Transcript Robber Barons vs. Captains of Industry

Robber Barons vs. Captains of
Industry
U.S. History
Warm Up:
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Complete the following to the best of your
knowledge:
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In a capitalist economy, how are prices
determined?
Explain the difference between a corporation
and a regular company.
Why is a monopoly illegal?
Define the terms “Robber Baron” and
“Captain of Industry”
Terms to know
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Capitalism: An economic system in which industries
are privately owned, and the prices, production, and
distribution of goods are determined by competition on a
free market.
Corporation: A large company that can generate
capital (money) by selling stock on the stock market.
Monopoly: A situation in which one company has
eliminated its competition.
Trust: An alliance of companies, run by a board of
trustees, that function as one company.
Reduces competition
Illegal if it forms a monopoly
Opposing View Points
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Captains of Industry
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Created Jobs
Increased production
Provided cheap products
Gave money back to the
community
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Robber Barons
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Exploited workers
Corrupted the
government
Greedy
Large corporations developed in two major ways: horizontal or
vertical integration
Horizontal integration is the growth of a business through acquiring additional
business activities in the same industry.
J.D.Rockefeller’s Standard Oil
Vertical integration is the growth of a business through the acquisition of the
materials that make the product, the factories that manufacture the products
including the machines needed to produce the product, as well as the distribution
channels to take the product to market.
Andrew Carnegie's steel company
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John Rockefeller and Standard Oil
Trust
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To monopolize the oil industry he forms
the Standard Oil Trust
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A trust is an organization of businesses
designed to operate like a monopoly
His corporation Standard Oil owned about
88% of the oil industry in the US in 1890
John Rockefeller and Standard Oil
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Recognized the
potential of the oil
industry
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Very hard worker
Spent all profits from
the company to
improve production 
Philanthropy- gave 
over $500 million to 
charities
Made deals with the
railroads to charge
competitors more
Lowers prices to force
other companies out of
business-then raised
prices
Low pay for workers
Sabotaged competitors
Paid government officials
in the Senate
Andrew Carnegie (1835-1919)
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Andrew Carnegie
came to U.S. as a
poor immigrant from
Scotland in 1848
Built the Carnegie
Steel Corporation
through vertical
consolidation
Retired a millionaire
and gave much of his
money to
education (CarnegieMellon University)
Cornelius Vanderbilt 1794-1877
Shipping tycoon- millionaire by 1846
Nicknamed “Commodore”
Built the first railroad line connecting New York City and Chicago. He also built
New York’s Grand Central station
Most historians estimate that when he died he was worth $100 million ($1.7
billion in today’s dollars)
Vanderbilt University
Biltmore House
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John Pierpont Morgan 1837-1913
Born into a wealthy family
Made a huge amount of money by financing railroad companies that
were in financial trouble
In 1901, he bought Carnegie Steel. He turned that into U.S. Steel,
the world's first billion-dollar corporation
By the early 1900s, Morgan controlled almost all of the major
industries in the U.S. and had a large stake in the financial and
insurance industries
The Pierpont Morgan Library in New York was donated by Morgan in
1924.
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How rich were the “robber barons” compared to
Microsoft founder Bill Gates?
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Justifications for Industrialists’
Extreme Wealth
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Social Darwinism
Herbert Spencer
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Based on Charles Darwin’s
theory of evolution
Those who are rich are
more fit, than those who
are poor
Attempted to use science
to explain social classes
Gospel of Wealth
Andrew Carnegie
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God gave wealth to the most
capable people
It is the duty of the wealthy to
give money to help the poor
 Carnegie gave millions of
dollars away to establish
libraries, colleges, and
museums
Working Conditions
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Laborers were immigrants, African
Americans, women, and children
12 hour days, six days a week
Accidents were frequent, deaths occurred
often
Low wages
Anti-Trust Movement
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The public began to dislike trusts
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Prices were high on important products
Trusts were responsible for a corrupt government
Although Congressmen liked trusts they
needed to please the public
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Passed the Sherman Antitrust Act
Made it illegal to form a trust or monopoly
 Act was not effective because the act did not clearly
define a trust
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Exit Pass
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-Evaluate if Industrialists should be viewed
as captains of industry or as robber
barons.
-Use details from your notes to support
your answer.