Chapter 12 Vocabulary
1. Gross national product: the total value of all goods & services that a country produces
2. Laissez-faire: a French phrase meaning “let people do as they choose” –supports of laissezfaire believe the government should not interfere in the economy other than to protect
private property rights & maintain peace
3. Entrepreneur: one who undertakes and assumes the risk of a business enterprise; contractor
4. Edwin Drake: also known as Colonel Drake, was an American oil driller, popularly credited
with being the first to drill for oil in the United States.
5. Alexander Graham Bell: American scientist (born in Scotland) who invented the telephone
6. Thomas Alva Edison: was an American inventor and businessman. He developed many
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devices that greatly influenced life around the world, including the phonograph, the motion
picture camera, and a long-lasting, practical electric light bulb. Dubbed "The Wizard of Menlo
Park" (now Edison, New Jersey) by a newspaper reporter, he was one of the first inventors to
apply the principles of mass production and large-scale teamwork to the process of invention,
and because of that, he is often credited with the creation of the first industrial research
laboratory.
Morrill Tariff: was a high protective tariff in the United States, adopted on March 2, 1861,
during the administration of President James Buchanan, a Democrat. It was a key element of
the platform of the new Republican Party, and it appealed to industrialists and factory workers
as a way to foster rapid industrial growth by limiting competition from lower-wage industries
in Europe. It had been opposed by cotton planters, but they had mostly left the United States
Congress when it was finally passed.
Time zone: one of the twenty-four different regions on Earth determined by longitude and
that determine one hour intervals in local time (to make rail service safer & more reliable)
Land grant: parcels of land granted to railroad companies to help them raise money to build
the railroads
Pacific Railroad Act: law enacted in 1862 which created the Union Pacific Railroad Company
and authorized the building of a railroad to connect the western and eastern United States
(U.S. History)
Grenville Dodge: was a Union army officer on the frontier and during the Civil War, a U.S.
Congressman, businessman, and railroad executive who helped construct the Transcontinental
Railroad.
12. Leland Stanford: was an American tycoon, industrialist, politician and founder of Stanford
University. Migrating to California from New York at the time of the Gold Rush, he became a
successful merchant and wholesaler, and continued to build his business empire. He served
one two-year term as Governor of California after his election in 1861, and later eight years as
Senator from the state. As president of Southern Pacific and, beginning in 1861, Central
Pacific, he had tremendous power in the region and a lasting impact on California.
13. Cornelius Vanderbilt: also known by the sobriquet Commodore, was an American
industrialist and philanthropist who built his wealth in shipping and railroads. He was also the
patriarch of the Vanderbilt family and one of the richest Americans in history. He provided
the initial gift to found Vanderbilt University, which is named in his honor.
14. Jay Gould: was a leading American railroad developer and speculator. He has long been
vilified as an archetypal robber baron, whose successes made him the ninth richest American
in history. Condé Nast Portfolio ranked Gould as the 8th worst American CEO of all time.
Some modern historians working from primary sources have discounted various myths about
him.
15. Credit Mobilier: was a French banking company, and one of the most important financial
institutions of the world during the 19th century. It had a major role in the financing of
numerous railroads and other infrastructure projects in Europe, North Africa and the Middle
East by mobilizing the savings of middle class French investors as capital for vast lending
schemes. The Crédit Mobilier investments created vast debts for the countries which accepted
these infrastructure loans, however, and was thus involved indirectly with the European
occupations of countries the governments of which defaulted on these loans during the
worldwide economic depression of the 1870s.
16. James J. Hill: was a Canadian-American railroad executive. He was the chief executive officer
of a family of lines headed by the Great Northern Railway, which served a substantial area of
the Upper Midwest, the northern Great Plains, and Pacific Northwest. Because of the size of
this region and the economic dominance exerted by the Hill lines, Hill became known during
his lifetime as The Empire Builder.
17. Corporation: is created under the laws of a state as a separate legal entity that has privileges
and liabilities that are distinct from those of its members. There are many different forms of
corporations. Many corporations are established for business purposes but public bodies,
charities and clubs are often corporations as well. Corporations take many forms including:
statutory corporations, corporations sole, joint-stock companies and cooperatives. An
important (but not universal) contemporary feature of a corporation is limited liability. If a
corporation fails, shareholders may lose their investments, and employees may lose their jobs,
but neither will be liable for debts to the corporation's creditors.
18. Stock: The capital stock (or simply stock) of a business entity represents the original capital
paid into or invested in the business by its founders. It serves as a security for the creditors of a
business since it cannot be withdrawn to the detriment of the creditors. Stock is different
from the property and the assets of a business which may fluctuate in quantity and value.
19. Economies of Scale: refers to the cost advantages that an enterprise obtains due to expansion.
There are factors that cause a producer’s average cost per unit to fall as the scale of output is
increased. "Economies of scale" is a long run concept and refers to reductions in unit cost as
the size of a facility and the usage levels of other inputs increase. Diseconomies of scale is the
opposite.
20. Pool: to stop prices from falling, many companies organized pools, or agreements, to keep
prices at a certain level
21. Vertical integration: describes a style of management control. Vertically integrated companies
in a supply chain are united through a common owner. Usually each member of the supply
chain produces a different product or (market-specific) service, and the products combine to
satisfy a common need. It is contrasted with horizontal integration. Vertical integration has
also described management styles that bring large portions of the supply chain not only
under a common ownership, but also into one corporation (as in the 1920s when the Ford
River Rouge Complex began making much of its own steel rather than buy it from suppliers).
22. Horizontal integration: combining firms in the same business into one large corporation
23. Monopoly: exclusive control of a commodity or service in a particular market; total access or
privilege to the exclusion of competitors
24. Trust: monopoly, several companies banded together in order to reduce competition;
custody, safekeeping
25. Holding company: is a company or firm that owns other companies' outstanding stock. The
term usually refers to a company which does not produce goods or services itself; rather, its
purpose is to own shares of other companies. Holding companies allow the reduction of risk
for the owners and can allow the ownership and control of a number of different companies.
In the US, 80% or more of stock, in voting and value, must be owned before tax
consolidation benefits such as tax-free dividends can be claimed.
26. Andrew Carnegie: was a Scottish-American industrialist who led the enormous expansion of
the American steel industry in the late 19th century. He was also one of the most important
philanthropists of his era.
27. John D. Rockefeller: was an American industrialist and philanthropist. He was the founder of
the Standard Oil Company, which dominated the oil industry and was the first great U.S.
business trust. Rockefeller revolutionized the petroleum industry and defined the structure of
modern philanthropy. In 1870, he founded the Standard Oil Company and aggressively ran it
until he officially retired in 1897. Standard Oil began as an Ohio partnership formed by John
D. Rockefeller, his brother William Rockefeller, Henry Flagler, Jabez Bostwick, chemist
Samuel Andrews, and a silent partner, Stephen V. Harkness. As kerosene and gasoline grew in
importance, Rockefeller's wealth soared, and he became the world's richest man and first
American worth more than a billion dollars. Adjusting for inflation, he is often regarded as
the richest person in history.
28. Deflation: decrease in the quantity of money in circulation, increase in buying power,
decrease in prices
29. Trade union: is an organization of workers that have banded together to achieve common
goals such as higher pay, increasing the number employees an employer hires, and better
working conditions. The trade union, through its leadership, bargains with the employer on
behalf of union members ( members) and negotiates labour contracts (collective bargaining)
with employers. The most common, but by no means only, purpose of these organisations is
"maintaining or improving the conditions of their employment".
30. Industrial union: is a labor union organizing method through which all workers in the same
industry are organized into the same union—regardless of skill or trade—thus giving workers
in one industry, or in all industries, more leverage in bargaining and in strike situations.
Advocates of industrial unionism value its contributions to building unity and solidarity,
suggesting the slogans, "an injury to one is an injury to all" and "the longer the picket line,
the shorter the strike."
31. Blacklist: list containing the names of people who are considered to be untrustworthy (or
unhirable, undesirable, guilty of some action, etc.)
32. Lockout: refusal of an employer to give work to his employees until they have collectively
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agreed to his terms
Arbitration: a form of alternative dispute resolution (ADR), is a legal technique for the
resolution of disputes outside the courts, where the parties to a dispute refer it to one or
more persons (the "arbitrators", "arbiters" or "arbitral tribunal"), by whose decision (the
"award") they agree to be bound. It is a resolution technique in which a third party reviews the
evidence in the case and imposes a decision that is legally binding for both sides and
enforcable.
Injunction: court order ordering someone to do or refrain from doing something (Law);
command, order
Closed shop: is a form of union security agreement under which the employer agrees to hire
union members only, and employees must remain members of the union at all times in order
to remain employed.
Marxism: is an economic and sociopolitical worldview and method of socioeconomic inquiry
that centers upon a materialist interpretation of history, a dialectical view of social change,
and an analysis and critique of the development of capitalism. Marxism was pioneered in the
early to mid 19th century by two German philosophers, Karl Marx and Friedrich Engels.
Marxism encompasses Marxian economic theory, a sociological theory and a revolutionary
view of social change that has influenced political movements around the world.
Knights of labor: was the largest and one of the most important American labor
organizations of the 1880s. Its most important leader was Terence V. Powderly. The Knights
promoted the social and cultural uplift of the workingman, rejected Socialism and radicalism,
demanded the eight-hour day, and promoted the producers ethic of republicanism. In some
cases it acted as a labor union, negotiating with employers, but it was never well organized,
and after a rapid expansion in the mid-1880s, it suddenly lost its new members and became a
small operation again
38. American Federation of Labor: was one of the first federations of labor unions in the United
States. It was founded in Columbus, Ohio in December 1886 by an alliance of craft unions
disaffected from the Knights of Labor, a national labor association. Samuel Gompers of the
Cigar Makers' International Union was elected president of the Federation at its founding
convention and was reelected every year except one until his death in 1924
39. Samuel Gompers: was an English-born American cigar maker who became a labor union
leader and a key figure in American labor history. Gompers founded the American Federation
of Labor (AFL), and served as that organization's president from 1886 to 1894 and from 1895
until his death in 1924. He promoted harmony among the different craft unions that
comprised the AFL, trying to minimize jurisdictional battles. He promoted "thorough"
organization and collective bargaining to secure shorter hours and higher wages, the first
essential steps, he believed, to emancipating labor. He also encouraged the AFL to take
political action to "elect their friends" and "defeat their enemies." During World War I,
Gompers and the AFL openly supported the war effort, attempting to avoid strikes and boost
morale while raising wage rates and expanding membership.