1. “Big Business”
Chapter 9
Section 3

2. The Rise of Big Business
The Role of Corporations
An organization owned by many people but treated by law as though it were a single person
Economies of Scale
Corporations invested in more machines and larger manufacturing facilities
Big corporations would continue operating during poor economic times because their operating costs were small compared to their fixed costs

3. The Consolidation of Industry
Andrew Carnegie and Steel
Bessemer process
Blowing air through molten iron to burn out impurities
Horizontal Integration
Combining many firms engaged in the same type of business into one corporation
Creates monopolies
Vertical Integration
Companies own all of the different businesses on which it depends for its operation

4. Vertical Integration

5. Vertical Integration

6. Horizontal Integration

7. Horizontal Integration

8. The Consolidation of Industry
Trusts
To preserve competition and prevent horizontal integration, many states made it illegal for one company to own stock in another
A trust allows one person to manage another person’s property
Holding Companies
Does not produce anything itself
Owns stock in companies that produce goods

9. Selling the Product
Women were able to purchase items such as food or clothing, rather than growing or make them
In the late 1800’s, mail-order catalogs became a popular way to sell products to people living in rural areas