1. The Growth of Big Business
Industrial Age
The Growth of Big Business

2. The Birth of Big Business
Big business grows as a result of the formation of corporations
Sell shares of business to investors (stock)
Capital from shares is used to fund business
Investors profit if company succeeds

3. Why a Big Business? Disadvantages for workers and public:
Advantages for business:
Lack of competition
Economy of scale
Efficiency and automation/produ ctivity studies
Corruption of political system
Crushes labor movements
Greater efficiency

4. Big Business Men
With the growth of big business comes the arrival of powerful industrialists
Through hard work, luck, genius, and sometimes underhanded means, they managed to become incredibly wealthy and successful.
These wealthy and powerful businessmen were both admired and hated by Americans

5. Big Business Men
Andrew Carnegie – US Steel founder who innovated many business techniques
John D. Rockefeller – Standard Oil baron who crushed competition
JP Morgan – Banking (during the Panic of 1893, he lent the US Treasury gold so that it would not collapse!)
Cornelius Vanderbilt – Railroads (Biltmore House)
James B. Duke – Tobacco; electrical power; Duke University

6. JP Morgan screams at a photographer
Carnegie

7. Creating Big Business
Vertical Integration – gaining control of all levels of an industry in order to control prices
Horizontal Integration – gaining control of all businesses on the same level of an industry 1

8. Creating Big Business
Mergers – when two businesses combine into one larger business
Trusts – when several businesses act as one to consolidate control of an industry
ALL OF THESE CAN BE USED TO CREATE A MONOPOLY – When a business control all or most of the supply of a product or service and can basically dictate pricing.

9. 2. The Standard Oil Monopoly as seen by its critics.

12. Social Darwinism Carnegie justified wealth with Social Darwinism
Used Darwin’s ideas to justify success
“Survival of the Fittest” applies to business
In “Gospel of Wealth” writes that it the duty of those who have made vast fortunes to distribute money wisely
Beginnings of Philanthropy

13. Philanthropy Name given to wealthy industrialist by public
Philanthropy – practice of donating large sums of money.
Improves images of Robber Barons
Name given to wealthy industrialist by public
Rockefeller donates $535 Million to charity
Carnegie gives away 90% of his wealth
Bill Gates?

14. Mixed Feelings
Public has mixed feelings about these wealthy industrialists
Horatio Alger’s “Dime Novels” tells rags to riches stories – best sellers of the American Dream
Journalists like Ida Tarbell, muckrakers, expose corrupt practices
Sherman Anti-Trust law is passed in 1890 – makes trusts illegal
Weakened by Supreme Court - United States v. E.C. Knight Company- “Sugar Trust Case”
Weak law but sets precedent for future legislation

15. 1. from http://historywithwoods.wikispaces.com