The Railroads in 1870s-1880s: Cooperation to Expand Through Traffic

The integration of many different railroad enterprises into a single na- tional transportation system required the managers to cooperate on three quite different sets of concerns. They had to arrange the physical connec- tion of the many roads; they had to devise uniform operating, accounting, and other organizational procedures; and they had to agree

The Railroads in 1870s-1880s: Cooperation to Control Competition

Before considering the central role that the new transportation system played in revolutionizing the processes of production and distribution, the story of the growth of the first modern business enterprises needs to be carried to its logical conclusion. Although the railroads had by 1880 been integrated into a single national network, the individual enterprises

The Railroads in 1870s-1880s: The Great Cartels

The answer to competition was better cooperation. Formal federations were created, and they were soon to have their own legislative, executive, and judicial bodies. The largest and most powerful of the roads—the trunk lines—were the first to organize formal cartels. The move toward federation came in the summer of 1874, as falling traffic intensified

The Railroads in 1870s-1880s: The Managerial Role

If a central theme can be found in the operation of American railroads during the 1860s and 1870s, it is cooperation. Interfirm cooperation was essential for the creation of an integrated national transportation network. Without such cooperation the standardization of equipment and operating procedures required to move through passengers and freight quickly and efficiently

Top Management Decision Making in the 1880s

The 1850s were a time of building and of learning to manage the railroads as the nation’s first modern business enterprises; the 1860s and 1870s were a period of coordinating and competing for the flows of through traffic; the 1880s and 1890s were the years of system-building. The perfecting of internal organization and the

Building the First Systems in the 1880s

No man had a greater impact on the strategy of American railroads than Jay Gould, the most formidable and best known of the late nineteenth- century speculators. It was Gould who forced the Pennsylvania to abandon its long-held territorial strategy and to build the nation’s first interterritorial railroad empire. And it was Gould who

System-Building in the 1880s

As the decade of the 1880s opened, Jay Gould was embarked on a venture in railroad combination that dwarfed his attempt of more than a decade earlier to expand the Erie. This enterprise was the outcome of his success in 1874 in obtaining the Union Pacific, the road which, with the Central Pacific, formed

Reorganization and Rationalization in the 1890s

It was therefore in the years immediately after 1893 that the investment bankers came to play their most influential role in American railroading. During the 1880s, 75,000 miles of track had been laid down in the United States, by far the greatest amount of railroad mileage ever built in any decade in any part

System-Building in 1880s-1900s: Structures for the New Systems

The managers and financiers who built the systems that came to domi- nate American railroad transportation also collaborated in devising the structures to manage them. The speculators, smaller investors, and larger capitalists contributed little. In the 1880s railroad men employed two al- ternative structures for the management of the huge new consolidated megacorps. One,

System-Building in 1880s-1900s: The Bureaucratization of Railroad Administration

Top management of American railroads remained truncated. The Pennsylvania had created a structure that permitted top managers working as a group to evaluate, coordinate, and allocate resources for the system as a whole. In the centralized form, however, no place existed in which such executives, relieved of day-to-day functional operating activities, could carry out

Completing the Infrastructure: Other Transportation and Communication Enterprises

As the first modern business enterprises, the railroads became the administrative model for comparable enterprises when they appeared in other forms of transportation as well as in the production and distribution of goods. The railroads were highly visible; the American businessman could easily see how they operated. Railroad managers, even at the lowest, the

Transportation: Steamship Lines and Urban Traction Systems

Steam revolutionized ocean-going transportation and the new lines became a significant part of the modern infrastructure, but of all the new forms of transportation and communication, steamship lines had the least impact on the development of modern business enterprise. Steam power began to alter ocean-going transportation in the 1850s, at almost exactly the same

Communication: The Postal Service, Telegraph, and Telephone

A communication revolution accompanied the revolution in trans7 portation. The railroad permitted a rapid increase in the speed and decrease in the cost of long-distance, written communication; while the invention of the telegraph created an even greater transformation by making possible almost instantaneous communication at great distances. The railroad and the telegraph marched across

Completing the Infrastructure: The Organizational Response

The organizational response to the new technologies in communication was comparable to that in transportation. Both came to be operated through modern business enterprises with career middle managers co- ordinating flows and top managers allocating resources. In the railroads, in urban transit enterprises, and to a lesser extent in the telephone and telegraph companies,

Mass Distribution: The Basic Transformation

Transformation in the size and activities of business enterprises came most swiftly in distribution. In the 1840s the traditional merchantile firm, operating much as it had for half a millenium, still marketed and distrib- uted the nation’s goods. Within a generation it was replaced in the sale of agricultural commodities and consumer goods by

Mass Distribution: The Modem Commodity Dealer

The transformation began, as might be expected, in the nation’s most important business—the marketing of farm crops. It came most dra-matically in the distribution of the two great crops, grain and cotton. The railroad and telegraph not only accelerated the movement of those crops to market but also, of equal significance, made possible the

Mass Distribution: The Wholesale Jobber

In somewhat different ways the new instruments of transportation and communication transformed the distribution of manufactured consumer goods as dramatically as they did the marketing of agricultural commodities. The wholesalers were the first to use the modern multiunit enterprise to mass market manufactured and processed goods. The new speed, regularity, and dependability of transportation

Mass Distribution: The Mass Retailer

The wholesalers’ dominance in American distribution peaked in the early 1880s. Although the total number of wholesalers continued to grow, their market share fell off.45 According to Harold Barger’s estimates, $2.4 billion worth of goods went to retailers by way of wholesalers in 1879, and $1.0 billion went directly from manufacturers and processors to

Mass Distribution: The Department Store

Modern department stores appeared almost simul- taneously in many American cities, growing most profusely in New York City—the largest urban market in the nation. In all cities they evolved from much the same sort of background, carried on much the same strate- gies of expansion, and adopted much the same type of internal operating

Mass Distribution: The Mail-Order House

A later and even more direct response to the new transportation and communication infrastructure than the department store was the mail-order house. Both relied, of course, on the railroad and telegraph for the effective operation of their purchasing organizations, but the department store customers came to their counters largely by horse car, carriage, or