John D. Rockefeller & Andrew Carnegie Ch. 19.3.

John D. Rockefeller

&Andrew

CarnegieCh. 19.3

John D. Rockefeller• Born in Richford, New York

o 1839

• Made his fortune in oil

• America’s first billionaire

• Built his first oil refinery at age 26o Cleveland, Ohio

Rockefeller• 1870- Organized the Standard Oil Company

• Horizontal Integration- Combining competing companies into one organization

The Standard Oil Trust

• Rockefeller lowered his prices to drive competitors out of businesso Who does this sound like today?

• Persuaded railroads to give him special rates

• 1882o Formed a trust by acquiring stocks in many different oil companieso Standard Oil Company became part owner of the other companies

• Trust: Group of companies managed by the same board of directors

• Rockefeller had formed a monopoly

Andrew Carnegie• Made his fortune in steel

• Son of a Scottish immigranto Began his career as a telegraph operator

• 1865- Invested in the Steel industry

Carnegie• By 1890- Carnegie was the dominant figure

in the steel industry

• Vertical Integration- His company acquired companies that provided the equipment and services he neededo Bought iron and coal mines, warehouses, ore ships, and

railroads

• By 1900, Carnegie Steel Company produced 1/3 of the nation’s steel

Philanthropy• Philanthropy: Use of money to benefit the

community

• Rockefeller and Carnegie used their fortunes to:o Found schools, universities

• Carnegie:o Built Carnegie Hall- Famous concert hall in New York Cityo 2,000 libraries

• Rockefeller:o Founded the University of Chicagoo Founded New York’s Rockefeller Institute for Medical Research

Monopolies• 1889- Some states pass laws to allow

businesses to form monopolies

• Many Americans admired large businesses, but some thought lack of competition hurt consumers

• 1890- Sherman Antitrust Acto Prohibits trusts and monopolieso Ineffective in its early years