StudyGuide_Industrialization - Industrialization Corporate...

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Industrialization, Corporate Consolidation, and a New Urban Society 1. Industrial growth: railroads, iron, coal, electricity, steel, oil, banks UNION PACIFIC RAILROAD, CENTRAL PACIFIC RAILROAD: The Pacific Railroad Act of 1862 had authorized the construction of the transcontinental railroad. The Union Pacific and Central Pacific Railroads were joined together to form the first transcontinental railroad in May 1869 when railroad executives drove a golden spike into the ground at Promontory Point, Utah in order to connect the two. It allowed Americans to travel from coast to coast in a week; it had previously taken several months to do so. "Robber Barrons": Known as the great captains of industy and as robber barons who lined their pockets, these captains, or villains, of industry made their money by manipulating the stock markets and company policies. Some of these Robber Barrons were Jay Gould, Hill, and John D. Rockefeller. John D. Rockefeller : He is famous for his Standard Oil Company. He had a desire for cost cutting and efficiency. Rockefeller helped form the South Improvement Company in early 1872, which was an association of the largest oil refiners in Cleveland, and he arranged with the railroads to obtain substantial rebates on shipments by members of the association. 2. Monopolization a. trusts b. horizontal and vertical integration Standard Oil Company: The Standard Oil Company was organized in 1870 by Rockefeller, his brother William, and several associates. In 1882 Rockefeller formed the Standard Oil Trust. This, the first corporate trust, was declared an illegal monopoly and ordered dissolved by the Ohio Supreme Court in 1892. Horizontal consolidation: Within three years, the Standard Oil Trust had consolidated crude oil by buying throughout its member firms. It had slashed the number of refineries in half. Rockefeller integrated the petroleum industry horizontally by merging the competing oil companies into one giant system. Vertical consolidation: The Standard Oil Trust had consolidated crude-oil buying throughout it members firms and slashed the number of refineries in half. Rockefeller integrated the petroleum industry vertically by controlling every function from production to local retailing. He controlled all aspects of manufacturing from mining to selling. 3. Laissez-faire Conservatism Laissez-faire: It meant non-governmental interference in business. The doctrine favors capitalist self-interest, competition, and natural consumer preferences as forces leading to optimal prosperity and freedom. It began in the late 18th century as a strong liberal reaction to trade taxation and nationalist governmental control known as mercantilism. a. Gospel of Wealth b. Myth of “self-made man” Nouveau riche: It was the new class of people which was created by the wealth and prosperity generated from the industrial capitalism and the big businesses. This class
grew during the Gilded Age. Most of these people were self-made and showed their importance through ostentatious displays. Robber barons were included in this class.

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