The Rise of “Big Business”
1870-1900
What led to the growth of corporations and monopolies
in the late 19th century?
Who were major industrialists during this period?
How did these businesses affect American economics,
politics, and social relationships?
The Gild
The Boldt Castle
The Astor Family
Breakers of the Vanderbilt Family
Lockwood-Mathews Mansion
The Mount of Edith Wharton
“Big Business”
• Monopolies (trusts): Companies that controlled the
majority of one industry:
– Rockefeller’s
Standard Oil
– Carnegie’s
U.S. Steel
– Vanderbilt’s
railroads
• Trusts -A group of separate companies placed under
the control of a single managing board
• Critics called these practices unfair and the business
leaders “Robber Barons”
Rationalizing Big Business
• Social Darwinism
– Used Darwin’s theory to
explain business, promoted by
Harvard professor William
Graham Sumner
– Natural Selection, Survival of
the Fittest
– Laissez-faire -policy that US
had followed since inception
to not allow govt. to interfere
with business
• Govt. should not interfere
• Sherman Anti-Trust Act of
1890
– Law outlawing a combination
of companies that restrained
interstate trade or commerce;
important to prevent
monopolies. Not initially
enforced properly.
• Gospel of Wealth -belief that
the wealthy are “chosen by
God” to be successful and
were therefore responsible to
look out for the well being of
those less fortunate. Many
Industrialist shared wealth
although rarely through direct
welfare. Started museums, etc.
– Captains of Industry: a
positive idea that industrial
leaders worked hard and
deserved their wealth
Andrew Carnegie
• A Scottish immigrant, Andrew
Carnegie helped build the American
steel industry—Carnegie Steel Co.
(originally started as an ironworks
foundry)
• 1900 Carnegie Steel produced more
of the metal than all of Great Britain
– Richest man in the world at the time
• One of the first philanthropists,
gave his collected fortune away to
cultural, educational and scientific
institutions for "the improvement of
mankind." (Gospel of Wealth)
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Carnegie Hall, NYC
Carnegie-Mellon University
Over 2,500 public libraries
$350 million by the time he died
Carnegie was unusual because he
preached for the rights of laborers
to unionize and to protect their
jobs.
• However, Carnegie's steel
workers were often pushed to long
hours and low wages-Homestead Strike of 1892
Building a monopoly
(as described by Andrew Carnegie)
• Vertical Integration
– A process in which a
company buys out all of
the suppliers. (Ex. coal and
iron mines, ore freighters,
RR lines)
• Horizontal Consolidation
-A process in which a
company buys out or
merges with all competing
companies (JP Morgan
bought out Carnegie steel
and other companies)
The Steel Industry’s Impact on
America
• Bessemer Processdeveloped around 1850
injected air into molten
iron to remove impurities
and make steel-a lighter,
more flexible, rust
resistant metal
• Steel is used in railroads,
farm equipment, canned
goods
• Engineers use steel to
create skyscrapers and
longer bridges (Brooklyn
Bridge)
View Steel Industry
Video
J.P. Morgan
• Industrialist and
financier who started
U.S. Steel from
Carnegie Steel and
other companies
• Became 1st billiondollar corporation
• Bailed out the U.S.
economy on more
than one occasion
John D. Rockefeller
• He was a co-founder of the
Standard Oil Company, which
dominated the oil industry and was
the first great U.S. business trust
• As kerosene and gasoline grew in
importance, became the world's
richest man and the first American
worth more than a billion dollars
– Often cited as the richest person in
history
• Like Carnegie, was a philanthropist
under the Gospel of Wealth:
– An abolitionist
– Creator of Spelman College
– Major donator to the University of
Chicago and other major medical
universities
– Owned a large portion of real estate
in Manhattan, NYC
Cornelius (“The Commodore”) and
W.H. Vanderbilt
• Originally a steamboat entrepreneur,
C. Vanderbilt became a railroad
magnate
• Initially did not think his son was fit
for the job
– W.H. became president of Central
and Hudson River Railroad, Lake
Shore and Michigan Southern
Railway, the Canada Southern
Railway, and the Michigan Central
Railroad
• An active philanthropist, giving
extensively to a number of
philanthropic causes:
– Funded the Metropolitan Opera
– Funded College of Physicians and
Surgeons at Columbia University.
– In 1880, he provided the money for
Vanderbilt University in Nashville,
Tennessee
"The Great Race for the Western Stakes, 1870," Cornelius Vanderbilt versus James Fisk
Thomas Edison
(“The Wizard of Menlo Park”)
• An American inventor and businessman.
He developed many devices that greatly
influenced life around the world,
including:
– Phonograph
– motion picture camera
– Long-lasting electric light bulb. one of
the first inventors to apply the
principles of mass production and
large-scale teamwork to the process of
invention, and because of that, he is
often credited with the creation of the
first industrial research laboratory.
• One of the first to apply the mass
production and large-scale teamwork to
the process of invention
• Created the first industrial research
laboratory
– Later electrical genius Nicola Tesla
worked for Edison and is (unofficially)
credited with many of his inventions
• 1,093 US patents in his name
• Inventions established major new
industries world-wide:
– electric light/power, power
utilities
– sound recording, motion
pictures
– Telecommunications: stock
ticker, mechanical vote
recorder, battery for an electric
car, recorded music device
Videos
• The Gilded Age
• “Traits of a Titan” from the History
Channel’s The Men Who Built America
• Captains of Industry (biography.com)