THE RISE OF THE TRUSTS

Rush to Merge into GIANT Companies As companies and industries grew there was a movement to merge companies together  this allowed for companies to streamline and become more productive/more successful Horizontal Integration = several small companies that do same thing combine to form one large company Vertical Integration = a company owns all of the things needed for production from raw material to finished product to retail

The Monopoly and the Trust Monopolies have been around for a very long time The word monopoly comes from Greek monos (single) polein (to sell)  one company controls an entire market  many monopolies in the U.S. were government sponsored (i.e. the railroads, utilities like electricity) Trusts also grew during this time period  several companies would merge together under the control of a single management  companies still owned by individual owners but they were controlled by a central body  they could use the single Trust to undercut competition

Internal Deliberation Time What are the concerns people have with Monopolies? What are the specific dangers that Monopolies pose to:  the employees of these businesses?  the products that the businesses produce?  the consumers for these businesses? Can Monopolies by good for most everybody involved? If so how?

Standard Oil and Carnegie Steel John D. Rockefeller was the founder of Standard Oil  this company came to dominate the oil industry  Rockefeller did use ruthless tactics to buy out competitors  often Rockefeller was trying to get rid of inferior competition who put out inferior product Andrew Carnegie founded what became Carnegie Steel in 1875 near Pittsburg  he managed to buy up other local steel mills over the next 15 years  Carnegie was able to come to dominate the U.S. steel industry and sold his company to JP Morgan in 1901 for $480 million

The Anti-Trust Movement Trusts were simply monopolies and many said that they were bad  some trusts were bad  many trusts were beneficial in that they used their resources to make better cheaper products Sherman Anti-Trust Act 1890 the Sherman Anti-Trust Act is created  goal was to target “bad” trusts and create more competition  some said it would prevent Trusts from charging artificially high prices  some said that this would stifle innovation by breaking up and punishing the big guys (or gals if you so prefer)