1. Chapter 14, Section 3 “Big Business”

2. The Rise of Big Business Big business dominated ________________ Not have been possible w/out corporations Corporations: ________________________ _____________________________________ Stockholders ___________________ Own shares of stock Stocks allows corporation to raise large _________________________________ 1830s: incorporation laws being passed

3. Economies of Scale Corporations could invest in __________ ___________________________________ Economies of scale possible Companies: 1. Fixed costs 2. Operating costs *small companies had to shut down if sales dropped *large companies high fixed costs, but low operating costs-could stay open *could produce goods cheaply and efficiently

4. The Consolidation of Industry Companies organized pools--- ________________________________ Pools interfered w/ _______________ _________________________________ Companies forming pools had no _____ _________________________________

5. Andrew Carnegie and Steel Became railroad supervisor of the ___________________________________ Bought shares in iron __________________ Invested in company building railroad bridges Quit job: traveled to sell railroad bonds Met Sir Henry Bessemer—_______________ ____________________________________ Carnegie opened steel company in 1875--- ____________________________________

6. Vertical and Horizontal Integration Carnegie began vertical integration--- ________________________________ Pushed for horizontal integration---could lead to a monopoly John D. Rockefeller’s ________________________________ ---kept prices low (competition)

7. Trusts To prevent horizontal integration---- _______ ____________________________________ 1882: Standard Oil formed first trust--- ____________________________________ Standard Oil had stockholders give stocks to group of trustees---_____________________ ______________________________________

8. Holding Companies Holding Companies formed---________ ________________________________ ________________________________ Do not produce anything themselves- ________________________________ ________________________________

9. Selling the Product New forms of advertising established--- attracted readers to new retail _____________appeared in the mid-1800s--- offered low prices (Woolworth’s) Retailers began issuing __________ catalogs Largest---____________________________ ______________________________________