Big Business

http://www.history.com/shows/men-who-built- america/videos/the-men-who-built-america-traits-of-a- titan

A Brassy, Flamboyant Age The Gilded Age, the period between the end of Radical Reconstruction (1877) and the beginning of the Progressive Era (1901), was a brassy, flamboyant age dominated by big business values, political corruption, and extremes of wealth and poverty. During the Gilded Age, the United States changed from a predominantly rural agrarian nation to an urban industrial one.

From Agriculture to Industry

The Way We Were in The Gilded Age: 1877-1901 Who We Were How We Lived 1880 1890 1900 Population (millions) 50.2 63.0  76.0 Gallon of milk $0.16 $0.17 $0.30 Pop. per sq. mile 16.9 21.2 25.6 Loaf of bread $0.02 $0.03 Percent rural 71.8% 64.9% 60.4% New auto N/A $500 Percent urban 28.2% 35.1% 39.6% Gallon of gas $0.05 Percent native born 94.4% 87.1% 84.4% New house $4,500 $5,800 $4,000 Percent immigrant 5.6% 12.9% 15.6% Average income $480 $660 $637  

The Role of Corporations an organization owned by many people but treated by law as though it were a single person. Stockholders: people who own the corporation because they own shares of ownership called stock. This raises large amounts of money for big projects while spreading out financial risk.

The Role of Corporations By the 1830s, states began passing general incorporation laws, allowing companies to become corporations and issue stocks. With money raised from selling stock, corporations would invest in new technologies, hire a large workforce, and purchase many machines. This greatly hurt small businesses with high operating costs— forcing many out of business. Corporations were criticized for cutting prices and negotiating rebates.

Andrew Carnegie Scottish immigrant who started small and became the owner of a steel company in Pittsburg. Began vertical integration- owns all of the different businesses on which it depends for its operation. Ex) Instead of buying coal from a company, Carnegie bought the actual coal mine. http://www.history.com/topics/andrew-carnegie/videos/the- men-who-built-america-andrew-carnegie

Vertical Integration

The Consolidation of Industry Business leaders also pushed for horizontal integration- combining many firms engaged in the same type of business into one, large corporation. This happened when: -a company that began to lose market share would sell out to its stronger competitor, creating a large organization. - a strong company would undercut its smaller competitors, then conduct a “hostile takeover” of its then weakened competition. http://www.bing.com/videos/search?q=glasses+conspiracy&view=detail&mid=47498D1 C675732F5095E47498D1C675732F5095E&FORM=VIRE&adlt=strict

Consolidation of Industry http://www.bing.com/videos/search?q=glasses+conspiracy&view=detail&mid=47498D1C675732F5095E47498D1C675732F5095E&FORM=VIRE&adlt=strict

John D. Rockefeller U.S. industrialist who made a fortune in the oil business. By 1880, Standard Oil controlled almost 90% of the oil refining industry in the U.S. When a single company achieves control of an entire market, this is called a monopoly. http://www.history.com/shows/men-who-built-america/videos/the-men-who-built- america-monopoly?playlist_slug=men-who-built-america-season-1-preview- list&cdn_provider=auto

The Consolidation of Industry By the late 1800s, Americans grew suspicious of large corporations and monopolies (controlled product supply and prices.) To preserve competition (equated with better quality, quantity, and price), many states made it illegal for one company to own stock in another without government permission.

Trusts In 1882, Standard Oil formed the first trust—a new way of merging businesses without violating the law of owning other companies. Trust: a legal concept that allows one person (called a trustee) to manage another person’s property. Example: Standard Oil trustees were able to control a group of individual companies as if they were one large merged company.

Review

Cornelius Vanderbilt American Railroad baron. Baron: An important or powerful  person in a specified business or industry Wealthiest man in the United States during the nineteenth century. Self-made man.

Biltmore House

J.P. Morgan American business leader, financier and banker. He was criticized for creating monopolies by making it difficult for any business to compete against his.  Morgan dominated two industries in particular He helped consolidate railroad industry in the East. Formed the United States Steel Corporation in 1901.

Robber Barons The great wealth many railroad entrepreneurs acquired in late 1800s led to accusations that they built their fortunes by swindling investors and taxpayers, bribing government officials, and cheating on their contracts and debts. Corruption in the railroad industry became public and created the impression that all railroad entrepreneurs were “robber barons.”

Captains of Industry or Robber Barons? Robber Barons: people who loot an industry and give nothing back. By 1900, “big business” dominated the economy, operating vast complexes of factories, warehouses, offices, and distribution facilities.