1. Railroads and Big Business Notes

2. Section 2-5 Linking the Nation After the Civil War, railroad construction dramatically expanded.  In 1862 President Abraham Lincoln signed the Pacific Railway Act, which provided for the construction of a transcontinental railroad by the Union Pacific and Central Pacific railroad companies.  To encourage rapid construction, the government offered each company land along its right of way.

3. Section 2-9 Railroads Spur Growth Railroads encouraged the growth of American industry.  They linked the nation and increased the size of markets.  The railroad industry stimulated the economy by spending large amounts of money on steel, coal, and timber.  In the early 1800s, most railways served only local needs, resulting in many unconnected rail lines.

4. Section 2-10 Eastern capitalists wanted to create a single rail transit system from the many smaller railroads.  The most famous railroad consolidator, Cornelius Vanderbilt, merged three short New York railroads to form the New York Central in 1869.  He was the first to offer direct rail service from New York City to Chicago.

5. Section 2-11 In 1883 rail service became safer and more reliable when the American Railway Association divided the country into four time zones, or regions, where the same time was kept.  Large integrated railroad systems provided increased efficiency, a decrease in time spent in long distance travel, and it united Americans from different regions.

6. Section 2-13 The Land Grant System Land grants were given to railroad companies by the federal government to encourage railroad construction.  Railroad companies like the Union Pacific and Central Pacific were able to cover all their building costs by selling the land to settlers, real estate agencies, and other businesses.

7. Section 3-5 The Rise of Big Business By 1900 big business dominated the economy of the United States.  A corporation is an organization owned by many people but treated by law as though it was a single person.  Stockholders, the people who own the corporation, own shares of ownership called stock. 

8. Section 3-6 From the sale of stock, corporations could invest in new technologies to increase their efficiency.  By making goods quicker and cheaper, these corporations achieved economies of scale.  The Rise of Big Business (cont.) Issuing stock allows a corporation to raise large sums of money but spreads out the financial risk.

9. Andrew Carnegie began vertical integration of the steel industry.  A vertically integrated company owns all the different businesses it depends on for its operation.  This not only saved money but also made the big company bigger.  Business leaders also pushed for horizontal integration, combining many firms doing the same type of business into one large corporation. The Consolidation of Industry

10. M/C 3-1

11. Section 3-12 A monopoly occurs when one company gains control of an entire market.  In the late 1800s, Americans became suspicious of large corporations and feared monopolies.  Many states made it illegal for a company to own stock in another company without permission from the state legislature.

12. Section 3-13 In 1882 Standard Oil formed the first trust, which merged businesses without violating laws against owning other companies.  A trust allows a person to manage another person’s property.  A holding company did not produce anything itself.  Instead, it owned the stock of companies that did produce goods.

13. Section 3-16 Selling the Product Retailers looked for new ways to market and sell their goods.  Advertising changed, with illustrations replacing small-type line ads.  The department store changed the idea of shopping by bringing in a huge assortment of products in a large, glamorous building. 

14. Section 3-17 Mail-order catalogs were created to reach rural Americans.  Montgomery Ward and Sears, Roebuck were the two largest catalog retailers. Chain stores, like Woolworth’s, focused on offering low prices instead of special services or fancy decor.

15. M/C 2-1a

16. M/C 2-2b

17. M/C 4-1