Fighting for Profits&Government Imposes Regulations

By: Melissa, Sabrina, Dashaun, and Hayley

The Corporation Rises• In order to expand markets,

investors developed a group called corporations.

• Corporations were the perfect solutions to expand businesses such as railroads and mining.

• Corporations had the same rights as individuals: it could buy & sell products and sue in courts.

• If chose to leave the group, others could buy out his interests.

• Access to capital or invest money, to fund technology, enter industries, & run large plants across the country.

• *Important fact*After the 1870’s, corporations increased, causing industrial capitalism, or the economic free-market system centered around industries.

Monopolies in Business

• Monopoly was complete control of a product or service.

• In order to do this, they either bought out competitions or drove them out of business.

• Consumers

had no other

choice but to

set its own

prices.

Cartels• A cartel is when

more than 1 business is making the same product and they limit production and prices to stay high.

• This is what corporations did to stop competition with other business.

• John D. Rockefeller (oil tycoon) made deals with railroads to make higher profit.

Horizontal vs. Vertical Integration

• Horizontal Integration is bringing firms together in a business as a whole or 1.

• Rockefeller was the first to do this.

• Vertical Integration is when companies reduced their cost and charged higher prices to competitors.

• Andrew Carnegie, Rockefeller, and other businessmen did this by taking control of businesses that were part of the making of the development of a product.

Trusts• Companies give their

stock to a trustee who puts them together in a new business.

• The trustee is paying themselves dividends on profits.

Government Imposes Regulation• In 1887, the United

States Senate created the Interstate Commerce Commission to oversee railroad operations.

• In 1890, the senate passed the Sherman Anti-Trust Act, which outlawed any trust that operated “in restraint of trade or commerce among the several states.”

Government Imposes Regulation (cont.)

• The “Gospel Of Wealth” is an article written by Andrew Carnegie in 1889. It describes the responsibility of philantrohpy by the new upper class of self-made rich.

• Philantrophy means “the caring of man” in the sense of caring for, improving and enhancing the quality of human life.

• Interstate Commerce Act is a United States Federal Law that was designed to regulate the railroad industry, particularly its monopolistic practices.

People To Remember• John D.

Rockefeller• July 8, 1839 –

May 23, 1937• “Oil Tycoon”• Built his first

oil refinery near Cleveland and in 1870, incorporated the Standard Oil Company.

• Andrew Carnegie• November

25, 1835 – August 11, 1919

• A Scottish-American industrialist who led the expansion of the American Steel Industry.

• A true “Rags to Riches” story

People To Remember• J. P Morgan• April 17, 1837 –

March 31, 1913• An American

financier, banker, and philanthropist who led corporate finance and industrial consolidation.

• Merged with Carnegie Steel Company in 1901.

Cited Page• http://

en.wikipedia.org/wiki/Andrew_Carnegie.• http://en.wikipedia.org/wiki/John_D._

Rockefeller.• http://en.wikipedia.org/wiki/J._P._Morgan.• www.google.com.