1. Ch. 19-3 Age of Big Business Mrs. Manley

2. An Age of Big Business Edwin Drake- drilled the 1 st oil well in Titusville, Pennsylvania; led to creation of petroleum industry! Factors of Production – Land- land and or natural resources – Labor- workers – Capital- the equipment- buildings, machinery, tools ; Also MONEY!

3. Stocks Corporations earned capital by selling stocks. Corporations are companies that sell shares or stocks of its business to the public. Stock- shares of a business Shareholders- partial owners Dividends- cash payments from the company’s profits to shareholders Stock exchange/market- where you buy and sell stocks

4. Oil Industry John D. Rockefeller- made fortune in oil – Cleveland, Ohio – Standard Oil Company – Horizontal integration- he aquired his competitor’s smaller oil companies and made one big corporation – He forced competitors out of business by offering lower rates. He got rebates from railroads in exchange for his business.

5. Rockefeller formed a trust to have more control in the oil industry Trust- a group of companies managed by the same board of directors. He acquired stock in many companies and they traded their stock for Standard Oil Stock to receive higher dividends. This created a monopoly Monopoly- total control of an industry

6. Steel Bessemer Process- new method to produce steel at affordable prices Pittsburgh, Pennsylvania- steel capital of US Andrew Carnegie- Scottish immigrant becomes a dominant figure in the steel industry Vertical integration- acquiring companies that provided equipment & services he needed

7. Carnegie bought up iron and coal miines, warehouse, ships, railroads, etc. to gain control of all business used in making and selling steel. (vertical integration) Carnegie Steel produced 1/3 of the nation’s steel Sold to J.P. Morgan- becomes U.S. Steel- world’s 1 st billion dollar corporation

8. Philanthropists Philanthropy- use of $ to benefit the community Carnegie – Carnegie Hall, NYC (Concert hall), Carnegie Foundation for teachers, more than 2,000 libraries Rockefeller- Univ. of Chicago, Rockefeller Institute for Medical Research

9. Corporations grow larger with corporate mergers- combining companies Mergers led to very powerful & rich individuals controlling industry – JP Morgan, Rockefeller This hurt competition! Corporations had no reason to offer low prices or improve products or services!

10. Government tries to restrict corporations Sherman Anti-trust Act- passed by Congress in 1890- outlaws monopolies.