The Rise of Big Business
Essential Question Were the big business leaders of the 19th century Robber Barons or Entrepreneurs?
Causes of Rapid Industrialization Steam Revolution of the 1830s-1850s. The Railroad fueled the growing US economy: First big business in U.S. Magnet for financial investment. Key to opening the West. Aided development of other industries.
Causes of Rapid Industrialization Technological innovations. Bessemer and open hearth process Refrigerated cars
Causes of Rapid Industrialization Abundant labor (skilled & semi-skilled) . Abundant capital. New, talented group of entrepreneurs or robber barons. Market growing < population increase. Government stimulate economic growth. Abundant natural resources.
10. New Business Culture Laissez Faire government keeps their hands off the economy. Individual as moral & economic ideal. Individuals compete freely in marketplace. Market not man-made or invented. No room for government in market!
Thomas Edison “Wizard of Menlo Park” Most important inventor in history over 1,000 patents
Incandescent Light Bulb
The Phonograph (1877)
The Ediphone or Dictaphone
The Motion Picture Camera
Alternate Current George Westinghouse
Alternate Current Westinghouse Lamp ad
Alexander Graham Bell Telephone (1876)
The Airplane Wilbur Wright Orville Wright Kitty Hawk, NC – December 7, 1903
Model T Automobile Henry Ford I want to pay my workers so that they can afford my product!
Henry Ford Net Worth day would be 199 billion –3rd richest American in history Assembly Line Model T
“Model T” Prices & Sales
U. S. Patents Granted 1790s 276 patents issued.
New Type of Business Entities Pool 1887 Interstate Commerce Act outlawed Trust John D. Rockefeller Standard Oil Co. creator of modern corporate structure: Richest American in History – 1.2 billion million, (336 billion)
New Type of Business Entities
Standard Oil Co.
New Type of Business Entities Trust: Horizontal Integration John D. Rockefeller Vertical Integration: Andrew Carnegie U. S. Steel
Andrew Carnegie Genius of technological innovation founder of U.S. Steel philanthropist--established over 800 public libraries in U.S. 92 music halls funded most major museums Carnegie foundation for educational research 2nd richest American: 200 million (309 billion)
Carnegie’s Bessemer Process
Cartoon featuring Andrew Carnegie from Harper's Weekly April 11, 1903 Accompanied by this poem: We men are only lusty boys, Though snowy be our locks, So Skibo's master still enjoys To sit and play with blocks.“ Patron Saint of Libraries’ He donated $56,162,622 for the construction of 2509 library buildings throughout the English-speaking parts of the world.
Iron & Steel Production
U. S. Corporate Mergers
Industrial Consolidation: Iron & Steel Firms
New Financial Businessman The Broker: J. Pierpont Morgan Financial genius father of Wall Street founded investment banking saved country from depression in 1907 by raising 25 million in 15 minutes to loan government collector of fine art
Wall Street – 1867 & 1900
% of Billionaires in 1900
% of Billionaires in 1918
The Protectors of Our Industries
The ‘Bosses’ of the Senate
Caused Black Friday, panic of 1869, by attempting to corner the gold market James Fisk & Jay Gould
Cornelius [“Commodore”] Vanderbilt Can’t I do what I want with my money?
William Vanderbilt The public be damned! What do I care about the law? H’aint I got the power? Shipping & railroad magnate who made fortune with help of free land given by government to railroads 6th richest American 100 million (185 billion)
Vanderbilt’s Summer Cottage at Newport
Regulating the Trusts 1890 Sherman Antitrust Act in “restraint of trade” “rule of reason” loophole
Relative Share of World Manufacturing
The ‘Robber Barons’ of the Past
Entrepreneurs or Robber Barons? innovators growth of America philanthropists Robber Barons ruthless competitors let their workers starve
Modern ‘Robber Barons’??