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The Rise of Big Business 20-2

The Rise of Big Business 20-2. Carnegie. Vanderbilt. Rockefeller. Morgan. Business Methods. Horizontal Integration - Buying up all competition in the same industry Vertical Integration - Owning all steps of a business in order to take a product from raw material to finished product.

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The Rise of Big Business 20-2

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  1. The Rise of Big Business20-2 Carnegie Vanderbilt Rockefeller Morgan

  2. Business Methods • Horizontal Integration- Buying up all competition in the same industry • Vertical Integration- Owning all steps of a business in order to take a product from raw material to finished product

  3. Vertical Horizontal

  4. Growth of Steel Industry • Growth of RR industry, led to the growth of the steel industry • Henry Bessemer created the Bessemer Process • Enabled steel makers to produce strong steel at a lower cost much faster.

  5. Steel Mills Thrive • Pittsburg, PA becomes one of the leaders in steel production • The boom in the industry brought jobs and prosperity to the cities • Negative effects • Air and water pollution

  6. Stop and Think • What is horizontal and vertical integration? • How did the Bessemer Process improve the steel industry? • Explain the positives and negatives of the steel industry growth in cities.

  7. Andrew Carnegie • Dominated the Steel Industry • Began buying up all phases of the steel industry • Iron mines, railroad and steamship lines, and warehouses • Vertical integration

  8. Andrew Carnegie continued… • “Gospel of Wealth” • Carnegie believed in giving to those who were less fortunate. • Sold his steel empire in 1901 and spent the rest of his life helping people and donating to charity

  9. Stop and Think • What industry did Andrew Carnegie lead? • How did he use vertical integration? • What was the “gospel of wealth”?

  10. J.P. Morgan • Most powerful banker and investor of industrial age. • Used his banking profits to gain control of other major corporations. • Gained control of most of the nation’s RR’s. • Became head of U.S. Steel Co. which was the first American business worth over $1 billion. • “I like competition, but I like combination more.”

  11. John D. Rockefeller • Rockefeller built oil refineries when everyone else was drilling for oil. • He bought up all competition. • Used horizontal integration • He started his own large company called Standard Oil. • Eliminated competition by forming trusts • Trust- a group of corporations run by a single board of directors

  12. Rockefeller • He slashed prices to undercut competition. • Forced RR companies to grant rebates and lower shipping costs to keep his business • The Standard Oil trust allowed Rockefeller to call the shots for all the companies that he overtook.

  13. Stop and Think • What was J.P. Morgan? How did this help him become such a dominant businessman? • What industry did John D. Rockefeller work in? • Explain how Rockefeller capitalized on the oil industry.

  14. The Case Against Trusts • Many Americans felt that trusts and monopolies went against the free enterprise system. • Free enterprise system- businesses are owned by private citizens. • They felt that it eliminated competition and without competition there was no reason for companies to keep prices low or improve

  15. Homework • Continue working on your graffiti books! • Due Thursday 11/20/14.

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