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Fighting for Profits & Government Imposes Regulations. By: Melissa, Sabrina, Dashaun, and Hayley. The Corporation Rises. In order to expand markets, investors developed a group called corporations. Corporations were the perfect solutions to expand businesses such as railroads and mining.
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Fighting for Profits&Government Imposes Regulations By: Melissa, Sabrina, Dashaun, and Hayley
The Corporation Rises • In order to expand markets, investors developed a group called corporations. • Corporations were the perfect solutions to expand businesses such as railroads and mining. • Corporations had the same rights as individuals: it could buy & sell products and sue in courts. • If chose to leave the group, others could buy out his interests. • Access to capital or invest money, to fund technology, enter industries, & run large plants across the country. • *Important fact* • After the 1870’s, corporations increased, causing industrial capitalism, or the economic free-market system centered around industries.
Monopolies in Business • Consumers had no other choice but to set its own prices. • In order to do this, they either bought out competitions or drove them out of business. • Monopoly was complete control of a product or service.
Cartels • A cartel is when more than 1 business is making the same product and they limit production and prices to stay high. • This is what corporations did to stop competition with other business. • John D. Rockefeller (oil tycoon) made deals with railroads to make higher profit.
Horizontal vs. Vertical Integration • Andrew Carnegie, Rockefeller, and other businessmen did this by taking control of businesses that were part of the making of the development of a product. • Horizontal Integration is bringing firms together in a business as a whole or 1. • Rockefeller was the first to do this. • Vertical Integration is when companies reduced their cost and charged higher prices to competitors.
Trusts • Companies give their stock to a trustee who puts them together in a new business. • The trustee is paying themselves dividends on profits.
Government Imposes Regulation • In 1887, the United States Senate created the Interstate Commerce Commission to oversee railroad operations. • In 1890, the senate passed the Sherman Anti-Trust Act, which outlawed any trust that operated “in restraint of trade or commerce among the several states.”
Government Imposes Regulation (cont.) • The “Gospel Of Wealth” is an article written by Andrew Carnegie in 1889. It describes the responsibility of philantrohpy by the new upper class of self-made rich. • Philantrophy means “the caring of man” in the sense of caring for, improving and enhancing the quality of human life. • Interstate Commerce Act is a United States Federal Law that was designed to regulate the railroad industry, particularly its monopolistic practices.
People To Remember • Andrew Carnegie • November 25, 1835 – August 11, 1919 • A Scottish-American industrialist who led the expansion of the American Steel Industry. • A true “Rags to Riches” story • John D. Rockefeller • July 8, 1839 – May 23, 1937 • “Oil Tycoon” • Built his first oil refinery near Cleveland and in 1870, incorporated the Standard Oil Company.
People To Remember • J. P Morgan • April 17, 1837 – March 31, 1913 • An American financier, banker, and philanthropist who led corporate finance and industrial consolidation. • Merged with Carnegie Steel Company in 1901.
Cited Page • http://en.wikipedia.org/wiki/Andrew_Carnegie. • http://en.wikipedia.org/wiki/John_D._Rockefeller. • http://en.wikipedia.org/wiki/J._P._Morgan. • www.google.com.
