Captains of IndustryCaptains of Industry American economy ran on oilAmerican economy ran on oil

– Steel was its backboneSteel was its backbone Two GiantsTwo Giants

– John D. Rockefeller – oilJohn D. Rockefeller – oil– Andrew Carnegie – steel Andrew Carnegie – steel

Would later be known as Would later be known as “Robber Barons”“Robber Barons”

Standard Oil TrustStandard Oil Trust John D. John D.

Rockefeller – The Rockefeller – The Early YearsEarly Years– Saved money early Saved money early

onon– Chose to invest in Chose to invest in

oil refining instead oil refining instead of drillingof drilling

– Too much Too much competition among competition among small producerssmall producers

Standard Oil TrustStandard Oil Trust Standard Oil Becomes a GiantStandard Oil Becomes a Giant

– Gained control of over 90% of the Gained control of over 90% of the nation’s oil refineriesnation’s oil refineries

– Used rebate on freight chargesUsed rebate on freight charges Give all shipping if they would secretly Give all shipping if they would secretly

charge lesscharge less Caused other refineries to shut downCaused other refineries to shut down

– Expanded vertically by gaining control Expanded vertically by gaining control of oil fieldsof oil fields

– Companies kept old namesCompanies kept old names– Controlled shipping of oil to EuropeControlled shipping of oil to Europe– Manufactured stoves in increase Manufactured stoves in increase

demand for kerosenedemand for kerosene– Many people resented methods Many people resented methods

Standard Oil usedStandard Oil used

Standard Oil TrustStandard Oil Trust Following Standard Oil’s leadFollowing Standard Oil’s lead

– Horizontal companies created Horizontal companies created monopoliesmonopolies

– Vertical companies resulted in Vertical companies resulted in lower priceslower prices Common form of businessCommon form of business

Business Tactics ExposedBusiness Tactics Exposed– 1903 – 1903 – McClure’s McClure’s

MagazineMagazine revealed revealed secret dealssecret deals

– Rockefeller admitted Rockefeller admitted no wrong doingno wrong doing

Master of SteelMaster of Steel Andrew Andrew

CarnegieCarnegie– Immigrated Immigrated

from Scotlandfrom Scotland– Worked a low Worked a low

wage jobwage job– Grew with the Grew with the

railroadrailroad– Invested Invested

earnings with earnings with iron companiesiron companies

Master of SteelMaster of Steel Another Giant is BornAnother Giant is Born

– Steel industry changed, required large Steel industry changed, required large amounts of capital to surviveamounts of capital to survive

– Carnegie found best technical and Carnegie found best technical and scientific experts to make steelscientific experts to make steel

– Combined all processes into a vertical Combined all processes into a vertical combinationcombination

– Controlled steel mills, iron ore deposits, Controlled steel mills, iron ore deposits, fleets of ships, railroads, factoriesfleets of ships, railroads, factories

Crushing Labor and Gobbling the Crushing Labor and Gobbling the CompetitionCompetition– Made ablest people in industry partnersMade ablest people in industry partners– Promoted workersPromoted workers– Still drove wages down and hours upStill drove wages down and hours up

Social DarwinismSocial Darwinism Great industrialists used theory to Great industrialists used theory to

justify their actionsjustify their actions– Survival of the fittestSurvival of the fittest

Carnegie wrote the “Gospel of Carnegie wrote the “Gospel of Wealth”Wealth”– believed wealthy people should help believed wealthy people should help

the under privileged the under privileged – Share knowledgeShare knowledge– Sold steel properties Sold steel properties

and devoted his life to and devoted his life to philanthropyphilanthropy Actions benefiting Actions benefiting

societysociety Built libraries, improved Built libraries, improved

education, promoted education, promoted researchresearch

Social DarwinismSocial Darwinism Sherman Antitrust ActSherman Antitrust Act

– Public cried to stop monopoliesPublic cried to stop monopolies– 1888 election both parties promised 1888 election both parties promised

actionaction– 1890 Congress passed Sherman 1890 Congress passed Sherman

Antitrust ActAntitrust Act Artificial restrictions on trade and private Artificial restrictions on trade and private

monopolies were wrongmonopolies were wrong Did not prevent consolidationDid not prevent consolidation Not strictly enforcedNot strictly enforced

– Signaled large corporations to be more Signaled large corporations to be more aware of their activitiesaware of their activities

– Start for regulation of big business and Start for regulation of big business and industryindustry