Topic 2.2

Industry and Immigration (1865-1914)
Lesson 2 Big Business Rises

Learning Objectives

•Analyze different management innovations that businesses used to increase their
profits.

•Describe the public debate over the pros and cons of big business.

•Explain how the government took steps to block abuses of corporate power.

Industry and Immigration (1865-1914)
Lesson 2 Big Business Rises

Key Terms

•corporation

•cartel

•John D. Rockefeller

•horizontal integration

•monopoly

•trust

•Andrew Carnegie

•vertical integration

•Social Darwinism

•Interstate Commerce Commission (ICC)

•Sherman Antitrust Act

Industry and Immigration (1865-1914)
Lesson 2 Big Business Rises

Corporations Find New Ways of Doing Business

The rapid industrial growth that occurred after the Civil War transformed American
business and society. Yet it was only the beginning. The rise of big business, characterized
by the investment of huge amounts of private financial resources, helped the United
States push aside strong economies like Britain’s, to become one of the most economically
powerful countries in the modern world.

Corporations Find New Ways of Doing Business

•The Corporation Meets New Needs

•Finding New Ways to Gain Advantage

•Business Management Innovations

Corporations Find New Ways of Doing Business

The expansion of markets and new methods of production and distribution encouraged the growth of
corporations. Analyze Charts Contrast the differences between a family-owned business and a
corporation.

Corporations Find New Ways of Doing Business

Many of John D. Rockefeller’s business practices at Standard Oil are part of mainstream corporate
culture today.

Corporations Find New Ways of Doing Business

Management innovations such as horizontal and vertical integration allowed American businesses to
remain competitive in the age of industrialization. Contrast What differences do you see between
horizontal and vertical integration?

The Pros and Cons of Big Business

Throughout the 1880s, business mergers created powerful empires for those who
controlled steel, railroads, meat, farm equipment, sugar, lumber, and a number of other
enterprises. However, many smaller companies and consumers began to question the
goals and tactics of those who led these businesses.

The Pros and Cons of Big Business

•“Robber Barons” or “Captains of Industry”?

•The Causes and Effects of Social Darwinism

The Pros and Cons of Big Business

“The Protectors of Our Industries” shows Cornelius Vanderbilt II and other business leaders. Analyze
Political Cartoons What point of view about these leaders does this cartoon express?

The Changing Relationship Between Government and
Business

The great industrialists’ methods and their influence on the nation’s economy worried
some Americans. Competing railroads took part in practices such as fixing rates and
pooling, or entering into secret agreements to divide up the nation's freight. Many
Americans felt that price fixing and pooling drove up rates and were unfair to consumers.
They also thought that unfair business practices and poor wages and working conditions
for the labor force had made the costs of the government's laissez-faire policies too high.
They wanted the federal government to take action.

The Changing Relationship Between Government and
Business

•Attempts to Regulate Business

•A Difficult Balance Between Business, Government, and Consumer

The Changing Relationship Between Government and
Business

Railroads all travel to one destination. Analyze Political Cartoons What does the “robber baron” in this
cartoon represent?

The Changing Relationship Between Government and
Business

The Sherman Antitrust Act tried to create a fair marketplace in which the needs of businesses, workers,
and consumers were addressed. Analyze Charts Why might some businesses disagree with the
Sherman Antitrust Act?

Quiz: Corporations Find New Ways of Doing Business

Corporations were an important addition to the industrial free-market system because
they

A. allowed for risk-free investing.
B. could sell to faraway markets.
C. had access to large amounts of funding.
D. could transform raw materials into finished goods.

Quiz: The Pros and Cons of Big Business

Social Darwinism equated being 'fit' with

A. surviving.
B. having good health.
C. being intelligent.
D. being financially successful.

Quiz: The Changing Relationship Between Government
and Business

Why did the federal government attempt to put limits on corporations’ powers?

A. to avoid having its constitutional rights threatened
B. to attempt to protect consumers and competitive practices
C. to fight the state courts, which usually sided with business interests
D. to prevent corporations from becoming more powerful than the government