Railroad Growth

Railroad GrowthBy: Thomas, Jess, Devon, and PJ

1The Purpose of the RailroadsCivil WarExpanding economyLarger travelTo unite the west and the east (communication)Rebates and pools

The Railroad CombineSmall railroads formThey combineTransportation becomes longerTranscontinental railroadRailroads become more luxurious

Vertical IntegrationBy: Joey, Chip, Ashley, Matt, and TomAndrew Carnegies ImpactAfter visiting Britain and discovering the Bessemer Process, Andrew returned to America and started a steel mill.

After some time, he was making enormous profits.

He then started to buy other mills.Andrew Carnegies ImpactAfter the buying of mills, he started to buy iron mines, railroad and steamship lines, and warehouses.

This was the beginning of vertical integration; he had began to build an empire.

Andrew Carnegies ImpactHe had began to control all the parts of the steel making process.

He had became one of the first people to do this. He set an example for modern companies.

Modern BuisnessAlmost all companies these days control all parts of the manufacturing, marketing, and selling.

Carnegie was an innovator in his time and one of the first to do this.

Monopolies and TrustBy: Kirsten, Sabrina, Holden, and James

Key TermsMonopolies- control all or nearly all the business of an industryTrust- a group of corporations run by a single board of directions

MonopoliesCaused by a lack of competitionMain industry controls the smaller industriesCauses higher prices and lowers quality of itemsLegal if they are not supported by force

TrustPromote monopoliesFirst trust = Standard Oil TrustDid not own the companies but did assist themSometimes used violence to formMany antitrust acts were put into effect to eliminate monopolies

Impact on Big BusinessPrices riseQuality of goods decreasesBig- big businesses thrive Big businesses struggleSmall businesses go under StocksAnd the impact on the rise of big businessStock BackgroundsA stock is a share of ownership in a corporation. A corporation sells stock to investors. These stockholders hope to receive dividends which are the shares of a corporations profits.A corporation can use the money invested by stock holders to build a new factory of buy new machines.

DividendsIn return for their investments stock holders hope to receive dividends.A dividend is a share of a corporations profits.To protect their investment, stockholders elect a board of directors to run the corporstion.

RisksStockholders face fewer risks than owners of private business do.If a private business goes bankrupt, the owner must pay all of the debts of the business.By law, stockholders cannot be held responsible for a corporations debts.TrustsWhen the bank industry created investment trusts that held individual securities, trusts could be sold in pools to investors.With multiple pools containing various amounts of money, high ranked investors had the money to buy back stocks and continue the cash flow of newly arisen stock trade.Banks and IndustryBy: Alyssa, Karen, Jess, Will, and ChrisCorporation and BankersSmall factories began to grow as peoples needs increasedRailroads distributed goods nation wideSmall factories then began to closeAmericans thought of new ways to organizes their businessesThe Rise of CorporationAs businesses grew, many became corporationsStock holders hoped to get shares of a corporations profit in return for investmentJ. Piermont MorganMost powerful banker of the 1800sNot only a banker, but used his profits to gain control of large industriesInvested in the stock of troubled corporationsWhen corporations came back, they were voted into the board of directors company

J. Piermont Morgan (cont.)Gained control of most of the nations major rail linesMerged them into one single corporationBecame the head of the United States Steel Company Investment Capital Funding Services1. financing2. debt financing3. technology licensing agreements4. real estate and project financing5. international trade agreements6. joining venture agreements7. private equity placements