During the late 1800's, business in the United States became very competitive.
Due to this fact, companies formed trusts. A trust is formed when multiple companies in the same industry join together as one. Trusts were stronger than individual companies and were necessary to gain dominance over a competitive market.
Trusts are run by a single board of trustees. The board of trustees makes the important decisions for the company, including hiring CEO's to run the corporations. All profits made by the trust are split evenly between all participants.
Examples of Trusts
Cingular merged with AT&T
Exxon and Mobil form Exxon Mobil
A trust or individual company holds a monopoly when it has complete control over an entire industry. A benefit of monopolies is that there is very little competition and they can raise prices and lower quality of products much easier than if they did not have a monopoly.
The popular board game Monopoly was inspired by this time period and the rise of monopolies in the American economy.
Examples of Monopolies
John D. Rockefeller was a powerful business tycoon during the 19th century. Rockefeller is most famous for his dominance over the oil industry. Using vertical integration- acquiring companies that supply his business-and horizontal integration- taking over companies producing the same products- he was able to develop a monopoly. He controlled 90% of oil refinement in the United Sates by 1879.
Created by Emily Peters, Rachel Meilan, and Ben Scott