5:3 ● the rise of big business ● corporation: owned by many people, but treated by law as if...
TRANSCRIPT
5:3● The Rise of Big Business
● Corporation: owned by many people, but treated by law as if owned by one person– Can own property– Pay taxes– Make contracts– sue and be sued
● People who own corporations are “stockholders”– They own “stock”
5:3● What do corporations do with the money they
receive from stockholders?● Invest in new technologies● Purchase machines● Hire more workers
● “Economies of Scale”● The cost of manufacturing is decreased by
producing goods quickly and in large quantities
5:3● Vertical Integration
● Began by Andrew Carnegie (steel)● Owns all of the businesses on which it depends for
its operation
5:3● Horizontal Integration
● John D. Rockefeller (oil)● Combining firms in the same business into one
large corporation– Companies not doing well would sell out to their
competitors● Eventually becomes a “Monopoly”
– When a single company achieves control of an entire market
5:3● Trusts
● Started by Standard Oil● New way to merge businesses without breaking the
law● Legal arrangement that allows one person to
manage another person's property● Ownership of a stock: Stockholder● Managing a stock: Trustee