Big Business

1. Big Business SSUSH11 The student will describe the growth of big business and technological innovations after Reconstruction. c. Identify John D. Rockefeller and the Standard Oil Company and the rise of trusts and monopolies

2. The Robber Barons/Captains of Industry • The term “robber barons” was coined to describe the powerful businessmen who used these new inventions to establish businesses in the late 1800s • The term implies that their fortunes were built by stealing from the public • Those who use this term believe that they drained the country of its natural resources, had laws interpreted in their favor, and treated workers poorly • The term “captains of industry” is sometimes use for the same men when looking at them in a more positive way • This view has them increasing the supply of goods, raising productivity, and expanding markets

3. The Two Most Important “Robber Barons”: • John D. Rockefeller – Standard Oil • Formed the Standard Oil Company in 1870 and gained a large share of the oil industry • Used his money for charitable purposes later in life • Andrew Carnegie – Carnegie Steel • Was a captain of the steel industry and believed that people should make as much money as they could and give it away

4. Laissez-faire • in the late 19th Century, businesses operated with little government regulation • this hands-off approach to economic matters is known by the French phrase laissez-faire which means “allow to be” • those who believe in laissez-faire believe that the government should play a very limited role in business • it was common for businessmen to give friendly politicians gifts of money, some of which were legal, some weren’t

5. Creating a monopoly • These businessmen created a monopoly in their companies • Monopoly – complete control of a product or service • They bought out their competitors through mergers or drove them out of business • This allowed them complete control over their industry’s production, wages, and prices

6. Antitrust Act • The government was concerned that expanding • corporations would put an end to competition in • business • The Sherman Antitrust Act was passed in 1890 and outlawed any combination of companies that restrained interstate trade or commerce • The problem was that “trust” wasn’t defined – was it company that held a monopoly? Did it prohibit mergers? • This was an effort to limit the power companies could have over an industry • The Supreme Court threw out 7 of the 8 cases the government brought against trusts – eventually they stopped trying