5:3 ● The Rise of Big Business ● Corporation: owned by many people, but treated by law as if owned by one person – Can own property – Pay taxes – Make contracts – sue and be sued ● People who own corporations are “stockholders” – They own “stock”

5:3 ● What do corporations do with the money they receive from stockholders? ● Invest in new technologies ● Purchase machines ● Hire more workers ● “Economies of Scale” ● The cost of manufacturing is decreased by producing goods quickly and in large quantities

5:3 ● Vertical Integration ● Began by Andrew Carnegie (steel) ● Owns all of the businesses on which it depends for its operation

5:3 ● Horizontal Integration ● John D. Rockefeller (oil) ● Combining firms in the same business into one large corporation – Companies not doing well would sell out to their competitors ● Eventually becomes a “Monopoly” – When a single company achieves control of an entire market

5:3 ● Trusts ● Started by Standard Oil ● New way to merge businesses without breaking the law ● Legal arrangement that allows one person to manage another person's property ● Ownership of a stock: Stockholder ● Managing a stock: Trustee