Cornelius Vanderbilt Vanderbilt built the railroads Majority of railway lines were owned by a few powerful men Offered secret deals to factories and industries

I. John D. Rockefeller Multimillionaire who dominated the oil industry

VI. The Oil Industry 1859 Oil discovered Oil boom followed

A. Rockefeller and Standard Oil Son of a humble, New York peddler Thought competition was wasteful Standard Oil Company; Rockefeller’s oil monopoly Rockefeller drove competitors out of business

B. Creating a Trust Trust: – A group of corporations run by a single board of directors Monopoly: – Controls all or nearly all of an industry Standard Oil controlled 95% of oil industry Corporation A Corporation B Corporation C Board of Directors

II. Growth of the American Steel Company Railroads fueled the growth of industry Steel became the ideal material

A. A new way to make steel Bessemer Process: – Method to produce strong and cheap steel More products being made of steel – Nails, screws, needles, skyscrapers

B. Steel Mills spring up Sprang out throughout the Mid-West Positive: Created Jobs Negative: Pollution

III. Andrew Carnegie Scottish Immigrant Went to England and saw the Bessemer process Built a steel mill and created relationships with railroads

B. Controlling the Steel Industry Used $ to buy out rivals, iron mines, railroads, steamships and warehouses Vertical Integration: – Owning all phases of an industry Carnegie combined all businesses to create Carnegie Steel Co.

C. Gospel of Wealth Carnegie thought the rich should help the poor Donated $60 million to build libraries

IV. Rise of Big Corporations Big factories out produced small ones Small factories were forced to close Factory owners need ways to build capital Corporation: – Business owned by investors Stock: – Share in a corporation Dividends: – Share in profits

V. Banks and Industry Corporations borrowed $ from banks JP Morgan: Powerful banker Invested in troubled corporations and turned a profit Took profits and invested in other industries (railroads and steel)

VII. Big Business: Two viewpoints A.Opposition – Reduced Competition – Too much political influence – Led to poor working conditions. – Sherman Antitrust Act: Outlawed the formation of trusts and monopolies B. Support Too much competition ruined business; put people out of work Lowered production costs, lower prices, By 1900…Americans enjoyed the highest standard of living Free Enterprise System: Business are owned by private citizens