1. Big Business in the Late 19 th Century Aim: Were big business leaders “robber barons” or “captains of industry”?

2. Definitions Robber Baron: any businessman or banker who used questionable business practices to become powerful or wealthy. Captain of Industry: a business leader whose means of gaining personal fortune contribute positively to the country in some way. https://www.youtube.com/watch?v=gR7oHh- fXUw https://www.youtube.com/watch?v=gR7oHh- fXUw

3. I. Vanderbilt and Railroads Significance of RR? Vanderbilt’s accomplishments:  Steel rails  Standard gauge Corruption  Bribed judges and legislatures  Free passes, rebates (discounts)  Pools – eliminated competition

4. II. Andrew Carnegie and Vertical Integration A. After working for a railroad company and investing in the steel industry, Carnegie opened his own steel company B. To increase efficiency, Carnegie began the vertical integration of the steel industry – he bought all the different businesses needed to produce steel C. Gospel of Wealth – The wealthy must use their fortunes for philanthropy, or the benefit of mankind.

5. Vertical Integration

6. III. Rockefeller’s Standard Oil Trust and horizontal Integration A. John D. Rockefeller formed the Standard Oil Company of Ohio, the most successful oil refining company in the U.S. - To defeat competition, he bribed and spied on rivals, created phony companies, and slashed prices - He also received rebates (discounts) from RR companies B. To avoid state restrictions on monopolies, he created a trust - a new way of merging businesses that didn’t violate the laws against owning other companies - Rockefeller gained control of almost all the nation’s oil refining industry, eliminating competition

8. IV. J.P. Morgan, “Holding Companies,” and Mergers A. When trusts were outlawed, holding companies, corporations that held shares of other companies, were formed. B. Holding companies controlled the companies whose stock it owned, effectively merging the companies into one large enterprise C. J. Pierpont Morgan, a financial giant, formed the biggest corporate merger ever, U.S. Steel.