1. Big Business and Society

2. Changes Shift in the nature of the US economy Corporations
A company or group of people authorized to act as a single entity (legally a person) and recognized as such in law.
Very few rules restricting them
Organization of Business
Increase in efficiency and wage

3. Robber Barons
Robber Barons- term given to the excessively wealthy capitalists of the era who dominated their industries (Morgan, Vanderbilt, Rockefeller, etc.)
JP Morgan- dominated the banking industry
Purchase Carnegie Steel and several other companies to create US Steel- first billion dollar company in the US
Also created GE and AT&T
Cutthroat tactics

4. New Scope Now a separation between ownership and management
Companies able to span multiple states and cities
GE had factories in 23 cities by 1900
Sears & Roebuck catalog
Oligopoly- control of an industry by a few groups or businesses

5. New Tactics Vertical Integration Horizontal Integration
A company purchases all smaller companies involved in the production of their product
US steel took the ore from the ground, transported it, melted it down, and shipped it to wholesalers- owned every single step- no costs
Horizontal Integration
A company purchases other companies that sell goods that use their product
US steel would look to purchase any company that sold metal products

6. Trusts Explosion of competition in all industries
Started as pools- groups of businesses agreeing to set prices at a certain level
Disintegrated under economic pressure
Trusts- major business owners assigned all their stock to 1 board of trustees
Challenged on the grounds that it illegally restricted trade
Sherman Anti-Trust Act in 1890 declared trusts illegal
Replaced by holding companies like General Motors

7. The Gospel of Wealth
Andrew Carnegie believed the wealthy should work towards the common good
On his death, he had given away 95% of his wealth, along with funding innumerable public works
Others said it was God’s will that some attain wealth and those that attained it, deserved it

8. Social Darwinism
Theory that applied Darwin principles of survival of the fittest to economics, ethics and other realms of life.
Used as the basis to rule an income tax unconstitutional until the 16th amendment in 1913
Many rejected that this process should not be allowed to proceed unregulated

9. The Great Chicago Fire- 1871
Dangers of the city life- people living so close together
Myth claims that Mrs. O-Leary’s cow kicked over a lantern, starting the 30 hour blaze which destroyed 17,500 buildings and killed at least 250 people
Very likely that Mrs. O’Leary’s cow was not the blame
Chicago was in the middle of a drought
Anti-Irish sentiment
Officially exonerated in 1997

10. Boss Tweed
William Tweed- New York political boss who headed the organization known as Tammany Hall
Personified public corruption of the day- manipulating politics, bribes and extortion
Building of the New York City Courthouse was a prime example
Members of Tammany Hall paid outrageous amounts for very little work
Ended up costing $178 million in today’s money- almost twice as much as the purchase of Alaska in 1867
Finally exposed- public outcry- died in prison

11. Controversy
Does wealth come from patience and hard work or exploitation?
Are the wealthy free to do as they wish with their wishes, or should we be taxing them more heavily for the public good?
Jot down your thoughts at the end of your notes and we will discuss it