Incorporation of America

1. Incorporation of America • Growth of Big Business

2. Natural Resources • Water power • Coal • Iron Ore • Oil (Petroleum)

3. Factors of Production • Land, Labor, and Capital • Entrepreneurial enterprises • Technology • Bessemer Process • Steel

4. Laissez-Faire Economic Policies Laissez Fairethe ideology of the Industrial Age. • No Government Regulation in the market! • An economic approach based on supply and demand as well as individual choices. • Secret Alliance = Big business, Courts, and all levels of government

5. Social DarwinismDefined by Andrew Carnegie • Advocate of laissez-faire. • Adapted Darwin’s ideas from the “Origin of Species” to humans. • Notion of “Survival of the Fittest” in Social, Economic, and Political areas

6. Deflation • Advocating using the use of the gold standard not bimetallism • Creditors (Robberbarons) favored while debtors (farmers, factory workers) were for BIMETALLISM

7. Horatio Alger Myth • 100 Dime novels written by Horatio Alger • Created the “rags to riches” myth or self-made man • Stories took a poor boy from a street corner job to being wealthy • Protestant (Puritan) “Work Ethic”

8. Social Darwinism“Gospel of Wealth” • White Anglo Saxon Protestant (WASP) are superior. • Inequality is inevitable and good. • Wealthy should act as “trustees” for their “poorer brethren.” • Pamphlet written by Andrew Carnegie

9. Government Subsidies • Homestead Act of 1862 – a. 150 acres to a farm family b. 5 years to develop farm c. 500,000 families moved west • Pacific Railway Act of 1862 – a. federally funded railroad system b. leads to 5 transcontinental routes

10. Supreme Court DecisionsBIG BUSINESS • Interstate Commerce Act (1887) – a. Designed to REGULATE RAILROADS b. Five-man Interstate Commerce Commission (ICC) c. Wabash v. Illinois (interstate commerce) • Sherman Antitrust Act (1890) – a. Designed to CREATE A RESTRAINT IN TRADE b. Control monopolies in interstate commerce c. Twisted by corporate lawyers and used on developing labor unions

11. Supreme Court Decisions • Munn v. Illinois (1876) – a. Favored the Granger Laws in the Midwestern States b. Aimed at the RAILOROAD • Wabash v. Illinois (1886) – a. Reversed the Munn decision b. Congress in control of INTERSTATE COMMERCE c. Gibbons v. Ogden decision

12. Supreme Court Decisions: Big Business Sherman Antitrust Act (1890) • in “restraint of trade” • Used to control labor unions • Loopholes in the law • No definition of a legal person 1895 US v. E. C. Knight Co. Supreme Court sided with BIG BUSINESS !!!!!

13. Railroads “Boom or Bust” Industry • Federal Land Grants enabled the railroad boom of the mid-1800s to occur. • Subsidies encouraged investment in railroad companies and the emergence of new cities.

14. Railroads “Boom or Bust” IndustryRailroad Time • Created by C.F. Dowd in 1883. • Under this system, the United States was divided into 4 major time zones and a total of 24 time zones for the world. • Adopted in 1918 by Congress as the official time for the entire United States.

15. Railroads “Boom or Bust” IndustryRailroad Time • Fredrick Jackson Turner’s “Frontier Thesis” • Safety Valve theory • Boom towns to Ghost Towns (railroads, mining) • New Western Cities = Denver, Dodge City, Chicago, Santa Fe, and San Francisco Railroad Boom Town Railroad Town Railroad Ghost Town

16. Railroads “Boom or Bust” IndustryMass Migration and Urbanization Mining, homestead laws, and railroad construction led to a mass migration of Americans and immigrants to the western United States between 1848 and 1900. Beginnings of anti-Immigrant movement in the West New Western Cities = Denver, Dodge City, Chicago, Santa Fe, and San Francisco

17. Railroads “Boom or Bust” IndustryNationwide Markets • Standard time improved travel and trade • Railroads connected the East to the West • Telegraphs and later telephones improved communication • Cattle cars, refrigerated cars, and metal cans

18. Consolidation MethodsVertical Integration • Vertical Integration or controlling the means of producing your product • Andrew Carnegie  Carnegie Steel Vertical Integration

19. Consolidation MethodsHorizontal Integration • Horizontal Integration or merging or buying out your competitors • John D. Rockefeller  Standard Oil

20. Consolidation MethodsPools • Pools or a group of companies in an industry secretly organize and set their prices plus divide profits. • Cornelius Vanderbilt  Railroads

21. Andrew CarnegieSteel Industry • Carnegie Steel • Invented horizontal and vertical integration • Social Darwinist • Creator of the “Gospel of Wealth” • Philanthropist = Carnegie Foundation

22. Standard Oil Vertical Integration Ruthless businessman Trust Rebates Philanthropist- Rockefeller Foundation John D. RockefellerOil Industry Robberbaron or Captain of Industry

23. What is the cartoon illustrating? What is his business technique? John D. RockefellerCartoon Robberbaron or Captain of Industry

24. What is the cartoon illustrating? What is his business technique? John D. RockefellerCartoon Robberbaron or Captain of Industry

25. Financier who controlled Wall Street Used the holding company Created monopolies Loaned the US Government $65 billion during the 1895 Panic Created US Steel J.P. MorganBanking, Railroads, Steel Robberbaron or Captain of Industry

26. President Grover Cleveland asked J.P. Morgan to loan the federal government $65 million. Coxey’s Army (1894) Morgan takes over part of the western rail system These actions show the corruption between Big Business, state and local government, and the federal government Panic of 1893 Major Depression 1893-1900