Rise of Big Business

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Rise of Big Business

• Objective 5.02

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Monopolies and Trusts

• Late 1800sAmericans become suspicious of large
  corporations
• Power of monopolies was feared
• Wanted to prevent horizontal integration

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• 1882first trust was formed by the Standard Oil
  Company
• Trust a coalition of organizations formed to
  limit competition by controlling the production
  and distribution of a product or service
• Enabled trustees to control a group of companies
  as if they were one large merged company

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New Industries

• Railroads
• Union Pacificstarted in Nebraska headed west
• Built by Civil War Veterans and Irish Immigrants
• Central Pacificstarted in California headed
  east
• Built mostly by Chinese Immigrants

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• Cornelius Vanderbilt (1794-1877)
• Began a RR empire by merging popular lines in NY
  to form the New York Central and Hudson River RR

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• Improvements for Trains
• George Westinghouse developed the new air brake
  system for trains in 1868 using compressed air
  after viewing a collision

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Steel Industry

• Andrew Carnegie (1835-1919)
• Began in RR
• Met Sir Henry Bessemer who invented a new process
  of making high quality steelnow called the
  Bessemer Process
• He decided to get into the steel business and
  opened a company in Pittsburgh in 1875

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• Success brought by the Carnegie Steel Company
  cemented Carnegie as a Captain of Industry
• By the 1890s, his company was the largest and
  most profitable enterprise in the world

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• J.P. Morgan (1837-1913)
• 1901Carnegie decided to sell his steel company
  to Morgan
• He and Elbert Gary then merged Carnegies steel
  with their holdings in the Federal Steel Company
  to form U.S. Steel
• At one time was the largest producer of steel in
  the world, now produces less than 10

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Oil Industry

• Edwin Drake (1819-1880)
• 1859drilled first oil in U.S. near Titusville,
  PA
• Caused major expansion of oil business
• By 1900 oil fields from PA to TX had been opened

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• John D. Rockefeller(1839-1937)
• Organized the Standard Oil Company
• By 1880scontrolled more than 90 of oil refining
  in the U.S.
• Used horizontal integration to buy out smaller
  refiners

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• 1911Government found his company to be a
  monopoly and forced it to be divided into 34
  companies including
• Amoco
• Chevron
• Conoco
• Exxon
• Mobil

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Ideas of the Gilded Age

• Objective 5.02

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The Gilded Age

• Coined by Mark Twain
• Era of U.S. from approximately 1876-1900
• Period of rapid industrialization
• Characterized by ruthless pursuit of profit and
  government corruption

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Individualism

• No matter how humble a persons origins, they
  could rise in society and go as far as their
  talents and commitment would take them
• Horatio Algerexpressed individualism through
  numerous rags-to-riches novels involving the
  poor going to the big city and becoming successful

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Social Darwinism

• Reinforced idea of individualism
• Proposed by Herbert Spencer, English philosopher
• Applied Darwins theory of evolution and natural
  selection to human society
• Argued that society progressed and became better
  because only the fittest were successful

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Gospel of Wealth

• Those who were wealthy, such as Carnegie,
  attempted to extend and soften the harsh
  philosophy of Social Darwinism through
  philanthropy
• Believed that those who profited from society
  owed it something in return
• Used their great fortunes to further social
  progress