1. The Emergence of Big Business

2. Railroads a.The first major business of the U.S. was the railroads. b.The railroad industry boomed after the Civil War. c.Railroads were also the first businesses to begin consolidation, or combining smaller companies into one larger company. d.Consolidation helped eliminate competition in an industry and allowed the business to charge higher rates.

3. Business Strategies a.Always make improvements in quality and techniques to cut costs. b.Use vertical integration to control all aspects of the business from raw materials to distribution. EX: Carnegie’s steel operation c.Use horizontal consolidation to take over an entire aspect of an industry by controlling one aspect of the industry. EX: Rockefeller’s Standard Oil of Ohio d.Create a holding company that buys out the stock of other companies. EX: J.P. Morgan’s U.S. Steel e.A trust was another option where companies illegally merged, were controlled by a board of trustees, and shared profits.

4. Society’s Views a.Social Darwinism was an idea based on the belief of natural selection, which is the idea that the strong will survive. b.Social Darwinists believed that in the economy, the fittest businesses will succeed and the weakest businesses will naturally fail. They believed that success in business was governed by natural law and that no one, especially the government should intervene. c.Social Darwinism also promoted the idea of individual responsibility and blame as a result of work ethic, which led to the idea that the poor must be lazy or inferior. d.The idea of work ethic was also shown by Horatio Alger, who wrote novels about poor kids that became wealthy through hard work and good behavior.

5. Robber Barons a.Many people became upset with the ruthless tactics used by industrialists to make greater profits. b.Rockefeller’s employees were paid low wages, and he made huge profits instead of passing savings along to customers. c.To try to change this view, Carnegie, Rockefeller, and Morgan made large contributions to various charities. d.In order to try to curb the influence of these major businesses, the government enacted the Sherman Antitrust Act, which officially declared trusts illegal. However, it was difficult to enforce, and the Supreme Court threw out cases that dealt with the law.

6. Business Boom Bypasses the South a.Most of the industrial growth in the country occurred in the North, because of an abundance of natural resources and urban centers. b.The South was still trying to recover from the destruction of the Civil War, it lacked capital (money for investing), and it only had a few cities, which all caused slower economic growth.