• horizontal integration – combining many firms engaged in the same type of business into one

• monopoly – when a single company gains control over an entire market

• trust – a concept that allows a single person to manage another person’s company that would not violate anti-monopoly laws

• holding company – a company that does not produce goods, but rather owns stock in other companies

• department stores – bringing many different types of products together under one roof

• chain stores – similar stores owned by the same company that focused on low prices rather than service

• catalog – allowed people to shop from home and receive their goods in the mail

Ch 9 Sec 3: Big Business (cont.)

Intro 4

Chapter ObjectivesSection 3: Big Business

• Analyze how large corporations came to dominate American business.

• Evaluate how Andrew Carnegie’s innovations transformed the steel industry.

Objective: Analyze how large corporations came to dominate American business.

Evaluate how Andrew Carnegie’s innovations transformed the steel industry.

Objective: Analyze how large corporations came to dominate American business.

Evaluate how Andrew Carnegie’s innovations transformed the steel industry.

Section 3-1

Guide to Reading

After the Civil War, big business assumed a more prominent role in American life.

Main Idea

Key Terms and Names• horizontal integration• monopoly• trust • holding company

Objective: Analyze how large corporations came to dominate American business.

Evaluate how Andrew Carnegie’s innovations transformed the steel industry.

Objective: Analyze how large corporations came to dominate American business.

Evaluate how Andrew Carnegie’s innovations transformed the steel industry.

Section 3-3

Guide to Reading (cont.)

Section Theme

Economic Factors Large national corporations formed in the United States in the mid-1800s and contributed to greater production.

Objective: Analyze how large corporations came to dominate American business.

Evaluate how Andrew Carnegie’s innovations transformed the steel industry.

Objective: Analyze how large corporations came to dominate American business.

Evaluate how Andrew Carnegie’s innovations transformed the steel industry.

• Business leaders also pushed for horizontal integration, combining many firms doing the same type of business into one large corporation.

The Consolidation of Industry(cont.)

(pages 320–322)(pages 320–322)

Objective: Analyze how large corporations came to dominate American business.

Evaluate how Andrew Carnegie’s innovations transformed the steel industry.

Objective: Analyze how large corporations came to dominate American business.

Evaluate how Andrew Carnegie’s innovations transformed the steel industry.

• 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.

• Many states made it illegal for a company to own stock in another company without permission from the state legislature.

The Consolidation of Industry(cont.)

(pages 320–322)(pages 320–322)

Objective: Analyze how large corporations came to dominate American business.

Evaluate how Andrew Carnegie’s innovations transformed the steel industry.

Objective: Analyze how large corporations came to dominate American business.

Evaluate how Andrew Carnegie’s innovations transformed the steel industry.

• In 1870 John D. Rockefeller’s Standard Oil in Cleveland, Ohio controlled 10% of the nation’s petroleum refining

• By 1880 they controlled 90%

•Due to mergers and vertical integration

The Consolidation of Industry(cont.)

(pages 320–322)(pages 320–322)

Objective: Analyze how large corporations came to dominate American business.

Evaluate how Andrew Carnegie’s innovations transformed the steel industry.

Objective: Analyze how large corporations came to dominate American business.

Evaluate how Andrew Carnegie’s innovations transformed the steel industry.

• According to Rockefeller, consumers benefited from the monopoly.

• Lower costs equaled lower prices

•Job security for workers as well as security for

stock owners (investors)

The Consolidation of Industry(cont.)

(pages 320–322)(pages 320–322)

Objective: Analyze how large corporations came to dominate American business.

Evaluate how Andrew Carnegie’s innovations transformed the steel industry.

Objective: Analyze how large corporations came to dominate American business.

Evaluate how Andrew Carnegie’s innovations transformed the steel industry.

• Opponents argued that Rockefeller cut prices so that his competitors would go out of business and they would have to sell to him

• This would allow Standard Oil the opportunity to raise prices once the competition was eliminated.

The Consolidation of Industry(cont.)

(pages 320–322)(pages 320–322)

Objective: Analyze how large corporations came to dominate American business.

Evaluate how Andrew Carnegie’s innovations transformed the steel industry.

Objective: Analyze how large corporations came to dominate American business.

Evaluate how Andrew Carnegie’s innovations transformed the steel industry.

Last year, satellite radio providers Sirrius and XM made an appeal to the federal regulators to be allowed to merge so that they could cut down on costs yet only leaving one satellite radio provider. Opponents of this merger said that it would result in a monopoly. Do you agree?

Objective: Analyze how large corporations came to dominate American business.

Evaluate how Andrew Carnegie’s innovations transformed the steel industry.

Objective: Analyze how large corporations came to dominate American business.

Evaluate how Andrew Carnegie’s innovations transformed the steel industry.

• 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.

• A holding company did not produce anything itself.

• Instead, it owned the stock of companies that did produce goods.

The Consolidation of Industry(cont.)

(pages 320–322)(pages 320–322)

Objective: Analyze how large corporations came to dominate American business.

Evaluate how Andrew Carnegie’s innovations transformed the steel industry.

Objective: Analyze how large corporations came to dominate American business.

Evaluate how Andrew Carnegie’s innovations transformed the steel industry.

• The holding company controlled all the companies it owned, merging them all into one large enterprise.

The Consolidation of Industry(cont.)

(pages 320–322)(pages 320–322)

Objective: Analyze how large corporations came to dominate American business.

Evaluate how Andrew Carnegie’s innovations transformed the steel industry.

Objective: Analyze how large corporations came to dominate American business.

Evaluate how Andrew Carnegie’s innovations transformed the steel industry.

• A holding company did not produce anything itself.

• Instead, it owned the stock of companies that did produce goods.

(page 323)(page 323)

Selling the Product• Retailers looked for new ways to market and sell

their goods.

• Advertising changed, with illustrations replacing small-type line ads.

Objective: Analyze how large corporations came to dominate American business.

Evaluate how Andrew Carnegie’s innovations transformed the steel industry.

Objective: Analyze how large corporations came to dominate American business.

Evaluate how Andrew Carnegie’s innovations transformed the steel industry.

$1.00 in 1900 is equal to $23.36 today

(page 323)(page 323)

Selling the Product• The department

store changed the idea of shopping by bringing in a huge assortment of products in a large, glamorous building.

• Chain stores, like Woolworth’s, focused on offering low prices instead of special services or fancy decor.

Objective: Analyze how large corporations came to dominate American business.

Evaluate how Andrew Carnegie’s innovations transformed the steel industry.

Objective: Analyze how large corporations came to dominate American business.

Evaluate how Andrew Carnegie’s innovations transformed the steel industry.

• Mail-order catalogs were created to reach rural Americans.

• Montgomery Ward and Sears, Roebuck were the two largest catalog retailers.

Selling the Product (cont.)

(page 323)(page 323)

Objective: Analyze how large corporations came to dominate American business.

Evaluate how Andrew Carnegie’s innovations transformed the steel industry.

Objective: Analyze how large corporations came to dominate American business.

Evaluate how Andrew Carnegie’s innovations transformed the steel industry.

Selling the Product (cont.)

(page 323)(page 323)

Objective: Analyze how large corporations came to dominate American business.

Evaluate how Andrew Carnegie’s innovations transformed the steel industry.

Objective: Analyze how large corporations came to dominate American business.

Evaluate how Andrew Carnegie’s innovations transformed the steel industry.

$1.00 in 1900 is equal to $23.36 today

Section 3-15

Why did Americans fear monopolies?

Americans feared monopolies because a company with a monopoly could charge whatever price it wanted for a product.

The Consolidation of Industry(cont.)

(pages 320–322)(pages 320–322)

Objective: Analyze how large corporations came to dominate American business.

Evaluate how Andrew Carnegie’s innovations transformed the steel industry.

Objective: Analyze how large corporations came to dominate American business.

Evaluate how Andrew Carnegie’s innovations transformed the steel industry.

Chapter Assessment 7

Reviewing Key Facts (cont.)

What new methods of selling products were developed in the late 1800s?

Large display advertisements in newspapers, department stores, chain stores, and mail-order catalogs were used.

Objective: Analyze how large corporations came to dominate American business.

Evaluate how Andrew Carnegie’s innovations transformed the steel industry.

Objective: Analyze how large corporations came to dominate American business.

Evaluate how Andrew Carnegie’s innovations transformed the steel industry.

Section 3-20

Checking for Understanding (cont.)

List the new methods of advertising and selling that helped push consumer goods in the late 1800s.

New methods included large display ads in newspapers, department stores, chain stores, and mail-order catalogs.

Objective: Analyze how large corporations came to dominate American business.

Evaluate how Andrew Carnegie’s innovations transformed the steel industry.

Objective: Analyze how large corporations came to dominate American business.

Evaluate how Andrew Carnegie’s innovations transformed the steel industry.

Section 3-18

How did department stores change the idea of shopping?

Department stores brought a huge assortment of products into one building. They made shopping seem glamorous and exciting.

Selling the Product (cont.)

(page 323)(page 323)

Objective: Analyze how large corporations came to dominate American business.

Evaluate how Andrew Carnegie’s innovations transformed the steel industry.

Objective: Analyze how large corporations came to dominate American business.

Evaluate how Andrew Carnegie’s innovations transformed the steel industry.

Section 3-19

Checking for Understanding

__ 1. an organization that is authorized by law to carry on an activity but treated as though it were a single person

__ 2. costs that occur while running a company

__ 3. total control of a type of industry by one person or one company

__ 4. costs a company must pay regardless of whether or not it is operating

__ 5. the combining of competing firms into one corporation

A. corporation

B. horizontal integration

C. fixed costs

D. operating costs

E. monopoly

Define Match the terms on the right with their definitions on the left.

D

E

A

C

B

Objective: Analyze how large corporations came to dominate American business.

Evaluate how Andrew Carnegie’s innovations transformed the steel industry.

Objective: Analyze how large corporations came to dominate American business.

Evaluate how Andrew Carnegie’s innovations transformed the steel industry.

Moment in History 1

Objective: Analyze how large corporations came to dominate American business.

Evaluate how Andrew Carnegie’s innovations transformed the steel industry.

Objective: Analyze how large corporations came to dominate American business.

Evaluate how Andrew Carnegie’s innovations transformed the steel industry.

Analyzing VisualsStudy the photograph. How would you compare this to today’s vacuum cleaners? How do you think new mass-produced appliances such as this one affected the lives of women in this era?

Vacuums are lighter today. New mass produced appliances gave women more leisure time.

Objective: Analyze how large corporations came to dominate American business.

Evaluate how Andrew Carnegie’s innovations transformed the steel industry.

Objective: Analyze how large corporations came to dominate American business.

Evaluate how Andrew Carnegie’s innovations transformed the steel industry.

Section 3-24

CloseAnalyze how large corporations came to dominate American business.

Objective: Analyze how large corporations came to dominate American business.

Evaluate how Andrew Carnegie’s innovations transformed the steel industry.

Objective: Analyze how large corporations came to dominate American business.

Evaluate how Andrew Carnegie’s innovations transformed the steel industry.

End of Section 3