4. (Elaborate) Why do you think there was a rush of inventions in the late
1800’s? What new Inventions excited the public in the 1800’s and how were
they used? How did improvements to railroads affect the economy and
transportation in the U.S.? What advances were made in
I. Industrial Giants
A. Railroads Grow
1. New Inventions (3 You Already
Have)
2. Consolidation
-Big companies buy smaller companies
-(ex. Today - American bought Reno Air)
3. Helps Economy (Merc . . .lism?????)
-Take goods to and from the factories.
- Companies Mass Produce and
ship huge amounts
The Bessemer Process
Invented in the 1850’s, the
Bessemer Process could make
several tons of steel in 10-20
minutes… Prior to this invention,
the process took over a day!
INVENTIONS
B. Inventions Galore
1. Between 1860-1890 400,000 patents
*Patent is an exclusive right to make or
sell an invention
*Telegraph / Telephone / Personal Camera/
Typewriter / Light Bulb / Affordable Car
2. Communications
*Telegraph, Samuel Morse
*1844 (1866- 1st cable across Atlantic)
*Telephone, Alexander Graham Bell
*1876 *500,000 sold by 1890’s
INVENTIONS
3. Genius of Menlo Park – Thomas Edison
-Created the 1st research laboratory
**1st practical Light Bulb
-Power plants (Run new Lights)
-Hired other to research: Lewis Howard Latimer
4. Transportation
-Ford, begins work in 1890’s – Company in1906
**Mass production/Assembly line: reduced cost
-The Airplane
* Orville and Wilbur Wright, 1903
» Kitty Hawk, N. Carolina
5. Explain the differences between sole proprietorship, partnerships,
and corporations in business. Give an advantage and disadvantage for
each. What would you consider the best for running a company? Why?
A. Big Business
1. The Major Players
a. Railroads (we’ve already talked about)
b. Steel Industry
-Andrew Carnegie
c. Oil Industry
-John D. Rockefeller
Study Guide #5: Big Business
2. Types of Business:
a. Sole Proprietor (One person owner)
Advantages- *All profits go to you ($)
*You’re the only boss
*Make all decisions
Disadvantage- *You do everything
*Responsibility
* You pay all expenses
*Company looses $ you do
Mr. Chaney
Study Guide #5: Big Business
B. Partnership (2-3 people own company equally)
Advantages- *1/2 work, time, expenses
Disadvantage-
*1/2 profit
*1/2 boos, must agree w/part.
*Disagreements with Partners
Study Guide #5: Big Business
C. The Corporation
1. Need to raise money for expansion
2. Sell stocks in company to investors,
raise “capital”(money) for expansion
Advantage- *raises more $$
(capital) than an individual
Disadvantage- *Stock holders
have no direct say in company
* receive dividends of profits if the company
does well
VI. Explain how both Horizontal & Vertical Integration* were used to create
trusts (Monopolies*). Name 3 businesses that grew with these practices and name
their leaders. Name the first attempt to limit trusts. What were the major arguments
for and against monopolies?
A. The growth of Monopolies: Expanding
Power
1. Vertical Integration
-Buy anything you use for your Business
Ex. Carnegie (Steel)
“From ground to Mill”
- Mine (Owned Iron Ore & Coal Mines)
- Shipping (Owned Ore Fleet in Great
Lakes)
-Some railways also
- Steel Mills (Turn Ore to Steel)
Study Guide #6: Monopolies
2. Horizontal Integration
- Buy interest in competitors companies, bring together
in one Corporation
Ex. – Rockefeller (Standard Oil)
Company A + Company B + Standard Oil=
MONOPOLY
The Oil Industry- Standard Oil
1. Oil discovered in Penn. In 1859
-“Black Gold”
2. John D. Rockefeller
- Created the Standard Oil Corporation
**Becomes most dominant oil company in the U.S.
– Controlled 95% of Refineries
**CONTROL ALL ASPECTS OF YOUR BUSINESS!!
Cartoons depicting Standard Oil
Study Guide #6: Monopolies
3. The TRUST (ex. Standard Oil Trust)
**A group of Corporations governed by
one Board Of Trustees
4. Public Reaction to Monopolies
a. supporters- more efficient/ leads to
reliable goods and services
b. detractors: People tired of trusts:
use unfair business tactics, leads to
reduced competition, too much
POWER (political???)
-Sherman Anti-Trust Act
(1890)
**WEAK!! Fails to even define a “Trust”