The Rise of Big Business and Corporations: Consolidation of Industry
Big Business and corporations became powerful and started to fix prices. The organized 'Pools' by which they maintained prices within an industry at an agreed level. However, agreements were broken and one 'Pool' member cut prices to steal customers from the competition within the Pool. The Pool system therefore did not last long but it had resulted in reducing some large industries being run by just a few extremely wealthy Big Businesses and corporations.
The Rise of Big Business and Corporations for kids: The Monopolies
The Rise of Big Business and corporations continued with the emergence of monopolies. Monopolies were achieved when a single corporation bought out all of the competition and achieved control over an entire market. A monopoly could basically set whatever prices they wanted. The could increase prices at will and exert power over their labor force by cutting wages or increasing hours.
The Rise of Big Business and Corporations for kids: The Trusts
The rise of monopolies held by Big Business and corporations were addressed by passing new laws to make it illegal for one company to own stock in other companies without specific permission from the State Legislature. Big Business and corporations then formed 'Trusts' which enabled them to merge businesses without violating the laws against owning other companies which enabled them to continue the practice of regulating the supply and price of commodities. The establishment of the Trusts were another way to monopolize an industry or big business.
The Rise of Big Business and Corporations: Laws to curb Monopolies
New laws were passed in response to public demand that the monopolies be regulated. The 1887 Interstate Commerce Act was passed by Congress to curb the activities of the railroads. The 1890 Sherman Antitrust Act was passed by Congress to protect trade and commerce from unfair business practices that limited competition, or controlled prices. The Sherman Antitrust Act ostensibly clamped down on monopolies, but in reality turned out to be pretty ineffective until the 1904 Northern Securities Case.
The Rise of Big Business and Corporations for kids: Holding Companies
The Rise of Big Business and corporations was allowed to continue and exacerbated in 1889 when the state of New Jersey passed a new incorporation law. This law allowed companies to create a new organization called a 'Holding Company'. A Holding Company owned the stock of companies but did not produce anything themselves. The establishment of a Holding Company allowed for all of its companies to be merged into one massive organization. By the beginning of the 1900's the United States had over 300 holding companies. Ordinary Americans started to clamor for reforms during the Progressive Movement and Progressive Reforms were made at city, state and federal levels.
The Rise of Big Business and Corporations in America
The Rise of Big Business and corporations therefore continued into the 20th century. the major sectors of the nation's economy were dominated by a small number of massive corporations. Big Business and Corporations had control over the railroads, banking, steel, oil refining, meat packing and manufacturing. The number of millionaires in America exceeded 4000. The Rise of Big Business had brought positive benefits to the economy of the nation and helped to improve the lifestyles of many Americans but their power also led to the abuse of workers and the corruption of the political system. For additional facts and information refer to Industrialization in America.
The Regulation of Big Business and Corporations in America
The Department of Commerce and Labor was established by President Theodore Roosevelt during the Progressive Era to reduce tensions between labor and management. In 1904 the Supreme Court had ruled in the Northern Securities vs US legal case that the company violated the Sherman Antitrust Law. After the federal prosecution, the Northern Securities company was dissolved, and other companies followed suit - it was a victory for the opponents of Social Darwinism. The Department of Commerce and Labor included a division called the Bureau of Corporations, which had the authority to investigate and regulate corporations. This enabled the government to have control over their activities without having to sacrifice economic efficiency by breaking up the trusts and holding companies.
Rise of Big Business in America for kids - President Rutherford Hayes Video
The article on the Rise of Big Business provides detailed facts and a summary of one of the important events during his presidential term in office. The following Rutherford Hayes video will give you additional important facts and dates about the political events experienced by the 19th American President whose presidency spanned from March 4, 1877 to March 4, 1881.