Bell Work: What is a cartel? How about a trust? What is a
business cycle? What do you think the difference is between the
Captain of Industry or Robber Barons? United States History How to
make and spend a fortune?
The Growth of Big Business Robber Barons- individuals who
exploited the American political and economic system in order to
gain extraordinary amounts of wealth at the expense of workers and
immigrants.
Slide 4
The Growth of Big Business Captains of Industry- individuals
who had a positive effect on the US economy by increasing the
number of goods, developing more factories, and practicing
philanthropic activities.
Slide 5
Lecture Outline- Growth of Big Business Robber Barons Captains
of Industry How the tycoons made their money? What were examples of
corruption with the government during the Grant administration?
Andrew Carnegie Vertical Consolidation Social Darwinism John
Rockefeller Horizontal Consolidation Samuel Dodds J. P. Morgan
Gospel of Wealth Philanthropy
Slide 6
How do you make a fortune? What allowed individuals to make so
much money after the Civil War?
Slide 7
Slide 8
Slide 9
Slide 10
Post Civil War Conditions In large part, wealth was made
through exploitation of the government and workers but also through
ingenious (and sometimes illegal) business practices.
Slide 11
Post Civil War Conditions Essentially the first business moguls
made their dough via the following Closing of the West. Social
Darwinism Developing of the Trust
Slide 12
Slide 13
Railroad industry- Government Subsidized Cheap Land= the
government Cheap Labor= immigrants Cheap Capital (steel)= Carnegie
Cheap Loans= Morgan
Slide 14
Corruption begins with the railroads Credit Mobilier Scandal-
Oakes Ames (Union Pacific RR) Cornelius Vanderbilt, Leland
Stanford
Slide 15
Corruption also found its way into the government Whiskey Ring
Scandal- Tax Fraud (Grants Dep. Of Treasury and Orville Babcock)
Bureau of Indian Affairs Gold Corner- Jay Gould
Slide 16
Big Ones Yet, despite government corruption, these events were
small change compared to the Robber Barons like Carnegie,
Rockefeller, and JP Morgan.
Slide 17
Andrew Carnegie Scottish immigrant, son of a expert weaver Rags
to riches (1.20 dollars an hour to a billionaire) Wealth through
the Bessemer Process With help of JP Morgan, starts US Steel
Slide 18
Andrew Carnegie
Slide 19
Vertical Consolidation Buy all the items of production and
corner the market. Cheaper products attack competition (economy of
scale). Social Darwinism- may the best man win; apply Darwinism to
business (government should encourage)
Slide 20
John Rockefeller At first a railroad baron Invested in black
gold= oil Standard Oil- bought off legislatures, secret railroad
deals, bribes, and sabotage
Slide 21
John Rockefeller
Slide 22
Horizontal Consolidation Buy all the small companies and then
monopolize the market. Undercut other business through rebates and
secret deals. "In a business so large as ours some things are
likely to be done which we cannot approve. We correct them as soon
as they come to our knowledge. Illegal if crosses state lines=
anti-trust laws
Slide 23
Samuel Dodds- Trust -Get around anti-monopoly laws, cant hold
stock in another company. -Develop a board of trustees, issuing
trust certificates (holding companies) Trusts keep prices
artificially high due to no competition while making wages
extremely low.
Slide 24
JP Morgan Bankers banker. Made millions off of the Civil War
(wise investments) Controlled nearly half of all the railroads in
America Invested into Carnegie Steel- US Steel (party)
Slide 25
JP Morgan
Slide 26
How To Spend a Fortune Gospel of Wealth- people should be free
to make as much money as they can. Afterwards, they should give it
away- philanthropy. Carnegie $350,695,654 in his life. A man who
dies rich dies disgraced
Slide 27
How To Spend a Fortune Andrew Carnegie- Carnegie Hall, the
arts, libraries, study on how to end war (Carnegie Institute). John
Rockefeller- universities, churches, anti-saloon league (10% of
paychecks) JP Morgan- Yachts, art collections Captains or Barons?
Legacy of big business?