#Big business definition apush free#

Business mechanisms, such as vertical and horizontal integration, aided in the domination of the market by select companies and in the exploitation of labor. Ruthless business tactics such as those later chronicled by Ida Tarbell in the History of Standard Oil (as one historian noted, Rockefeller broke no laws, but a lot of laws were passed because of him) eliminated small business competition and put consumers at risk of price gouging. The Sherman Antitrust Act was the initial attempt at regulating trusts that, in the public mind, had grown out of control. There was also the belief that business control of government retarded the ability of workingmen to raise wages and ensure better working conditions as the federal government frequently intervened in labor disputes on the side of big business. There was a growing belief that big business controlled the federal government and encouraged such policies as a high protective tariff which resulted in higher prices for consumers and widened the gap in income distribution. While the Interstate Commerce Act of 1887 represented the first attempt by the federal government to regulate business practices, the Sherman Antitrust Act was the initial attempt at regulating trusts that, in the public mind, had grown out of control. The rapid growth of trusts and the subsequent development of monopolies during the Gilded Age led to a growing call for the regulation of big business by the federal government. Vertical integration reduced a trust’s expenses by eliminating the need for middle men to make a profit at each stage of production.

#Big business definition apush free#

Trusts did, however, make it much more difficult for small businesses to gain a foothold in the free enterprise system. Economies of scale allowed some trusts to produce goods faster and cheaper. Generally, monopolies were frowned upon because of the fear that control of the market allowed them to increase prices and produce inferior products. Horizontal integration involved gaining control of all of the companies that produced a similar product so that regardless of where a customer bought that product in the marketplace it was controlled by the same trust. In the case of Carnegie Steel, that would mean gaining control of companies that mined iron ore, coal, and limestone, those that produced coke from coal, and those that transported those products to steel mills, to name a few. Vertical integration involved gaining control of all of the materials necessary for the production of a product. The ambivalence resulted in a long history of antitrust activity before the election of 1912.New business structures such as vertical and horizontal integration gave trusts a competitive advantage. Here the department store appears as a pig, keeping out the hungry small business person.įrank Beard and other cartoonists expressed this ambivalence well before 1912. The limitation of those opportunities seemed somehow to lessen freedom itself and to have potentially dangerous implications for republican society and democratic government. On the other hand, Americans worried that the growth of large firms eliminated many opportunities for individuals to go into business. The large stores provided attractive spaces for customers, as well as a wide range of different goods arranged in 'departments' such as clothing for women and men, dry goods, appliances, hardware, and so forth. Department stores, for instance, grew at the expense of small merchants because department stores were popular. On the one hand, Americans admired the efficiencies that large businesses provided.

The trust issue went back at least to the 1880s.Īmericans were often ambivalent about 'the trusts' and the phenomenon of the rise of big business. Concern about 'the trusts' and the rise of big business was not new in 1912.