Trusts and Monopolies n Objective: The student will explain the impact of the railroads on other industries, such as steel, and on the organization of big business. The student will also identify John D. Rockefeller and the Standard Oil Company and the rise of trusts and monopolies. n Essential Question: How did Rockefeller and the Standard Oil Company contribute to the rise of monopolies? n Vocabulary: John D. Rockefeller, Standard Oil Company, Trusts, Monopolies
Impact of Railroads n Increased migration to the West n Led to rise of Big Business n Increased demand for other industries (like steel, for example)
Jay Gould n wealthy businessman n purchased the Union Pacific Railroad in 1874 n bought up smaller railroads and took control of railroads east of Mississippi River
Cornelius Vanderbilt n A wealthy businessman n gained control of the east railway lines from Chicago to New York
Andrew Carnegie n “rags to riches” mogul n Dominated steel industry n Steel was used for machinery in industry and tracks and engines for railroads
J. P. Morgan n Banker that headed the United States Steel n A monopoly set up by a holding company n a corporation that did nothing but buy out stock of other companies
JP Morgan n United States Steel became one of the most successful holding companies n Became the world’s largest business when it bought the largest manufacturer, Carnegie Steel in 1901
John D. Rockefeller n Standard Oil Company n Bought out small refineries until he controlled oil industry and market n Established the nation’s first trust that controlled every aspect of the oil industry
John D. Rockefeller n By 1882 established the nations first trust that controlled every aspect of the oil industry (vertical integration) n Examples n owned the forests used to produce the wood for the oil barrels n Owned the pipeline the oil flowed from n Used to destroy competition and create a monopoly
Rise of Trusts and Monopolies n By the end of the 1800 s, trusts controlled oil, steel, railroad, sugar and meat industries n By 1900, about 30% of all industries were controlled by a handful of wealthy robber barons
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