The Rise of Big Business

Until the mid-1800s…• …businesses were run by one person or family.• BUT the railroads provided businesses with

raw materials and customers from far away.• Business leaders wanted to increase profits by

expanding.

The Corporation

• Investors developed a form of group ownership called a corporation–Many people shared ownership by

buying shares of the company.– Since corporations had more $, they

could invest in new technology, expand their business, etc.

– Corporations were part of the economic free-market system (capitalism).

Structure of a Corporation

Public Shareholders• Give money to a company in exchange for share ownership.

Board of Directors• Elected by shareholders to set business direction and to protect

company.

Managers• Hired by the board of directors. Run the company and hire workers.

Employees• Carry out the company’s jobs.

Corporations Maximized Profits by:

• Decreasing the cost of production– Paying workers low wages– Paying as little as possible for raw

materials

• Advertising their products• Supporting research laboratories

for inventors• Gaining a monopoly, or complete

control of a product or service.– Company could set its own prices.– Consumers had no choice.

Big Businessmen of the late 1800sWhat do you think? Which were they?

Robber Barons

Squeezed out competition

Charged high prices

Took advantage of workers

Captains of Industry

Benefitted the economy

Developed technology

Provided jobs for many

OR