Chapter 19, Section 3: The Rise of Big Business

Growth of ==Corporations==

  • Until the late 1800s, businesses were owned by one/few

  • needed money for new technology

  • corporations sold shares of the company by selling stock

  • stockholders owned part of the company

  • businesses raised money

Advantages of Corporations

  • raised money
  • could still exist if the founders died
  • banks were more likely to lend money

limited risk for investors

Few Laws Regulated Corporations Leading to Giant Corporations

EXAMPLES: oil and steel industries

Oil Industry- Rockefeller

  • grew up poor/frugal/gave away millions
  • built 1st refinery- 1863
  • created a monopoly- wiped out competitors- to control industry
    • secret deals with railroads
    • built pipelines
    • bought pipelines
    • bought other refineries
  • created a trust- legal and owns stock in many companies; often in the same industry
    • Standard Oil Trust
    • persuaded oil companies to join
    • controlled 95% of all refining in the US
    • set higher prices
    • many trusts in sugar, cottonseed oil, lead mining

Steel Industry- Carnegie

  • immigrated from Scotland to Pennysylvania at age 12
  • Early jobs- cotton mill, telegraph office, railroad supervisor assistant
  • learned about companies and invested
  • started steel business
    • beat competitors by making best/cheapest
    • controlled all parts of steel process
  • sold business to banker J.P. Morgan
  • gave away millions to colleges, libraries

Gilded Age- late 1800’s

  • fabulous wealth by some masked society’s problems

South-poor and mostly agricultural (cotton)

  • except for Birmingham- steel/iron
  • except for cotton mills- Virginia to Alabama