Robbing Barons

• Business owners with controversial practices

• They were called Robbing Barons

• Exploited workers

• Unfair Labor Practices

  • The government hasn’t passed any working regulations

• Horrible Working Conditions

  • Long Hours

  • Low Pay

  • Dangerous Conditions

  • Child Labor

• Enormous Wealth

Captains of Industry

• These business owners were also viewed in good ways

• Also called captains of industry

• Efficient

  • More

  • Better

  • Faster

• Inventive

• “Good Business”

• Broke No Laws

• Philanthropic

Andrew Carnegie

• Steel Industry

  • Made from Iron Ore

• Steel

  • Hard to produce

  • Iron was the only thing they could make

  • Iron wasn’t good because it was malleable(means bendy)

  • Couldn’t be used to make skyscrapers

  • Steel was the only option

  • However, Steel wasn’t affordable

  • Carnegie changed that

American Dream

• Through honesty, hard work, and strong determination, the American Dream was available to anyone willing to make the journey

• “Rags to Riches"

• Carnegie was an example of this as he worked hard and was able to create a business that he sold for 350 million

Bessemer Process

• Carnegie goes to the steel manufacturing plant in England

• He sees a machine that does the Bessemer Process

• It mass-produces steel in an efficient way

• Carnegie uses this machine in mass production

• It can be used to make any form of steel such as tracks or girders

• Part of Andrew Carnegie’s Success

Vertical Consolidation

• Consolidation-Combine together businesses

• Carnegie joined together businesses to make a product

• Instead of paying other companies to make parts of a product, he buys every company necessary to make the product to make the manufacturing process cheaper

• This is called vertical consolidation

How did He Do it?

• Owned the mines to get the iron ore

• Owned the rail lines

• Owned the shipping lines

• Owned the Factories

• This cut costs and made steel affordable

How he Survived

• Surrounded himself with “better” people

• Hired the Best-Paid them the best

• Undersold, Price Fixed, Kept Wages Low

  • These business practices made him successful and wealthy

• Just like evolution, Businesses survive if they are the fittest

Gospel of Wealth

• Carnegie was making 20 million a year

• Gospel of Wealth-Philanthropy

• Rich people thought that they should use the money they have to give back to society to improve it

• Carnegie followed this and gave $350 million to libraries, hospitals, arts and culture

John Rockefeller

• Created a monopoly for the Oil Industry

• Created the Standard Oil Trust

STANDARD OIL TRUST CO.

• John D. Rockefeller

• From Controlling 2-3% of the Industry

• To to 90% of production

• Example of a monopoly

Corporations

• Businesses owned by the Public

• They sell stocks

  • Help Generate Capital

  • The business had the money to grow

  • With the funding, they can pass ahead of competitors

Cut-throat Competition

• Rockefeller did many practices to succeed

  • He did Rebates

  • He undersold

  • Had secret agreements with railroads

    • Got charged less for transportation

    • Was able to cut costs and sell for less

    • Other businesses couldn’t compete

  • Combined Companies

  • Got confidential information able to take down competitors

Horizontal Integration

• Joined together Businesses across one Industry

• Goal - To create a Monopoly

• Rockefeller was successful in creating a monopoly

Trust-Competition Eliminated

• Rockefeller doesn’t change the name of companies he buys

• Doesn’t want the public to know about his practices

• Doesn’t want government to have regulations to stop him

• Rockefeller made a Trust

  • A combination of companies to control an industry

  • 5,000 companies in 300 trusts

    • Less competition

  • Sherman Anti-Trust Act 1890 – 1^ST Attempt to Regulate Trusts

Philanthropist

• Rockefeller was a Philanthropist

• Rockefeller Center

• Rockefeller Plaza

• University of Chicago

  • Donated a lot of money to it