Transcript Big Business Notes - Streetsboro City Schools

Industrial Revolution
America
The Rise of Big Business
• The Gilded Age
• period between the end of
Radical Reconstruction (1877
• beginning of the Progressive
Era (1901)
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Brassy
Flamboyant
big business values
political corruption
extremes of wealth and poverty.
• United States changed:
• from a predominantly rural/
agrarian nation
• to an urban industrial one.
Major Developments
Established the foundation for 20th century America
• Industrialization
• By 1913 America produced
1/3 of the world’s industrial
output.
• ½ of all workers worked in
factories
• 2/3 of all workers worked for
wages
• Urbanization
• 11 million moved from
farms to cities
• Great Lakes Region
• Immigration
• 1870-1920 25 million
immigrants
Technology
Telegraph
Telephone
Typewriter
Handheld Camera
• Mass products
• Market, production,
distribution, marketing
• National Brands
• Nation wide companies
• Thomas Edison
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Phonograph
Lightbulb
Motion picture
Electricity - power
• Key to economic growth
• Reliable
• Flexible
• Cheap
• Electric motor
Took Problems into 20th Century
• Problems generated by
the Age of Energy
• the unequal distribution
of wealth
• large-scale
unemployment
• urban crowding
• decline of farm income
• reckless exploitation of
natural resources
• would carry over into the
20th century.
Distant Corporations
• rural communities:
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Self-sufficient
Isolated
satisfied people's needs
replaced by distant
corporations.
• Corporations:
• Impersonal
• located primarily in the
Northeast
• Manufactured products
• Provided Services
• Generated ideas
Controlled Nation’s Economy
• Corporations swallowing up
independent companies
• Formed trusts
• Controlled food supply
• Fashioned clothing
• produced household
furnishings & tools
• Dominated methods of
transportation
• published its books,
magazines, and
newspapers.
Life Profoundly Changed
• Allan Nevins & Henry Steele Commanger
provide a vivid description of the impact of
trusts on the "island community:"
The life of the average man, especially if
he was a city dweller, was profoundly
changed by this development. . . . When
he sat down to breakfast he ate bacon
packed by the beef trusts, seasoned his
eggs with salt made by the Michigan salt
trust, sweetened his coffee with sugar
refined by the American Sugar trust, lit his
American Tobacco Company cigar with a
Diamond Match Company match.
Standardization
• Then he rode to
work on a bicycle
built by the bicycle
trust or on a trolley
car operating under
a monopolistic
franchise and
running on steel
rails made by United
States Steel. . .
Rapid Industrialization
• By 1890, the value of
industrial goods and
services, for the first time,
exceeded that of agricultural
products.
Captains of Industry
• Entrepreneurs with
the talent, vision,
and willingness to
take risks were able
to achieve
unprecedented
wealth and power.
Standard Oil Trust
• In 1882, John D.
Rockefeller formed the
Standard Oil Trust and
consequently dominated
95% of the production,
refining, and marketing of
oil in the United States.
Horizontal Consolidation
• The merger of
competing
companies in one
area of business,
like oil refining,
was known as
horizontal
consolidation.
Raw material
Independent
Companies
Horizontal Consolidation
Manufacturing
Refineries,
pipelines, tankers
Product
Distribution
Fuel, kerosene,
oil, tar
Standard Oil
Trust
Independent
Companies
Vertical Consolidation
• It was often accompanied by vertical
consolidation of industries, in which a firm
would strive to control all aspects of production
from acquisition of raw materials to final
delivery of finished products.
Raw material
Vertical
Consolidation
Manufacturing
Product
Distribution
U.S. Steel
Giant Corporations
• By 1900, two-thirds of
all manufactured goods
were being produced by
giant corporations. Swift
and Armour dominated
meat packing, the Duke
family controlled
tobacco, and Andrew
Carnegie took over
every aspect of steel
production.
Swift
armour
1889 Duke Tobacco Advertisement
U. S. Steel Corporation
• When he retired in 1901,
he sold Carnegie Steel to
financier J. P. Morgan for
over $400 million dollars.
Morgan subsequently
reorganized the company
into the United States
Steel Corporation.
USS
Equal Protection of the Law
• In 1886, the Supreme
Court set a precedent
that has been
interpreted to mean that
corporations have the
same rights as living
persons under the
Fourteenth Amendment
to the Constitution.*
*
Before oral argument took place in
Santa Clara County v. Southern
Pacific Railroad Company, Chief
Justice Waite announced: "The court
does not wish to hear argument
on the question whether the provision in the Fourteenth Amendment to the Constitution,
which forbids a State to deny to any person within its jurisdiction the equal protection of
the laws, applies to these corporations. We are all of the opinion that it does."
Corporate Personhood
• From that point on, the 14th
Amendment, enacted to protect
rights of freed slaves, was used
routinely to grant corporations
constitutional "personhood."
Justices have since struck down
hundreds of local, state and
federal laws enacted to protect
people from corporate harm
based on this premise. Armed
with these "rights," corporations
increased control over
resources, jobs, commerce,
politicians, even judges
Citizens United
• In Citizens United v.
Federal Election
Commission (2010), the
Supreme Court ruled that
the government may not
ban political spending by
corporations in candidate
elections.
Federal Regulation of Trusts
• The Sherman
Antitrust Act of
1890 outlawed all
contracts,
combinations, or
conspiracies in
restraint of trade,
and all monopolies
Theodore Roosevelt: Trust Buster
• President Theodore
Roosevelt was
successful in cases
against the Northern
Securities Company,
the meatpacker trust,
the tobacco trust, and
the Standard Oil
Company.
Discriminatory Practices
• Rebate: a partial kick back of
a large company's shipping
costs in exchange for all of its
freight business.
• Long and Short Haul Abuses:
a short journey where no
competition existed cost
more than a long one where
two or more lines competed.
• Graft: officials bribed public
officials by giving out free
train passes.