STAAR_06_Big_Business.ppt

• Free Enterprise - economic system that gives freedom to producers to decide
what to make and consumers to what to buy.
• Corporation – form of business that limited an investor’s risk and allowed for
large sums of money to be pooled together .
• Monopoly – a company that owns all of a business and has little or no
competition. Similar to a trust.
• Trust – different companies working together to eliminate competition and
establish prices. Similar to a monopoly.
• Entrepreneur - a person that invests their time, money, and skills on the
chance of making a profit.
Learning Objective
US.2 (A) identify the major characteristics that define an
historical era; .
US.3 (B) analyze economic issues such as industrialization, the
rise of entrepreneurship, free enterprise, the pros and cons of
big business the growth of railroads, the growth of labor unions,
farm issues, and the cattle industry boom,;

Proof of Learning
Small Group Purposeful Talk and Critical Writing
By the end of the lesson you will be expected to –
• Examine the methods Carnegie and Rockefeller
used to create monopolies.
– (Vertical and Horizontal integration)
• Analyze the effects monopolies had on
businesses and the American public?
• Use internet to find a political cartoon about
monopolies and then explain the cartoon.

Corporations and Stock Values
Spring 2017
• Amazon – $810.00
• Apple - $129.00
• Coca-Cola - $34.85
• Disney - $110.33
• Facebook – $131.00
• Google – $801.00
• McDonalds - $124.81
• Microsoft - $63.61
• Netflix – $140.19
• Verizon - $47.97
• Walmart - $66.50
http://www.stockpricetoday.com
Fall 2017
• Amazon – $993.00
• Apple - $158.00
• Disney - $98.00
• Google – $925.00
• Netflix – $182.10
• Verizon - $47.00
• Walmart - $80.00
New Year 2018
• Amazon – $1210.50
• Apple - $173.12
• Disney - $112.11
• Google – $1087.00
• Netflix – $205.90
• Verizon - $52.63
• Walmart - $99.52

Stock Market Tracker
You borrow $10,000 to invest in Stock Market
Use website to purchase stocks – www.stockpricetoday.com

New Types of Business Organization
• Most businesses were owned by
individuals or by a group of
partners. Partnerships had risk!
• Corporations had advantages .
• A corporation helped to:
– Limit a person’s risk as you were only
liable for the money you had invested
– Shareholders could buy Stock or
partial ownership in a corporation.
– Allowed business to gather large
amounts of money to grow.
• Bam! BIG Business was born.

Rise of Big Business
• The Rise of Big Business saw the corporations dominating
all of the important, major industries.
• They were able to make goods more cheaply and quickly
and cut prices by using large manufacturing facilities.
• They began to make enormous profits, which attracted
even more investors who bought shares of stock that
provided Big Business and corporations with large
amounts of cash to make even more investments.
• Existing businesses just could not compete and were
forced out of business - meaning more customers,
limited competition and the opportunity to increase
profits even further.

Rise of Big Business
• Monopolies were achieved when a single corporation
bought out all of the competition and achieved control
over an entire market.
• A monopoly could basically set whatever prices they
wanted. The could increase prices at will and exert power
over their labor force by cutting wages or increasing
hours.
• Big Business and Corporations had control over the
railroads, banking, steel, oil refining, meat packing and
manufacturing
• It would take government action to break up these
powerful monopolies/trusts

The Free Enterprise System
• The Success of America’s industrialization was
based on its free enterprise system.
• Free Enterprise System is when people have the
freedom to make their own choices in what to buy,
where to work, and what to make.
• People are free to use their money and time to
start a business in hopes of making a profit.
(Producers)
• People are free to choose the type of product they
wish to buy and how much they’ll pay.
(Consumers)

The Free Enterprise System
• People have unlimited wants but we have limited
resources to satisfy these wants.
• Businesses use their resources to compete with
each other to satisfy these consumer desires.
• Every society must answer three basic economic
questions to determine how to use its resources
to satisfy these wants.
What
Should Be
Produced ?
How
Should It
Be
Produced ?
Who
Should
Get It ?

Free Enterprise System
• Individuals are free to produce and sell whatever
they chose to.
• People go into business to make a profit.
• Prices are set by supply and demand.
• Inefficient companies that are unable to compete
are driven out of business.
• Government has a limited involvement in :
– protection of property and contracts,
– passing protective tariffs,
– establishing a system of patents.

Entrepreneurs
• An Entrepreneur is a person that
invests their time, money, and skills on
the chance of making a profit.
• In the 1870s these entrepreneurs
dominated America’s economic life.
• Efficient large-scale production allowed
them to sell goods at lower prices.
• Competition forced them to continually
improve the quality.
• Many of these entrepreneurs created
monopolies and made huge fortunes.

Captains of Industry
• Many of the more successful entrepreneurs became
known as ‘Captains of Industry’.
• Some called them ‘robber barons’ because of the
ruthless tactics they used to destroy their
competition and methods used to keep workers
wages low.
• Some of the best known were:

Andrew Carnegie
• Carnegie started penniless, but
he made his fortune in steel mills
in the Pittsburgh, PA area.
• He used vertical integration to
undercut the competition.
• He bought his own iron ore fields,
coal mines and ships so he could
control all phases of steel
production.

Andrew Carnegie
• Carnegie created a monopoly in
the steel business and he crushed
attempts to form labor unions.
• Carnegie’s Homestead Steel Mill
paid low wages, and forced
laborers to work 12 hour days in
extremely dangerous conditions.
• The labor strike on Carnegie’s
Homestead Steel Mill would be
one of the eras most violent.
• A result of the strike was that
Unions began to lose favor.

John D. Rockefeller
• Rockefeller started out poor, but
made his fortune refining oil.
• He created Standard Oil Co..
• Kerosene, for lighting, made him
millions, later the gasoline
industry, would make him the
richest man in the world!
• Rockefeller used horizontal
integration and ruthless tactics
to drive his competition out of
business, then he would buy
them out and raise prices.

John D. Rockefeller
• His Standard Oil Co. became a
trust, with him owning most of the
shares.
• Later it would be a monopoly as
he controlled 90% of all oil refined.
• Because of the lack of competition
due to Standard Oil’s monopoly the
government would force it to be
broken into multiple smaller
companies.

Philanthropy
• Carnegie and Rockefeller both made
millions at the expense of American
pubic.
• They paid low wages and demanded
long hours of work.
• As businessmen they didn’t believe in
charity, their belief was;
‘help those who help themselves’
• Later, both would lead the rich in
philanthropy, they gave away millions
of their dollars to the public.
• They built libraries', museums, colleges,
and gave college scholarships.
Here’s
a dime
I want to
help
mankind

• The time when these Captains of Industry ruled America
became known as the .
• They amassed fabulous wealth and lavishly spent it while
the majority of Americans were poor.
• These ‘robber barons’ were glorified and vilified.
• Some became the richest men in the world.
• But, for the working person, life wasn’t so golden

• Robber Barons were accused of
– being just plain greedy
– unfair business practices,
– being above the law,
– abusing labor with low wages
and long hours,
– having too much, influence
on government,
– simply not caring about the
American public,
Political Cartoons on Robber Barons

abusing labor with low wages and
long hours

Simply not caring about the
American public,

having too much,
influence on
government,

Proof of Learning
• Examine the methods Carnegie and Rockefeller
used to create monopolies. (Vertical and
Horizontal integration)
• Analyze the effects monopolies had on
businesses and the American public?
• Use internet to find a political cartoon about
monopolies and then explain the cartoon.

Learning Objective
US.3 (B) analyze economic issues such as industrialization, the
growth of railroads, the growth of labor unions, farm issues, the
cattle industry boom, the rise of entrepreneurship, free enterprise,
and the pros and cons of big business; (pg. 15)
Vocabulary
• Monopoly or Trusts – control of an industry by one
(or small group) of businesses that eliminate competition.
• Laissez-faire – 'Laissez-faire' economics relied on
supply and demand, rather than government
intervention, to regulate prices and wages
“HANDS OFF!”

Proof of Learning
• Small Group discussion –
– Contrast the change in government attitude towards
monopolies:
• Contrast laissez faire attitude v. anti-trust laws
• Critically write –
– Evaluate how the Sherman Anti-trust Act has had an
impact your life today. (i.e. gas stations and cellphones)

Pros and Cons of Big Business
• Large business is more
efficient which leads to
lower prices.
• Hire large numbers of
workers.
• Produce goods in large
quantities.
• Have the resources for
expensive research and to
invent new items.
• Unfair competitive
advantage.
• Often exploited workers.
• Often unconcerned about
pollution they may cause.
• Have an unfair influence
on government rules that
affect them.

Laws Against Big Business
• At first, the government did little to regulate big
business.
• Government / business leaders believed in laissez-faire
– the theory that government should not interfere in the
operations of the free market.
• Government did have some involvement in business,
such as patent laws, enforcing contracts, laws
protecting property, and tariffs to help American
manufacturers.
• Some of the anti-competitive practices of big business
soon became so obvious that reformers started calling
for government intervention to remedy the problems.

Laws Against Anti-Competitive Practices
Interstate Commerce Act (1887)
• Railroads often charged small farmers more to
ship goods than they did large companies.
• States passed laws to stop this, but the
Supreme Court ruled these laws were
unconstitutional.
• Congress finally passed the Interstate
Commerce Act that prohibited unfair practices
by the railroads.
• The Interstate Commerce Commission was
created to enforce these laws.
First time Congress had regulated big business.

• Teddy Roosevelt is carrying
a club saying “Greater
Railroad Regulation”.
• Roosevelt felt there were
‘good’ trusts (those that didn’t
harm the publics interests) and
‘bad’ trusts (those that created
monopolies) and it was the
governments responsibility
to stop the bad trusts.
• TR became known as the
‘Trust-busting’ president.
Laws Against Big Business

• The railroad trains
are labeled with
words like :
‘bribery’, extortion,
and lack of
competition’.
• This was to show
that the railroads
took advantage of
the average
American,
particularly the
small farmers.

Laws Against Anti-Competitive Practices
Sherman Anti-Trust Act (1890)
• Federal law aimed at stopping
monopolies and trusts from engaging
in unfair practices.
• Attempted to prevent unfair
competitive advantages.
• Act marked a significant change in the
attitude of government about the
abuses of big business.
• Standard Oil was the 1st monopoly
the government attempted to stop.
• What other industries were affected
by the Anti-trust Act?

Vocabulary
• Free Enterprise - economic system that gives freedom to
producers to decide what to make and consumers to what to
buy.
• Corporation – form of business that limited an investor’s
risk and allowed for large sums of money to be pooled
together .
• Monopoly – a company that owns all of a business and
has little or no competition. Similar to a trust.
• Trust – different companies working together to eliminate
competition and establish prices. Similar to a monopoly.
• Entrepreneur - a person that invests their time, money, and
skills on the chance of making a profit.

Entrepreneurs
“Robber Barons” or “Captains of Industry”?
• Robber barons used ruthless tactics to
destroy competition and keep workers
wages low.
• Andrew Carnegie –
– Dominated steel industry by owning iron ore
fields, coal mines, and steel mills.
– Became a philanthropist, gave away millions.
• John D. Rockefeller –
– Monopolized oil industry until Sherman Act.

Organized Labor
• Problems of Workers:
– Long hours, low pay, dangerous conditions.
– Child labor and unequal pay for women.
– Lack of job security.
• Rise of Labor Unions:
– Knights of Labor - Terrence Powderly
– American Federation of Labor - Samuel Gompers.
• Government attitude towards unions:
– Anti-union bias, unions drove up cost of goods.
– Violence associated with strikes, like Haymarket Riot
brought negative attention to unions.

Which Industrialist is best described by the
concepts in the graphic?
A. John D. Rockefeller
B. Thomas Edison
C. Samuel Gompers
D. Andrew Carnegie
Made his
fortune
producing steel
in Pittsburgh,
PA
His Homestead
Steel Mill strike
was one of the
most violent in
history
Gave away his
fortune
(philanthropy) to
start libraries and
college
scholarships
STAAR Review Question
Click mouse for answer

The following concepts are most closely
associated with which statement?
A. Free Enterprise System
B. Captains of Industry
C. Interstate Commerce Commission
D. American Federation of Labor
What
should be
produced?
How should
it be
produced?
Who gets
what is
produced?

If you admired the men shown on the graphic, you
might refer to them as ?
A. Muckrakers
B. Robber Barons
C. Philanthropists
D. Captains of Industry
John D.
Rockefell
er
Cornelius
Vanderbilt
J.P.
Morgan
Andrew
Carnegie

In the late 1800s, the Bessemer Process led directly to
which of the following ?
A. An increase in miles of highway roads constructed
B. A decrease in the number of men joining labor unions
C. A reduction in the miles of railroad track being laid
D. The expansion of industry in the Northeastern cities
Click mouse
for answer
The Bessemer Process made a lighter weight, more
flexible steel that didn’t rust. This allowed for more,
Railroads, factories and farm equipment to be built.

During the late 1800s what was a major effect of
industrialization in American workers?
A. Membership in labor unions declined.
B. Workers migrated to rural regions to find work.
C. Most factory jobs became service industry jobs.
D. Skilled craftsmen were often replaced by unskilled
machine operators.
The flood of new immigrants were mostly
unskilled and could be hired to do the boring
monotonous jobs for a cheaper wage.

The arrow points to a sign that reads
‘Public Entrance is Closed’.
What is the author trying to show about the public?
A. Public has little influence
compared to the trusts.
B. Public is treated just like
trusts and enter same door.
C. Public doesn’t need to attend
meeting.
D. Public hired the trusts to
represent them in
government.
The closed door shows the public doesn’t have the influence the
trusts and monopolies have .
Public
Entrance

The graphic shows that the number of
immigrants in the late 1800s
continually increased. Which of the
following is a direct result of this
increase in immigration?
A. Factory wages increased as the number of skilled
workers increased.
B. Life in the major cities became overcrowded and
dangerous.
C. Farm production decreased as prices increased.
D. Government regulations limited where these
immigrants could live and work.

During the age of industrialization many critics of big
business claimed that monopolies harmed the
American economy by ---
A. Unfairly limiting competition and driving prices up.
B. Encouraging people to invest in the stock market.
C. Offering to many choices of products which confused
buyers.
D. Prevented new technologies from being used to
improve production.
Monopolies often drive other businesses out
of business and limit choices while increasing
prices for consumers.

During the late 1800s, the United States government
took which of the following steps to limit the influence
of monopolies in American society?
A. Encouraged a laissez-faire attitude by government
towards big business
B. Stopped the formation of labor unions in businesses
of national interest
C. Passed the Sherman Anti-Trust Act to limit unfair
business competition
D. Sent in federal troops to stop the violence of strikers

The message the cartoonist is sending by
portraying the monopolists as larger in size than
the senators is that the monopolists …..
A. Have more power to influence the
government
B. Represent the majority of the
people
C. Are smarter and work harder
D. Are able to voice the concerns of
the people more effectively
Political cartoons often show the most powerful people as being
larger than others

The graphic shows a steady increase in immigration.
How did this increase create favorable conditions for
business expansion?
A. Price for products decreased as demand
increased.
B. There was a plentiful supply of cheap
labor to work in factories.
C. Immigrants brought lots of money to
buy American made products.
D. Businesses imported goods that the
foreign immigrants wanted to purchase.
• Lots of immigrants came looking for jobs and
when they earned wages they spent them on
products creating a demand for goods.

The political cartoon shows George Pullman putting his
employee in a tight situation between high rent and low
wages.
The author of this cartoon most likely would have used which
of the following terms to describe George Pullman?
A. Captain of Industry
B. Muckraker
C. Robber Baron
D. Philanthropist

Term used to describe the theory that the
government should not interfere in the
operations of the free market and that
business owners should regulate themselves.
A. Monopoly
B. Philanthropist
C. Robber Baron
D. Laissez-faire

The graphic shows the violence associated with
strikes like the ‘Haymarket Affair of 1886. Which of the
following best describes the impact of such events?
A. Membership in labor unions increased significantly.
B. Labor unions were banned by the government.
C. Public developed negative opinions of labor unions.
D. Workers rights improved dramatically.

Which group’s goals are expressed in the lyrics of this
song?
We mean to make things over,
We are tired of toil for naught,
With but bare enough to live
upon,
and never an hour for thought:
Chorus.
Eight hours for work, eight hours for rest
Eight hours for what we will!
Eight hours for work, eight hours for rest
Eight hours for what we will!
- I.G. Blanchard, “Eight Hours.” 1878
A. Labor union members
B. Native American Indians
C. Government officials
D. Business owners

Which answer best interprets information shown in the
graph?
A. The smallest number of women worked in factories.
B. The smallest number of women worked as teachers
or nurses.
C. The largest number of women worked as farmers or
domestic laborers.
D. The largest number of women worked in factories
Click mouse
for answer

The graphic is an example of vertical integration. Which
business entrepreneur used this business model?
A. Alexander Graham Bell
B. John d. Rockefeller
C. J.P. Morgan
D. Andrew Carnegie
Carnegie controlled all the different parts
of the production of a good, in this case,
the production of steel.

What do the large men at the back of the
Senate Chambers represent?
A. Labor organizers
B. Wealthy monopolists
C. Powerful senators
D. Average Americans
They are the ‘Trusts’ controlled by the wealthy monopolists.

STAAR_06_Big_Business.ppt

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