cornelius vanderbilt vanderbilt built the railroads majority of railway lines were owned by a few...
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AIM: THE RISE OF BIG BUSINESS
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Cornelius VanderbiltVanderbilt built the railroads
• Majority of railway lines were owned by a few powerful men
• Offered secret deals to factories and industries
Railroads
I. John D. Rockefeller
Multimillionaire who dominated the oil industry
VI. The Oil Industry
• 1859 Oil discovered• Oil boom followed
A. Rockefeller and Standard Oil
• Son of a humble, New York peddler
• Thought competition was wasteful
• Standard Oil Company; Rockefeller’s oil monopoly
• Rockefeller drove competitors out of business
B. Creating a Trust
• Trust:– A group of corporations
run by a single board of directors
• Monopoly:– Controls all or nearly all
of an industry
• Standard Oil controlled 95% of oil industry
Corporation A Corporation B Corporation C
Board of Directors
II. Growth of the American Steel Company
• Railroads fueled the growth of industry
• Steel became the ideal material
A. A new way to make steel
• Bessemer Process: – Method to produce
strong and cheap steel
• More products being made of steel– Nails, screws, needles,
skyscrapers
B. Steel Mills spring up
• Sprang out throughout the Mid-West
Positive:Created Jobs
Negative:Pollution
III. Andrew Carnegie
• Scottish Immigrant• Went to England and
saw the Bessemer process
• Built a steel mill and created relationships with railroads
B. Controlling the Steel Industry
• Used $ to buy out rivals, iron mines, railroads, steamships and warehouses
• Vertical Integration:– Owning all phases of an
industry
• Carnegie combined all businesses to create Carnegie Steel Co.
C. Gospel of Wealth
• Carnegie thought the rich should help the poor
• Donated $60 million to build libraries
IV. Rise of Big Corporations
• Big factories out produced small ones
• Small factories were forced to close
• Factory owners need ways to build capital
• Corporation:– Business owned by
investors
• Stock:– Share in a corporation
• Dividends:– Share in profits
V. Banks and Industry
• Corporations borrowed $ from banks
• JP Morgan: Powerful banker
• Invested in troubled corporations and turned a profit
• Took profits and invested in other industries (railroads and steel)
VII. Big Business: Two viewpoints
A. Opposition– Reduced Competition– Too much political
influence– Led to poor working
conditions. – Sherman Antitrust Act:
• Outlawed the formation of trusts and monopolies
B. Support• Too much competition
ruined business; put people out of work
• Lowered production costs, lower prices,
• By 1900…Americans enjoyed the highest standard of living
Free Enterprise System: Business are owned by private citizens
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