Case Study of John D. Rockefeller: Business Pioneer or Robber

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Unit 2
Industrialization
SS8 Mrs. Francis
Industrialization
SS8
Mrs. Francis
Name ____________________________
Period _____
Essential Question: How can rapid industrial and technological development be a
blessing and a curse?
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Railroads and Industry
Aim:
Do Now:
Growth of Railroads
The period from 1865 to 1900 was the great age of railroad building. Coast-to-coast rail service,
in particular, helped tie the nation together.
How did the railroads improve?
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
What impact did the railroad networks have on those that would ship goods?
How was Railroad travel improved?
_______________________________designed and sold an air brake that allowed a locomotive
engineer to stop all railroad cars at once.
Before this invention each car had its own break and break operator and if they did not stop at
the same time there would be serious accidents.
________________________________designed a railroad sleeping car which made long
distance travel more comfortable.
_______________________________, or combining, of Railroads. Large railroads bought
smaller railroads.
If you were a railroad owner and you bought all of the other railroads would that be good or bad
for you? Explain
______________________________________________________________________________
______________________________________________________________________________
Important People
____________________________was a very tough businessman who believed in consolidation.
He bought lines in NY first and then continued to buy more and more. He was a ruthless
businessman.
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_____________________________ built the Great Northern Railroad. He did so with no help
from the Government rather he worked with the farmers and people moving west.
What was the most important invention for the railroad? Why?
______________________________________________________________________________
______________________________________________________________________________
Document 1:
GROSS EARNINGS OF THE RAILROADS
$600,000,000
$550,000,000
$500,000,000
$450,000,000
$400,000,000
$350,000,000
$300,000,000
$250,000,000
$200,000,000
$150,000,000
$100,000,000
$529,012,999
$403,329,208
$130,000,000
1861
Use the graph above to answer the following questions.
1871
1879
1. How much money was earned in 1861? 1879?
1861_______________________
1879____________________________
2. What is the difference between 1861 and 1879?
3. What do you think is the reason for this?
4. How did the railroad effect industrialization?
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SS8 Mrs. Francis
Mark Twain wrote about his experiences living and working out West in his book Roughing It,
published in 1872.
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SS8 Mrs. Francis
Describe the differences that Twain wrote about between his travel on the mail coach and the
accounts from the railroad travel.
Reducing Competition
Define rebates: _______________________________________________________________
Define pools: ________________________________________________________________
Why were pools created?
Railroads and Farmers
How did rebates and pools affect farmers?
How did the farmers attempt to address the problem?
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“With Rail lines in place, the United States was ready to become the greatest Industrial Nation
the world had ever seen.”
Why? ________________________________________________________________________
Positives of the Railroad
Negatives of the Railroad
Directions: You are to create your own political cartoon about the Railroad. You can portray
either the negatives or the positives of the railroad.
Rise of Big Business
Aim:
Do Now:
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Industrialization
SS8 Mrs. Francis
How would having a single company produce all of the video and computer games affect the
variety, quality and pricing?
______________________________________________________________________________
______________________________________________________________________________
Why did the steel industry become important?
What was the Bessemer process and why was it important?
What new ways of doing business did Americans develop?
What are the pros and cons to Big Business?
Pros
Cons
Andrew Carnegie
Where did Carnegie build his mill?
Carnegie owned every process of making steel from the mining of iron ore to shipping the steel.
This ability to gain control of all steps used to change raw materials into finished product is
called__________________________________________________.
_______________________________ - Carnegie’s idea or belief that the rich had a
responsibility to help the poor and improve society. Gave millions to charities.
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Industrialization
SS8 Mrs. Francis
John D. Rockefeller
Oil is discovered in Pennsylvania, but Rockefeller believes the money is in _________________.
He invests in an oil refinery at the age of 23. He believes competition is wasteful. He buys out
other refineries. Why? _________________________________________________________.
Creates Standard Oil in 1870.
Rockefeller formed the Standard Oil trust in 1882. He had a monopoly in the oil industry.
Define monopoly: _____________________________________________________________.
Rockefeller= Horizontal Integration
Carnegie=Vertical Integration
Answer the Chart Skills Question:
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
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SS8 Mrs. Francis
Analyzing a Document
1. Who is the man in this cartoon?
2. What industry does he control?
3. What is made to look like a factory in the background?
4. What is the message of this cartoon?
5. What act was passed to try to prevent monopolies?
J.P. Morgan
Morgan was the most powerful banker of the late 1800s. He used his profits from the banking
industry to gain control of major corporations.
_____________________________________ first billion dollar corporation.
Social Darwinism
Definition:
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SS8 Mrs. Francis
Rockefeller’s Standard Oil Company Cuts Prices to Kill Competition
Throughout her life, muckraker Ida Tarbell was interested in the unfair competition between the
small oil producers of Pennsylvania and the Standard Oil Company. In this excerpt, which is
taken from Tarbell’s book The History of the Standard Oil Company, she wrote about how the
Standard Oil Company dealt with competition. Her information is based on interviews with
former Standard Oil Company employees.
The marketing department of the Standard Oil Company is organized to cover the entire
country, and aims to sell all of the oil sold in each of its divisions. To eliminate competition it
had organized an elaborate secret service for locating the quantity, quality, and selling price of
independent or competitor shipments. Having located an order for independent oil with a dealer,
Standard Oil persuades the independent dealer, if possible, to cancel the order. If this
impossible, Standard Oil threatens “predatory competition,” that is, to sell at cost (the amount
spent in producing and manufacturing) or less until the rival is worn out…
The sureness and promptness with which Standard Oil located their competitors’
shipments was remarkable. The ruthlessness (harshness) and persistency with which Standard
Oil cut and continued to cut their prices drove small independent oil producers to despair.
1. According to Tarbell, how did Standard Oil eliminate competition?
2. If you were an independent oil producer in the late 1800s, how would you have
responded to Rockefeller’s business methods?
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Form
Proprietorship
Partnership
Corporation
SS8 Mrs. Francis
Forms of Business Organization
Advantages
*owner close to customers ad
workers
*has total control of
management
*receives all profits
*more capital can be raised
*risks are shared
*more management
perspective
*increased capital through sale
of shares (stocks)
*losses limited to investment
*increased number of
managers
*ownership transferable
*larger growth potential
*research facilities possible
*risks shared
Disadvantages
*owner assumes all risks
*limited capital available
*one manager’s perspective
*profits must be shared
*unlimited liability for owners
*ends if one partner leaves
*state & federally regulated
*subject to corporate taxes
*management removed from
customers & workers
Government Response to Industrial Development and Abuses
The great strides in technology made
the remote geographic areas of the United
States more accessible to each other.
Telephone and telegraph communication
and railroad transportation went beyond
state borders. However, in the industrial
age, the new interstate commerce required
national laws. The new laws made the
national government grow increasingly
stronger.
prices because there is no competition to
deep it in line by offering the product for a
lower price. The trust becomes the dictator
of the market.
In the 1870s, farmers of prairie and
western states were at the mercy of railroad
trusts. Railroad companies formed pools to
eliminate competition. The group of
companies conspired to control prices.
Together they acted as a monopoly.
Railroad pools charged high prices to get
farmers produce to market. The farmers had
no alternatives. The public was hurt, too.
Food prices rose because it cost so much to
bring crops to the market.
There were no laws to stop some
companies from forming mergers
(combinations of several companies) so big
that they dominated the market for their
product. When one company eliminates all
others it becomes a monopoly or a trust.
Once a company controls the market, it can
set the design, quality, and quantity of a
product. A monopoly can charge high
The farmers pressed their states to
regulate such railroad abuse. However, rich
and powerful railroad owners bribed
legislators and prosecutors and found ways
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Industrialization
around the regulations. The Supreme Court
of the United States said states could
regulate the railroads but only within their
state boundaries. In Wabash RR v. Illinois
decision of 1886, the Court said Congress
alone could regulate interstate commerce.
SS8 Mrs. Francis
regulated railroad rates. It also prohibited
railroad pools. Shortly afterwards, Congress
passed the Sherman Anti-trust Act (1890).
It outlawed monopolies in all industries by
forbidding “combinations in restraint of
trade.” These acts were a weak start.
Neither act was exceptionally strong, and
corrupt officials worked to keep them weak.
Not until the Progressive Era were strong
laws passed to control monopolies.
Farmers and the public turned to
Congress for action. In 1887, Congress
passed the Interstate Commerce Act. It
Define all bold terms from the reading above in the space below:
1. ________________________________________________________________________
2. ________________________________________________________________________
3. ________________________________________________________________________
4. ________________________________________________________________________
5. ________________________________________________________________________
6. ________________________________________________________________________
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Unit 2
Industrialization
SS8 Mrs. Francis
Rockefeller: Captain of Industry or Robber Baron?
Directions: For each situation listed below, decide if you think Rockefeller was a Captain of
Industry or a Robber Baron. Write your answer in the space provided.
______________
1. Rockefeller cut waste in the oil industry and thus was able to lower
production costs. Lower production costs led to lower prices and higher
wages for workers.
______________
2. Rockefeller forced railroads to give Standard Oil rebates, or kickbacks.
In other words, owners had to pay him for using their railroads.
______________
3. Before Rockefeller built his trust, there were dozens of small companies
competing against each other in the oil industry. In this confusing
situation companies could not provide the oil needed to meet the nation’s
needs.
______________
4. Rockefeller owned not only companies that refined oil, but also ships,
barrels, and pipelines that carried oil. He had a complete monopoly of the
oil industry.
______________
5. Rockefeller gave $500,000,000 to charity, the largest amount of money
ever given by one person.
______________
6. During Rockefeller’s time, many people thought the United States was
still a nation of small businesses. They failed to see that Americans were
no long completely independent and self-sufficient. To build and manage
the great empire of railroads, oil, and steel, Americans had to form large
groups. In other words, they had to realize that they were becoming
increasingly interdependent.
______________
7. Rockefeller lived during a time of change. There were no laws or
established business practices. He used the tools available to him as well
as his own original ideas.
______________
8. Rockefeller used the rebates he received from railroads to lower prices
and destroy competitors.
______________
9. Rockefeller was a hero of the age of industry, similar to the heroes of
the age of exploration. Drake, Hawkins, Cavendish, and Cabot pursued
new opportunities boldly and confidently, and some of them were good
businessmen, too.
______________
10. Rockefeller was worth $1,000,000,000 at a time when the most able
factory workers made $14 to $16 a week.
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Industrialization
SS8 Mrs. Francis
Case Study of John D. Rockefeller: Business Pioneer or
Robber Baron?
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SS8 Mrs. Francis
Inventions
Aim:
Do Now:
Name one invention that has had a major impact on the way people live today
______________________________________________________________________________
Between 1860 and 1890 approximately ________________ patents were issued.
A __________________ is a license for an invention that allows you the rights to the invention
and prevents people from copying what you have made.
What is necessary to experience the Industrial Revolution?
1.
2.
3.
4.
___________________________ such as coal, iron ore, rich soil, timber, etc.
___________________________ which are needed to work and purchase goods.
___________________________ money to buy machines and pay workers.
___________________________ willing to take risks to establish new businesses.
Identify two new sources of power:
1. ______________________________________________________________________
2. ______________________________________________________________________
Inventions that sped up Communication
In 1844, Samuel Morse received a patent for ___________________ which improved
communication in the United States.
It sent _______________________ based on a code of dots and dashes.
1866- ______________________ ran an underwater cable across the Atlantic Ocean that
could now connect the US to Europe.
____________________________invented the telephone “talking machine”
It improved business (no longer had to go to the telegraph office, quickly get prices, or check
on supplies in inventory)
Thomas Edison
Edison was known as the “Wizard of Menlo Park”
He invented the _______________________, ______________________, and hundreds of
other devices.
He created the first_______________________ (1882 NYC) which gave people light.
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Technology Takes Over
 It seemed like every day there was a new invention and with the new technology,
businesses became more _______________ and life became more _________________.

Examples:
 Refrigerated Railroad Car (1880) – _________________________________
 Typewriter (1868) – _____________________________________________
 Lightweight Kodak camera(1888) – ________________________________
Automobiles
No single person invented the automobile. Henry Ford made the first car that was affordable.
In 1913, he introduced the _________________________________________.
A method of production where workers stayed in one place and the product moved along.
The assembly line allowed for _______________________________________________.
What are two benefits to mass producing products?
1. _________________________________________________________________
2. _________________________________________________________________
Airplanes
__________________________________invented the first plane.
At the time, people saw no use for the “flying machine.”
New Technologies during Industrialization
Directions: Use your textbook (page 545) and your notes to complete the following chart.
Advancements in
Communication
Advancements in Travel
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Advancements in Home/office
Unit 2
Industrialization
SS8 Mrs. Francis
Create an Advertisement
Directions: Choose one of the inventions above and create an advertisement for it that you could
see in the newspaper during the time of industrialization. Remember, you want people to want to
buy your product, so your advertisement should be catchy.
Letter Writing
Directions: On a separate sheet of paper, you are to write a letter pretending you were a person
living in 1910 to someone who is alive today. In your letter, you have to explain how the
inventions from 1860-1910 changed the way people lived. Explain how advancements in
transportation, communication, and home/office changed your life (you were alive between
1860-1910). The letter should be at least a page long.
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Industrialization
SS8 Mrs. Francis
1876 Fair
At the 1876 Centennial Exhibition in Philadelphia, a celebration of our nations’ one hundredth
birthday, nearly 200 buildings showcased the country‘s newest technology. Examine some
inventions and innovations that were changing life and work in the United States at the time;
then complete the exercise that follows.
The telephone invented
by Alexander Graham
Bell.
The Corliss steam engine supplied
power to more than 8,000 other
machines on the fairground.
An aerial view of the buildings of the 1876
Centennial Exhibition in Philadelphia, which
featured the country’s newest inventions.
Advertising
poster for
Columbia
Bicycle
Typewriter
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Factories engaged in mass production
began to employ assembly lines like
those later used by the Ford Motor
Company.
Consumers in rural
areas looked
forward to
receiving mail
order catalogues
sent by large
companies such as
Montgomery Ward
and Sears, Roebuck
and Company.
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In the 1870s, Edison tested the
first successful electric light bulb.
Invention of the
Bessemer process for
refining iron into steel
made possible the
construction of steel
frame buildings, elevated
railroads, and
suspension bridges such
as the Brooklyn Bridge.
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Industrialization
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SS8 Mrs. Francis
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Industrialization
SS8 Mrs. Francis
Factory Conditions
Aim:
Do Now:
A New Workplace
_________________ the Civil War, most factories were ____________ and
____________________. Bosses knew their workers. Most workers had skills that the factory
needed, so they were able to _____________________________________________________.
Working Conditions
________________________ - is a workplace where people labor ____________________ in
____________________________________________ for ____________________________.
Who worked in the sweatshops? Why?
What hazards could be found in the workplace?
Describe what life was like for children during this time period.
Who was Lewis Hine?
Triangle Shirtwaist Factory Fire
The Triangle Shirtwaist factory was located in the Asch Building in NYC. It’s workforce
was made up of mainly young immigrant women, most of them Italians and Jews from Eastern
Europe. Most workers earned $9 per week, with the most experienced making up to $12 per
week. The younger workers, some only 13 years old, earned just $6 a week. Everybody was
expected to work at least 59 hours a week. Working at the factory was unhealthy,
uncomfortable, and unsafe. Managers seldom let workers leave to use the bathroom or drink
from the dirty tap in the hallway. Fire hazards were everywhere. Workers stuffed leftover fabric
into wooden bins where it sat for months.
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1. Describe the workers and working conditions in the Triangle Shirtwaist factory, using at
least three examples.
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
On March 25th 1911, a fire swept through the Triangle Shirtwaist Factory. The
cause of the fire was unknown. But suddenly people on the 8th floor began to cry “fire!”
Within minutes, the entire floor was a mass of flames. Escaping workers rushed to the
stairs, however, they were soon ablaze. The workers on the 9th floor had no warning.
Some women died immediately. Fireman later found them as “skeletons bending over
sewing machines.” Those who had time to escape found themselves trapped by the
locked factory door. In desperation, they rushed to the windows and began to jump.
The crowd that gathered outside the Asch building watched in horror as girls
began to fall out of the sky – “fire streaming back from their hair and dresses.” Their
bodies hit the pavement with sickening thuds. Firefighters arrive quickly, but had trouble
because bodies had fallen on the hoses and their ladders did not extend further than the
7th floor. A total of 146 women died that day.
Why did so many women die in the fire?
Could the fire have been prevented?
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Industrialization
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Analyzing a Document
1. What type of work is shown in this
picture?
2. Describe the worker.
3. Describe the working conditions.
4. What problem is shown in this picture?
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Industrialization
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Workers in the Age of Industry
Aim:
Do Now:
HW:
Changes in the Workplace



Factory life: _____________________________________________________________
Hazards on the job: _______________________________________________________
Child labor: _____________________________________________________________
Knights of Labor –
Goals:
1. ________________workday
2. ________________ pay for men and women
3. ______________ child labor
Haymarket Square




Workers at McCormick Harvester went on Strike – The Knights ____________________
McCormick hired strikebreakers, which are ____________________________________
Workers and strikebreakers clashed and the police
________________________________________________________________________
________________________________________________________________________
Thousands gathered in Haymarket Square the next day to protest. The rally was led by
______________________. (Definition: ______________________________________)
American Federation of Labor (AFL) was a union organized by _______________________.
It was made up of ______________________________________.
Goals:
1.
2.
3.
4.
_______________________wages
_______________________hours.
_______________________working conditions.
Collective bargaining: ____________________________________________________
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Women at Work
Why would women need to organize in response to working conditions?
What union did the women join?
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Industrialization
Government Response
How did the government respond to strikes?
Read the following articles and answer the questions below.
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SS8 Mrs. Francis
Unit 2
Industrialization
SS8 Mrs. Francis
1. What role did the federal government play in the industrialization of the United States?
2. How did the formation of monopolies or trusts by big railroad, oil, and steel companies
affect consumers in the United States? Workers in the United States?
3. Why do you suppose the government generally adopted a “hands-off” policy during this
period?
4. Why did workers strike in 1894 at the Pullman Palace Car Factory?
5. How did the federal government respond to the Pullman Worker’s strike?
6. Was the government justified in sending troops to enforce the injunction against the
Pullman strike? Why or why not?
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SS8 Mrs. Francis
Aim: How did the media portray industrialization?
Do now:
View scenes from Charlie Chaplin's Modern Times classic film. Answer questions while the
film is shown.
1. Referring to the opening scene, what are people (going to work) compared to?
2. Describe the work done by Charlie Chaplin?
3. What were the effects of this type of work on the workers?
4. How are machines used in the film?
a.
b.
c.
5. What is the relationship between the workers and the boss?
6. Does this film show industrialization as positive or negative? Explain.
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SS8 Mrs. Francis
Review for Test on Industrialization
Social Darwinism
______________________________________________________________________________
______________________________________________________________________________
Large companies forced small companies out of business.
Big Business Leaders
______________________________________________________________________________
______________________________________________________________________________
Cornelius Vanderbilt – ___________________________________________________________
JP Morgan – ___________________________________________________________________
Mass Production
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
Increase in demand in steel and rubber
Inventors
______________________________________________________________________________
Samuel Morse – Telegraph
______________________________________________________________________________
Inventions – helped factories to improve efficiency
Railroads
______________________________________________________________________________
______________________________________________________________________________
Terms
______________________________________________________________________________
Triangle Shirtwaist Factory Fire
After the fire – called for laws to regulate safety in factories
Child labor
______________________________________________________________________________
______________________________________________________________________________
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Labor Unions
Late 1800s – American opinion – striking workers didn’t need help
Labor unions developed to
___________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
Labor Unions
______________________________________________________________________________
Union for skilled and unskilled – Knights of Labor
______________________________________________________________________________
Terms
______________________________________________________________________________
Blacklist –
______________________________________________________________________________
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