Railroads and Big Business

Railroads & Big Business or... how the rich got richer.

Tuesday, February 2, 2010

Building the Railroads • • • •

Tuesday, February 2, 2010

Black Gold.

Bessemer Process By 1890 210,000 miles.

Immigrants and poor.

What the Railroad Brings • Money • Job opportunities.

• Towns.

• Cattle Transportation.

• Product Transportation.

• Standard Time (Four Time Zones) Tuesday, February 2, 2010

Tuesday, February 2, 2010

Price Gouging •

Railroads charge different prices to different customers.

• •

1877 Munn v. Illinois

Tuesday, February 2, 2010

1887 Interstate Commerce Act

Corporations, Companies, and Corruption •

Corporations - sell stock. Incorporate.

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Companies - privately held by one or a small group.

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Crédit Mobilier scandal 1867.

Tuesday, February 2, 2010

Economics Terms • Specialization • Interdepedence • Comparative Advantage • Vertical Integration • Horizontal Integration Tuesday, February 2, 2010

Monopoly!

Tuesday, February 2, 2010

Trusts and Pools •

Pools: Gentlemen’s agreements regarding prices within an industry. Outlawed in 1887.

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Trusts: Larger companies would hold “in trust” the finances of another company.

Tuesday, February 2, 2010

Holding Companies •

Act as owners of multiple trusts.

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Hold stock in multiple corporations within an industry.

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Potentially leads to combinations.

Tuesday, February 2, 2010

Government Action Against Railroad Corporations • •

Munn v. Illinois 1887

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1890 Sherman Anti-Trust Act.

Tuesday, February 2, 2010

Interstate Commerce Act 1887