Unit VI – A Growing America Chapter 19 Section 2 – Big Business Lecture Station

Big Business The Big Idea The growth of big business in the late 1800s led to the creation of monopolies. Main Ideas The rise of corporations and powerful business leaders led to the dominance of big business in the United States. People and the government began to question the methods of big business.

Main Idea 1: The rise of corporations and powerful business leaders led to the dominance of big business in the United States.   Many entrepreneurs.   A new type of business organization developed called the corporation   Corporate leaders.   Successful corporations.   Corporations encouraged.   laissez-faire capitalism   Social Darwinism   Trusts   Mass Marketing

Advantages of Corporations and Stockholders.  1. Stockholders are not responsible for the debts of the corporation.  2. If the corporation fails the stockholders only lose the money they invested. Invest in strong companies that will survive.  3. Stockholders can sell their stock to whomever they wish when ever they wish.  4. By 1900 over 100 million shares were traded on the NYSE every year.

The Rise of Big Business  Terms: Entrepreneurs- Risk takers who started new ventures in free enterprise. Entrepreneurs- Risk takers who started new ventures in free enterprise. Capitalism- Free Enterprise. Economic system based on ownership of land, factories, Capitalism- Free Enterprise. Economic system based on ownership of land, factories, Laissez-faire- companies operating without government interference. Laissez-faire- companies operating without government interference. Social Darwinism- competition by the species, survival of the fittest. Natural selection. Strong business prosper, weak ones fail. Society should not interfere with business. Gov’t stay out. Social Darwinism- competition by the species, survival of the fittest. Natural selection. Strong business prosper, weak ones fail. Society should not interfere with business. Gov’t stay out. Tycoons- businessman with great wealth and power. Tycoons- businessman with great wealth and power. Robber Barons- destroying competitors with tough tactics Robber Barons- destroying competitors with tough tactics Captains of Industry- Using business skills to strengthen the economy. Captains of Industry- Using business skills to strengthen the economy.

Andrew Carnegie Used vertical integration Carnegie Steel Gospel of Wealth John D. Rockefeller Standard Oil Company Developed horizontal integration, Formed a trust Rebates Business Leaders Leland Stanford

Industrial Tycoons Made Huge Fortunes John D. Rockefeller Andrew Carnegie Cornelius Vanderbilt George Pullman

Rock Oil Lights the World  First uses-  Drilling George Bissell, Edwin Drake and Titusville, Penn George Bissell, Edwin Drake and Titusville, Penn. Wildcatters- Wildcatters Boom in Texas lasts 20 years Boom in Texas lasts 20 years. Cleveland, Ohio (railroads and rivers) and Rockefeller Cleveland, Ohio (railroads and rivers) and Rockefeller Pipelines, Oil lamps Pipelines, Oil lamps Rebates. Rebates.

Dominance of Big Business  What role do stockholders play in corporations?  Why are corporations advantageous for stockholders?  Why do you think Andrew Carnegie was one of the most admired businesspeople of his time?

Main Idea 2: People and the government began to question the methods of big business.   Big business as a problem in the late 1800s. Concerned about Social Darwinism.   Rich should help the poor. Carnegie, Rockefeller, Stanford, and other business leaders gave away large sums of money to charities.

Monopolies  Business competition became fierce Pools:. Pools:. Holding companies: Holding companies: Trusts: Trusts:

The Antitrust Movement   Critics said many businesses earned their fortunes through unfair business practices. Used size and strength Powerful trusts sold goods and services.   Monopoly, or total ownership of a product or service.   The Sherman Antitrust Act passed in The act did not. Corporations and trusts continued.

Questioning the Methods of Big Business  What is Social Darwinism?  Why did some business leaders give money to charity?  Why did critics oppose the practices of big business?  Was the Sherman Antitrust Act successful in curbing the power of wealthy trusts? Why?

Section 2 Activity Write at least three sentences on the back of the Sect. 2 homework sheet on why these men were so important in U.S. History?