Big Business study guide
Big Business and Industrialization (use of machines to do work)
A. Life in Industrialized America
 a large variety of consumer goods available to buy (because of national markets)
 more people leaving farms, moving to city to work in factories
 machines doing more of the work on farms and in the city, improving efficiency
 more job opportunities for unskilled labor in factories
 the United States went from an agricultural nation to an industrial nation
B. Growth and Prosperity Factors (Big Business was concentrated in cities)
 Businesses started with raw materials (natural resources) such as coal, iron, wood, or cattle.
 Natural resources were shipped to eastern factories on the advanced transportation
(railroads).
 In factories and mills raw materials became finished products to be sold.
 More labor supply was available - businesses could pay workers less (immigrants & farmers)
 Assembly lines and cheap labor helped to create lower production costs.
 Lots of capital was needed to start or expand a business.
 Railroads allowed finished products to be shipped out to national markets.
 Advertising tried to get consumers’ interest and expand the business’s market.
C. Inventions
 Bessemer process – made stronger steel more cheaply than before
 Alexander Graham Bell – invented the telephone, creating telephone services available
nationally
 Thomas Edison – improved light bulb, figured out how to use electricity in factories
 Henry Ford – used assembly line to lower production costs for automobiles
D. Major Industrial Centers
 Manufacturing areas were clustered near cities (access to resources, products, labor and
markets)
 Many people bought shares (parts of the ownership) of big businesses called corporations.
 finished products: meatpacking in Chicago, steel in Pittsburgh, automobiles in Detroit, textiles
in New England
 raw materials: cotton from Southeast, beef cattle from Texas, iron ore to steel mills
E. “Captains of Industry”
 Rockefeller = oil; accused of having the first monopoly
 Carnegie = steel
 Vanderbilt = railroads
 J. P. Morgan = banking
 Henry Ford = automobiles
 used vertical integration – bought other companies so that they would control all the steps in
making their products (including natural resources, transportation, factories, and markets)
 created monopolies (companies that controlled most or all of a certain kind of business) by
driving competitors out of business and buying other companies