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Big Business Emerges

Big Business Emerges. Were they Robber Barons or Captains of Industry. Andrew Carnegie. Scottish Immigrant, textile mill worker Telegraph and RR worker Bough Iron Bridge company and formed Carnegie Steel Company Incorporated new techniques and machinery

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Big Business Emerges

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  1. Big Business Emerges Were they Robber Barons or Captains of Industry

  2. Andrew Carnegie • Scottish Immigrant, textile mill worker • Telegraph and RR worker • Bough Iron Bridge company and formed Carnegie Steel Company • Incorporated new techniques and machinery • Chemists and metallurgists improved quality • Detailed accounting systems-precise tracking • Attracted talented people • Offered stock in company • Encouraged competition to increase production and low costs

  3. Business Strategies • Vertical Integration • Bought out all suppliers • Coal & iron mines, ore freighters and RR lines • Controlled raw materials, transport systems and every state of manufacturing • Horizontal Integration • Attempted to buy out all competitors • Similar companies merged • Gained control of suppliers and competition • Almost monopolized steel industry-produced 80% of all steel

  4. Carnegies two sides • Homestead Strike of 1892- workers struck, 9 dead, PA national guard called, took 40 yrs. For steel workers to reorganize • Charitable contributions (90% of fortune) • Funded over 3,000 public libraries • Funded Scottish and U.S. Universities • Funded Carnegie Foundation • Funded the arts, museums, music halls

  5. John D. Rockefeller • Standard Oil Company • Trust- stock turned over group of trustees • Separate companies ran as one corporation • Grey area not an official merger • Total control of oil industry in U.S. (90%) • Keep profits, paid workers low wages • Sold oil lower than cost to produce to run competitors out of business • RR rebates and kickbacks- higher fees for competitors

  6. Charitable Contributions • Gave $500 million to Rockefeller Foundation • $80 million to found the University of Chicago • Created a medical institute to stamp out yellow fever • Gave away more than Carnegie (325 million) vs. Rockefeller (over 500 million)

  7. J.P. Morgan • Banker- controlled much of U.S. economy • Set up monopolies by creating “holding companies” • Corporation that did nothing but buy out the stock of other companies • Could then influence the running of the Co. • 1901 bought out Carnegie Steel • Became the worlds largest business org.

  8. Social DarwinismJustification? • Natural selection-the economy selects out the strong and eats the week • Justified Laissez-faire economics to keep Gov. regulation out for free competitions (mortgage crisis this weekend? • 4,000 millionaires came out of the Civil War • Based on individual responsibility and blame • No shame in humble beginnings, focused on opportunities to be upright, energetic, and smart. (pull yourself up by your bootstraps)

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