Railroads & Big Business or... how the rich got richer.
Tuesday, February 2, 2010
Building the Railroads • • • •
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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.
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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