CAPTAINS OF INDUSTRYCHAPTER 1-3

CAPTAINS OF INDUSTRY

Rockefeller and the Standard Oil Trust

A. One of the most notable entrepreneurs of the late 1800s was John D. Rockefeller, who gained almost complete control of the nation's oil industry.

B. By 1870, Rockefeller's firm, the Standard Oil Company of Ohio, owned one of thelargest refineries in the Clevelandarea. 1. Over the next nine years,Rockefeller gained control of morethan 90 percent of the nation's refiningbusiness.

Rockefeller and the Standard Oil Trust

C. One method he used to gain control ofthe industry was to make deals forlower rates with railroads that shippedhis oil in order to gain a competitiveedge.

D. In 1882, Rockefeller consolidated his control of the oil industry by combining 40 companies under a single management.1. He then expanded vertically, taking over oil fields and even building a fleet of tankers and wagons to deliver the oil.

Cartoon of John Rockefeller from 1901.

What can be determined based on the cartoon about Rockefeller’s corporation, Standard Oil?

Rockefeller and the Standard Oil Trust

Rockefeller and the Standard Oil Trust

E. In 1903, journalist Ida Tarbell exposed Rockefeller’s ruthless business tactics in a series of articles.

F. Rockefeller denied any wrongdoing. He claimed that much of Standard Oil success stemmed from his passion for efficiency and hatred of waste.1. Standard Oil continuouslyworked to improve its product.2. In addition, the companyhad few labor troublesbecause it paid its workerswell.

How Wealthy Was Rockefeller?

$100 B

illion

(1997)

$660 B

illion

(1937)

Bill Gates John D. Rockefeller

Andrew Carnegie, Master of SteelA. The other giant of American industry

during this period was Andrew Carnegie, who gained control over the nation's steel industry.

B. In 1873, Carnegie formed a groupof investors to build the world'slargest and most modern steel millnear Pittsburgh.1. He used a new and cheaperway to make steel and thus gaineda quick advantage over his competitors.

Andrew Carnegie, Master of SteelC. In his constant effort to be more

efficient, Carnegie combined all the processes required for making steel into one great vertical combination.1. He seized control of mines that dug out iron ore, a raw material used in steelmaking.2. In addition, he gained control of the ships and railroads that carried the ore, as well of coal mines, whose products fired the blast furnaces in his factory.

Andrew Carnegie, Master of SteelD. Life in Carnegie's mills was hard

for workers.1. Carnegie drove wages down and hours up.2. He crushed the steel workers' union so that the 12-hour day remained standard for years.

Homestead Strike; 1892

Social Darwinism and the Industrialists

A. Carnegie and most other industrialists found justification for their ruthless business actions in a philosophy known as Social Darwinism, which applied the biological theories of naturalist Charles Darwin to human society.

Social Darwinism and the Industrialists

B. Darwin believed that in nature a competition exists in which only the strongest plants and animals survive.1.The weak die out

C. Industrialists believed that a similar competition operated within human societyand that the fittest-the strongest,most clever, most efficient-competitors will succeed.

Social Darwinism: The strong will rise tothe top – the weak will sink to the bottom.

Social Darwinism and the Industrialists

D. Some industrialists, including Carnegie, gave back much of the money they made in the form of philanthropy.1. By the time he died in 1919, Carnegie had donated about $350 million-mostly to building libraries and improvingeducation.2. Rockefeller's donationstotaled more than $500million.

A Carnegie Library close to home

Social Darwinism and the Industrialists

E. By the late 1800s, a growing number of Americans were calling on the federal government to impose greater regulation (more rules) on big businesses.1. In 1890, Congress passed the Sherman Antitrust Act, which outlawed monopolies.

F. The Sherman Act, however, had little effect on preventing business consolidation.1. It was not strictly enforced and was so loosely worded that many were unsure of its true meaning.

Rockefeller’s Points to Success

Don’t be wasteful, do average tasks in above average ways

Try new things Never give up, enjoy what you do,

work hard Take full responsibility for your

actions, treat people well Be charitable