AH 3

arbitration (Content Vocabulary)

settling a dispute by agreeing to accept the decision of an impartial outsider

Lockout: (Potential Short Answer)

* a company tool to fight union demands by refusing to allow employees to enter its facilities to work * no work = no pay * used by companies to keep workers from forming unions * workers who were locked out were replaced by workers who took oaths or signed contracts promising not to join a union * efforts to break unions often succeeded because there were no laws giving workers the right to form unions or requiring owners to negotiate with them * courts frequently ruled that strikes were "conspiracies in restraint of trade"

Deflation: (Potential Short Answer)

* a decline in the volume of available money or credit that results in lower prices, and therefore increases the buying power of money * industrialism led to a dramatic rise in the standard of living * the average worker's wages rose by 50% * deflation caused prices to fall, which increased the buying power of worker's wages * companies cut wages regularly in the late 1800s (since the buying power increased) * workers resented getting less money so they began to form unions * unions bargained for higher wages and better working conditions

Land Grant: (Potential Short Answer)

* a grant of land by the federal government, especially for roads, railroads, or agricultural colleges * most private investors could not raise the money needed to build railroads, so the federal government gave land grants to many railroad companies * companies sold the land to raise money for construction * unfortunately, misuse and even abuse of the government's generosity occurred * accusations of swindling investors and taxpayers and bribing officials were common * to get more grants, some investors began bribing members of Congress (e.g., The Credit Mobilier Scandal)

Economies of Scale: (Potential Short Answer)

* the reduction in the cost of a good brought about especially by increased production at a given facility * economies of scale was achieved by corporations who invested in new technologies, hired large workforces, and purchased new machines for mass production * corporations who achieved economies of scale could produce more goods at a lower cost and could stay open in bad economic times by cutting prices to increase sales * small businesses that could not compete with large corporations were forced out of business

Monopoly: (Potential Short Answer)

* total control of a type of industry by one person or one company * a company can achieve a monopoly by way of forming pools, vertical integration, horizontal integration, forming a trust or by creating holding companies * companies organized pools to keep prices at a certain level (they were trying to keep prices from falling) * vertical integration occurs when a company owns all parts of the industrial process * horizontal integration occurs when a company grows by buying its competitors * a trust is a combination of firms or corporations, formed by a legal agreement, especially to reduce competition * a holding company is a company whose primary business is owning a controlling share of stock in other companies * Rockefeller's Standard Oil company controlled about 90% of the U.S oil refining industry, nearly a monopoly

Laissez-Faire: (Potential Short Answer)

*a policy that government should interfere as little as possible in the nation's economy *laissez-faire economics helped the U.S. industrialize *supporters believe that government should not interfere in the economy other than to protect property rights and maintain peace supporters believe government regulation of the economy increases costs and hurts society more than it helps *an economic system with little or no government regulation is known as a free enterprise system *laissez-faire relies on supply and demand to regulate wages and prices *supporters believe that competition promotes efficiency and wealth *they advocate low taxes and limited government debt

Gross National Product (GNP): (Potential Short Answer)

*the total value of goods and services produced by a county in a single year *As the U.S. industrialized, its GNP rose dramatically *GNP is one of the measures by which nations are ranked *Industrialized nations generally have a higher GNP than those that are not industrialized *GNP divided by the number of people within a nation = GNP per capita

What is a corporation, who owns it, and how does it raise capital? (Potential Essay)

A corporation is an organization that is authorized by law to carry on an activity but treated as though it were a single person. Stockholders own corporations through shares of ownership called stock. Selling stock allows a corporation to raise money while spreading out the financial risk. With the money raised from selling stock, corporations could invest in new technologies, hire large workforces, and purchase machines. This greatly increased their efficiency. They achieved economies of scale, in which the cost of manufacturing is decreased by producing goods quickly in large quantities. Examples of corporations today include Apple, Microsoft, McDonalds, Home Depot, Amazon, and Google.

List and explain at least three (3) ways business leaders in the 1800s tried to eliminate competition. (Potential Essay)

Business leaders in the 1800s tried to eliminate competition by forming pools, trusts, monopolies, and through vertical and horizontal integration. Many companies organized pools to keep prices at a certain level, that is, they tried to keep prices from falling. Some companies formed trusts. A trust is a combination of firms or corporations formed by a legal agreement, especially to reduce competition. A monopoly is achieved when a company has total control of a type of industry. A company that is vertically integrated owns all parts of the industrial process. By doing so, these companies found it easier to control costs. Companies that are horizontally integrated have grown by buying its competitors. All of the aforementioned are ways companies or corporations have tried to control costs and eliminate competition.

Why do companies form pools? Implications for other businesses? (Potential Test Questions)

Companies formed pools or other arrangements to keep prices at a certain level, to keep prices from falling. Businesses who were not part of the pool often found it difficult to compete and eventually went out of business.

What caused the breakup of business pools? (Potential Test Questions)

Companies that formed pools had no legal protection and could not enforce their agreements in court. Pools generally did not last long, as one member inevitably cut prices to steal market share from the others.

What are some tactics companies used to break up unions? (Potential Test Questions)

Companies used several tactics to break up unions. Companies required workers to take oaths or sign contracts promising not to join a union. They hired detectives to identify union organizers. Workers who tried to organize a union or strike were fired and placed on a blacklist - a list of "troublemakers" - so no company would hire them. Companies used lockouts; they locked workers out of the property and refused to pay them. If the union called a strike, employers would hire replacements, or strikebreakers.

What is the difference between department stores and chain stores? (Potential Test Questions)

Department stores are generally large buildings that offer many services and products. Chain stores are groups of retail outlets owned by the same company. In contrast to department stores, chain stores focus on low prices.

What is economies of scale? How is it achieved? (Potential Test Questions)

Economies of scale is the reduction in the cost of a good brought about especially by increased production at a given facility. Corporations invested in new technologies, hired large workforces, and purchased new machines to achieve economies of scale, producing goods quickly in large quantities.

How did employers generally view unions? Why? (Potential Test Questions)

Employers generally viewed unions as conspiracies that interfered with property rights. The courts, generally, ruled in favor of the employers since unions did not have a legal basis to exist.

Which unions generally failed during the late 1800s? Why? (Potential Test Questions)

Industrial unions generally failed during the late 1800s because workers could be easily replaced since they lacked specialized skills. In contrast, employers had to negotiate with trade unions because the unions represented workers whose skills they needed.

What does laissez-faire rely on to regulate prices and wages? (Potential Test Questions)

It relies on supply and demand to regulate wages and prices. Supporters believe that competition promotes efficiency and wealth. They advocate low taxes and limited government debt.

The American oil industry was built on the demand for what product? (Potential Test Questions)

It, which began in western Pennsylvania, was built on the demand for kerosene, a fuel used in lanterns and stoves.

Why did many members of Congress believe that tariffs were necessary? (Potential Test Questions)

Members of Congress believed that tariffs (a tax on imported goods) were necessary in order to protect new American industries and businesses from foreign competition. The ultimate goal was to get Americans to purchase products made by American companies.

Did most unions in the late 1800s admit women? Why or why not? (Potential Test Questions)

Most unions excluded women. Women were paid less than men even when they performed the same jobs. It was assumed that a woman had a man helping support her. Having women in the workforce did not increase wages; therefore, most unions excluded them.

What was the dominant union of the late 1800s? (Potential Test Questions)

The American Federation of Labor (AFL) was the dominant labor organization of the late 1800s. The AFL focused on promoting the interests of skilled workers.

Why was the U.S. able to industrialize so rapidly? (Potential Test Questions)

The U.S. had an abundance of raw materials, a large workforce, and new inventions and technologies so it was able to industrialize quickly.

Who were some robber barons? Why were they called robber barons? (Potential Test Questions)

The great wealth accumulated by railroad entrepreneurs, such as Jay Gould, led to accusation of swindling investors and taxpayers and bribing officials. Robber barons is a term used to describe industrialists who grew wealthy unethically.

monopoly (Content Vocabulary)

Total control of a type of industry by one person or one company

gross national product (GNP) (Content Vocabulary)

The total value of goods and services produced by a country during a year

What two railroad companies built the transcontinental railroad? (Potential Test Questions)

The two corporations that built the transcontinental railroad are the Union Pacific and the Central Pacific. The government offered each company land along its right-of-way.

How did the government encourage the building of the transcontinental railroad? (Potential Test Questions)

They encouraged the building of the transcontinental railroad by passing the Pacific Railway Act in 1862 and by offering land to railroad companies for every mile of track laid by that railroad company.

What is the difference between vertical and horizontal integration? (Potential Test Questions)

Vertical integration occurs when a company owns all parts of the industrial process. Horizontal integration occurs when a company grows by buying its competitors.

trust (Content Vocabulary)

a combination of firms or corporations formed by a legal agreement, especially to reduce competition

lockout (Content Vocabulary)

a company tool to fight union demands by refusing to allow employees to enter its facilities to work

holding company (Content Vocabulary)

a company whose primary business is owning a controlling share of stock in other companies

injunction (Content Vocabulary)

a court order whereby one is required to do or to refrain from doing a specified act

deflation (Content Vocabulary)

a decline in the volume of available money or credit that results in lower prices, and therefore increases the buying power of money

time zone (Content Vocabulary)

a geographic region in which the same standard time is kept

land grant (Content Vocabulary)

a grant of land by the federal government, especially for roads, railroads, or agricultural colleges

laissez-faire (Content Vocabulary)

a policy that government should interfere as little as possible in the nation's economy

closed shop (Content Vocabulary)

an agreement in which a company agrees to hire only union members

industrial union (Content Vocabulary)

an organization of common laborers and craft workers in a particular industry

corporations (Content Vocabulary)

an organization that is authorized by law to carry on an activity but treated as though it were a single person

entrepreneur (Content Vocabulary)

one who organizes, manages, and assumes the risks of a business or enterprise

What do laissez-faire supporters advocate? (Potential Test Questions)

supporters believe that government should not interfere in the economy other than to protect property rights and maintain peace. They believe that government regulation of the economy increases costs and eventually hurts society more than it helps. An economic system with little or no government regulation is known as a free enterprise system.

What happened to the prices of many products as the U.S. became an industrial nation? Why? (Potential Test Questions)

the prices of products generally decreased as they were being mass-produced.

economies of scale (Content Vocabulary)

the reduction in the cost of a good brought about especially by increased production at a given facility