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American History Terms

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American History Terms

1. Government role in RR building- Congress was impressed by arguments supporting military and postal needs and began to advance liberal money loans to two favored cross- continent companies in 1862 and added enormous donations of land and tracks. Within the routes the RR’s were allowed to choose alternate mile- square sections in checkerboard fashion
2. Significance of Transcontinental RR- A magnificent engineering feat- most impressive peacetime undertakings. Welded West Coast firmly to the Union. Facilitated flourishing trade with Asia. Stimulated growth with the West. Architectural feat- increased nationalism. Huge fortunes, jobs.
3. Stock watering - favorite device of the moguls of manipulation. Originally meant the practice of making cattle thirsty by feeding them salt and then having them bloat themselves with water before they weighed in for sale. Using a variation of this, RR stock promoters grossly inflated their claims about a given line’s assets and profitability and sold stocks and bonds far in excess of the RR’s actual value.
4. Secret Rebates – kickbacks given to powerful shippers in return for steady and assured traffic- not given to everyone. Often slashed prices on competing lines, but more often mad up the difference on noncompeting ones
5. Wabash Case - 1886 Supreme Court ruled that said individual states had NO power to regulate interstate commerce. This would be done by the federal gov’t
6. Interstate Commerce Act - Prohibited rebates and pools and required the railroads to publish their rates openly. Forbade discrimination against shippers and outlawed charging more for a short haul than for a long one over the same line. Created Interstate Commerce Commission (ICC) to enforce and administer the new legislation. It did not really beat corporate wealth, but it did provide a forum where businesses could resolve their conflicts peaceably.
7. Vertical and Horizontal integration - vertical integration was combining into one organization all phases of manufacturing from obtaining raw materials to marketing. It made supplies more reliable, controlled the quality of product at all states of production, and cut out middlemen’s fees and was perfected by Carnegie. Horizontal integration was consolidating with competitors to monopolize a given market, used a lot by Rockefeller.
8. Trust’s benefits – Gave consumers a superior product at a relatively cheap price. The efficient use of expensive machinery called large-scale production and consolidation proved more profitable than ruinous price wars.
9. Sherman Anti-Trust Act – 1890 – forbade combinations in restraint of trade, without any distinction between “good” and “bad” trusts. Ineffective, because it contained many loopholes for corporate lawyers. It curbed labor unions or labor combinations that were deemed to be restraining trade. Not until 1914 were Sherman Act give some power to regulate trusts.
10. Strength of corporations over unions - Corporations used lawyers, local press, and pressured politicians to fight unions. Federal courts could be called upon to put injunction to stop strike. “Lockouts” – lock doors against rebellious workers until they were starved into submission. They used ironclad oaths or yellow dog contracts – could not join labor union. Blacklist – name of agitators sent among fellow employers. Employ scabs or thugs to beat up labor organizers.

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