The Rise of Big Business

An Industrial Society1860-1914

Chapter 20, Section 3

Essential Questions

• Should private businesses and corporations have the right to run their businesses how they see most “fit”? Why or why not?

• What should be the roll of a government during a time of great wealth for a few, and much poverty for many?

Jay Gould• Jay Gould was a Robber

Barron– Was in the Railroad

Industry – Worth $77 Million in

1892

• Robber Barron:– Business Leader Who

Becomes Wealthy Through Dishonest Methods

• Jay Gould Used Illegal Methods to Become Rich:– Bribing Officials– Selling Fake Stock

How to Raise Investment Capital?

• Most Businesses in the 1800’s were Owned by 1 Person

• Businesses Owners Wanted to Buy New Equipment & New Technologies (Factory Equipment) Very Expensive!

• How Can You Raise Investment Capital? (Story of Rob!)

Corporations

• Corporations are Businesses that are Owned by Multiple Investors

• Owner of Business Sells Shares of Stock (Part of the Business) to Investors to Raise Investment Capital

• George Steinbrenner

A Sample Share of Stock

Advantages of Corporations vs. Private Businesses

• Corporations Can Raise Large Amounts of $$$ Money by Selling Stock

• A Corporation Continues After Its’ Founders Die (President, Vice Presidents, Etc…) Banks are MORE Likely to Lend to Corporations then Private Businesses

• If a Corporation Goes into Debt, Investors (Stock Holders) DO NOT have to Pay the Debt! Safer to Invest

John D. Rockefeller• Most Famous

Robber Barron in U.S. History!

• Had a Monopoly on the OIL Industry!

• You MUST Know John D. Rockefeller!

• His Company Was Called Standard Oil!

Monopoly• A Monopoly is a Company

that WIPES OUT its’ Competitors & Controls an Industry

• Purpose of the Game is to Have All the $$$ and Bankrupt Your Opponents! Charge High Rent!

• Monopolies Have the Only Product, They Charge High Prices $$$

• Ah Pizza & Espizitos

• Rockefeller Had a Monopoly on the Oil Industry!

Rockefeller’s Strategy• Put His Competitors

Out of Businesses!

• Rockefeller Built Oil Refineries Around the United States

• Made Secret Deals with Railroads to Carry HisHis Oil at Lower RatesLower Rates than his Competitors

• Built and Purchased His Own Pipelines to Carry Oil (Did Not Have to Pay Rent)

Rockefeller Formed the Standard Oil Trust

• A Trust is a LEGAL (In 1882) Body Created to Hold Stock in Many Companies in the SAMESAME Industry

• Rockefeller Purchased Stock in All the Other Oil Companies in U.S. in 1882

• That Way He Had Ownership of All Oil Companies! (A Monopoly!)

• What Would Steinbrenner Do if He Had Red Sox Stock?

Price of Gasoline• By 1880, Rockefeller

Controlled 95% of All Oil Companies in the U.S.

• Rockefeller Raised the Price of Oil!

• Americans Couldn’t Get Oil Anywhere Else!

• Standard Oil Earned Hundreds of Millions of $$$ Dollars

Other Trusts Formed• Trusts Formed in the

Sugar, Cottonseed, & Lead Mining Industries

• It Was Legal!– Americans Got

Screwed! – Had to Pay High Prices!

• U.S. Government Did Nothing About It!

Andrew Carnegie• Andrew Carnegie Had

a Monopoly in the STEELSTEEL Industry

• Differed From Rockefeller

• Created a Monopoly & Beat His Competition by Making a Better & Cheaper Product

• Company Was Called U.S. Steel

Andrew Carnegie• Sought to Control All

of the Processes Related to the Making of Steel

• Bought the Mines That Supplied the Iron Ore to Make Steel

• Bought the Ships & Railroads that Carried Iron Ore to Carnegie Steel Mills

Philanthropists

• People Who Give Large Amounts of Money to Charities

• Rockefeller and Carnegie Gave Away Hundreds of Millions of Dollars

• Why???

Rockefeller• John D. Rockefeller

Gave Away Over $500 Million

• Donated to University of Chicago & NYU

• Rockefeller Center

• Rockefeller Estate

Carnegie• Andrew Carnegie

Gave Away Over $350 Million Dollars

• Carnegie and Mellon University (Engineering School)

• Built Hundreds of Public Libraries

Duh… Carnegie Hall

The Gilded Age

• What Do These 2 Images Tell You About Life During the Gilded Age?

• Why Did Mark Twain Call the Late 1800’s The Gilded Age?

• What Does it Mean to Gild Something?

The Gilded Age (Late 1800’s)

• To Gild Something is to Cover it With Gold

• Mark Twain Wrote The Gilded Age: A Tale of Today

• What Was Mark Twain Trying to Say About U.S. Society During the Late 1800’s?

• Wrote About Great Disparity Between Rich & Poor– Corruption in

Government– Poverty

In the South (1860-1914)• After the Civil War, Slaves

Were Freed!

• YIPPEEEEEEE!

• Former Slaves/Poor Whites:– No Job– No Education– No House– No Food – No $$$– Screwed!

– Turned to Sharecropping

Sharecropping• The Southern States

Stayed Agricultural (Farming) for the Most Part After the Civil War

• Former Slave Owners Had Large Plantations, But NONO Workers

• Hired Poor Whites & Former Slaves to Work the Fields

• Rented the Land to the Workers – Workers Had to Pay in Crops

Sharecropping• As a Sharecropper, You

Rented a Piece of Land from a Landowner

• You Had to Pay For:– Land That You

Rented– Tools/Equipment– Seeds to Plant– Housing– Food

*** Very Similar to Slavery, EXCEPTEXCEPT You Had a Choice!

Essential Questions

• Should private businesses and corporations have the right to run their businesses how they see most “fit”? Why or why not?

• What should be the roll of a government during a time of great wealth for a few, and much poverty for many?