GRAB A BOOKP. 208 #2,3

Chapter 6 Section 2

Rise of Big Business

Andrew Carnegie

Born in 1835 in Scotland Immigrated to United

States in 1848 at age of 12 Worked in cotton mills for

$1.20/week in 1848 At 17 became private

Secretary to railroad superintendent

Carnegie Steel

Began investing to raise money which he used to get into steel industry

Began empire in 1860’sKnew nothing about production but

hired experts to run company

Vertical Integration

Own the companies that provide materials and services you depend on

Iron and coal mines for ore Steamships and railroads to transport products By 1899 Carnegie organizes Carnegie Steel

Company Sold it to J.P. Morgan in 1901 for $500 million

Gospel of Wealth

“Rich are morally obligated to benefit their fellow citizens”

Donated $350 million to charities across the country

Vertical Integration

Turn to a partner and explain “Vertical Integration” in your own words

How did Carnegie utilize this strategy?

John D. Rockefeller

Ran Standard Oil CompanyStarted in 1863 at beginning of oil boomPracticed vertical integration like

CarnegieSet out to control the oil industry

“Competition was inefficient”

Horizontal Integration

Control of other companies producing oil Drove others out of business by making deals

with suppliers/transportation at cheaper rates than others

Became first trust in U.S. in 1899 By 1880 controlled 90% of all oil production Like Carnegie– donated vast sums to charity

$530 million total

Horizontal Integration

Turn to a neighbor and explain “Horizontal Integration” in your own words.

How did Rockefeller utilize this strategy? What is the difference between “Vertical”

and “Horizontal” integrations?

Chapter 6 Section 2

Rise of Big Business