Industrialization through the Gilded Age Big Business STAAR

Industrialization through the Gilded Age Big Business STAAR Review 6

Learning Objective US. 2 (A) identify the major characteristics that define an historical era; Gilded Age. US. 3 (B) analyze economic issues such as industrialization, the rise of entrepreneurship, free enterprise, the pros and cons of big business the growth of railroads, the growth of labor unions, farm issues, and the cattle industry boom, ; • Free Enterprise - economic system that gives freedom to producers to decide what to make and consumers to what to buy. • Corporation – form of business that limited an investor’s risk and allowed for large sums of money to be pooled together. • Monopoly – a company that owns all of a business and has little or no competition. Similar to a trust. • Trust – different companies working together to eliminate competition and establish prices. Similar to a monopoly. • Entrepreneur - a person that invests their time, money, and skills on the chance of making a profit.

Proof of Learning Small Group Purposeful Talk and Critical Writing By the end of the lesson you will be expected to – • Examine the methods Carnegie and Rockefeller used to create monopolies. – (Vertical and Horizontal integration) • Analyze the effects monopolies had on businesses and the American public? • Use internet to find a political cartoon about monopolies and then explain the cartoon.

Corporations and Stock Values • • • Spring 2017 Amazon – $810. 00 Apple - $129. 00 Coca-Cola - $34. 85 Disney - $110. 33 Facebook – $131. 00 Google – $801. 00 Mc. Donalds - $124. 81 Microsoft - $63. 61 Netflix – $140. 19 Verizon - $47. 97 Walmart - $66. 50 • • • Fall 2017 Amazon – $993. 00 Apple - $158. 00 Coca-Cola - $41. 85 Disney - $98. 00 Facebook – $171. 00 Google – $925. 00 Mc. Donalds - $157. 81 Microsoft - $75. 00 Netflix – $182. 10 Verizon - $47. 00 Walmart - $80. 00 • • • New Year 2018 Amazon – $1210. 50 Apple - $173. 12 Coca-Cola - $39. 65 Disney - $112. 11 Facebook – $184. 64 Google – $1087. 00 Mc. Donalds - $173. 88 Microsoft - $87. 14 Netflix – $205. 90 Verizon - $52. 63 Walmart - $99. 52 http: //www. stockpricetoday. com

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New Types of Business Organization • Most businesses were owned by individuals or by a group of partners. Partnerships had risk! • Corporations had advantages. • A corporation helped to: – Limit a person’s risk as you were only liable for the money you had invested – Shareholders could buy Stock or partial ownership in a corporation. – Allowed business to gather large amounts of money to grow. • Bam! BIG Business was born.

Rise of Big Business • The Rise of Big Business saw the corporations dominating all of the important, major industries. • They were able to make goods more cheaply and quickly and cut prices by using large manufacturing facilities. • They began to make enormous profits, which attracted even more investors who bought shares of stock that provided Big Business and corporations with large amounts of cash to make even more investments. • Existing businesses just could not compete and were forced out of business - meaning more customers, limited competition and the opportunity to increase profits even further.

Rise of Big Business • Monopolies were achieved when a single corporation bought out all of the competition and achieved control over an entire market. • A monopoly could basically set whatever prices they wanted. The could increase prices at will and exert power over their labor force by cutting wages or increasing hours. • Big Business and Corporations had control over the railroads, banking, steel, oil refining, meat packing and manufacturing • It would take government action to break up these powerful monopolies/trusts

The Free Enterprise System • The Success of America’s industrialization was based on its free enterprise system. • Free Enterprise System is when people have the freedom to make their own choices in what to buy, where to work, and what to make. • People are free to use their money and time to start a business in hopes of making a profit. (Producers) • People are free to choose the type of product they wish to buy and how much they’ll pay. (Consumers)

The Free Enterprise System • People have unlimited wants but we have limited resources to satisfy these wants. • Businesses use their resources to compete with each other to satisfy these consumer desires. • Every society must answer three basic economic questions to determine how to use its resources to satisfy these wants. What Should Be Produced ? How Should It Be Produced ? Who Should Get It ?

Free Enterprise System • Individuals are free to produce and sell whatever they chose to. • People go into business to make a profit. • Prices are set by supply and demand. • Inefficient companies that are unable to compete are driven out of business. • Government has a limited involvement in : – protection of property and contracts, – passing protective tariffs, – establishing a system of patents.

Entrepreneurs • An Entrepreneur is a person that invests their time, money, and skills on the chance of making a profit. • In the 1870 s these entrepreneurs dominated America’s economic life. • Efficient large-scale production allowed them to sell goods at lower prices. • Competition forced them to continually improve the quality. • Many of these entrepreneurs created monopolies and made huge fortunes.

Captains of Industry • Many of the more successful entrepreneurs became known as ‘Captains of Industry’. • Some called them ‘robber barons’ because of the ruthless tactics they used to destroy their competition and methods used to keep workers wages low. • Some of the best known were:

Andrew Carnegie • Carnegie started penniless, but he made his fortune in steel mills in the Pittsburgh, PA area. • He used vertical integration to undercut the competition. • He bought his own iron ore fields, coal mines and ships so he could control all phases of steel production.

Andrew Carnegie • Carnegie created a monopoly in the steel business and he crushed attempts to form labor unions. • Carnegie’s Homestead Steel Mill paid low wages, and forced laborers to work 12 hour days in extremely dangerous conditions. • The labor strike on Carnegie’s Homestead Steel Mill would be one of the eras most violent. • A result of the strike was that Unions began to lose favor.

John D. Rockefeller • Rockefeller started out poor, but made his fortune refining oil. • He created Standard Oil Co. . • Kerosene, for lighting, made him millions, later the gasoline industry, would make him the richest man in the world! • Rockefeller used horizontal integration and ruthless tactics to drive his competition out of business, then he would buy them out and raise prices.

John D. Rockefeller • His Standard Oil Co. became a trust, with him owning most of the shares. • Later it would be a monopoly as he controlled 90% of all oil refined. • Because of the lack of competition due to Standard Oil’s monopoly the government would force it to be broken into multiple smaller companies.

Philanthropy • Carnegie and Rockefeller both made millions at the expense of American pubic. • They paid low wages and demanded long hours of work. • As businessmen they didn’t believe in charity, their belief was; ‘help those who help themselves’ • Later, both would lead the rich in philanthropy, they gave away millions of their dollars to the public. • They built libraries', museums, colleges, and gave college scholarships. Here’s a dime I want to help mankind

The Gilded Age • The time when these Captains of Industry ruled America became known as the Gilded Age. • They amassed fabulous wealth and lavishly spent it while the majority of Americans were poor. • These ‘robber barons’ were glorified and vilified. • Some became the richest men in the world. • But, for the working person, life wasn’t so golden

Political Cartoons on Robber Barons • Robber Barons were accused of – being just plain greedy – unfair business practices, – being above the law, – abusing labor with low wages and long hours, – having too much, influence on government, – simply not caring about the American public,

Above the Law

abusing labor with low wages and long hours

Simply not caring about the American public,

having too much, influence on government,

being just plain greedy

Proof of Learning Small Group Purposeful Talk and Critical Writing By the end of the lesson you will be expected to – • Examine the methods Carnegie and Rockefeller used to create monopolies. (Vertical and Horizontal integration) • Analyze the effects monopolies had on businesses and the American public? • Use internet to find a political cartoon about monopolies and then explain the cartoon.

Industrialization through the Gilded Age Limits on Monopolies

Learning Objective US. 3 (B) analyze economic issues such as industrialization, the growth of railroads, the growth of labor unions, farm issues, the cattle industry boom, the rise of entrepreneurship, free enterprise, and the pros and cons of big business; (pg. 15) Vocabulary • Monopoly or Trusts – control of an industry by one (or small group) of businesses that eliminate competition. • Laissez-faire – 'Laissez-faire' economics relied on supply and demand, rather than government intervention, to regulate prices and wages “HANDS OFF!”

Proof of Learning Small Group Purposeful Talk and Critical Writing By the end of the lesson you will be expected to – • Small Group discussion – – Contrast the change in government attitude towards monopolies: • Contrast laissez faire attitude v. anti-trust laws • Critically write – – Evaluate how the Sherman Anti-trust Act has had an impact your life today. (i. e. gas stations and cellphones)

Pros and Cons of Big Business • Large business is more efficient which leads to lower prices. • Hire large numbers of workers. • Produce goods in large quantities. • Have the resources for expensive research and to invent new items. • Unfair competitive advantage. • Often exploited workers. • Often unconcerned about pollution they may cause. • Have an unfair influence on government rules that affect them.

Laws Against Big Business • At first, the government did little to regulate big business. • Government / business leaders believed in laissez-faire – theory that government should not interfere in the operations of the free market. • Government did have some involvement in business, such as patent laws, enforcing contracts, laws protecting property, and tariffs to help American manufacturers. • Some of the anti-competitive practices of big business soon became so obvious that reformers started calling for government intervention to remedy the problems.

Laws Against Anti-Competitive Practices • • Interstate Commerce Act (1887) Railroads often charged small farmers more to ship goods than they did large companies. States passed laws to stop this, but the Supreme Court ruled these laws were unconstitutional. Congress finally passed the Interstate Commerce Act that prohibited unfair practices by the railroads. The Interstate Commerce Commission was created to enforce these laws. First time Congress had regulated big business.

Laws Against Big Business • Teddy Roosevelt is carrying a club saying “Greater Railroad Regulation”. • Roosevelt felt there were ‘good’ trusts (those that didn’t harm the publics interests) and ‘bad’ trusts (those that created monopolies) and it was the governments responsibility to stop the bad trusts. • TR became known as the ‘Trust-busting’ president.

• The railroad trains are labeled with words like : ‘bribery’, extortion, and lack of competition’. • This was to show that the railroads took advantage of the average American, particularly the small farmers.

Laws Against Anti-Competitive Practices • • • Sherman Anti-Trust Act (1890) Federal law aimed at stopping monopolies and trusts from engaging in unfair practices. Attempted to prevent unfair competitive advantages. Act marked a significant change in the attitude of government about the abuses of big business. Standard Oil was the 1 st monopoly the government attempted to stop. What other industries were affected by the Anti-trust Act?

Proof of Learning Small Group Purposeful Talk and Critical Writing By the end of the lesson you will be expected to – • Small Group discussion – – Contrast the change in government attitude towards monopolies: • Contrast laissez faire attitude v. anti-trust laws • Critically write – – Evaluate how the Sherman Anti-trust Act has had an impact your life today. (i. e. gas stations and cellphones)

Vocabulary • Free Enterprise - economic system that gives freedom to producers to decide what to make and consumers to what to buy. • Corporation – form of business that limited an investor’s risk and allowed for large sums of money to be pooled together. • Monopoly – a company that owns all of a business and has little or no competition. Similar to a trust. • Trust – different companies working together to eliminate competition and establish prices. Similar to a monopoly. • Entrepreneur - a person that invests their time, money, and skills on the chance of making a profit.

Entrepreneurs “Robber Barons” or “Captains of Industry”? • Robber barons used ruthless tactics to destroy competition and keep workers wages low. • Andrew Carnegie – – Dominated steel industry by owning iron ore fields, coal mines, and steel mills. – Became a philanthropist, gave away millions. • John D. Rockefeller – – Monopolized oil industry until Sherman Act.

Organized Labor • Problems of Workers: – Long hours, low pay, dangerous conditions. – Child labor and unequal pay for women. – Lack of job security. • Rise of Labor Unions: – Knights of Labor - Terrence Powderly – American Federation of Labor - Samuel Gompers. • Government attitude towards unions: – Anti-union bias, unions drove up cost of goods. – Violence associated with strikes, like Haymarket Riot brought negative attention to unions.

STAAR Review Question Which Industrialist is best described by the concepts in the graphic? Made his fortune producing steel in Pittsburgh, PA A. B. C. D. His Homestead Steel Mill strike was one of the most violent in history Gave away his fortune (philanthropy) to start libraries and college scholarships John D. Rockefeller Thomas Edison Samuel Gompers Andrew Carnegie Click mouse for answer

STAAR Review Question The following concepts are most closely associated with which statement? What should be produced? A. B. C. D. How should it be produced? Who gets what is produced? Free Enterprise System Captains of Industry Interstate Commerce Commission American Federation of Labor Click mouse for answer

STAAR Review Question If you admired the men shown on the graphic, you might refer to them as ? Andrew Carnegie A. B. C. D. John D. Rockefell er Muckrakers Robber Barons Philanthropists Captains of Industry Click mouse for answer Cornelius Vanderbilt J. P. Morgan

STAAR Review Question In the late 1800 s, the Bessemer Process led directly to which of the following ? A. B. C. D. An increase in miles of highway roads constructed A decrease in the number of men joining labor unions A reduction in the miles of railroad track being laid The expansion of industry in the Northeastern cities Click mouse for answer The Bessemer Process made a lighter weight, more flexible steel that didn’t rust. This allowed for more, Railroads, factories and farm equipment to be built.

STAAR Review Question During the late 1800 s what was a major effect of industrialization in American workers? A. B. C. D. Membership in labor unions declined. Workers migrated to rural regions to find work. Most factory jobs became service industry jobs. Skilled craftsmen were often replaced by unskilled machine operators. The flood of new immigrants were mostly unskilled and could be hired to do the boring monotonous jobs for a cheaper wage. Click mouse for answer

STAAR Review Question The arrow points to a sign that reads ‘Public Entrance is Closed’. What is the author trying to show about the public? A. Public has little influence compared to the trusts. B. Public is treated just like trusts and enter same door. C. Public doesn’t need to attend meeting. D. Public hired the trusts to represent them in government. Click mouse for answer Public Entrance says Sign d’ ‘Close The closed door shows the public doesn’t have the influence the trusts and monopolies have.

STAAR Review Question The graphic shows that the number of immigrants in the late 1800 s continually increased. Which of the following is a direct result of this increase in immigration? A. Factory wages increased as the number of skilled workers increased. B. Life in the major cities became overcrowded and dangerous. C. Farm production decreased as prices increased. D. Government regulations limited where these immigrants could live and work. Click mouse for answer

STAAR Review Question During the age of industrialization many critics of big business claimed that monopolies harmed the American economy by --- A. Unfairly limiting competition and driving prices up. B. Encouraging people to invest in the stock market. C. Offering to many choices of products which confused buyers. D. Prevented new technologies from being used to improve production. Monopolies often drive other businesses out of business and limit choices while increasing prices for consumers. Click mouse for answer

STAAR Review Question During the late 1800 s, the United States government took which of the following steps to limit the influence of monopolies in American society? A. Encouraged a laissez-faire attitude by government towards big business B. Stopped the formation of labor unions in businesses of national interest C. Passed the Sherman Anti-Trust Act to limit unfair business competition D. Sent in federal troops to stop the violence of strikers Click mouse for answer

STAAR Review Question The message the cartoonist is sending by portraying the monopolists as larger in size than the senators is that the monopolists …. . A. Have more power to influence the government B. Represent the majority of the people C. Are smarter and work harder D. Are able to voice the concerns of the people more effectively Click mouse for answer Political cartoons often show the most powerful people as being larger than others

STAAR Review Question The graphic shows a steady increase in immigration. How did this increase create favorable conditions for business expansion? A. Price for products decreased as demand increased. B. There was a plentiful supply of cheap labor to work in factories. C. Immigrants brought lots of money to buy American made products. D. Businesses imported goods that the foreign immigrants wanted to purchase. Click mouse for answer • Lots of immigrants came looking for jobs and when they earned wages they spent them on products creating a demand for goods.

STAAR Review Question The political cartoon shows George Pullman putting his employee in a tight situation between high rent and low wages. The author of this cartoon most likely would have used which of the following terms to describe George Pullman? A. B. C. D. Captain of Industry Muckraker Robber Baron Philanthropist Click mouse for answer

STAAR Review Question Term used to describe theory that the government should not interfere in the operations of the free market and that business owners should regulate themselves. A. B. C. D. Monopoly Philanthropist Robber Baron Laissez-faire Click mouse for answer

STAAR Review Question The graphic shows the violence associated with strikes like the ‘Haymarket Affair of 1886. Which of the following best describes the impact of such events? A. B. C. D. Membership in labor unions increased significantly. Labor unions were banned by the government. Public developed negative opinions of labor unions. Workers rights improved dramatically. Click mouse for answer

STAAR Review Question Which group’s goals are expressed in the lyrics of this song? A. B. C. D. Labor union members Native American Indians Government officials Business owners We mean to make things over, We are tired of toil for naught, With but bare enough to live upon, and never an hour for thought: Chorus. Eight hours for work, eight hours for rest Eight hours for what we will! - I. G. Blanchard, “Eight Hours. ” 1878 Click mouse for answer

STAAR Review Question Which answer best interprets information shown in the graph? A. The smallest number of women worked in factories. B. The smallest number of women worked as teachers or nurses. C. The largest number of women worked as farmers or domestic laborers. D. The largest number of women worked in factories Click mouse for answer

STAAR Review Question The graphic is an example of vertical integration. Which business entrepreneur used this business model? A. B. C. D. Alexander Graham Bell John d. Rockefeller J. P. Morgan Andrew Carnegie Click mouse for answer Carnegie controlled all the different parts of the production of a good, in this case, the production of steel.

STAAR Review Question What do the large men at the back of the Senate Chambers represent? A. B. C. D. Labor organizers Wealthy monopolists Powerful senators Average Americans Click mouse for answer They are the ‘Trusts’ controlled by the wealthy monopolists.