led the world in industry, innovation, and wealth
Laissez-faire gov’t policies and new business tactics led to monopolies
But the gap between the wealthy monopolists and their poor immigrant workers grew wider

24. “Robber Barons” of the Gilded Age
Were the industrial capitalists of the Gilded Age “robber barons” or “captains of industry”? Weigh their positive and negative effects
The “Robber Barons” of the Past

25. Political Cartoon Analysis
For each cartoon answer the following questions:
What imagery is used to display power?
Who are the victims and how are they portrayed?
Then answer this overall question:
Why do they use the octopus?
Make sure to write the cartoon number near the answer to each question
Make sure to look at all labels in the cartoon

27. Why an octopus?
What symbols are used to show power?
What is the overall message?