The Rise of Big Business

1. The Rise of Big Business The Main Idea Corporations run by powerful business leaders became a dominant force in the American economy. Reading Focus • What conditions created a favorable climate for business during the late 1800s? • How did business structures change? • Who were the leading industrial tycoons, and what did they achieve? • How did mass marketing change the way goods were sold?

2. Student Performance Indicators What will I Learn by the end of this lesson? 6.6-I CAN- Read and interpret a primary source document reflecting the dynamics of the Gilded Age American society. 6.8-I CAN Match innovators to their industrial and technological contributions (Vanderbilt,Carnegie, Bell, Edison, Rockefeller, and Armour). 6.10-I CAN Interpret a political cartoon which portrays the controversial aspects of the Gilded Age

3. A Favorable Climate for Business Free markets With capitalism, most industries are run by private businesses. In the 1800s, business leaders believed in laissez-faire capitalism with no government intervention. They believed government regulation would destroy self-reliance, reduce profits, and harm the economy. Social Darwinism Charles Darwin believed that members of a species compete for survival in a natural selection process. Believers in social Darwinism thought that weak and struggling business should never get assistance from the government The American ideal was one of self-reliant individualism. A strong work ethic made one successful

4. Social Darwinism: Only the Strong Survive

5. Business Structures Change Proprietorships and partnerships Small businesses were run by individual proprietors or had more than one owner in a partnership. In either case, owners are personally responsible for all business debts and obligations. Corporations Corporations are owned by stockholders decisions made by a board of directors, with day-to-day operations run by corporate officers One advantage of a corporation is the ability to raise money and the limited liability of stockholders Corporations and partnerships are similar in that they are held or owned by two or more people. Trusts and Monopolies Some companies merged and turned their stocks over to a board of trustees who ran the group of companies as a single entity. Sometimes a trust gained a monopoly, having complete control of an industry. With no competition, prices could be raised or lowered at will. If a trust was completely successful, it would hold a monopoly.

7. Industrial Tycoons John D. Rockefeller bought barrel factories, oil fields, pipelines and railroad cars in an example of vertical integration. John D. Rockefeller became a famous for building his businesses through both horizontal and vertical integration. Rockefeller and oil Andrew Carnegie rose from immigrant child to steel magnate. He used profits from various business investments to found his own company. By the end of the century the Carnegie Steel Company dominated the U.S. steel industry. In Gospel of Wealth Carnegie explained his belief that great wealth was a resource to be used to benefit others. Carnegie and steel

9. Industrial Tycoons Vanderbilt began investing in railroads during the Civil War. By 1872, he owned the New York Central Railroad. At the height of his career he controlled 4,500 miles of track. He supported few charities, but gave money to what would come to be Vanderbilt University. He died leaving an estate of $100 million. Cornelius Vanderbilt George Pullman made his fortune designing and building sleeper cars that made long-distance travel more comfortable. He built a town to house workers in relative comfort, believing happy workers were more productive. The town of Pullman, south of Chicago was notable because it was built and controlled by the Pullman Company George Pullman

10. A Mixed Legacy Critics Business tycoons were “robber barons” who profited unfairly by squeezing out competitors. They lived lavish lifestyles from their ill-gotten rewards. Proponents Business tycoons were “captains of industry” who used their business skills to make the American economy more productive. That in turn made the American economy stronger.

11. Mass Marketing Retailers looked for new ways to maximize their profits. Household goods were targeted toward women, who made most of those purchasing decisions. Wholesome images were used to convey a sense of purity. Brand names helped customers remember products. Shopping became easier with the emergence of department stores The development of mail order catalogs benefited rural Americans

12. Group Work: Political Cartoon Work with the students in your row to answer the questions with the cartoon

13. Class Work Assessment Questions P. 463 & 471 (1-3 Part A only) Chapter Review P. 484 (1-7) These are due with the test. Don't ask me when the test is. It's gonna do what it do.