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If YOU were there….

Aim: How can we connect the growth of big business in the late 1800’s to the creation of monopolies?. If YOU were there….

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If YOU were there….

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  1. Aim: How can we connect the growth of big business in the late 1800’s to the creation of monopolies?

  2. If YOU were there…. • It is 1895, and your town is home to a large corporation. The company’s founder and owner, a wealthy man, lives in a mansion on a hill. He is a fair employer but not especially generous. Many townspeople work in his factory. You and other town leaders feel that he should contribute more to local charities and community organizations. • How could this business leader help the town more?

  3. Dominance of Big Business • Many entrepreneurs formed their businesses as corporations (business that sell portions of ownership called stock shares) • Leaders were • Widely respected • Praised as examples of hard work, talent, and success

  4. Corporations Generate Wealth • -Investors who hold stock (% of profits based on how much they own) • Investors are not responsible for debts • Free to sell stock whenever they want

  5. Andrew Carnegie • Came to the United States as a poor immigrant from Scotland • Took a job with the railroad and worked his way up to superintendent • Focused his efforts on steel making. Expanded his business by buying out competitors when steel prices were low

  6. Vertical Integration • Ownership of business involved in each step of a manufacturing process • Ex. Carnegie-bought iron mines, coalfields, and railroads

  7. John D. Rockefeller • Was a successful consolidator • Started an oil-refining company . • Standard Oil Company (largest in country in only 10 years)

  8. Horizontal Integration • Owning all businesses in a certain field

  9. Trust • a legal arrangement grouping together a number of companies under a single board of directors • To earn more money, trusts often tried to get rid of competition and to control production (This was a concern!)

  10. Leland Stanford • Sold equipment to miners • Founded Central Pacific Railroad • Stanford University • He believed that industries should be owned and managed cooperatively by workers. This would help with democracy.

  11. Social Darwinism • Thought that Darwin’s “survival of the fittest” theory decided which human beings would succeed and in life in general.

  12. However,…. • Other business leaders believed that the rich had a duty to aid the poor. • Philanthropy-giving money to charities • (Carnegie-$350 million)

  13. Monopoly • Total ownership of a product or service

  14. Sherman Anti-Trust Act • A law that made it illegal to create monopolies or trusts that restrained trade • However, the act did not clearly define a trust in legal terms. Therefore, the antitrust laws were difficult to enforce and corporations kept growing in size and power.

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