The Rise of Big Business An Industrial Society

The Rise of Big Business An Industrial Society 1860 -1914 Chapter 20, Section 3

Essential Questions • What should be the roll of a government during a time of great wealth for a few, and much poverty for many? • Why is it “safer” to invest in corporations rather than private businesses? • What effects did monopolies and trusts have on the United States? • What was the hidden truth of the “Gilded Age? ”

Jay Gould • Jay Gould was a Robber Barron – Was in the Railroad Industry – Worth $77 Million in 1892 • Robber Barron: – Business Leader Who Becomes Wealthy Through Dishonest Methods • Jay Gould Used Illegal Methods to Become Rich: – Bribing Officials – Selling Fake Stock

How to Raise Investment Capital? • Most Businesses in the 1800’s were Owned by 1 Person • Businesses Owners Wanted to Buy New Equipment & New Technologies (Factory Equipment) Very Expensive! • How Can You Raise Investment Capital? (Story of Rob!)

Corporations • Corporations are Businesses that are Owned by Multiple Investors • Owner of Business Sells Shares of Stock (Part of the Business) to Investors to Raise Investment Capital • George Steinbrenner

A Sample Share of Stock

Advantages of Corporations vs. Private Businesses • Corporations Can Raise Large Amounts of $$$ Money by Selling Stock • A Corporation Continues After Its’ Founders Die (President, Vice Presidents, Etc…) Banks are MORE Likely to Lend to Corporations then Private Businesses • If a Corporation Goes into Debt, Investors (Stock Holders) DO NOT have to Pay the Debt! Safer to Invest

John D. Rockefeller • Most Famous Robber Barron in U. S. History! • Had a Monopoly on the OIL Industry – You MUST Know John D. Rockefeller! – His Company Was Standard Oil!

Monopoly • A Monopoly is a Company that WIPES OUT its’ Competitors & Controls an Industry • Purpose of the Game is to Have All the $$$ and Bankrupt Your Opponents! Charge High Rent! • Monopolies Have the Only Product, They Charge High Prices $$$ • Ah Pizza & Espizitos • Rockefeller Had a Monopoly on Oil Industry!

Rockefeller’s Strategy • Put His Competitors Out of Businesses! • Rockefeller Built Oil Refineries Around the United States • Made Secret Deals with Railroads to Carry His Oil at Lower Rates than his Competitors • Built & Purchased His Own Pipelines to Carry Oil (Did Not Have to Pay Rent)

Rockefeller Formed the Standard Oil Trust • A Trust is a LEGAL (In 1882) Body Created to Hold Stock in Many Companies in the SAME Industry • Rockefeller Purchased Stock in All the Other Oil Companies in U. S. in 1882 • That Way He Had Ownership of All Oil Companies! (A Monopoly!) • What Would Steinbrenner Do if He Had Red Sox Stock?

Price of Gasoline • By 1880, Rockefeller Controlled 95% of All Oil Companies in the U. S. • Rockefeller Raised the Price of Oil! • Americans Couldn’t Get Oil Anywhere Else! • Standard Oil Earned Hundreds of Millions of $$$ Dollars

Other Trusts Formed • Trusts Formed in the Sugar, Cottonseed, & Lead Mining Industries • It Was Legal! – Americans Got Screwed! – Had to Pay High Prices! • U. S. Government Did Nothing About It!

Andrew Carnegie • Andrew Carnegie Had a Monopoly in the STEEL Industry • Differed From Rockefeller • Created a Monopoly & Beat His Competition by Making a Better & Cheaper Product • Company Was Called U. S. Steel

Andrew Carnegie • Sought to Control All of the Processes Related to the Making of Steel • Bought the Mines That Supplied the Iron Ore to Make Steel • Bought the Ships & Railroads that Carried Iron Ore to Carnegie Steel Mills

Philanthropists • People Who Give Large Amounts of Money to Charities • Rockefeller & Carnegie Gave Away Hundreds of Millions of Dollars • Why? ? ?

Rockefeller • John D. Rockefeller Gave Away Over $500 Million • Donated to University of Chicago & NYU • Rockefeller Center • Rockefeller Estate

Carnegie • Andrew Carnegie Gave Away Over $350 Million Dollars • Carnegie & Mellon University – Engineering School • Built Hundreds of Public Libraries

Duh… Carnegie Hall

The Gilded Age • What Do These 2 Images Tell You About Life During the Gilded Age? • Why Did Mark Twain Call the Late 1800’s The Gilded Age? • What Does it Mean to Gild Something?

The Gilded Age (Late 1800’s) • To Gild Something is to Cover it With Gold • Mark Twain Wrote The Gilded Age: A Tale of Today • What Was Mark Twain Trying to Say About U. S. Society During the Late 1800’s? • Wrote About Great Disparity Between Rich & Poor – Corruption in Government – Poverty

In the South (1860 -1914) • After the Civil War, Slaves Were Freed! • YIPPEEEEEEE! • Former Slaves/Poor Whites: – No Job – No Education – No House – No Food – No $$$ – Screwed! – Turned to Sharecropping

Sharecropping • The Southern States Stayed Agricultural (Farming) for the Most Part After the Civil War • Former Slave Owners Had Large Plantations, But NO Workers • Hired Poor Whites & Former Slaves to Work the Fields • Rented the Land to the Workers – Workers Had to Pay in Crops

Sharecropping • As a Sharecropper, You Rented a Piece of Land from a Landowner • You Had to Pay For: – Land That You Rented – Tools/Equipment – Seeds to Plant – Housing – Food *** Very Similar to Slavery, EXCEPT You Had a Choice!

Essential Questions • What should be the roll of a government during a time of great wealth for a few, and much poverty for many? • Why is it “safer” to invest in corporations rather than private businesses? • What effects did monopolies and trusts have on the United States? • What was the hidden truth of the “Gilded Age? ”