Limited Liability/The Gilded Age
Trust
A business entity formed with intent to monopolize business, to restrain trade, or to fix prices. A trust was created when corporate leaders convinced (or coerced) the shareholders of all the companies in one industry to convey their shares to a board of trustees, in exchange for dividend-paying certificates.
Robber baron
A businessman or banker who used questionable business practices to become powerful or wealthy. Popularized by Matthew Josephson in 1934. The theme was popular during the Great Depression amid public scorn for big business.
Corporation
A legal entity having its own privileges and liabilities distinct from those of its members.
The Progressive Era
A major period of reform following the Gilded Age.
The Gilded Age
Lasted from 1870-1900. The name came from the title of a Mark Twain book. "Gilded" means covered with gold on the outside, but not really golden on the inside. A period of rapid economic growth but also much social conflict. America's industrial economy exploded. National wealth increased more than fivefold. Large disparity between the rich and the poor. Andrew Carnegie and John D. Rockefeller revolutionized business and ushered in the modern corporate economy,
Limited Liability
Shareholders are not liable for the debts of their company. Before limited liability, few people invested their capital in shares of stock. In 1811 New York state passed a limited-liability law for manufacturing companies. Companies located there from other states. Soon every state had one, and England did too.
Definition of Gilded Age
The era of rapid economic and population growth in the United States during the post-Civil War and post-Reconstruction eras of the late 19th century. The term "Gilded Age" was coined by Mark Twain and Charles Dudley Warner in their book The Gilded Age: A Tale of Today. The name refers to the process of gilding an object with a superficial layer of gold and is meant to make fun of ostentatious display while playing on the term "golden age. This period also witnessed the creation of a modern industrial economy. A national transportation and communication network was created, the corporation became the dominant form of business organization, and a managerial revolution transformed business operations.
Laissez-Faire
Transactions between private parties are free from state intervention, including restrictive regulations, taxes, tariffs and enforced monopolies. French for "let it be", or "leave it alone."
Monopoly
When a specific person or enterprise is the only supplier of a particular commodity. A lack of economic competition to produce the good or service and a lack of viable substitute goods.
