Big Business - Jenn

After the 1830’s and the Civil War, business was beginning to boom because of the rise of corporations.  With these newly formed corporations, many people could own a specific share of the company by buying stocks.  The benefits of this included that the corporation as a whole could grow and raise more money and spread out the financial dangers that might happen if the sales and distribution went down.  Additional income gave the companies an opportunity to invest in new technologies and hire more people, which ended up lowering the manufacturing prices of their goods because they were made swiftly and profusely.

A couple of the front-runners of big business were, unquestionably, Andrew Carnegie and John D. Rockefeller.  Carnegie started out inevitably poor; he was an immigrant from Scotland and had started working at the age of 12 in a textile factory.  He managed to work his way up to become a telegraph messenger, and after a few years of hard work and dedication, he became the president of the Pennsylvania Railroad.   With his experience, he found it wise to invest in the railroad industry, and he ended up quitting his job after he started making $50,000 a year to focus on these investments.  In 1875, Carnegie founded a steel company stationed in Pittsburgh, and he started copying an efficient steel producing process created by Sir Henry Bessemer.  His company began to become successful, and in order to preserve that, Carnegie started the vertical integration of his industry to own all of the businesses incorporated into his larger one, including coal mines and iron ore fields.  This made his company transform into an enormous industry and made him unfathomably wealthy.

The second most successful entrepreneur was John D. Rockefeller, who built the largest oil refinery company in America.  Many people were creating their own little businesses to try and drill for the “black gold”, but 90% of them were ended up being bought out by Rockefeller’s company!  This is an example of horizontal integration, which combines companies with the same products into an overall larger corporation.  Standard Oil ended up making a staggering amount of money and helped boost the nation’s economy significantly.