1. BIG BUSINESS IN THE GILDED AGE

2. Why do you think businesses got bigger in the Gilded Age?  New technology – businesses can be national  More expensive equipment – you need to do more business in order to pay back the costs of machinery  Eliminating competition = massive profits (and protection against downturns)  Urbanization

3. Horizontal Integration  Taking over similar businesses to create a monopoly  Standard Oil under John D. Rockefeller – bought out oil refineries

4. Vertical Integration  Taking over industries in the same supply chain to control production and prices  Carnegie Steel under Andrew Carnegie – bought out coal and iron mines, railroads, steel works…

5. Trusts and Pools  Pools or cartels: informal agreements between competitors to divide up the markets and set prices  Trusts or holding companies: businesses that coordinated other businesses’ activities to reduce competition

6. Why might these practices be controversial? With your partner:

7. Background: Standard Oil Rebates  John D. Rockefeller and Standard Oil  Railroads required to charge the same rate to all customers  1868: Standard Oil begins receiving rebates from railroads  Later got drawbacks – a portion of railroads’ profits from shipping other companies’ oil

8. Ida Tarbell on Standard Oil (p. 59)  According to Tarbell, why is Standard Oil acting unfairly?  What do you think Tarbell wants the government to do about this?

9. John D. Rockefeller on Standard Oil (p. 60)  According to Rockefeller, why is Standard Oil acting fairly?  What do you think Rockefeller wants the government to do about this?