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The "Fat Cats"
Transcript of The "Fat Cats"
2:Who Were they?
J.D. Rockefeller--->founded standard oil company1870-by1880-> 90% monopoly; nation's 1st billionaire
Andrew Carneige--->steel; 25% of U.S. Steel production"Rags to Riches" story; Sold out to Morgan in 1901
James J. HIll--->"Empire builder"MN connection Railroad- Great Northern (lumber, grain, freight)
J.P. Morgan--->"Giant of Finance" Banker; U.S. Steel Great Organizer
John D. Rockefeller
-Founded Standard Oil
-Drove competitors out
of business by selling his
oil at a lower price than it
cost to produce it.
-Raise prices once he
controlled the market
-Gave away $500 million
Wealth fell into the hands of a few
1) By 1890 -->4,000 millionaires
2) Approx 90% of $(wealth and assets) controlled by 10% of population
3) 1900-20 M Americans lived in poverty (small middle class)
4)Living in poverty today=$23,021 for a family of four
Also known as
Captains of Industry
The "Fat Cats"
By: Kelli and Jordan
J P Morgan
Started as accountant
7 Factors of America's Industrial Growth
7. Government Cooperation: Aid to American businesses
a) High tariffs (tax on imports) -> Buying American goods
b) Patent System protected & encouraged inventions
c) No Interstate Tax = Free Trade (Rural Free Delivery)
d) Land Grants to railroads encouraged westward growth (p.103)
e) Laissez-Faire Philosophy = Hands – Off (limited) Government
Some people became believers of Carnegie gospel of wealth and that it was the rich peoples obligation to improve society by distributing your own wealth to what needs to be fixed in America some examples are Carnegie Rockefeller and Morgan
H. Gov’t Actions
1. Land Grants were issued to encourage
a. railroad construction
b. settlement on the Western frontier. (Homestead Act)
2. Protective Tariffs
a. placed a tax on imported (foreign) goods that compete w/
domestic (U.S.) goods.
b. Problem: Industries became dependent on tariffs
to maintain huge profits. (no free market)
Many raw materials such as coal, iron, steel became goods during this time
Fertile soil led to a surplus in agriculture which led to the industrial revolution
Mny things such as swift moving water became a power source and fueled America
Capitol is the need to pay for the production of goods with no capitol there is no need for production
Stable buying power such as stable money and exchanges are needed
The selling of stock is also needed to raise capitol
Bank loans build the companies in America
labor supply was needed to create goods this cause a spike in birth rates and it also cause a lot of immigrants from Europe and Asia to come to America
Even women and children worked
Better ways to make more goods
Telephone ment better communication
Electricity produced more power
Factor system is faster production
interchangeable parts and assembly lines produced quick goods
and also new inventions made it possible to create goods quickly
Bribery and Corruption:
Rockefeller forced RR's to pay him rebates on shipping
Political (U.S. Senate= "Millionaires club")
Improved tech. meant increased efficiency in: Farming (McCormick's Reaper & John Deere's steel plow)
by 1980, 1 Farmhand could harvest 135 acres on average young men migrated to cities adding to the industrial labor supply.
Bought goods an services and mail catalogs like Sears and Roebuck
department stores became more common in large cities and there were many exports from America during this time all because the consumers could buy the goods and use them
linked raw materials to factories and then right to the consumers
Rivers and Canals were used for transportation along with Roads and Railroads and tey were fast
Aids american businesses like high taxes, patents on american goods , no interstate taxes, land grants to railroads and laissez fairer philosophy was the governments cooperation in the industrial revolution
How did they bcome rich?
A. Opportunity ---> A pure capitalist system allows for unlimited
economic opportunity, but no guarantees
B. Laissez-faire Gov’t meant unchecked free enterprise
1. Hands off attitude toward business/industry/economy
2. No income tax (not made law until 1913, 16th amendment)
C. Labor Abuses were permitted
1. No Safety Codes
2. No minimum wage
3. Unions were rare, even illegal
D. Monopolies formed: (goal: to rid competition & control prices)
1. Integration Tactics (p. 242)
a. Vertical Integration: buying up resources, transportation, etc
b. Horizontal integration: merging like companies together
Corporations (Publicly held companies) were formed.
Quick method of raising capital ($) for growth and expansion
reduced risk (spread out among stock holders)
ensures the longevity (life)of the company
"Social Darwinism" (H. Spencer) --> Richwere meant to be rich"
life is a struggle and the poor are just weak and/or lazy.
justified "hunt & kill" methods to acquire wealh and power