Chapter 16 Flashcards
1
Q
when was first continental railroad completed
A
1869
2
Q
what was finally standardized in the railroads
A
gauges
3
Q
Pacific Railway Act of 1862
A
- gave loans to the Central Pacific and Union Pacific Railroad companies to subsidize construction of rail line between Omaha and Pacific
- gave companies 10 square miles of public domain for every 1 mile of track
4
Q
Why did railroad companies become extremely wealthy
A
- sold extra land from railway act to raise capital
- more people, businesses, farming along tracks toe more opportunities
- ore freight, cattle, wheat, umber, ore to be transported
5
Q
why did it cost a lot of money to run railroad companies
A
- maintenance and repairs
- scheduling of trains
- higher fixed costs
- fixed costs: costs a company incurs even if shut down: taxes, interests on loans, etc.
6
Q
what were pools
A
an agreement to divide up the market and charge equal prices instead of allowing competition to set prices
- most famous: Iowa Pool1874-1886
7
Q
railroad copanies and politics
A
- Lobbying: private entities that attempt to influence public officials for or against a particular issue
- attempted to influence politicians by contributing to their campaigns
8
Q
Chicago: city built by railroads
A
- 1850-1880city went from 30,000 to half a million residents
- by 1890 second largest city
- ## 15,000 miles of track connected it to rest of north America
9
Q
Social Darwinism
A
- modeled after Darwins theory of evolution
- competition of human society, survival of the fittest
- ## benefited society as a whole
10
Q
Laissez Faire Capitalism
A
- the principle that the government should not interfere with the workings of the economy - grew out of social darwinism
11
Q
the gospel of wealth
A
- idea that wealth should return their riches to the community
- Andrew Carnegie built 3000 libraries and 4100 churches cross country and many other buildings dedicated to the arts
12
Q
JP Morgan
A
- raised capital necessary for railroads to grow
- born into wealth in 1837
- his investment banking firm became most powerful in the US
- seat on the board and almost all RR companies
13
Q
Andrew Carnegie
A
- penniless immigrant from Scotland
- took a load from JP Morgan
- constructed largest steel mill in 1875, 8000 workers by 1901
- used the bessemer process
- cut costs in order to boosts benefits
14
Q
vertical vs horizontal integration
A
Vertical:
- one product
- bringing together all activities in one company that manufactures the product
- Carnegie
Horizontal:
- merging one or more companies that do the same activities s a way of limiting competition or enhancing stability and planning
- Rockefeller
15
Q
JD Rockefeller
A
- revolutionized old refining
- creating standard oil in 1870
- by 1881 controlled 90% of nations refining capacity
- by 1901 had control of vertical and horizontal industry creating a monopoly
