1. Big Business
5-3

2. Corporation
Organization owned by many people but treated as one person

3. Stock Shares of a corporation
Sold to raise money and spread the financial risk

4. Economies of Scale Corporations make goods cheaply by making a lot
Fixed Costs
Operating Costs

5. Pools
Corporations worked together to fix prices
Often fell apart

6. Andrew Carnegie Born in Scotland, immigrated in 1848
Entered Steel Industry in 1873
By 1899, Carnegie Steel was making more steel than all of Great Britain

7. Bessemer Process New process for making steel
Could be made quickly and cheaply

8. Carnegie’s Strategies
Vertical Integration
Bought up all of his suppliers
Owned mines, railroads, quarries, etc.

9. Carnegie’s Strategies,cont’d.
Horizontal integration
Combined similar companies into one large corporation
Bought up competitors = +

10. Monopoly One company controls a market
Sets prices and production levels

11. John D. Rockefeller Owner of Standard Oil First trust
Stockholders in many companies give their stock to the trustee
He runs all of the companies as one
The stockholders are given stock in the trust

12. J.P. Morgan Formed the first holding company: U.S. Steel
Does not produce goods, but owns stock in companies that do and runs them as one company
Morgan bought out Carnegie for $500 million

13. Too Much Stuff
American companies were overproducing, they need to sell more products
Created Advertising Industry

14. New Markets
Department Stores
Chain Stores
Catalogs