9/25 (history) US History: Industrialization and Frontier Settlement

Rise of Trusts and Cartels

  • Definition: A "trust" or "cartel" refers to companies working together, often to control a market or industry.

  • Impact on Small Businesses: While it was easy to start a business, the rise of trusts created a significant disadvantage for small producers.

  • Andrew Carnegie's Example (Vertical Integration):

    • Carnegie, a prominent figure in the steel industry, owned his entire supply chain, including iron mines and railroads.

    • This vertical integration allowed him to drastically lower his costs because he didn't have to pay for shipping once his railroads were paid off, effectively shipping for free.

    • His competitors, lacking this integrated system, incurred higher costs by having to pay for railroad shipments, putting them at a severe disadvantage.

  • Standard Oil Trust (John D. Rockefeller - Horizontal Integration):

    • Legal Problem: Under Ohio law, Rockefeller's Standard Oil company could not legally own property in multiple states.

    • Solution: To circumvent this, they formed a trust, enabling Standard Oil to acquire and control various oil companies across different states.

    • Structure of a Trust: All the combined oil companies, though legally separate entities, were governed by a single board of directors (Standard Oil's board).

    • Strategic Advantage: This allowed them to act as a unified force, coordinating efforts to eliminate competition (e.g., buying out or driving small producers out of business).

    • Legal Headquarters: To further insulate the trust, Standard Oil's official board meetings and legal headquarters were initially established in New York and later moved to New Jersey, a state with more favorable corporate laws.

    • Long-Term Impact: Trusts like Standard Oil were instrumental in the development of the large, powerful corporations seen in America today, characterized by significant horizontal and vertical integration.

    • Pervasiveness: Such consolidations and trust formations were commonplace across nearly every industry in America during this period.

Settlement of the Great Plains: Challenges

  • Incentives for Settlement: People were encouraged to move west by the promise of free or very cheap land under policies like the Homestead Act and the Preemption Act.

  • Environmental Difficulties: The Great Plains presented a starkly different and much harsher environment than the East, particularly in areas like Western Kansas or Western Nebraska.

    • Climate: Characterized by tough weather and a predominantly dry climate.

    • Forestry: A significant lack of trees, contrasting sharply with the forested Eastern regions that settlers were accustomed to.

  • Natural Disasters - Grasshopper Plagues:

    • Historical Occurrence: Infamous plagues of grasshoppers swept through the plains in the 1870s1870s.

    • Visual Impact: Described as resembling