Robber Barons Vertical Integration Horizontal Integration Social

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Robber Barons

Andrew Carnegie

• Andrew made his money from stock in the Pennsylvania Railroad. In 1873 he saw the railroad’s need for steel and got into the steel industry.

• By 1899 Carnegie Steel Company made more steel than all the factories in Great Britain.

• Started new business Practices: – Making a better product cheaper – Used new technology – Used new techniques: • Accounting practices that allowed his to keep precise records of costs • He also attracted the best assistants by offering stock in the company.

Vertical Integration

• To control as much of the steel industry as he could, Carnegie bought out his suppliers • Coal fields, iron mines, ore freighters, & railroad lines.

• He controlled the raw materials and the transportation systems.

Horizontal Integration

• John D. Rockefeller

• Standard Oil • Gained control of the competition by buying up other oil companies.

Social Darwinism

• Natural Selection • Weeded out less suited individuals and enabled the best adapted to survive.

• Used to justify the doctrine of laissez-faire (the idea that government should stay out of private industry)

Sherman Antitrust Act

• 1890 • Government worried big business would stifle free competition.

• Made it illegal to form antitrust that interfered with free trade between states or with other countries.

• Was hard to enforce because companies would restructure and continue to grow.

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