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BIG BUSINESS

BIG BUSINESS. Carnegie U.S. Steel. Quality control Cost control / accounting Stock incentives for managers Vertical Integration: Buying out your suppliers. J.P. Morgan RRds & bought U.S. Steel. Holding Companies: Companies that are formed only to buy up other companies.

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BIG BUSINESS

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  1. BIG BUSINESS

  2. CarnegieU.S. Steel • Quality control • Cost control / accounting • Stock incentives for managers • Vertical Integration: • Buying out your suppliers

  3. J.P. MorganRRds & bought U.S. Steel • Holding Companies: • Companies that are formed only to buy up other companies

  4. PullmanRailroad Cars • Company Town: • The company owns the land, houses, churches and schools around a factory. Have great control over workers.

  5. RockefellerStandard Oil • Trusts / price fixing: • Companies in the same industry ban together, drop prices, & drive out competitors. Then raise prices artificially high. • RRd. Kickbacks: • He would get rebates from RRd companies, they pass cost onto farmers

  6. Standard Oil

  7. Trusts

  8. Bosses of the Senate

  9. VanderbiltRailroads • Consolidation: • Made all RR tracks the same in width, then bought out all his competitors (horizontal integration).

  10. DukeTobacco • Advertising / Label Leveraging: • Developed a label – “Bull Durham”. Advertises it / creates demand. Wouldn’t let other brands be sold if his was sold there.

  11. Competing Philosophies:Are these men heroic or evil? Heroic: “Captains of Industry” • Horatio Alger Stories: • “Rags to riches” tales of young men who succeed due to their own efforts / character • Social Darwinism: • These men are better and deserve their wealth. “Survival of the fittest” natural process of natural selection.

  12. Competing Philosophies:Are these men heroic or evil? Evil: “Robber Barons” • These men use unethical practices to squash out their competition and overcharge common people. • They want the gov’t. to stop them

  13. Homework • Would you classify the industrialists of the Gilded Age as “robber barons” or “captains of industry”? Explain your answer!

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