i will analyze the rise of big business in america
TRANSCRIPT
Big Business and LaborI will analyze the rise of big business in America.
Cornell Notes
• Topic- Big Business and Labor
• Essential Question: How did tycoons consolidate and create the country's largest companies?
• Create notes on the following topics using pages 241-244:• Andrew Carnegie• Carnegie’s Business Strategies
• Vertical Integration• Horizontal Integration• Social Darwinism• John D. Rockefeller• Trusts• Holding Companies• Monopolies• Sherman Anti-trust Act
Andrew Carnegie• Born in Scotland to penniless parents• Immigrated to the U.S. in 1848 (12 years Old)• Worked as superintendent of the Pennsylvania
Railroad• His boss gave he the opportunity to buy stock.
• One of the first moguls to make his own fortune• Made his money by going in into the Steel industry and
put the Bessemer process in action.
• By 1899, Carnegie’s factories made more steel than all of Great Britain.
New Business Organization
• New Business organization:Corporation- a company sells stock or pieces of ownership in a company, investors buy stock which entitles them to a share in the profit
• Owners of stock- have limited liability, they are not personally responsible for loses in the business and can not lose more than their investment
• Companies incorporate to eliminate liability, raise money from sale of stock
• Spurs the growth of corporations and the middle class
• Dividend- a return on profits, paid to stock holder
Sole-Proprietorship
Carnegie’s Business Strategies• Carnegie searches for ways to make better products
more cheaply• Incorporated new machinery and an accounting system
to track costs.• Hires talented staff• offers company stock to employees• promotes competition among assistants
Vertical and Horizontal Integration
• Horizontal Integration: expansion of one corporation or owner takes over other businesses in and industry, example Standard Oil- forces out of business other oil companies.
• Vertical Integration: form of business expansion where one industry controls aspects of the business, raw materials, to the distributor example: Carnegie began with steel mills, then railroads, coal mines, iron mines, and distributor of
Principles of Social Darwinism
• Darwin’s theory of biological evolution: the best-adapted survive
• Social Darwinism, or social evolution, based on Darwin’s theory• Strongest companies and individuals will survive
• Economists use Social Darwinism to justify doctrine of laissez faire• Laissez faire economics- Market Place should not be
regulated by the government• Success and failure of business were governed by
natural law and no regulation was needed.
A New Definition of Success• Idea of survival and success of the most capable appeals
to wealthy- because they were successful• 4000 New Millionairs
• Notion of individual responsibility in line with Protestant ethic
• See riches as sign of God’s favor• Poor must be lazy must be inferior
Growth and Consolidation• Businesses try to control industry with mergers— buy out
stock from competitors• Buy all other companies led to monopolies—
• control • production• wages• prices
• Holding companies buy all the stock of other companies• Holding Company: trust or corporation that buys
stock or owns businesses in other industries, oil refinery owns a railroad.
Trusts and Holding Companies• Holding Company: trust or corporation that
buys stock or owns businesses in other industries, oil refinery owns a railroad.
• A corporation that does nothing but buy out the stock of other companies
• Trust: A large corporation made up of many companies that receive certificates entitling them to dividends on profits earned by all the companies combined.• transfer stocks to a group of trustees, in exchange for shares in the trust itself
• Both helped to create monopolies
John D. Rockefeller• Forms Trust• Founds Standard Oil
• Refines oil into Kerosene
• Bought out all competitors in Oil Refining• Refined 90% of country’s oil• Rockefeller profits by paying low wages, underselling
others• - when controls market, raises prices• • Critics call industrialists robber barons• - industrialists also become philanthropists
Rockefeller, cont.• Over One Billion
Given• At death, gave over
one billion dollars in philanthropy
• University of Chicago - $180 million
• Arts, medicine, black Baptist churches, etc.
Major gifts given by Rockefeller by his death in 1937:
• American Baptist Foreign Mission Society $6,845,688• American Baptist Home Mission Society $6,994,831• American Baptist Missionary Society $1,902,132• General Education Board $129,209,167• Laura Spelman Rockefeller Memorial $73,985,313• Rockefeller Foundation $182,851,480• Rockefeller Institute for Medical Research $59,931,891• University of Chicago $34,708,375• Yale University $1,001,000• YMCA $2,295,580
TOTAL $506,816,041
• “There is a great responsibility resting upon the possessors of wealth, and I believe there is on the part of many a growing appreciation of that responsibility.”
-John D. Rockefeller
“It will be a great mistake for the community to shoot the millionaires, for they are the bees that make the most honey, and contribute most to the hive even after they have gorged themselves full.”
-Andrew Carnegie
Sherman Antitrust Act• • Government thinks expanding corporations stifle
free competition• • Sherman Antitrust Act: trust illegal if interferes
with free trade • • Prosecuting companies difficult; government stops
enforcing act
Business Boom Bypasses the South• South recovering from Civil War, hindered by lack of
capital• North owns 90% of stock in RR, most profitable Southern
businesses • Business problems: high transport cost, tariffs,
few skilled workers
DOL• In a 7 sentence constructed response, explain how
big business took over America. Be sure to include details on the following:• Andre Carnegie• John D. Rockefeller• Horizontal Integration• Vertical Integration• Monopolies• Trusts• Holding Companies
I will analyze to what extent big business was for America.
Big Business…was it good for America?
Stations Activity Instructions• Instructions:
• Create a T-Chart (Full 2 Pages)
• Positives and Negatives of Big Business
• For each document your analyze, determine what that document displays as positive or negative aspects of Big Business.
• In complete sentences, add those positives and negatives to your t-chart.
• Remember that you do not get the documents to keep, so be sure to include the source and other key information.
• Purpose: The purpose of this activity is to gain a deeper understanding for the industrial era by closely reading primary and secondary source documents located at various stations. Each station is organized around a unifying theme and includes a series of documents that provide a window into the era.
DOL• In a OER, justify to what extent was the rise
of big business good for America. • Be sure to include a strong thesis and key
details from the documents.
Dynamo• Dynamos and Generators convert mechanical
rotation into electricpower. Dynamo - a device that makes direct current electric power using electromagnetism. It is also known as a generator, however the term generator normally refers to an "alternator" which creates AC power
• How does this document prove that the Industrial leaders were captains of industry or Robber Barons?
Homework due Next Week
DBQ- Due Wednesday• Should the American
leaders of the Gilded Age (Industrial Revolution) be remembered as Robber Barons or Captains of Industry?
OER- Due Tuesday• Justify to what
extent was the rise of big business good for America.