Chapter 19 Flashcards
Types of Goods
- consumer goods- things that people buy (durable or consumable)
- capital goods- things that businesses buy
Technology
Edison, Ford, Wright Brothers
Railroads
- 1880s- track gauge (standardized)
- 1883- time zones (standardized)
- Westinghouse:
- airlift brake- less employees needed,longer trains, same brake times
- automatic cupler- attach trains easier
Problems with Railroad Technology
- drove prices down for goods
- too many railroad companies and they always change trains
Solution to Railroad Problems
Morganization- system management tightened, rebates and drawbacks declined
- rebates- good customers get a percentage back for being good
- drawbacks- offering of money to a company who’s business is essential for the railroads
Mechanization
- anthracite coal- slower burning, cooler burning, consumer good
- bituminous coal- faster buring, hotter burning, capital good
- steel- used for railroads, more flexible, won’t crack
Expanding Markets to Expand Business
- advertising, mail order houses, and catalouges used more often
- chain stores- stores with multiple locations (Sears or Marshall’s)
- department stores- bigger scale stores that offered a multitude of goods, wide variety
Horizontal Growth
Eliminate competition to form a monopoly.
-Rockefeller- Standard Oil Company
Vertical Growth
Trying to gain more aspects of the industry rather than just the product itself.
-Gustavus Swift and Co.- invented refridgerated rail car, also had raw material, transportation, horse, buggie teams, and facotries. Lowered his price an pushed people out of business
Carnegie- made steel and created the finished product
Trust
Horizontally combined business that restricts trade and disgueses it holdings with company names
-Pujo Committee- Morgan and Rockefeller together had 22 billiom dollars, they could buy the South 3 times or the whole US west of the Mississippi
Holding Company
Hold their money and buy stock
-Northern Securities Company- broken up by Roosevelt with the Sherman Anti-Trust Act
Sherman Anti-Trust Act
If a company slows trade it is an illegal trust.
-US v EC Knight- 90% of sugar was with ECK and US couldn’t prove that it was slowing trade, this made the Act lay dormant
Gospel of Wealth
With great wealth come great responsibility
-Carnegie was lucky to get his fortune with his steel company, he came in the right industry at the right time
The Erie War
Gould, Fisk, and Drew against Vanderbilt
- the first 3 owned the Erie Canal in NYC
- Vanderbilt was a high school drop out and ended up dominating the water trade in NYC, he wanted the Erie Canal too
- he tried to buy 51% of stocks, but the 3 found out, so they made a bunch, kept half and put half on the market so Vanderbilt would never get to 50%
- tires to have gunfights and bribe politicians, but the 3 do the same thing
- the 3 end up buying all of Vanderbilt’s stocks to give him profit and keep doing the keep 51% thing to make more money
Edgar Thompson Works
Modeled how other steel factories would operate.
-makes the steel and the finsihed products (I-beams and railroad tracks)
