PowerPoint Presentation

Robber Barons&Big BusinessCorporations & BankersBig factories have now replaced small factories= cheaper goods, faster service

Railroads distributed these goods across the nation

Now that a few large companies were running major industries, they needed capitalCAPITAL: money for investment that a company uses to buy raw materials, pay workers & cover shipping/ advertising costs

Corporations & Bankers

To raise capital, expanding businesses became corporationsCORPORATION: business owned by investorsSells STOCK: shares in the business to investors, or stockholdersThis $$ can be used to build a new factory or buy machines

Corporations & Bankers

In exchange for investing, stockholders hope to receive DIVIDENDS: shares of a corporations profit

Corporations & Bankers

To protect their investments, stockholders elect a board of directors to run the corporation

If the business goes bankrupt, the owner MUST pay all the debts of the business

By law, stockholders CAN NOT be held responsible for a corporations debts

Corporations & Bankers

To be so successful, corporations had borrowed tons of $$ from banks, so bankers made huge profits

Most powerful banker late 1800s: J.P. MorganUsed banking profits to gain control of major corporations

Corporations & Bankers

During an economic loss in the 1890s, Morgan invested in the stock of troubled corporationsAs large stockholders, they were on the corporations boardsBy 1898 Morgan controlled most rail lines & steel companies (bought Carnegie)By 1901 he combined all steel companies into one: U.S. Steel CompanyCorporations & Bankers

U.S. Steel Company becomes the 1st company in America to be worth over $1 Billion Dollars!Black Gold1859- Discovery of oil. Valuable resource that could act as fuel

J.D. Rockefeller builds oil refineryHe knows oil is worthless until it is refined to make keroseneStoves/lamps

Oil

Ive got to get my hands on some of that black gold!

Used profits from his refinery to create Standard Oil Co. of OhioJ.D. Rockefeller

Grease me up, baby!Hated the idea of competition, thought it was a waste Slashed prices to drive rivals out of businessPressured customers with mediaCut a deal with railroads supply for rebates on shipping

J.D. RockefellerWho has theMost effectiveAdvertising today?

1882 creates Standard Oil trustTrust: group of corporations run by a single board of directorsThis created a monopoly of the oil industry

J.D. Rockefeller

Hey J.D. Thanks for being a billionaire tycoon and inspiring my record label!Cause & EffectCAUSES:

Railroad boom spurs business

Businesses become corporations

Nation has rich supply of natural resources

New inventions make business more efficientEFFECTS:

Steel & Oil become HUGE industries

Monopolies & trusts dominate important industries

Factory workers face harsh conditions

Membership in labor unions growsRISE OF INDUSTRYEFFECTS TODAY:U.S. is worlds leading economic powerU.S. corporations do business around the worldGovernment laws regulate monopoliesbusinesses are owned by private citizens who decide what to produce, how much to produce & what prices to charge

Free enterprise system:

citizens*GOOD for entrepreneurs starting out***CONTRAVERSIAL for our fat cats**

Many thought leaders of giant corporations were abusing the free enterprise system

Companies compete to win customers by making the best product at the lowest price

Free enterprise system:

VS.1. Trusts/ monopolies reduce competitionWithout competition theres no reason for companies to keep prices low or improve products

2. Hard for new companies to compete with powerful trusts

3. Few Fabulous Wealthy vs. Majority Wretchedly Poor

Political influence & wealth can sway people in power to buy or neglect certain companiesAgainst Trusts

1890- banned formation of trusts and monopoliesToo weak to be effective since it spanned the whole nationSome state govts passed laws to regulate, but powerful, $$ corporations side-stepped them

Sherman Antitrust Act:

Too much competition ruins businesses & puts people out of work

Are they really giving back? Or is Carnegie a rare example?

For Trusts

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 Carnegie2. Growth of giant corporations broughtLower production costsLower pricesHigher wages

3. Better quality of life for millions of AmericansBy1900- Americans enjoy highest standard of living in the world

For Trusts

http://www.youtube.com/watch?v=MnvPBYoJ_bY http://www.youtube.com/watch?v=b-sR6W_fM-s