Big businesses transformed the American economy in the late 1800s. Tycoons like Rockefeller and Carnegie created vast corporate empires through strategies like monopolies, cartels, and vertical integration that maximized profits but shut out competitors. This concentration of economic power led to public debate over whether these "robber barons" helped the nation through innovations and philanthropy or harmed society. In response to concerns over abuses, the federal government began regulating corporate power through agencies like the Interstate Commerce Commission and laws like the Sherman Antitrust Act.

1. Chapter 25 Section 1
• Analyze different methods that businesses
used to increase their profits.
• Describe the public debate over the impact
of big business.
• Explain how the government took steps to
block abuses of corporate power.
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Objectives

2. Chapter 25 Section 1
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Terms and People
• corporation – a form of group ownership in which
a number of people share the ownership of a
business
• monopoly – complete control of a product or
service
• cartel – an arrangement in which businesses
making the same product agree to limit production
to keep prices high
• John D. Rockefeller – an oil tycoon who made
deals with railroads to increase his profits

3. Chapter 25 Section 1
Terms and People (continued)
• horizontal integration – a system of
consolidating many firms in the same business to
lower production costs
• trust – a situation in which companies assign their
stock to a board of trustees, who combine them
into a new organization
• Andrew Carnegie – a steel tycoon who used
vertical integration to increase his power
• vertical integration – the practice of gaining
control of many different businesses that make up
all phases of a product’s development
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4. Chapter 25 Section 1
Terms and People (continued)
• Social Darwinism – an application of Charles
Darwin’s work which held that wealth was a
measure of one’s inherent value and those who
had it were the most “fit”
• ICC – the Interstate Commerce Commission, a
government body set up to oversee railroad
operations
• Sherman Antitrust Act – a bill passed in 1890
which outlawed any trust that operated “in
restraint of trade or commerce among the several
states”
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5. Chapter 25 Section 1
How did big business shape the
American economy in the late 1800s
and early 1900s?
1. The growth of big business in the late 1800s
changed American society. The rise of business
empires turned the United States into an
economically powerful nation.
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6. Chapter 25 Section 1
Industrialization changed how businesses
were run.
• Business leaders combined funds and resources.
• Investors formed corporations that protected
them from losing more than original investment.
• A corporation could operate in different regions.
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7. Chapter 25 Section 1
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2. Corporations
worked to maximize
profits by
• paying workers
low wages
• paying lower
prices for raw
materials
• supporting
research labs
Standard Oil Factory

8. Chapter 25 Section 1
Corporations used strategies to eliminate
competition and decrease costs.
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• monopolies
• cartels
Competitors forced
out of business
• horizontal integration
• vertical integration
Better control of
production and
costs reduced

9. Chapter 25 Section 1
Tycoons of the Late 1800s
Business leader Industry
John D. Rockefeller Oil
Andrew Carnegie Steel
Cornelius Vanderbilt Railroads
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10. Chapter 25 Section 1
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or “captains
of industry”
who served
the nation
and made
prices of
goods
cheaper?
3. Were the
tycoons
“robber
barons” who
swindled the
poor and
drove small
businesses
under…

11. Chapter 25 Section 1
Big Business Is Bad for Small Businesses?
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12. Chapter 25 Section 1
Or Is Big Business Good for the Nation?
provides jobs
allows for product innovations
financially supports universities,
libraries, and museums
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13. Chapter 25 Section 1
Survival of the Fittest
Charles Darwin’s idea of evolution of species
applied to American capitalism
led to the idea of Social Darwinism
This is the belief that wealth was a
measure of a person’s value and
those who had wealth were the most “fit.”
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14. Chapter 25 Section 1
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4. Social
Darwinists
believed
government
should stay out
of private
business and
thought it was
wrong to use
public funds to
assist the poor.
5. Americans
who worried
about the
methods of
industrialists
called for
federal
regulation of
business
practices.

15. Chapter 25 Section 1
The ICC and the Sherman Antitrust Act
began a trend toward government limits on
corporate power.
ICC • Interstate Commerce Commission
• Oversaw railroad operations
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Sherman
Antitrust
Act
• Passed by the Senate in 1890
• Outlawed trusts that restrained
trade among several states

16. Chapter 25 Section 1
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Section Review
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