Big Business and the Rise of Monopolies in the Gilded Age

 

Gilded Era Magnates

A Time of Rapid Change

During the Gilded Age, from the 1870s to about 1900, the United States shifted from farming to industry. Factories, railroads, and new inventions changed daily life. Business leaders used new technology and cheap labor to grow wealthy very quickly.

The Rise of Powerful Leaders

Three major business leaders dominated their industries: John D. Rockefeller controlled oil, Andrew Carnegie led the steel industry, and Cornelius Vanderbilt focused on railroads. These men used smart—and sometimes harsh—methods to make profits. They were often called “captains of industry” for building the economy, but some people called them “robber barons” because they treated workers poorly and crushed competition.

What Is a Monopoly?

A monopoly happens when one company controls nearly all of an industry. With little or no competition, they can raise prices however they want. Rockefeller’s company, Standard Oil, controlled almost 90% of America’s oil. This worried many Americans because it gave one person too much power.

Standard Oil Logo

Life for Workers

Workers often labored long hours in unsafe factories for low pay. Child labor was common, and many families lived in crowded tenements. Labor unions formed to fight for better wages and safer conditions. Strikes sometimes turned violent.

Government Steps In

At first, the government did little to stop monopolies. But in 1890, the Sherman Antitrust Act was passed to limit the power of big business. It was not always enforced, but it marked the beginning of government action against monopolies.

Timeline

  • 1870 – Standard Oil is founded by John D. Rockefeller.
  • 1873 – Carnegie builds large steel plants.
  • 1882 – Rockefeller begins forming trusts to control competition.
  • 1890 – Sherman Antitrust Act is passed.
  • 1901 – U.S. Steel becomes the first billion-dollar corporation.

Glossary

  • Monopoly – When one company controls an entire industry.
  • Labor union – A group of workers who join together for better rights.
  • Trust – A group of companies controlled by one board of directors.
  • Robber baron – A business leader accused of using unfair practices.
  • Antitrust law – A law made to stop monopolies.

Discussion Questions

  1. Why were monopolies seen as unfair to the public?
  2. Do you think the “robber barons” helped or hurt America? Why?
  3. How did the government try to control big business?
  4. Would you have joined a labor union back then? Explain your answer.

America Starts to Change

In the late 1800s, America moved from farming to factory work. Many people left the countryside to find jobs in growing cities. New machines and inventions helped businesses grow quickly.

Powerful Business Leaders

Some men became extremely rich and powerful. John D. Rockefeller controlled oil, Andrew Carnegie controlled steel, and Cornelius Vanderbilt focused on railroads. They helped build the country—but also wanted control over their industries.

Monopolies

A monopoly happens when one company controls almost everything. With no competition, a company can raise prices and make huge profits. Rockefeller’s Standard Oil had a monopoly on oil, and many people thought this was unfair.

Workers Struggle

Workers had long hours, low pay, and unsafe conditions. Children also worked in factories. Some workers formed labor unions to fight for safer jobs and better wages.

The Government Responds

In 1890, the Sherman Antitrust Act was passed to help stop monopolies. It was the first major law to control big business in America.

Timeline

  • 1870 – Standard Oil is formed.
  • 1882 – Rockefeller begins forming trusts.
  • 1890 – Sherman Antitrust Act is passed.

Glossary

  • Monopoly – One company controlling an entire industry.
  • Labor union – Workers joining together for better rights.
  • Trust – Companies controlled by a single group of leaders.

Discussion Questions

  1. Why is a monopoly unfair to customers?
  2. How were working conditions different from today?
  3. What might you do to improve workers’ lives back then?