Transcript Chapter 4, Lesson 2 The rise of Big Business

Chapter 4, Lesson 2
The Rise of Big Business
Mr. Julian’s 5th Grade Class
Essential Question
How did big businesses in
the late 1800’s and early
1900’s help the United
States economy grow
quickly?
Places
 Pittsburgh, Pennsylvania
 Cleveland, Ohio
People
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Andrew Carnegie
John D. Rockefeller
George Westinghouse
William Randolph Hearst
Madame C.J. Walker
J. P. Morgan
Vocabulary
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Corporation
Stock
Monopoly
Free enterprise
Consumer
Human resource
Capital resource
Building with Steel
 Steel has been made for 2,000 years by
melting iron and adding carbon.
 Steel can hold more weight than iron
alone.
 Steel was very expensive to make.
 Henry Bessemer, an Englishman, made a
way to make steel affordable in England.
Building with Steel
 Andrew Carnegie used Bessemer’s
process of making steel.
 He built a steel factory in Pittsburg,
Pennsylvania
 Carnegie wanted to lower prices for steel
so he bought iron and coal mines to
supply his factories.
 He also bought ships and railroads to
bring the resources to his factories and
finished steel all over the country.
Building with Steel
 Carnegie helped steel become a “big
business” or a major industry in the
United States.
 By 1900, the United States was producing
more steel than any other country.
 Steel was now affordable so people could
use it to build buildings, trains, cars, and
other products.
Railroads Link Markets
 The railroads needed steel to build trains
and tracks.
 By 1893 the U.S. had more than 160,000
miles of railroad track!
 Railroads were the first large
corporations.
 A Corporation is a business that is owned
by investors.
Railroads Link Markets
 Corporations sell shares of the company called
stocks to investors.
 A corporation can use the money from selling
stock to buy equipment for the company.
 Railroads were the fastest and cheapest way to
transport goods.
Railroads Link Markets
 Railroads linked mines, farms, and cities
all over the United States.
 By providing these links, railroads helped
the U.S. economy grow.
 Cities that were major railroad centers
also grew, like Chicago.
The Oil Industry
 On August 27, 1859, Edwin Drake found oil
in western Pennsylvania.
 This discovery made a teenager John D.
Rockefeller realize money could be made
in the oil business.
 He built his first oil refinery in Cleveland,
Ohio.
The Oil Industry
 Using profits from his company, he bought
other refineries.
 Rockefeller’s company, Standard Oil,
slowly gained control of the nation’s oil
industry.
 Standard Oil had become a monopoly, or a
company that has control of an entire
industry with little or no competition.
The Oil Industry
 By the early 1900’s people began buying
cars in large numbers.
 This created a huge demand for oil
products such as gasoline and motor oil.
Free Enterprise
 In a free enterprise system, people are
free to start their own business and own
their own property. Business owners are
free to decide what to produce, and how
much to charge for their products or
service.
Free Enterprise
 A consumer is a person who buys or uses
goods or services.
 An inventor named George Westinghouse
formed the Westinghouse Electric
Company.
 He used Alternating current (A/C) to
deliver electricity to homes.
Free Enterprise
 He was in a “War of the currents” with
Thomas Edison who used Direct Current or
D/C.
 Westinghouse won the war because he
had a better product.
 An newspaper owner named William
Randolph Hearst found news ways to
compete in the newspaper business.
Free Enterprise
 Hearst used big eye catching headlines and
color sections to make peoples attention, thus
selling more papers.
 Madame C.J. Walker took a different road to
success.
 She began bottling shampoo and other products
in her attic.
 She became the first African American woman
to become a millionaire.
Resources and Big Business
 Resources are divided into three
categories; natural resources, human
resources, and capital resources.
 Natural resources are things that are
found in nature.
 Human resources are people who work to
produce goods and services.
Resources and Big Business
 Capital resources are tools and machines
that companies use to produce goods and
services.
 Banks helped businesses get the capital
resources they needed.
 J. P. Morgan was the countries richest and
most powerful banker.
Help Wanted
 Before the Civil War most Americans
worked on farms.
 By 1900 most Americans worked in
factories.
 The U.S. was the biggest producer of
manufactured goods.
 The U.S. economy was the fastest growing
and one of the strongest in the world.
Help Wanted
 Growing industries created millions of
jobs in American cities.
 Many people moved to the cities looking
for work.
 Immigrants came from all over the world
to find new opportunities in the United
States.
Review Questions
1. How did railroads help the United States
economy grow?
2. What freedoms do business owners and
consumers have in a free enterprise
system?
3. How was Andrew Carnegie able to
produce huge amounts of steel at low
prices?