Gilded Age: Rise of Big Business

Gilded Age: Rise
of Big Business

HS.SS.H4.03: I can identify how information and
technology has changed and evolved society.

Essential Question: What practices allowed for the
development of big business and what impact did these
businesses have on the economy?

Bellwork

● Individual/Partner: What did businesses look like before and during
the Civil War?

○ Think about it for a moment and, when prompted, discuss with your table
partner

○ Be prepared to share

Review

● With your partner, discuss the four factors of industrialization that we
learned yesterday.

○ List them

○ Explain what they mean

○ Decide which you think is most important and why

Rise of Big Business

● corporations = group of people
share ownership of business
○ less risky - only lose what you invested

○allowed businesses to grow much
larger

● Little to no gov’t intervention

● Big business created:

○ monopolies: when a single company
controls an entire product - free to
set prices

○ trusts: a way of merging businesses
together: one person still controls

■ both pretty much same thing

○ Small businesses couldn’t compete
= driven out of business

Social Darwinism

● Social Darwinism has its origins in Darwin’s theory of evolution

○ Darwin theorized that some individuals in a species flourish and pass their
traits on while others do not
○ Not developed by Darwin, just based on his ideas

● Social Darwinists believed riches were a sign of God’s favor, and being
poor was a sign of inferiority and laziness

Captains of Industry/Robber Barons

● Robber Barons = term used to describe business men that formed
monopolies and trusts

○ negative viewpoint

○ hurt consumers (high prices)

○ paid low wages to their workers

● Captains of Industry = term applied to same businessmen because
they served the nation positively

○ provided jobs

○ built the economy

○ philanthropists: established universities, museums, and libraries

Captains of Industry/Robber Barons

● J.P. Morgan (Banking)

○ most powerful and influential financial banker

○ created holding companies

○ bought out another company's stock

○ did this with railroads

○ By 1900 Morgan controlled ½ of the railroad mileage in the country

● Cornelius Vanderbilt (Railroads)

○ made money in steamships first then he moved into railroads

○ Changed the railroad industry…

■ iron tracks become steel

■ made trains safer

■ standardized track size

■ consolidated New York railroads - what is this an example of?

Captains of Industry/Robber Barons

● John D. Rockefeller (Oil)

○ founder of Standard Oil Company (monopoly)

○ controlled 90% of the oil market in the US

○ used cut-throat tactics to buy out competitors and force them out of business

○ horizontal integration

■ gaining control of many businesses that make the same product

● Andrew Carnegie (Steel)

○ Scottish immigrant, grew up poor

○ made money in steel and founded the US Steel Company

○ Used new business ideas

○ Bessemer process

○ vertical integration

■ gaining control of businesses that make up all parts of a product’s development

Match

Match the following person to their industry

• John D. Rockefeller

• J.P. Morgan

• Andrew Carnegie

• Cornelius Vanderbilt

Oil

Banking

Steel

Railroads

• Oil

• Banking

• Steel

• Railroads

Multiple Choice

True or False: Charles Darwin coined the term "Social Darwinism"

• True

• False

Multiple Choice

Which of the following is NOT a reason men like J.P. Morgan and Andrew Carnegie are called Captains of Industry?

• provided jobs

• paid workers low wages

• built the economy

• established universities, museums, and libraries

Hotspot

Select the example of horizontal integration

​List a couple things that stand out to you.


What is the point of the image?

Gospel of Wealth

● Gospel of Wealth

○ article written by Carnegie in 1889

○ businessmen have the right to make money, but also the responsibility
to give it away

○ believed $ was more wisely spent by the wealthy than the masses

○ encouraged philanthropy

■ Carnegie gave away 80% of his wealth (over $350 million)

Government Interference

● Interstate Commerce Commission (ICC) (1887)

○ established to oversee the railroad industry

○ first federal body to monitor business operations

● Sherman Antitrust Act (1890)

○ outlawed trusts that interfered with interstate commerce or trade

● Neither of these laws were enforced at first but set a precedent that the gov’t
should be involved in business