The Rise of Big Business

What made mass production in manufacturing possible?

Technology

What did transportation and communication revolutions develop?

national markets for goods

When did large-scale companies grow?

Large-scale companies grew as the scale and scope of modern business increased

What did the Constitutional Rule of Law protect?

Private properties and patents, letting entrepreneurs start over with bankruptcy laws

What was the first corporation that provided a model for the rise of big business?

railroads

What type of companies caused deflation?

companies that struggled to make profit due to fierce competition

Define pools or trade associations

informal agreements to cooperate in the fixing of prices allocating business so all members made a profit

Generally, pools or trade associations were…

…voluntary/not legally binding

Define trusts

a type of business consolidation that formally makes a single holding company for the stocks of many leading business of a company

With trusts, business could set prices and control…

…small businesses as monopolies or oligarchies

By 1900, what was the percentage of control that Standard Oil had on the oil industry?

Standard Oil controlled 90% of the oil industry by 1900

Rockefeller (the one who built Standard Oil) entered into…

…voluntary agreements with competitors and set their production quotas to his liking

How did Standard Oil win favorable treatment and block government regulation?

engaged in political bribery

Why were industrialists described as robber barons?

Monopolies became wealthy through corruption and mistreating workers, competitors, and the public

How were small businesses (some) able to survive?

by making a niche product or targeting a local market instead of competing with big companies

Why did companies market their goods with name brands?

to differentiate themselves on shelves

Advertisements flooded newspapers and…

…influenced buying decisions by glamorizing goods

What did the culture for the middle class reflect instead of the Victorian character?

consumerism

Why did some entrepreneurs donate a lot of their money to charity organizations, universities, medical research, and urban renewal?

Because they were worried about American civic culture and the condition of the masses

Define Gospel of Wealth

great wealth brought a social responsibility to create a better society

What was the Gospel of Wealth criticized for?

critics argue that it was just a way to maintain social control over the American public

Which act marked the beginning of government regulation?

the Interstate Commerce Act 1887 and the Sherman Antitrust Act

What did the Interstate Commerce Act target?

railroad rebates

Define the Interstate Commerce Act

prohibits rate discrimination

What was the Interstate Commerce Act generally supported by?

railroads

Define Sherman Antitrust Act 1890

law passed by Senate that bans any trust that restrained interstate trade/commerce

Why did the Sherman Antitrust act not scare the titans of industry?

It was rarely enforced since courts favored big businesses, it was vague, and it targeted labor unions instead of monopolies

Define the Elkins Act 1903

prohibited rebates

Define the Hepburn Act 1906

created a commission that set reasonable rates instead of the market

What clause lets Congress regulate interstate trade?

What were the results of U.S. v E.C. Knight (1895)?

The Supreme Court decided that sugar trust didn’t violate the Sherman Act because there wasn’t evidence that showed the trust controlling prices

What percent of the industry did sugar trusts control?

90%

List the presidents who sought carious regulatory agencies to control trusts and prosecuted trusts in federal court?

Theodore Roosevelt, William Howard Taft, Woodrow Wilson

What event made Theodore Roosevelt known as a “trust-buster” ?

the dissolution of the 1904 Northern Securities Company by the Court for biolating the Sherman Act

Which company did Howard Taft break up in 1911?

The court used the “rule of reason” to break up Rockefeller’s Standard Oil Company

Name the act that Woodrow Wilson signed in 1914

the Clayton Act

What does the Clayton Act (1914) do?

lists illegal antitrust activites and empowers the Federal Trade Commission