Big Business and the Rise of American Statism (Roy A. Childs, JR. Flashcards
State Sponsored Monopoly in Gilded Age
What is one of the reason, or principal reason, that states experienced depressions and recessions from 1870s to the 1890s?
State intervention and Monetary expansion by the state-manipulated banking system.
What were big businessmen’s responses to the recessions and depressions of the 1870s and ’90s?
They called for larger markets (domestically and imperialistically), state regulation, and aid. From 1875 and on corporations overexpanded and overcapitalized.
What were the three great setbacks of mergers in the late 19th century?
- Inability to respond to the market
- Reduction of profits at times
- More competition (dubious)
How is U.S Steel an example of detrimental monopolization?
U.S. Steel was created in 1901 by Carnegie and Morgan’s merger of many corporations. Yet, its profit margin declined over 50% between 1902 and 1904 due to inefficiency and costly management. In its first two decades of existence, it held a continually shrinking share of the market.
How did Bell Telephone (AT&T) acquire a virtual monopoly in the telephone industry?
From 1877 to 1894, it had control on almost all patents (these were illegitimate according to libertarian ownership theories since multiple people came up with the idea around the same time but were restrained from enjoying the product of such creativity).
What was the National Civics Federation?
The NCF, founded in 1900, was the major organizational tool of big business
What world order did the National Civics Federation envision?
Hamiltonian views of a strategic alliance between the state and big business.
What were the NCF’s “twin enemies”?
“The socialists and radicals among workers and middle-class reformers, and the anarchists among businessmen”
If the NCF was the main organizational body of big business, who would represent the smaller businesses?
The National Association of Manufacturers (NAM) formed an alliance against the new liberalism that was characterized by cooperation between big business and government.
Who were prominent early leaders of the NCF?
Marcus A. Hanna (Republican Senator from Ohio and later head of the Republican National Committee, Samuel B. Insull (pioneer of the electrical infrastructure in the U.S and business magnate), Franklin McVeagh (later secretary of the treasury), Theodore N. Vail (president of AT&T), Elbert H. Gary (later a head of U.S. Steel after Carnegie), George Cortelyou (head of Consolidated Gas), and its largest contributor was Andrew Carnegie.
How did the NCF contribute to the creation of Public Service Commissions/ Public Utilities Commissions?
They sponsored legislation to promote the formation of “public utilities”, a special privilege monopoly granted by the state, preserving an area of production to one company. The NCF established a general framework for regulatory laws, stating that utilities should be conducted by legalized independent commissions.
How did Carnegie and Ingalls try to further regulate industry with regards to mergers?
They had suggested to the NCF that they push for the establishment of an American version of the British Board of Trade which would have the power to judge mergers and other industrial actions.
What victory did AT&T have regarding the telecommunications industry in 1910?
AT&T (owned by JP Morgan as of 1907), celebrated the creation of the ICC (interstate commerce commission)in 1910 and rate wars became a thing of the past.
During a congressional committee meeting in 1911, what did U.S Steel say to members?
Elbert H. Gary of U.S Steel said “I believe we must come to enforced publicity and governmental control even as to prices.”
How did J.P Morgan earn the nickname of “rescuer of governments”?
His many dealings in currency manipulation and loans to oppressive European governments.
