Industrial and Finance Capitalism in America

What is a market?

Any exchange between buyers and sellers.

What is Industrial Capitalism?

Changes in the ways goods are made/manufactured, aiming to lower costs to undercut competition.

What is Finance Capitalism?

Using various techniques to gain control over an industry and eliminate competition, potentially lowering prices below manufacturing costs.

What are the characteristics of the factory system in Industrial Capitalism?

It includes mechanization, assembly/disassembly lines, and division of labor.

How were workers compensated before and after mechanization?

Before mechanization, workers were paid per piece made; after, they were paid by the hour.

What is scientific management?

It involves time and motion studies that break down tasks individuals perform, separating mental work from physical labor.

What did Rockefeller discover about the labor force in barrel making?

He found that many tasks did not require skilled labor, allowing him to alter his labor force to save on costs.

What is horizontal integration?

When companies in the same industry and at the same stage of the supply chain merge or acquire each other.

What is vertical integration?

Joining all areas of one business from raw materials to finished product, as utilized by Carnegie in his steel business.

What is an interlocking directorate?

When directors serve on several Boards of Directors, effectively running the companies together as one.

What is a trust company?

A type of company that was used to create a monopoly but was shut down.

Who was Vanderbilt and how did he build his empire?

He started with a $100 ferry boat, built the largest shipping empire, and later invested in railroads, becoming the richest man in America.

What strategic move did Vanderbilt make with the NYC rail bridge?

He closed the bridge to block access for other railroads, creating a blockade and gaining control over competitors.

How did Vanderbilt acquire control of rival railroads?

He bought up stock at low prices during a crisis, leading to the creation of the largest railroad in America.

What was the Grand Central Project?

A massive construction project that created the biggest building and train station in NYC.

What was the Erie Line and Vanderbilt's interest in it?

The Erie Line was the most valuable route, and Vanderbilt attempted a hostile takeover by buying up its stock.

What was the impact of Vanderbilt's strategies on his competitors?

His tactics bled competitors dry and allowed him to dominate the railroad industry.

What role did Vanderbilt's son play in his business?

William took over after Vanderbilt's son died in the war, but the company became vulnerable without Vanderbilt's leadership.

What is the significance of the line from Chicago to NYC?

It was considered the most valuable railroad line in the world.

What does the term 'hostile takeover' refer to in the context of Vanderbilt's actions?

It refers to Vanderbilt's aggressive acquisition of stock in the Erie Line to gain control.

What was the outcome of Vanderbilt's strategic decisions during his peak?

He became the richest man in America and transformed the railroad industry.

What strategy did Jay Gould and James Fisk use against Vanderbilt regarding Erie Stock?

They printed 100,000 new shares of Erie Stock, diluting Vanderbilt's stock, a tactic known as watering down stock.

How much did Vanderbilt invest in watered-down stock?

Over $7 million.

What industry did Vanderbilt aim to dominate after realizing the potential of kerosene?

The shipping markets of the oil industry.

Who did Vanderbilt team up with to cut Rockefeller's shipping deals?

His rival, Tom Scott.

What was John D. Rockefeller's realization about oil?

He realized that oil would change the world and make him rich.

What advantage did Rockefeller gain in his deals compared to his competitors?

He received exclusive deals and discounts, and rebates if they didn't ship his oil.

How did Rockefeller respond to the issue of bad kerosene burning down houses?

He created a standard for quality oil.

What percentage of the oil supply did Rockefeller control at the height of his power?

90%.

What innovative transportation method did Rockefeller develop for oil?

He built 4000 miles of pipelines to transport oil.

What was the impact of Rockefeller's pipelines on railroad companies?

⅓ of all railroad companies went bankrupt due to the collapse of competition.

How did Rockefeller's actions affect Tom Scott's company?

He stopped oil from going to Scott's Pittsburgh refinery, causing Scott to lose half of his revenue.

What was Andrew Carnegie's initial position in the railroad industry?

He was hired as an assistant to Tom Scott.

What major project did Carnegie undertake at Scott's request?

A bridge spanning the Mississippi River.

What material did Carnegie choose for the bridge and why?

He chose steel for its strength and durability.

Who did Carnegie collaborate with to mass-produce steel?

Henry Bessemer.

What challenge did Carnegie face during the construction of the bridge?

The use of steel was two years behind schedule.

How did Carnegie convince the public of the bridge's strength?

He staged a parade across the bridge led by an elephant.

What was the outcome of the bridge project for Carnegie?

He received many more requests for his steel after the bridge was completed.

What did Rockefeller do to eliminate competition in the oil industry?

He bought out his competitors for next to nothing.

What was the significance of Rockefeller's monopoly in the oil industry?

It created the first monopoly in the oil supply.

How did Rockefeller's strategies impact his wealth compared to Vanderbilt?

He replaced Vanderbilt as the richest man in America.

What was the public perception of Carnegie's bridge after its completion?

The successful completion and public demonstration increased confidence in his steel.

What was a key factor in Andrew Carnegie's business success?

His insistence on quality, using only the best materials and ensuring high standards.

How did Carnegie respond to projects that did not meet his quality standards?

He refused the job, even if it meant losing business.

What did Carnegie believe about maintaining a reputation for quality?

He believed it would lead to greater success in the long run.

What was Carnegie's view on the early years of building a business?

He accepted that they would be difficult and encouraged persistence and hard work.

How did Carnegie ensure efficiency and improvement in his business?

By hiring intelligent people, educating them well, and striving for excellence.

What was the reputation of Carnegie's company, the Keystone Bridge Works?

It was known for reliability, with none of their bridges ever failing.

What unexpected opportunity did Carnegie seize to win a valuable contract?

His company won a contract after a rival's weak cast-iron lamppost broke, showcasing the superiority of Carnegie's wrought iron.

What advice did Carnegie give regarding negotiations?

He advised others to 'stay until you can take the written contract home in your pocket.'

What was Carnegie's approach to business profits?

He focused on building a respected, trustworthy business rather than short-term profits.

Who did Carnegie hire to give him a ruthless edge in business?

Henry Frick.

What was the outcome of Frick's management in Carnegie's company?

Earnings doubled in just two years, allowing them to buy out competitors.

What catastrophic event occurred related to the dam that Frick was urged to strengthen?

A Memorial Day storm caused the lake levels to rise, leading to over 2,000 deaths and 1,600 homes destroyed.

What was the public's perception of Frick after the dam disaster?

He was viewed as responsible for the disaster along with the owner of the Pittsburgh Fishing Club.

What did Frick do to cut costs at the steel mill?

He cut wages and increased working hours to 12 hours a day, 6 days a week.

What was the role of the Pinkerton detective agency in the labor conflict?

They were hired as mercenaries to intimidate the barricaded workers.

What was the outcome of the confrontation between the Pinkertons and the workers?

The Pinkertons opened fire, killing 9 workers and injuring many.

What reminder did the assassination attempt on Frick serve for Carnegie?

It reminded him that Frick was a liability.

What was Carnegie's ambition in relation to Rockefeller?

He wanted to be richer than Rockefeller to avenge Scott.

How did Carnegie's investments impact the production of steel?

He invested millions in a mill outside Pittsburgh to amp up production.

What was the significance of the Cathedral of Performing Arts built by Carnegie?

It escalated the rivalry between Carnegie and Frick.

What was Frick's first assignment upon being hired by Carnegie?

To get Carnegie Steel into shape.

What did Carnegie believe was essential for long-term business success?

A mix of determination, strategic thinking, integrity, and attention to detail.