More information on rise of big business - captians of industry?

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thisdayinhistory | Teacher | (Level 1) Adjunct Educator

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The rise of big business began with the railroad. Once the transcontinental railroad was built, others also wanted to start railroad companies and contribute to the business. Things that came out of this that were beneficial for big rail road companies were:

networking: system of conneted lines

airbrake: allowed engineers to stop all cars at once, which allowed for faster longer trains

sleeping car: allowed owner to make more money because more people were taking the train due to it being more comfortable

consolidation: to combine companies, large companies can buy out smaller companies

pooling: several RR companies agree to divide business in an area which fixes prices at a high level

rebates: discounts to biggest customers, forced small co's out of business

more jobs were created by the railroads with a great growth from 1850-1990. It also helped transport goods across the country from other big businesses at a faster, cheaper rate.

One of the biggest captains of industry came out of this (also known as Robber Barons because of their ruthless business practices).

Cornelius Vanderbuilt: owned over 4,000 miles of RR track in 1800's, controlled lines from New York to the Great Lakes. He forced his competition out of business and then raised his rates to gain profits lost. He had a monopoly over shipping and and passenger travel in the entire NE U.S.. By the time he died he had a wealth of over $100,000,000. In his lifetime he donated millions to charity.

other captains of industry include:

John Rockefeller: owned monopoly of oil with Standard Oil Company, which produced 95% of oil sold in U.S. He saw "competition as wasteful," which we know is untrue. He forced others into bankruptcy and threatened RR companies to lower price of shipping oil, otherwise he would go to someone else. This kept his shipping rates low. Like Vanderbuilt, he also dropped prices of his product (oil) in order to force competition out, and then created a trust. A trust is a large group of companies controlled by one. By the time he died he donated over $550,000,000 to different charities. He is the richest man that ever lived.

Andrew Carnegie: has a rags to riches story and did not come from any type of wealth. He saw that a process called the bessemer process makde steel cheaper and stronger. He then started US Steel which soon owned all aspects of steel production, this is also known as vertical integration. He owned iron mines, shipping lines and factories. He did not have the greatest working conditions at his facilities and in 1892 there was a strike in PA because workers refused to have their wages cut. The state militia had to stop the strike. Carnegie however, beleived that it the wealthy had to make society better and so he helped to create thousands of libraries in the U.S., as well as a collge. He also created Carnegie Hall and donated millions to charities.

JP Morgan: He owned a bank monopoly. He also reduced prices to get rid of his competition. He gained control over many different businesses and was not good to his workers. It is unknown how much he gave back to the community, if any.

All of these men changed the United States forever.

Sources:

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