Growth of Big Business

Big Business: Two Views

“Robber Barons” Connoted that business leaders stole

from the public Paid workers meager, subsistence

wages Drove competitors to ruin

“Captains of Industry”

Served nation in positive way

Increased productivity, found new overseas markets, created jobs

Founded museums, libraries, and universities

Some Leaders of Industry

John Pierpont (J.P.) Morgan--Banking John D. Rockefeller—Standard Oil James B. Duke—Tobacco Andrew Carnegie—U.S. Steel Cornelius Vanderbilt—railroads Bell--AT&T DuPont—chemicals, etc. Some charitable Most practiced conspicuous consumption,

showing off the wealth by purchasing the most expensive material goods possible

Production of steel

1. Mining natural resources such as iron ore, coke, copper

2. Transport of resources to factory3. Bessemer process to develop steel4. Transport of steel to market for sale

Andrew Carnegie: Carnegie Steel Company

Owned every aspect of his steel production

1. The mines that produced the iron ore

2. The ships that carried it from the UP to docks at Erie, Pennsylvania

3. The rails that transported it to his steel mills

4. The steel mills in Pittsburg

Vertical Integration

Production of oil

1. Discovery2. Retrieval3. Transport to refinery4. Refining into usable components5. Transport to markets for sale

Horizontal integration Purchased refineries to turn crude oil

into kerosene Purchased miles and miles of pipeline Built and owned most oil cars used for

transportation of crude oil to refineries

John Rockefeller – Standard Oil

Sherman Anti-Trust Act Passed under pressure from citizens in

1890 Passed to limit the power of large

business combinations known as trusts

Poorly written and rarely enforced Law did not accomplish what it was

designed to do but it did create a precedent that Congress could place some regulations on business

Federal Government - Congress

Business Cycle Can be portrayed as a wave moving through

the ocean1. Top of the wave is known as the Boom

period or crest2. Bottom of the wave is known as the Bust

period or the through – also called a depression

3. As the wave moves from the crest toward the bottom of the through, it is called economic decline or recession

4. As the wave grows from the bottom of the through, it is called economic recovery

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