Business in the Gilded Age

1. Business in the Gilded Age

2. Focus Question: • What are some of the stores you like to shop at? Why do you prefer to go to those stores?

3. APUSH Objectives: After today’s lesson you will: • Describe the rationale behind “trusts” • Outline the major business models of the late 19th century • Discuss the interpretation of “Robber Barons” and “Industrial Statesmen”

4. Big Business Comes of Age • Entrepreneurs tapped onto the resources of the day • Used financial resources of Wall Street and abroad • Drew on technical expertise • Used the vast supply of labor and resources. • Many made vast fortunes

5. Growth of New Business Models • Growth of corporate giants • Bigger the firm, greater access to resources • Small, family firms found it hard to operate

6. Growth of the Trust • Many businesses consolidated into Trusts • Sought control of the market in a given area. • Provided greater economies of scale • Allowed for far greater profits

7. Models of Integration • Numerous models of Trusts • Two principal patterns • Horizontal Integration • Control a single step in production process • Vertical Integration • Control corporations on each step of the process

9. Monopoly Became the Rule • Nearly all industries part of the monopolistic drive • Promoted by ideas of Social Darwinism • “Survival of the Fittest” • Justification of ruthless tactics • Justified the depths of poverty • Justified autocratic approaches

10. Robber Barons v. Industrial Statesmen • Abuses within the system led many to criticize entrepreneurs • Lack of competition • Exploited workforce • Corruption of Government • Others praised entrepreneurs • Built the wealth of the nation • Developed a multitude of new products • Success stories

11. Which Were They? ROBBER BARONS INDUSTRIAL STATESMEN

12. Which Were They? ROBBER BARONS • Exploited Workers • Drained Natural Resources • Controlled Government • Devastated Competition • Ruled Autocratically INDUSTRIAL STATESMEN • Created wealth • Created Jobs • Made the U.S. a world power • Developed a bevy of new products and industrial procedures • Philanthropists

13. The Gospel of Wealth • Some grew uncomfortable with the situation • Andrew Carnegie promoted the Gospel of Wealth • Riches were justified if the wealthy used his wealth for the community “The Man Who Dies Rich Dies Disgraced.”

14. Reforms proposed • Many saw the government as a tool to prevent monopolies • Sherman Antitrust Act • Forbade “combinations in restraint of trade” • Did not define trusts • Rarely used against any monopoly. • Ineffective