1. Big Business

2. Robber Barons
The great wealth many railroad entrepreneurs acquired in the late 1800s led to accusations that they built their fortunes by swindling investors and taxpayers, bribing government officials, and cheating on their contracts and debts.
Corruption in the railroad industry became public and created the impression that all railroad entrepreneurs were “robber barons.”
Robber Barons: people who loot an industry and give nothing back.
By 1900, big business dominated the economy, operating vast complexes of factories, warehouses, offices, and distribution facilities.

3. The Role of Corporations
Corporation: an organization owned by many people but treated by law as though it were a single person.
Stockholders: people who own the corporation because they own shares of ownership called stock.
This raises large amounts of money for big projects while spreading out financial risk.

4. The Role of Corporations
By the 1830s, states began passing general incorporation laws, allowing companies to become corporations and issue stocks.
With money raised from selling stock, corporations would invest in new technologies, hire a large workforce, and purchase many machines.
This greatly hurt small businesses with high operating costs— forcing many out of business.
Corporations were criticized for cutting prices and negotiating rebates.

5. Andrew Carnegie
Scottish immigrant who started small and became the owner of a steel company in Pittsburg.
Began vertical integration- owns all of the different businesses on which it depends for its operation.
Ex) Instead of buying coal from a company, Carnegie bought the actual coal mine.

6. The Consolidation of Industry
Business leaders also pushed for horizontal integration- combining many firms engaged in the same type of business into one, large corporation.
This happened often and when a company began to lose market share, it would sell to its competitors and create a large organization.

7. John D. Rockefeller
U.S. industrialist who made a fortune in the oil business.
By 1880, Standard Oil controlled almost 90% of the oil refining industry in the U.S.
When a single company achieves control of an entire market, this is called a monopoly.

8. The Consolidation of Industry
By the late 1800s, Americans grew suspicious of large corporations and monopolies.
To preserve competition, many states made it illegal for one company to own stock in another without permission from state legislature.

9. Trusts
In 1882 Standard Oil formed the first trust—a new way of merging businesses without violating the law of owning other companies.
Trust: a legal concept that allows one person to manage another person’s property (called a trustee).
Ex) Standard Oil trustees were able to control a group of companies as if they were one large merged company.

10. References
Appleby, J., Brinkley, A., Broussard, A.S., McPherson, J.M., Ritchie, D. A. (2006). The American vision (pp ). New York, NY: McGraw-Hill.
Robber Baron political cartoon retrieved from content/uploads/2011/09/RobberBarons.jpg
Andrew Carnegie photo retrieved from rofiles/C/Andrew-Carnegie jpg
John D. Rockefeller photo retrieved from ockefeller_1885.jpg