2. Why Big Business developed in the late 1800s
Civil War
[industrialization for war materials]
Social changes
[end of slavery, Native Americans, immigration]
Mineral resources
[iron ore, coal, lumber]
Transportation
[Railroads]

3. Inventions
Bessemer Process

4. - Edison’s Light Bulb

5. - Bell’s Telephone

6. Corporations Capital sell stock to create capital
use capital to produce goods
pay investors through dividends

8. The Entrepreneurs of Big Business
Men who innovated to create new industries and products which created jobs to help create the Middle Class
Out to improve & enhance society

9. Robber Barons
Business owners who exploited workers and other businesses
Primary goal was personal gain, not improving society

10. Andrew Carnegie – created and owned Carnegie Steel Company
Horizontal or Vertical Integration?
Bought out competing firms
Bought out suppliers of ore and coal
Bought out transportation of raw materials

11. John D. Rockefeller created the Standard Oil Company
Horizontal or
Vertical Integration?
Bought out 39 oil
companies

12. Cornelius and William Vanderbilt Staten Island, New York & Harlem Railroads
Horizontal or
Vertical Integration?
Bought ferry and steamship
companies
Bought other railroad

13. J.P. Morgan Financier [investment banker] Horizontal or
Vertical Integration?
Bought out Carnegie’s steel plants
combined them with other steel plants to form the largest steel plant in the world called: US Steel Corporation

14. Herbert Spencer and Social Darwinism
- "Society advances, where its fittest members are allowed to assert their fitness with the least hindrance… the unfit should not be prevented from dying out."
- The idea that the poor are poor because they are “unfit” and the rich are rich because they are “fit”

15. Economic and Social beliefs
Adam Smith wrote
“Wealth of Nations”
In 1776
US gov’t followed
Doctrine of
“Laissez-Faire” Economics

16. Laissez-faire means “leave it be” or “leave it alone” - refers to the government staying out of (not regulating) businesses
How does the philosophy of “Social Darwinism” support the notion of Laissez-faire?

17. Gospel of Wealth
Belief that great wealth had a responsibility to better society
Donated huge sums of money to improve society
• Rockefeller & Carnegie
Example: Built schools, libraries, museums, theaters

18. d. Sherman Anti-Trust Act, 1890
Prevent corporations from creating monopolies/trusts or trying to hinder free trade
Ineffective until Teddy Roosevelt

19. Some of Standard Oil’s workers

20. Effects of Industrialization
Increased Immigration
- Need for cheap labor, plenty of opportunities

21. Working conditions deteriorate
New immigration drops wages and increases rampant poverty [causes increase in nativism]
Child labor common in factories and cities
Dangerous working conditions common
Workers required to work up to 60 hours per week

22. Growth of Unions to protect workers
Samuel Gompers
American Federation of Labor 1886
Skilled craft workers
Used strikes to gain $6.50/wk in wages and reduce hours from 55 to 49 hrs/wk
Eugene V. Debs
American Railway Union
Skilled and unskilled workers in one industry
Strikes failed

24. Immigration/Urbanization Issues (late 1800s/early 1900s)
Industry needs cheap labor
Immigrants want better life
East Coast
More immigrants from Southern and Eastern Europe
Enticed by industrialization
West Coast
More immigrants from China
Enticed by work on railroads and
mining

25. Other Unions
“Big Bill” Haywood and the International Workers of the World [IWW]
“Wobblies”
Ideas of Socialism, Marxism
Marginally successful
Mary Harris Jones and the United Mine Workers Union 1877
Mine workers in the east and west
Influenced child labor laws

26. Violence between business and unions
Hire private security firms such as the “Pinkertons” to break strikes
Beatings, killings, and intimidation of union leaders and members used to end strikes and attempt to break unions
Unions
Commit violent acts against “scabs” [strike-breakers]
Block strike-breakers from entering business under threat of violence
Property distruction of businesses

27. Map of Ellis Island

28. Map of Angel Island

29. Growth of Cities
Urbanization centered around industrial factories

30. Horatio Alger Author who wrote books about people like Carnegie
About people going from “Rags to Riches” by working hard
This creates the American Dream of working hard to achieve unparalleled success:you have a chance to make it “BIG”

31. Monopoly
Company that has exclusive control in a given trade

32. - Trust Group of companies with one central Board of Directors
Able to control member companies, prices and destroy competition
Sherman Anti-trust Act of 1890 attempted to remove trusts
Ineffective because trusts could break up before trials

33. Business formations Type Owner decisions advantages/disadvantages
Partnership joint owners owners owners control/
each responsible
Corporation stockholders Board of raise $ from investors/
Directors investors have little say
elected horizontal markets can
lead to monopoly
Trust stockholders trustees massive $-control market/
monopoly

34. Mass Culture New Middle Class Mid-level management Disposable income
Free Time
Popular Fiction
Mass-circulation Newspapers
Bicycling, Tennis
Baseball
Department Stores
Catalog shopping
Photography
Amusement Parks