John D. Rockefeller & Andrew Carnegie Ch. 19.3

John D. Rockefeller Born in Richford, New York o 1839 Made his fortune in oil America’s first billionaire Built his first oil refinery at age 26 o Cleveland, Ohio

Rockefeller Organized the Standard Oil Company Horizontal Integration- Combining competing companies into one organization

The Standard Oil Trust Rockefeller lowered his prices to drive competitors out of business o Who does this sound like today? Persuaded railroads to give him special rates 1882 o Formed a trust by acquiring stocks in many different oil companies o Standard Oil Company became part owner of the other companies Trust: Group of companies managed by the same board of directors Rockefeller had formed a monopoly

Andrew Carnegie Made his fortune in steel Son of a Scottish immigrant o Began his career as a telegraph operator Invested in the Steel industry

Carnegie By Carnegie was the dominant figure in the steel industry Vertical Integration- His company acquired companies that provided the equipment and services he needed o Bought iron and coal mines, warehouses, ore ships, and railroads By 1900, Carnegie Steel Company produced 1/3 of the nation’s steel

Philanthropy Philanthropy: Use of money to benefit the community Rockefeller and Carnegie used their fortunes to: o Found schools, universities Carnegie: o Built Carnegie Hall- Famous concert hall in New York City o 2,000 libraries Rockefeller: o Founded the University of Chicago o Founded New York’s Rockefeller Institute for Medical Research

Monopolies Some states pass laws to allow businesses to form monopolies Many Americans admired large businesses, but some thought lack of competition hurt consumers Sherman Antitrust Act o Prohibits trusts and monopolies o Ineffective in its early years