1. Chapter 20, Lesson 3 Big Business

2. Production Factors of Production: land, labor, & capital Land: includes natural resources Labor: workers & our pop. doubled 1860-1900 Capital: machines, buildings, tools, money

3. Expansion Entrepreneurs: People who take risks & start businesses, raise capital to buy materials, equipment & pay workers Corporation: Business w/ many owners that sells shares of ownership or stock Shareholders: People who buy stock Dividends: Profits from stock

4. John D. Rockefeller Built oil refinery w/ 4 partners in Cleveland, OH 1870 started Standard Oil Company Formed a trust: group of companies managed by a few people (board) which led to a monopoly: total control of an industry (horizontal Integration)

5. Andrew Carnegie Built a steel plant near Pittsburgh, PA Dominated industry by 1890 w/ vertical integration: owning all businesses that make up the industry (iron & coal mines, warehouses, ore ships, railroads) Controlled all the steps of production Was making 1/3 of nation’s steel by 1900

6. Carnegie Steel

7. Corp. Grow Larger Holding companies gained control over other companies by buying their stock Mergers (combining companies) was easier This hurt competition 1890-Sherman Antitrust Act made monopolies illegal