The Growth of Big BusinessChapter 13 Section 2

Objective:

• Evaluate the wealth created through the growth of Big Business against the methods and means used by business owners to gain success

Robber Barons or Captains of Industry?

• Robber Barons Drain Natural ___________

Corrupt ___________ officials

Ruin ___________

Pay meager ______

_____________ and _________ work environments

Robber Barons or Captains of Industry?

• Captains of Industry increased the ________ of factory made goods

Increased ___________

Expanded __________

Created jobs

Raised the standard of ________

______________

Robber Barons or Captains of Industry?

• So Barons, Captains or both?

John D. Rockefeller

• _______ ___ Company

• Donated $500 million to charity

In 2007, that would be around

$10,615,034,080.50

Andrew Carnegie

• “_____ __ _____”– Make as much ______ as

you can, as long as you give it away

• _____ of his fortune went toward education– $350 million by his death

In 2007, that would be around $4,162,173,341.27

Social Darwinism

• _______ Selection– “The ___” would

become _____– Gov’t shouldn’t

interfere with ________

Business on a Larger Scale

• ____ _______ = more money, more workers and more products

• Need for new ________ tactics

Business on a Larger Scale

• Larger Pools of _______• Higher start up costs

prevented small business

• Wider _________ Span• New innovations expanded

markets

Business on a Larger Scale

• Revised Role of ________

• Too big for one person professional _________

• New Methods of ___________

• Complex accounting, written rules, specialized departments

Gaining a Competitive Edge

• New Market ________– Oligopoly– Monopoly– _______

• ________ structures, so new methods were created

Carnegie Steel Company

• Vertical __________– Controlling every step

of a product’s ____________

Andrew Carnegie was making $50,000 a year when he was 30…in 2006, that would come

out to around $622,474.41

The Standard Oil Trust• Huge Size brought __________

advantages– Under price __________– Special ______ for RR use

• Rockefeller’s Expansion– Control of ___________

Horizontal Consolidation

Standard Oil Company

Oil Company A Oil Company B Oil Company C

Standard Oil Trust

• Rockefeller blocked from “_____ ____” competition– New Plan—new form of __________

• Board of _________• “Trust”

The Government Response

• The American people feared _______

• Gov’t did little to ____ them– Big Business…

• Contributed to America’s growing _________

• Great success stories• Political contributions

The Government Response

– Sherman Anti-Trust Act• Outlawed ___________ of

companies that restrained interstate trade or commerce

• __________ vague wording

• Worked against itself blocked _______ _______

In Review:

• Why were American industrialists of the late 1800s called both “robber barons” and “captains of industry”?

• How did social Darwinism affect American’s view on big business?

• In what ways did big business differ from smaller businesses?

• How did industrialists gain a competitive edge over their rivals?