Big Businessmen

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  • Created by: Lily
  • Created on: 29-04-13 23:01


Before 1865 American businesses were small and family owned. This dramatically changed as a result of the Industrial Revolution.Federal Government was largely on the side of Big Business and due to the absence of the South in Congress getting loans was far easier.

Limited liability meant more attraction to Corporations as they could invest their money with the knowledge that only that would be at risk, no other assets.

Corporations took advantage of economies of scale in order to decrease their production costs and sell goods cheaper (attractive to wider society)

Corporations sometimes formed with trusts (horizontal integration) to create Monopolies. This gave them the ability to control prices.

Vertical intergration meant that they could control every aspect of the manufacturing process (e.g extraction of raw material to final product)

Although now illegal, competing Corporations could agree to form a cartel. This is where they would regulate supply and affect prices.

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Cornelius Vanderbilt

"FATHER OF TRANSPORTATION"                                                                      - controlled 16 major railroads by the time of his death

BACKGROUND: Bought 1st boat at 16, set up a "ferry" to NY, 1829 own steamboat company, 1840's - 100 boats

TACTICS: Took advantage of new technology, low prices so competitors bought him out/paid him not to open in certain areas, merged small companies to make dominating ones

REPUTATION: Not very charitable, 1877 one of the richest men in the world

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Andrew Carnegie

1892 CARNEGIE STEEL (worlds largest iron/steel producer)

BACKGROUND - Worked in a cotton mill, 1850 messenger boy for Ohio Telegraph, 1851 Telegraph operator, 1853 Secretary to Thomas A Scott (soon the "best of Pensylvania Railroad in Pittsburgh"), 1855 invested in railroads/steel mills, Assistant secretary in the Civil War (over saw military railroads).

TACTICS - became part of US Steel (gigantic trust), expanded into many areas e.g sales & shipment, funded into rival companies = empire!, low shipping costs

REPUTATION - Philanthropist, intelligent, hardworking, not a particulary good employer - Homestead Steel Strike in 1892 left 16 for dead.

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John D Rockefeller

1870 STANDARD OIL OF OHIO                                     -largest oil refinery in the world (90% of market & bought 22/26 competitors)

BACKGROUND: Raised turkeys, sold candy to children, loaned farmers money, opened himself as a partner in a small oil refinery, bought out his business partner and joined his brother.

TACTICS: good mathematic ability, found good deals, drove competitors into bankruptcy and then bought them out at a cheap price, aimed to dominate

REPUTATION: ruthless, created scaled economies (lower consumer prices), worth 900 million

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Henry Ford


BACKGROUND: apprentice machinist, worked at a family farm, tinkered with family car, 1891 took a job as an engineer (quickly became chief), 1896 built the "quadricycle", 1899 "Detroit Autombile Company")

TACTICS: technical whiz, "assembly line" manufacturing to maximise profits, employed skilled craftsmen to focus on specific tasks to create a more efficient and better production.

REPUTATION: raised living standards, revolutionized industries, better wage than any other factory owner, nazi sympathiser, thuggish security

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J P Morgan

GENERAL ELECTRIC -merger of edison & thomas-houston electric companies.

BACKGROUND: 1857 was involved in banking, 1860-4 acted as an agent in New York for his fathers firm, 1864-72 member of the Dabney, Morgan & company, 1871 J.P Morgan & co.

TACTIS: merged big businesses together to form gigantic trusts, used his financial knowledge, expanded his business ventures (e.g steel & railroads) in order to maximise his individual profit,

REPUTATION: philanthropist, lover of the arts, strengthend the economy (1907 panic), devotion to religion, civic responsibility, many unsucessfull ventures (e.g London subways), redefined conservatism

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