Unit 7 Vocabulary Flashcards
Cornelius Vanderbilt
was an American business magnate and philanthropist who built his wealth in railroads and shipping
Albany Bridge Blockade
Hostile Takeover by Vanderbilt
Federal Land Grants
Recognizing that western railroads would lead the way to settlement, the federal government provided railroad companies with huge subsidies in the form of loans and land grants. The government expected that the railroad would make every effort to sell the land to new settlers to finance construction. Furthermore, it was hoped that the completed railroad would both increase the value of government lands and provide preferred rates for carrying the mails and transporting troops. However, the land grants and cash loans (1) promoted hasty and poor construction and (2) led to widespread corruption in all levels of government
Union and Central Pacific
The task was divided between two newly incorporated railroad companies. The Union Pacific was to build westward across the Great Plains, starting from Omaha, Nebraska, while the Central Pacific took on the formidable challenge of laying track across mountain passes in the Sierras by pushing eastward from Sacramento, California. General Grenville Dodge directed construction of the Union Pacific using thousands of war veterans and Irish immigrants. Charles Crocker recruited 6,000 Chinese immigrants, who at enormous risk, blasted tunnels through the Sierras for the Central Pacific
Jay Gould
Responsible for watering down stock and thwarting Vanderbilt’s effort to purchase the company
Watered Stock
New technologies and industries tend to be overbuilt. Certainly this was the case with the railroads built in the 1870s and 1880s, many of which were unprofitable. In addition to overbuilding, the railroads frequently suffered from mismanagement and outright fraud. Speculators like Jay Gould went into the railroad business for quick profits and made their millions by selling off assets and watering stock (inflating the value of a corporation’s assets and profits
before selling its stock to the public)
Panic of 1893
Big business survived this easier than small businesses; increased their power when the economy began to recover
JP Morgan
A banker who quickly moved in to take control of the bankrupt railroads and consolidate them.
Second Industrial Revolution
The late 19th century witnessed a major shift in the nature of industrial production. Early factories had concentrated on producing textiles, clothing, and leather products. After the Civil War, in what some scholars have termed a “second Industrial Revolution,” the growth was in heavy industry and the production of steel, petroleum, electric power, and the industrial machinery to produce other goods
Bessemer Steel Process
This refined iron more efficiently, allowing Carnegie to build his empire
Andrew Carnegie
a Scottish-American industrialist who led the expansion of the American steel industry in the late 19th century, and is often identified as one of the richest people and Americans ever.
Vertical Integration
Own every step of the process
- save money on buying products from other companies and don’t have to pay middle men
US Steel
Deciding to retire from business to devote himself to philanthropy, Carnegie sold his company in 1900 for over $400 million to a new steel combination headed by J. P. Morgan. The new corporation, United States Steel, was the first billion-dollar company and also the largest enterprise in the world, employing 168,000 people and controlling over three-fifths of the nation’s steel business
John D. Rockefeller
Robber baron known for his monopoly of the oil industry
Standard Oil Trust
A Horizontal Integration, Standard Oil, Rockefeller owned 90% of U.S.’s oil refinery industry
Horizontal Integration
Own all of one type of industry so you don’t have competition for the price of the product
Anti-Trust Movement
The trusts came under widespread scrutiny and attack in the 1880s. Middleclass citizens feared the trusts’ unchecked power, and urban elites (old wealth) resented the increasing influence of the new rich
1890 Sherman Antitrust Act
Outlawed integration that restricted trade
United States v. E.C. Knight
the Supreme Court in United States v. E. C. Knight Co. ruled that the Sherman Antitrust Act could be applied only to commerce, not to manufacturing. As a result, the U.S. Department of Justice secured few convictions until the law was strengthened during the Progressive era
Adam Smith
The economist Adam Smith had argued in The Wealth of Nations that business should be regulated, not by government, but by the “invisible hand” of the law of supply and demand. This was the origin of the concept of laissez-faire. If government kept its hands off, so the theory went, businesses would be motivated by their own self-interest to offer improved goods and services at low prices. In the 19th century, American industrialists appealed to laissez-faire theory to justify their methods of doing business—even while they readily accepted the protection of high tariffs and federal subsidies
Laissez-faire Capitalism
The idea of government regulation of business was alien to the prevailing economic, scientific, and religious beliefs of the late 19th century. The economic expression of these beliefs was summed up in the phrase “laissez-faire.”
Social Darwinism
Although it offended many, Charles Darwin’s theory of natural selection in biology played a role in bolstering the views of economic conservatives
Gospel of Wealth
The idea that the wealthy have a social obligation to help those less fortunate
Horatio Alger
At first, Americans tended to ignore the widening gap between the rich and the poor by finding comfort in the highly publicized examples of “self-made men” in business. They also thought there might be some truth in the popular novels by Horatio Alger, Jr., which sold more than a million copies. Every Alger novel portrayed a young man of modest means who became rich and successful through honesty, hard work, and a little luck
