1. 5.3The Rise ofBig Business in America

2. By 1900 America was an Industrial super power

3. The Rise of Big Business Technology allowed for huge factories to be built for massive standardized items as opposed to the traditional personalized items Big Business dominated the economy with factories, warehouses, and distribution facilities. Corporations raised money by selling stocks (stockholders actually own the company) and then using that money to invest in new technologies, larger workforce, and new machines to impact efficiency

4. The Rise of Big Business Corporations had several advantages: 1. Produce goods cheaply 2. Cut prices to stay in operation during hard economic times. 3. Negotiate rebates from thelarge railroad companies. 4. Spread out the financial risk to many people Many smaller businesses felt these larger corporations were driving them out of business.

5. How did this happen? Business men learned and larger forms of business organizations and new ways to promote their products. Business consolidation Advertising and catalogs

8. Industrial Leaders, the New Millionaires Carnegie

9. Andrew Carnegie and Steel “rags to riches” story Scottish immigrant as a boy 1st job = $1.20 per week Age 33 he was worth 4 million Opened a steel mill in Pittsburgh and then began buying up quarries, mines, etc By the 1890s, his company was the most profitable industrial company in the world 1900…Carnegie steel out produced all of Britain Sells company to JP Morgan for 480 million and then gives much of it away “Gospel of Wealth” “A man who dies rich dies disgraced”

10. The Growth of Railroads: Railway Mileage of the U.S. 1830 -1890 50,000 miles 100,000 miles 150,000 miles 1840 1850 Central Pacific locomotive No. 1, the first engine to be placed in construction service on the western end of the transcontinental railroad. 1860 1870 1880 1890 http://railroads.unl.edu/documents/view_document.php?id=rail.str.0252

12. Andrew Carnegie was one of the 40 Richest Americans in History American Heritage, October 1998.

13. Andrew Carnegie - From Explore PAHistory - http://explorepahistory.com/displayimage.php?imgId=2831

14. "Forty-Millionaire Carnegie in his Great Double Role. As the tight-fisted employer he reduces wages that he may play philanthropist and give away libraries, etc."

15. Videoizzle for my studentizzles

16. Horizontal Integration Horizontal integration – buying out your competitors. Occurred through competition, as one company would begin to lose market shares, they would often sell themselves to create large corporations

17. Horizontal Integration Independent steel mills Integrated steel company

18. John D. Rockefeller and Standard Oil Oil discovered in Penn., he decided to begin a oil refinery business 1870 he founded the Standard Oil Company which by 1890 controlled 90% of the oil business in the US Considered the richest man in the history of the world Worth $318 billion at death Gave away $527 million Philanthropist vs Robber Baron

19. His Parents Deaf, blind mute salesman “Snake oils” for 25 bucks….2 months salary at the time Raped a women…left town and changed name… Never benefitted from his son’s wealth Said to be a bigomist "I cheat my boys every chance I get. I want to make ‘em sharp."

20. His Story In spite of his father’s absences and frequent family moves, young Rockefeller was a well-behaved, serious and studious boy. VERY religious guy saying “God gave me money” As a boy gave 6% of money to church…later it was 10%

21. Johnny Rock Video

22. Age 86…He wrote a poem about his life “ I was early taught to work as well as play,My life has been one long, happy holiday;Full of work and full of play-I dropped the worry on the way-And God was good to me everyday.”

23. Rockefeller as the Richest Man in US History….BY A LOT! American Heritage, October 1998.

26. Standard Oil

27. J.P. Morgan The most successful banker from the late 1800’s was John Pierpont Morgan. He made his fortune by buying and selling stock of large corporations. He bought out Andrew Carnegie in 1901 and created the largest company in America called United States Steel Company.

28. % of Billionaires in 1900

29. % of Billionaires in 1918

30. Relative Share of World Manufacturing

31. Millionaire's Row, New York City in the 1880s The Frick Mansion, 5th Ave. & 70th St. The Carnegie Mansion, 5th Ave. & 91st St. Mrs. Astor’s House, 5th Ave. & 65th St. The Vanderbilt Chateau, 5th Ave. & 52nd St. - American Experience - http://www.pbs.org/wgbh/amex/carnegie/gallery/index.html

32. Advertising and Shopping Advertising quickly became a big money maker. By 1900, retailers were spending $90 million a year attracting new customers. Department stores became popular which helped make shopping more fun. These new stores offered a wide variety of products.

33. Singer Sewing Machines

34. “A Busy Bee Hive"

35. Interior of an early department store

36. Mail Order Catalogs Department stores would send out catalogs with colored pictures to people living in rural areas. The idea of “shopping from home” appealed to thousands of people. Two large mail-order retailers: 1. Montgomery Ward 2. Sears and Roebuck