Monopolies ESWBAT DRAW CONCLUSIONS REGARDING 3 EFFECTS MONOPOLIES
Monopolies ESWBAT: DRAW CONCLUSIONS REGARDING 3 EFFECTS MONOPOLIES HAD ON BUSINESS IN THE U. S. IN THE EARLY 1900 S BY ANALYZING AND DISCUSSING IN GROUPS DOCUMENTS DEPICTING THE COMPANIES POWER. DO NOW: AFTER WATCHING THE VIDEO CLIP THINK AND JOT DOWN POSSIBLE POSITIVE AND NEGATIVES YOU THINK TO HAVING MONOPOLIES IN THE U. S.
Capitalism aka “Free Enterprise System” Businesses are owned by private individuals 2 types of businesses Private & Corporations Business What owners decide to make How much to produce What to charge Where to sell items
Steel Industry - Steel much stronger than iron - Bessemer Process made steel affordable - Mostly used for RR tracks and skyscrapers. - Pittsburgh became the steel capital. - Caused environmental problems.
Andrew Carnegie - Bought out competition - Had Vertical Integration of steel - Able to charge cheaper prices - Believed in the “Gospel of Wealth”
Oil Industry John D. Rockefeller - Bought out competition - Created the Standard Oil Company - Eventually led to a monopoly of the oil industry
Are trusts/monopolies good or bad? ØCompetition ruined business ØPut people out of work ØGiant businesses brought lower prices to consumers ØEliminated competition ØHigh prices/poor products ØFew rich & many poor
Banks + Corporations - What did J. P Morgan do? - Big factories were replacing small town factories (cheaper prices) Railroad boom helped distribute goods nationally Big factories needed capital ($) to cover their costs Created corporations (business owned by investors) See next slide Banks loaned businesses $ -
Private v. Corporations § Corporation Private One person Controls High all finances risk/high reward §Group of people §Sell stocks (called shares) §Pay dividends to investors
Corporation - Business owned by investors Investors buy stocks (small share of the company) Investors hope to receive dividends (only if the company is doing well) Company uses $ from investors to run the company Corporations have less risk than private business
Word Definition Network System of connected railroad lines. Gauge Width of a train track Corporation Business that is owned by investors Stock Share of ownership in a corporation Dividend Share of a corporations profit Trust Group of corporations run by a single board of directors Monopoly One company has control over an entire industry Patent License for a new invention Sweatshop Workplace where people work in poor condition for low pay Sherman Anti 1890 – law banned trusts and -Trust Act monopolies in the US Paraphrase
Vertical Integration You control all phases of production from the raw material to the finished product Coke fields purchased by Carnegie Iron ore deposits purchased by Carnegie Steel mills purchased by Carnegie Ships purchased by Carnegie Horizontal Integration Buy out your competition until you have control of a single area of industry Railroads purchased by Carnegie
Sherman Anti-Trust Act Passed in 1890 Outlawed Difficult all trusts and monopolies to prove
Life in the 1860 s No indoor electric lights No refrigeration No indoor plumbing Kerosene or wood to heat Wood stoves to cook with Horse and buggy In 1860, most mail from the East Coast took ten days to reach the Midwest and three weeks to get to the West Coast. A letter from Europe to a person on the frontier could take several months to reach its destination. Life in the 1900 s US Govt issued 500, 000 patents—electricity Refrigerated railroad cars Sewer systems and sanitation Increased productivity made live easier and comfortable. Power stations, electricity for lamps, fans, printing presses, appliances, typewriters, etc. New York to San Francisco to 10 days using railroad. 1. 5 million telephones in use all over the country Western Union Telegraph was sending thousands of messages daily throughout the country.
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