Big Business. Factors Supporting Industrialization: Western Mining Immigration Government subsidies...
-
Upload
dylan-bates -
Category
Documents
-
view
223 -
download
1
Transcript of Big Business. Factors Supporting Industrialization: Western Mining Immigration Government subsidies...
Big Business
Factors Supporting Industrialization:• Western Mining• Immigration• Government subsidies and tax concession to railroad• Advances in communication• Corporation Charters• Laissez faire attitude of government• Bessemer process• High tariffs • Entrepreneurs• Vertical and horizontal integration• National markets• Civil War profits and foreign investment
Industrialism and Big Business
• Industrial expansion changed American after the Civil War.– HUGE businesses formed– Railroads, Oil and Steel
• Industrialists (owners) bought up small companies and merged them into large corporations.
• These business owners became known as Robber Barons.
Captains of Industry or Robber Barons?
• Wealthy industrialists who used ruthless business tactics to drive competitors out and get rich. – Paid low wages– Did not allow strikes– Secret agreements
• Big 4 Robber Barons:– Vanderbilt– Andrew Carnegie– John D. Rockefeller– J.P. Morgan
Robber Baron #1: Vanderbilt
• Remember the transcontinental railroad?• Railroads– Lowered prices to drive people out of business– …then raised prices!
Robber Baron #2: Carnegie• Andrew Carnegie was a poor Scottish
Immigrant who struck it rich!• Forms U.S. Steel Company– New machines made products more cheaply• Bessemer Process – mass production of steel
– Horizontal and Vertical Integration• Buy out all of your competition
Companies like Carnegie Steel used vertical integration
to buy companies in order to gain materials needed to make or deliver their products
Companies like Standard Oil used horizontal integration to buy similar companies to reduce competition
Gospel of Wealth
• Andrew Carnegie wanted to give back to the people and wrote the “Gospel of Wealth”– It is the duty of rich people to give away their
wealth– Gave away 90% of his money to the poor.• Set up schools, libraries, art centers.
Robber Baron #3: Rockefeller
• Standard Oil Company– Unified many oil refineries in Cleveland – Gained control of 90% of the industry
• How did he do it?
Rockefeller’s Riches
• Created Trusts-Group of people who ran separate companies in one large corporation
• Low wages for workers• Low prices drove competitors
out of business raise prices
Oil • 1859 Edwin Drake invented the oil well. • 1859 produced 2,000 barrels of oil a year• By 1900 produced 64 million barrels of oil a
year. • “Black Gold”
• By 1880s US had surpassed Britain economically
Robber Baron #4: Morgan• J.P. Morgan• Investment Banking– Large corporations needed money to finance their
growth. – “Holding companies” would buy up stock of
other businesses to get their profits
Industrialists like Vanderbilt, Carnegie, Rockefeller changed the way businesses were organized
Businesses hired professional managers to oversee employees, improve efficiency, and manage finances
Corporations became a more common business structure
Corporations used boards of trustees
(“trusts”) to manage the company…
…and holding companies to manage other
subsidiary companies
Board of Trustees
Company Manager
Employees Employees Employees Employees
Holding Company
Company A
Company D
Company E
Company B
Company F
Company C
Company G
Company H
Corporations used mergers to increase profits
Monopolies!• Robber Barons created
monopolies.– Rockefeller was criticized for
being a monopolist.• Monopoly - Corporation
that is so powerful it can block competition.
• What are the advantages of being a monopoly?– Total Control!!– Set prices!!
Differences in Society• The Robber Barons were becoming VERY
wealthy. • But, most people worked in mills and factories.• To justify the difference between the rich and
poor, they turned to...
VS
Darwin• Darwin's Theory of Evolution - “Survival of
the Fittest”• Social Darwinism– Whoever got rich deserved it– Poor people are lazy and undeserving– Wanted “laissez faire” government
Monopolists justified their wealth in a variety of ways
The “Gospel of Wealth” argued that it is God's will
for some men to gain great wealth so they could serve the public
Social Darwinism taught that natural
competition weeds out the weak and allows the strong to survive
The government used laissez faire policies
toward big business…
…the lack of regulation allowed businesses to become very powerful
and exploitive
Government Position
• Usually supported businesses– Protective tariff to help business grow and
develop– Gave money and land to support railroad growth– Unlimited immigration• Made sure there was a cheap labor supply
Government eventually responded
• Sherman Anti-Trust Act– Tried to break up monopolies and trusts to
increase competition-out lawed monopolies-Vague and unclear-Generally unsuccessful-But does lay ground work for first attempt by gov’t to do something about monopolies and restrictions on free trade
Conclusions• America was changed by the Industrial Revolution:– The United States led the world in industry,
innovation, and wealth– Laissez-faire gov’t policies and new business
tactics led to monopolies –But the gap between the wealthy monopolists
and their poor immigrant workers grew wider
“Robber Barons” of the Gilded AgeWere the industrial capitalists of the Gilded Age “robber barons” or “captains of industry”?
Weigh their positive and negative effects
Political Cartoon Analysis
• For each cartoon answer the following questions:– What imagery is used to display power? – Who are the victims and how are they portrayed?
• Then answer this overall question: – Why do they use the octopus?
• Make sure to write the cartoon number near the answer to each question
Make sure to look at all labels in the cartoon
• Why an octopus?• What symbols are used to show power?• What is the overall message?