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American History Terms

1. Government role in RR building- Congress was impressed by


arguments supporting military and postal needs and began to advance
liberal money loans to two favored cross- continent companies in 1862
and added enormous donations of land and tracks. Within the routes the
RRs were allowed to choose alternate mile- square sections in
checkerboard fashion
2. Significance of Transcontinental RR- A magnificent engineering featmost impressive peacetime undertakings. Welded West Coast firmly to
the Union. Facilitated flourishing trade with Asia. Stimulated growth with
the West. Architectural feat- increased nationalism. Huge fortunes, jobs.
3. Stock watering - favorite device of the moguls of manipulation.
Originally meant the practice of making cattle thirsty by feeding them
salt and then having them bloat themselves with water before they
weighed in for sale. Using a variation of this, RR stock promoters
grossly inflated their claims about a given lines assets and profitability
and sold stocks and bonds far in excess of the RRs actual value.
4. Secret Rebates kickbacks given to powerful shippers in return for
steady and assured traffic- not given to everyone. Often slashed prices
on competing lines, but more often mad up the difference on
noncompeting ones
5. Wabash Case - 1886 Supreme Court ruled that said individual states
had NO power to regulate interstate commerce. This would be done by
the federal govt
6. Interstate Commerce Act - Prohibited rebates and pools and required
the railroads to publish their rates openly. Forbade discrimination
against shippers and outlawed charging more for a short haul than for a
long one over the same line. Created Interstate Commerce Commission
(ICC) to enforce and administer the new legislation. It did not really beat
corporate wealth, but it did provide a forum where businesses could
resolve their conflicts peaceably.
7. Vertical and Horizontal integration - vertical integration was combining
into one organization all phases of manufacturing from obtaining raw
materials to marketing. It made supplies more reliable, controlled the
quality of product at all states of production, and cut out middlemens

fees and was perfected by Carnegie. Horizontal integration was


consolidating with competitors to monopolize a given market, used a lot
by Rockefeller.
8. Trusts benefits Gave consumers a superior product at a relatively
cheap price. The efficient use of expensive machinery called large-scale
production and consolidation proved more profitable than ruinous price
wars.
9. Sherman Anti-Trust Act 1890 forbade combinations in restraint of
trade, without any distinction between good and bad trusts.
Ineffective, because it contained many loopholes for corporate lawyers.
It curbed labor unions or labor combinations that were deemed to be
restraining trade. Not until 1914 were Sherman Act give some power to
regulate trusts.
10. Strength of corporations over unions - Corporations used lawyers,
local press, and pressured politicians to fight unions. Federal courts
could be called upon to put injunction to stop strike. Lockouts lock
doors against rebellious workers until they were starved into
submission. They used ironclad oaths or yellow dog contracts could
not join labor union. Blacklist name of agitators sent among fellow
employers. Employ scabs or thugs to beat up labor organizers.