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Chapter 6 Section 3 Part I: Big Business
Captain of Industry Someone whose business practices are admired. Created Jobs Gave money to charity Seen as smart Donated buildings & parks Made the US Powerful
Robber Baron Someone whose business practices are seen as corrupt and often illegal Most people find them greedy Seen as smart, but ruthless Were taking all of our natural resources Treated their workers poorly
Can a person be considered both good and bad? Have you ever looked up to someone and had others disagree? Can the same person be both a captain of industry and a robber baron?
Andrew Carnegie I was born in Scotland at this house…. . I moved to America when I was young and got a job as a secretary. One day, I fixed a mess with train schedules and my boss offered to let me buy some stock in his company. My mom mortgaged our house so I could and I did very well. I took a trip to England, and after seeing the “Bessemer Process, started my own steel company.
Do you think the public thought he was a Captain of Industry or a Robber Baron based on these events? 1. Tracked costs precisely 2. Offered stock options to talented workers 3. Attempted to control as much of the steel industry as possible 4. Encouraged competition among assistants 5. Bought out most of his competitors to limit competition 6. Gave away 90% of his fortune to charity and such
John Rockefeller My father was a “snake oil salesmen. ” He tricked us and ripped us off every chance he had to make us smart. At age 11, I made money lending $10 dollars to a farmer with interest. After that, I vowed I would never do hard labor to earn money again. I owned Standard Oil.
Do you think the public thought he was a Captain of Industry or a Robber Baron based on these events? 1. Standard Oil ruthlessly bought out competitors, created trusts. – Trusts are several companies pooling there stocks together controlled by trustees. Trustees controlled by Rockefeller 2. Started the University of Chicago 3. Drove competitors out of business by dropping prices super low 4. Got rebates (cash kickbacks) from railroads. 5. Gave away 500 million dollars 6. Paid low wages 7. Funded the study that cured yellow fever 8. Controlled 90% of oil refineries by 1880
When a company owns an industry and all the resources it takes to make its product: Steel Industry Car Industry Iron mine Steel mill Carnegie Steel Company GM Corporation Ships And Railroads Semi-Truck And Railroads
Occurs when A company buys out or merges with its competitors. Buick Car Industry General Motors Cadillac Soft Drinks Coke Sprite Barq’s Root beer
Participating in both horizontal integration and vertical integration Steel mill Buick GM Corporation Semi-Truck And Railroads Cadillac
Charles Darwin- a biologist who came up with theory of evolution Evolution applied to society- the “strong” become rich, and the “weak” are poor. – If the poor are helped by the government, society will become weak – If weak businesses are allowed to survive, economy will be weak – God must want some to be poor for a reason Laissez-faire government should not interfere with business
Social Darwinism 4, 000 new millionaires from the Civil War to 1873 Social Darwinism made sense to people – Poor /weak Countries should be taken over – No sympathy for the poor
Business Control Sherman Anti-trust Actmade trusts illegal if they interfered with free trade. It wasn’t clearly defined and didn’t work. The South was still poorthe most profitable businesses (railroads) were owned by Northerners. The South was all farmers and depended on them. No skilled workers.
5 Richest Men in History • Number 5 • John Jacob Astor (1763 1848) • $116. 6 billion If John Jacob Astor were alive to hear industry critics’ “fur kills” cries, he might partially agree. He did, after all, make a killing in fur and it made him the first millionaire in America. Upon overhearing a man discussing fur trading, Astor decided to pursue it himself and realized great success. Along the way, he diversified and dabbled in selling opium -- again, he was successful. Decades later, he got out of the fur business and segued into New York City real estate.
Top 5 Richest Men • Bill Gates (1955 - ) • $124 billion Even if Bill Gates’ currently estimated $58 billion fortune is down from its heady peak nearly a decade ago, the Harvard dropout and Microsoft leader is hardly hurting. After the proposed merger with Yahoo fizzled out and shares dropped in the dominant company he cofounded, he’s probably not losing sleep. He is no doubt looking forward to stepping back from his current role at Microsoft and devoting more time to the Bill and Melinda Gates foundation, currently $38. 7 billion strong.
Top 5 Richest Men • Cornelius Vanderbilt (1794 1877) • $178. 4 billion You can’t necessarily get rich by playing nice, and Cornelius Vanderbilt apparently took that to heart. If some point to Sam Walton as the one who unfairly undercut prices, they should look a little further back to Vanderbilt. In his early years in the steamboat business, he would undercut competitors to the point of his own unprofitability, just to make a point. That ruthless competitive nature typified Vanderbilt through his years, especially in the way he ran his railroad empire. He may not have always played nice, but without exception, he played to win.
Top 5 Richest Men • Andrew Carnegie (1835 - 1919) • $297. 8 billion Steel wasn’t a bad business pursuit in the late 1800 s. It paid off for Andrew Carnegie and continued to pay handsomely through philanthropy long after his death. A selfmade man from humble beginnings, Carnegie worked hard from childhood. He didn’t enjoy overnight success, but he did realize almost continual progress. His savings became investments and his investments became capital for the business ventures for which he would later be known. Even if today’s wealth seekers don’t necessarily follow Carnegie’s principles for philanthropy, they do still highly regard his formulas for acquiring the means.
Top 5 Richest Men • John D. Rockefeller (1839 - 1937) • $323. 4 billion You have to wonder how John D. Rockefeller would fare as a major player in Big Oil today. After all, he founded Standard Oil in 1870, and it wasn’t long before he dominated the industry. Naturally, some didn’t take kindly to that and the company was eventually found to have a monopoly. Yet, for all Rockefeller’s detractors, the U. S. ’s first billionaire was a serious philanthropist to education, medicine and science. From a legacy standpoint, however, he’s best remembered for his unfathomable wealth. Even today, the name connotes “money. ”