Unit 6 Lesson 2: Big Business Flashcards
Who was Andrew Carnegie and how did he get rich
Carnegie built his fortune in steel. By adopting innovations such as the Bessemer Process, the Carnegie Steel company produced higher quality steel than anyone else. Plus, they did it more efficiently.
How did Cornelius Vanderbilt earn his money
Vanderbilt’s wealth came via miles and miles of new railroad tracks made of Carnegie steel.Railroads were relatively small, with regional service areas. Vanderbilt bought these small railroads, joined them, and created an interconnecting transportation network.
What did John D. Rockefeller do
Rockefeller was an early investor in the new oil industry.: It replaced whale oil as the fuel of choice for lighting homes and businesses. Anticipating the development of other uses for oil, Rockefeller began buying refineries. By creating a trust to oversee his company, he set the example for other business owners who wanted to monopolize their industry.
Who was J.P Morgan
J.P. Morgan made his money by managing money for others. As a financier, he provided both financial resources and business expertise to leaders in many different industries. His skill at merging companies created some of the most recognized businesses today, including General Electric and International Harvester. Without Morgan’s leadership, some industries would likely have gone bankrupt.
What process enabled Carnegie to produce higher quality steel?
the Bessemer Process
How did the interconnected railroad network affect the market for goods?
The interconnected railroad network made it possible for markets to go national. Companies could now sell their goods and transport them across the country.
What new product replaced whale oil for fuel in homes and businesses?
: Kerosene was a new product refined from crude oil that replaced whale oil as a fuel source for lighting.
What was the lasting impact on America due to these leaders of industry?
America became more competitive in the global market because of the legacies of Rockefeller, Morgan, and Carnegie.
How did Rockefeller affect government legislation of businesses?
Rockefeller established a monopoly by merging companies into a trust which eventually led to the creation of anti-trust laws to protect competition.
What did Cornelius Vanderbilt do in the beigning of his career
Vanderbilt started out as a ferry boat operator between Staten Island and Manhattan in New York. He worked his way up to a steamship captain and eventually became one of the nation’s largest steamship operators.
Where did Vanderbilt’s railroad start and finish
. In the 1860s, he created a railway system between the East coast and the Midwest by establishing a vast system of railroads spanning from New York to Chicago.
Why was the befnit of connecting serveral smaller railroads together
. By connecting several smaller railroads, Vanderbilt was able to simplify processes, transportation schedules, and shipping timetables.
Vanderbilt played a key factor in the building of…
He was a key factor in the building of Manhattan’s Grand Central Depot, which would later be the foundation for the present-day Grand Central Terminal (also known as Grand Central Station).
How did the Vanderbilt University come to be
Later in life, he also donated $1 million to establish Vanderbilt University in Tennessee.
What did Andrew Carneige do in the begning
Andrew Carnegie started as a cotton factory worker. He became a division superintendent in the railroad, then began investing in different ventures, such as iron and oil, to gain success.
What did Andrew Carnegie start his steel empire
s. In the early 1870s, Andrew Carnegie co-founded his first steel company, near Pittsburgh. Over the next few decades, he created a steel empire.
What did Carnegie use vertical integration
Carnegie used vertical integration to maximize his profits and minimize any inefficiencies by controlling every step of production, from raw material to finished product.
What was vertical intergartaion
He bought iron mines, factories, and some of the transportation systems involved in steel-making in order to feed materials to his railroad manufacturing company.
How did Carnegie use the Bessemer Process
One strategy utilized by Carnegie was to implement a new process for steel-making known as the Bessemer Process.
Carnegie was well-known for his philanthropic efforts. What did he do
After leaving the steel industry, he gave money to build libraries, fund scientific research, and enhance music education. He also acquired the land and gave money for the construction of Carnegie Hall, a well-known concert venue in New York City. Carnegie’s charitable contributions were over $350 million during his lifetime.
How does vertical integration work?
Vertical integration is a process in which a company owns the supply chain for its product. Once a company has greater control of its supply chain, there is more flexibility when setting prices.
How did vertical integration enable Carnegie to create a national market for steel?
Since Carnegie didn’t rely on suppliers for the raw materials needed to produce steel, his company had more cost control and shorter production times, enabling the company to mass produce for a national market.
What did John D. Rockfeller do before owning Standard Oil Company
John D. Rockefeller started out as a clerk and then opened his own shipping company. At the age of 24, he started to explore the oil industry. Within a few years, he and his partners created a corporation called the Standard Oil Company.
What is a corporation
A corporation is a company owned by many stockholders who only risk the amount of money they invested
What was Standard oil the leader of
By the late 1870s, Standard Oil was a leader in the oil industry, converting crude oil to kerosene and selling the by-products to other companies
How was Rockefeller able to dominate the oil industry
Rockefeller was able to dominate the oil industry by taking over other companies and developing trusts.
What is a trust
A trust is a group of companies formed by a legal agreement to work together
What is horizontal intergration
Rockefeller used a process known as horizontal integration to gather competing companies under combined ownership
What is a monopoly
A monopoly occurs when one company or group of companies has complete control of a product or business and drives competing companies out of the industry.
What percent of companies was under Rockefellers Stanrd Oil Compnay
By the 1880s, Rockefeller’s Standard Oil Company controlled more than 90 percent of the nation’s refineries.
What were the disadvantages of monopolies
Monopolies often limit or prevent competition, which allows certain businesses to fix prices for their products. When consumers do not have an alternative source for the product, they have to buy from the monopolizing company. Monopolies can also be harmful to the labor force. Workers have to work for the wages the monopoly sets since there may be no other jobs available in a specific trade.
Critics accused Rockefeller of unethical practices in setting prices and making deals with railroads in order to eliminate his competitors. What was the government response to this
The Sherman Anti-Trust Act
What was the Sherman Anti-Trust Act
The Sherman Anti-Trust Act was a direct result of Rockefeller’s practices in the state of Ohio.
What role did Congressman John Sherman play in the Sherman Anti Trust Act
Congressman John Sherman of Ohio sponsored this law in order to curb the creation of monopolies in industry and restore competition.
What was Rockefellers response to the Sherman Anti Trsut Act
To combat the law, Rockefeller established holding companies, or parent companies, that did not participate in production but owned stock in other companies. Holding companies work by acquiring enough stock of a smaller company that it could control the smaller companies’ management and policies. A holding company is not technically a trust and therefore is not subject to anti-monopoly laws.
Was Rockefeller found guilty if so elaborate
However, between 1906 and 1911, the U.S. government brought Standard Oil under investigation. In 1911, the U.S. Supreme Court found Standard Oil in violation of anti-trust laws and ordered it to dissolve.
Describe the phiantrphoc things Rockefeler has done
, Rockefeller donated more than $500 million to various philanthropic causes. His major charitable donations were to medical research and education. He also donated money to build Rockefeller Center in New York City, which spans close to 22 acres and includes several office buildings and a theater.
What two growth industries did Rockefeller invest in with his oil profits?
iron-ore mining and New York commercial banking
What are some companies that stem from the original Standard Oil Company?
Mobil Oil Company, Standard Oil of California, Standard Oil of Ohio, and Standard Oil of Indiana
How did J.P. Morgan start off
Unlike Carnegie, Morgan came from a successful family. He started out working in his father’s bank and began investing in smaller ventures and selling war materials. He later moved on to buying up smaller, struggling railroad companies.
What did JP Morgan do the Carnegie Steel Comapny
He even bought the Carnegie Steel Company from Andrew Carnegie in 1901, eventually turning it into a billion-dollar enterprise.
What impact the Morgan’s iverstments ahve
His investments and business deals helped form companies that are still around today, such as General Electric and U.S. Steel
How did JP Morgan assit the govermnet
Throughout the late 1890s and early 1900s, Morgan assisted the government by bailing out several failing institutions and improving investment banking practices in an effort to steady the economy.
morgan served as the President of..
Morgan served as president of the Metropolitan Museum of Art in New York City, to which he also donated thousands of important works of art.
J.P. Morgan gained his wealth from working in what industry?
investment banking
Up until the late 1890s, most American businesses functioned under the French philosophy of ..
laissez-faire,
What is laissez-faire
he French philosophy of laissez-faire, or without government interference, a practice encouraged by Scottish philosopher, Adam Smith.
What is Social Darwinism
Social Darwinism was a business theory that also gained acceptance after British philosopher Herbert Spencer applied Charles Darwin’s theories of “survival of the fittest” to business models. Spencer reasoned that just as in nature, struggling businesses would die out, and that as the economy ran its course, prices would adjust.
How did LAbor unions and political groups feel about some complnies
Labor unions and other political groups began pushing for reform. They called for better working conditions, fair pricing for goods and services, and a stop to political corruption.
What laws made it illegal for a corporation to rule over an entire industry
Sherman Anti-Trust Act and the Interstate Commerce Act.
What was the Interstate Commerce Act of 1887
The Interstate Commerce Act of 1887 became the first law granting Congress the right to establish regulations over the railroad industry. These regulations required fair pricing and prohibited special rebates for any specific geographic areas or shippers
What was the relationship between the railroads and the raw material resources in the area?
Most of the railroad lines traveled through areas with natural resources such as coal, clay, iron, and oil. The railroads grew and filtered out from the resource areas.
What cities were railroad stops along Lake Erie?
The cities of Buffalo, Dunkirk, Brockton, and Erie were larger cities along the coast of Lake Erie.
Why would these cities form on the borders of Lake Erie?
The railroads brought raw materials from the interstate areas to transport these items across the lake to western parts of the United States.