23 - HIST2112 17:24 QuestionforToday

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HIST 2112 17:24 Question for Today How and why did big business become so prominent in this period? o Laws were passed that allowed for creation of corporations. o Raised capital by selling stocks. This was more money than a single  investor o Good because it has limited liability Railroads Pioneers of big biz. Relative to size, staff, and complexity Required economies of scale Large capitalization and new management techniques Carried lots of debt. Intense competition led to instability By 1870s: the leaders of railroad companies wanted a stable industry so they  created POOLS – Informal agreements. o Because of informality it was not as effective The next method for stability was a TRUST. Held by a board of trustees. John D. Rockefeller started TRUST for his  company STANDARD OIL in 1881 He believed small competitive companies were ineffective. Was a ruthless  businessman. Used bribes and threats to put others out of business He controlled 90% of US Oil Refining  for Standard Oil Trust movement : whiskey lead sugar
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23 - HIST2112 17:24 QuestionforToday

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