How did railroads try to eliminate competition?
Describe the tactics railroad owners used to eliminate competition. Railroad owners gave discounts to their biggest customers. This forced smaller companies out of buisiness. Railroad owners also started pooling (several railroad companies agreed to divide up the business in an area.
How did railroads abuse their power?
In some cases, the railroads abused their power as a result of too little competition, as when they charged scandalously high fares in places where they exerted MONOPOLY control. Railroads also grouped together to form trusts that fixed rates at artificially high levels.
What effects did competition have on the railroad industry?
What effects did competition have on the railroad industry? rate wars, & lost a lot of money. They also pooled and divided up business in an area.
What did the railroads do to keep their biggest customers?
Large railroads offered discounts called rebates to their biggest customers. Smaller railroads that could not match these prices were often forced out of business. Giving discounts to big customers meant higher rates for other customers who shipped small loads.
What industries benefited from railroads?
The material needs of the railroads helped create several other big industries, such as iron, steel, copper, glass, machine tools, and oil. Soon, Wall Street had to be reorganized into a national money market, capable of handling the enormous capital that was needed to build and operate the railroads.
How did competition between railroads lead to bankruptcy?
Competition among railroads led some into bankruptcy, sunk others heavily in debt, and ignited bitter rate wars. To limit competition, lines operating in the same region sometimes worked out an agreement to share the territory or divide the profit equally at the end of the year.
Why did the railroads invent new management techniques?
Because of their size and complexity, the railroads pioneered new management techniques such as the separation of finance and accounting from operating functions and the development of the first organizational charts that clearly showed the chain of command and responsibility.
How did the federal government regulate the railroads?
Illinois that the authority to regulate railroads engaged in interstate commerce rested with the federal government rather than the states. Congress, which had been investigating the railroads for several years, responded to the decision by passing the Interstate Commerce Act of 1887.
How did railroads contribute to the development of the United States?
Besides making it possible to ship agricultural and manufactured goods throughout the country cheaply and efficiently, they directly contributed to the development of other industries. The railroads were the largest single market for steel, which went into their locomotives and track, and they relied on coal as their principal fuel.