Before the Civil War, most manufacturing enterprises were
owned by just a few people working in partnership. Everything had changed by
1900. Big business dominated the economy. Big business would not be possible
without the corporation, an organization owned by many people but treated by
law as though it were a person. The people who own the corporation are called
stockholders because they own shares of ownership called stock. The stock
allows a corporation to raise large amount of money for big projects while
spreading out the financial risk.
Before
the 1830s there were few corporations because entrepreneurs had to convince a
state legislature to issue them a charter. In the 1830s, however, states began
passing general incorporation laws, allowing companies to become corporations
and issue stock without charters from the legislature.
With the
money they raised from selling stock, corporations could invest in new
technologies, hire large work forces and purchase many machines, greatly
increasing their efficiency. This enabled them to achieve economies of scale:
the cost of manufacturing is decreased by producing goods quickly in large
quantities. Some successful examples for the businessmen and their corporations
during that time could be Andrew Carnegie and his steel corporation,
Rockefeller and his oil corporation.
Unclaimed Old Stock Certaficates
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