Big businesses in the late 19th century United States grew through forming corporations that issued stock, acquiring other companies through horizontal and vertical integration, and creating trusts. This allowed some businessmen like Andrew Carnegie in steel and John D. Rockefeller in oil to gain control of their industries and become extraordinarily wealthy, though some criticized this as cheating the system while others viewed it as a natural outcome of social Darwinism's "survival of the fittest."

1. CHAPTER 19:
The Industrial Age
Section 2:
Big Business

2. THE U.S. ECONOMY
 Based on capitalism –
Economic system in which private
businesses run industries
• Provides for free markets and
competition
• Keeps prices low and quality
high

3. Capitalism and the Free
Market

4. HOW BUSINESSES
GREW –
 Formed corporations
business that sells portions of
ownership called stock shares

5. How Corporations
Work

6. HOW BUSINESSES
GREW
 Stockholders:
• Get a % of the profit
• Elect board of directors to run
company

7. HOW BUSINESSES
GREW
 Using horizontal integration –
Acquiring ownership of other
businesses in the same field

8. Horizontal Integration

9. HOW BUSINESSES
GREW
 Using vertical integration –
Acquiring ownership of
businesses involved in each step
of a manufacturing process

10. Vertical Integration

11. HOW BUSINESSES
GREW
 Making a trust – Legal
arrangement grouping together a
number of companies under a
single board of directors

12. A Trust

13. A Trust

14. HOW BUSINESSES
GREW to run
• Set prices very low
competitors out of business, then
raised prices very high

15. HOW BUSINESSES
GREW monopoly –
 Goal was to form a
Total ownership of a product or
service

17. HOW BUSINESSES
GREW
• No competition left
• Raise prices to whatever they
wanted
• Quality of products decreased

18. TWO LEADERS IN
BUSINESS
 Some men used integration and
trusts to become extraordinarily
wealthy

19. TWO LEADERS IN
BUSINESS
 Andrew Carnegie – Controlled
most of the steel production in the
U.S.

20. TWO LEADERS IN
BUSINESS
 John D. Rockefeller –
Controlled most of the oil
production in the U.S.

21. WHY DID THESE MEN
BECOME SO RICH?
 Some said they were cheating
the system
 Others justified their actions
through a theory called Social
Darwinism
• “Survival of the fittest”
determined which human beings
would succeed in business and
in life in general

22. Social Darwinism and
“Survival of the Fittest”

23. Social Darwinism and
“Survival of the Fittest”