Railroads & Big BusinessThe building of the Railroads resulted in the growth of big businesses

Benefits of Railroad - A more united nation

The railroads companies built transcontinental

local lines

The nation was united

Railroad time became the time zones

we have today

Drawbacks

•Unchecked power and greed of the railroad companies led to widespread corruption & abuse of power. • Sold land from government to businessmen instead of

settlers• Charged different prices to different people• Used race discrimination

Government steps in• Interstate Commerce

Act – • Established the right

of the federal government to supervise railroad activities • Today this law still

regulates business between states

Mismanagement of the Railroads

• Overbuilding, competition caused many railroad companies to almost go bankrupt.

• Caused a nationwide depression• By 1894, a quarter of the railroad companies were taken over

by financial companies, such as JP Morgan• By 1900, 7 companies owned ¾ of the railroads

Review:

1. Describe the railroad companies in the late 1800’s2. In what ways did the big railroad companies impact people?

Think about positive and negative ways.

Railroads made some people very richWere they Captains of Industry? Or Robber Barons?

• Andrew Carnegie (Steel)• John D. Rockefeller (Oil) • Cornelius Vanderbilt (Shipping and Railroads)• J.P. Morgan (Banking)

• Captain of Industry – leader of industry, leader of economic development in the United States

• Robber Barons: Name given to leading American businessmen. Suggested that they acquired their wealth by taking advantage of others

How did they get so wealthy?

Vertical IntegrationBuying all the raw materials to make products as well as the shipping and transportation to deliver to companies

Raw Mater

ials

• Carnegie would buy the raw materials• Forests, coal fields, iron mines, ore freighters

Manufactur

ing

• CARNEGIE STEEL COMPANY

Distributio

n

• He would also buy the means for distribution (shipping, tranportation), i.e. railroads

Horizontal Integration: Buy out the companies that sold similar products

• Steel company

• Steel company

• Steel company

Government steps in Again• Sherman Anti-Trust Act• Made it illegal to form a trust (monopoly) that interfered with

free trade (other businesses)• Still around today (Microsoft 1999)

Homework: • Read 447-450• Answer the following questions:

1. What were Andrew Carnegie’s management and business strategies? 2. How many millionaires were there after the Civil War? 3. How did Social Darwinism explain the successful and the poor? 4. What is a merger? Why did it occur? 5. What is a monopoly? How did JP Morgan establish a monopoly? 6. How did Rockefeller great mergers? Was this legal? 7. How much of the oil refining business did Rockefeller own? 8. How did he get to own this much business? 9. What is a philanthropist? Look it up on your phone or internet, or in a

dictionary. Why were Rockefeller and Carnegie considered philanthropists?

10. Why was most of the growth in industry in the north and not the south? List at least 4 reasons.

Activity: Captains of Industry or Robber Barons? • Examine one of the Robber Barons

• Andrew Carnegie• John D. Rockefeller• Cornelius Vander Built• J.P. Morgan• Jay Gould

• Fill out the chart as a group• Write paragraph independently• Were they Robber Barons or Captains of Industry?

• Be prepared to present to the class

Captain of Industry – leader of industry, leader of economic development in the United StatesRobber Barons: Name given to leading American businessmen. Suggested that they acquired their wealth by taking advantage of others

King of the World

• A political cartoon by C.J. Taylor entitled "King of the World" depicts John D. Rockefeller and the monopoly held by Standard Oil. A monopoly is a company that is the only firm supplying a product or service to a market. Monopolies have no competitors, allowing them to set prices and terms without any constraints.

Review• Were these men “Robber Barons” or “Captains of Industry?”• Does the life of these men support or go against the idea of

Social Darwinism? • If something ends up okay, does it matter how you get there?