Discuss the various ways leading industrialists transformed American business in the late 19th century.Discuss the various ways leading industrialists transformed American business in the late 19th...
Discuss the various ways leading industrialists transformed American business in the late 19th century.
John D. Rockefeller, Cornelius Vanderbilt, Andrew Carnegie were among the leading industrialists during the late 19th century. These men were able to transform American business practices, which were largely unregulated by the federal government, by concentrating their power. In doing this they were able to dominate either most or all aspects of an industry limiting competition. The industrialists accomplished this by developing pools, trusts, holding companies, the horozontial and vertial merger. A pool was a simple agreement between two or more firms to share the market, an early example would be the railroad industry. Trusts were the large business monopolies where by the stocks sold would be turned over to the trusteein exchange for a 'trust certificate' (a share in the profits).Holding Companies set out to 'hold 51% of the stock' there by controlling the ownership and interest among a few investors. There were two popular types of mergers in the late 19th century, the horozontial merger was between two businesses that were in the same line of business. The vertical merger was a merger between two or more businesses at different stages of production. An example of horozontial merger was Rockefeller's control over shipping and refining industries, and Carnegie's total control over the raw material through its finished product (Steel) is an example of a vertical merger.
In a purely laissez-faire economy, where the government barely regulated business, if at all, it was easy to put the ideas of capitalism to the test. The so called robber barons of the time, Andrew Carnegie, John D. Rockefeller, and J.P. Morgan to name a few, were shrewd businessmen who revolutionized how business was done because they were so successful at it. The survival of the fittest rule had produced them, and so others industry leaders that came after them tried to follow their business models. I mean, why wouldn't they? The robber barons had become fabulously rich doing what they did, so why reinvent the wheel where wealth was concerned?