Glossary
Balance Sheet Statement of a business or institution that lists the assets, debts, and owners' investment as of a specified date.
Bessemer Process Industrial process for the manufacture of steel from molten pig iron. The principle involved is that of oxidation of the impurities in the iron by the oxygen of air that is blown through the molten iron; the heat of oxidation raises the temperature of the mass and keeps it molten during operation. The process is carried on in a large container called the Bessemer converter, which is made of steel and has a lining of silica and clay or of dolomite. The capacity is from 8 to 30 tons of molten iron; the usual charge is 15 or 18 tons. The converter is egg-shaped. At its narrow upper end it has an opening through which the iron to be treated is introduced and the finished product is poured out. The wide end, or bottom, has a number of perforations through which the air is forced upward into the converter during operation. The container is set on pivots so that it can be tilted at an angle to receive the charge, turned upright during the blow, and inclined for pouring the molten steel after the operation is complete. As the air passes upward through the molten pig iron, impurities such as silicon, manganese, and carbon unite with the oxygen in the air to form oxides; the carbon monoxide burns off with a blue flame and the other impurities form slag. Dolomite is used as the converter lining when the phosphorus content is high; the process is then called basic Bessemer. The silica and clay lining is used in the acid Bessemer, in which phosphorus is not removed. In order to provide the elements necessary to give the steel the desired properties, another substance is usually added to the molten metal after the oxidation is completed. The converter is then emptied into ladles from which the steel is poured into molds; the slag is left behind. The whole process is completed in 15 to 20 min. The Bessemer process was superseded by the open-hearth process.
Credit Mobilier The Crédit Mobilier of America scandal of 1872 involved the Union Pacific Railroad and the Crédit Mobilier of America Construction Company. The company Crédit Mobilier of America had been formed by a vice-president of the Union Pacific Railroad, Thomas Durant. The company was designed to limit the liability of stockholders and maximize profits from construction. The company was the sole bidder for certain construction contracts from Union Pacific and in 1864 was given 1,074 km of the Transcontinental Railroad to build, with the hefty fees being paid by federal subsidies. The company also gave cheap shares of stock to those who agreed to support more funding in congress. In 1867 Durant was replaced as head of the firm by Representative Oakes Ames. In that year Ames allowed members of Congress to purchase shares at face rather than market value, the same people who voted the government funds to cover the inflated charges of Crédit Mobilier.
Entrepreneur Person who organizes, operates, and assumes the risk for a business venture
Grafting Graft is the act of a politician personally benefiting from public funds in a way other than prescribed by law. New York's Senator George Washington Plunkitt once famously claimed that there was a difference between "honest" and "dishonest" graft. The classical example of graft is a politician using his knowledge of zoning and decision making to purchase land which he knows his political organization is interested in developing on, and then selling it at a significant profit to that organization. Large gifts from parties within the government also qualify as graft, and most countries have laws against it. (For example, any gift over $200 value made to the President of the United States is considered to be a gift to the Office of the Presidency and not to the President himself. The outgoing President must buy it if he wants to take it with him.)
Holding company A holding company is a company that owns enough voting stock in another firm to control management and operations by influencing or electing its board of directors. Strictly speaking, the term "holding company" might be used to describe any company that owns a majority of shares in another company. Usually, though, the term signifies a company which does not produce goods or services itself, but, rather, whose only purpose owns shares of other companies (or owning other companies outright). Holding companies allow the reduction of risk for the owners and can allow the ownership and control of a number of different companies.
Horizontal Integration When a company expands its business into different products that are similar to current lines. For example, a hot dog vendor expanding into selling hamburgers. Compare this to vertical integration
Interstate Commerce Commission (ICC) Former independent agency of the U.S. government, established in 1887; it was charged with regulating the economics and services of specified carriers engaged in transportation between states. Surface transportation under the ICC's jurisdiction included railroads, trucking companies, bus lines, freight forwarders, water carriers, oil pipelines, transportation brokers, and express agencies.
Kickbacks A return of a percentage of a sum of money already received, typically as a result of pressure, coercion, or a secret agreement.
Monopoly Exclusive control by one group of the means of producing or selling a commodity or service: Monopoly frequently arises from collusive agreements among individuals
Munn v. Illinois Case decided by the U.S. Supreme Court in 1876. Munn, a partner in a Chicago warehouse firm, had been found guilty by an Illinois court of violating the state laws providing for the fixing of maximum charges for storage of grain. He appealed, contending that the fixing of maximum rates constituted a taking of property without due process of law. The Supreme Court upheld the Granger laws, establishing as constitutional the principle of public regulation of private businesses involved in serving the public interest.
Patronage In politics, patronage more narrowly defined is the practice by holders of political office of appointing their followers or fellow party members to positions. For example, those could be high-level posts such as ambassadorship, or lower-level civil service posts. Even blue collar jobs on the government payroll may be sought after.
Political Boss A leader in a political party who controls votes and dictates appointments; party bosses have a reputation for corruption.
Sherman Antitrust Act, 1890 First measure passed by the U.S. Congress to prohibit trusts; it was named for Senator John Sherman. Prior to its enactment, various states had passed similar laws, but they were limited to intrastate businesses. Finally opposition to the concentration of economic power in large corporations and in combinations of business concerns led Congress to pass the Sherman Act. The act, based on the constitutional power of Congress to regulate interstate commerce, declared illegal every contract, combination (in the form of trust or otherwise), or conspiracy in restraint of interstate and foreign trade. A fine of $5,000 and imprisonment for one year were set as the maximum penalties for violating the act.
Scientific management The administration of a business or industry based on experimental studies of efficiency; the application of the principles of the scientific method to managing a business or industry
Social Darwinism The application of Darwinism to the study of human society, specifically a theory in sociology that individuals or groups achieve advantage over others as the result of genetic or biological superiority
Supply And Demand An economic concept which states that the price of an article (or ‘good’) will move to the level where the quantity demanded by purchasers equals the quantity that suppliers are willing to sell.
Transcontinental RR A transcontinental railroad is a railway that crosses a continent, typically from "sea to sea". Terminals are at or connected to different oceans. Because Europe is criss-crossed by railroads, railroads within Europe are usually not considered, the Orient Express perhaps being an exception.
Trust A combination of firms or corporations for the purpose of reducing competition and controlling prices throughout a business or an industry.
Tycoon A wealthy and powerful businessperson or industrialist; a magnate
Vertical Integration When a company expands its business into areas that are at different points of the same production path. For example, a car company that is expanding into tire manufacturing. A company such as this is often referred to as vertically integrated.
Wabash Case Popular name for Wabash, St. Louis & Pacific Railroad Company v. Illinois, decided by the U.S. Supreme Court in 1886. The decision narrowed earlier ones favorable to state regulation of those phases of interstate commerce upon which Congress itself had not acted. The court declared invalid an Illinois law prohibiting long- and short-haul clauses in transportation contracts as an infringement on the exclusive powers of Congress granted by the commerce clause of the Constitution. The result of the case was denial of state power to regulate interstate rates for railroads, and the decision led to creation of the Interstate Commerce Commission
World's Fair Is the generic name for various large expositions held since the mid 19th century