The Rise of Big Business (ME) Eric Herber

           At the conclusion of the Civil War in 1865 the economy was in a slump and the country was in need of big businesses to increase the economy. Before the civil war, most of the manufacturing businesses were ran and owned by few people. These small enterprises were ran with high operating costs because they paid high wages, they had high costs for manufacturing plants because they had no stock investors to provide funds for the factories, and they had high costs for raw materials because these small companies had no investors. This is one of the main reasons why, after the Civil War, the expansion of big businesses was so abundant.

The creation of corporations and stock were the key points to success of big business. Corporations provided exactly what companies needed in the late 1800s to become successful. The corporations were owned by many people but it was treated by law as if only one person owned the company; this allowed for the creation of stock and stockholders.  A stockholder is basically a person that gives money to a company in order to own a part of the company. The money given by the stockholders created a much broader financial backbone for the corporations. This investment money allowed the big business to hire a larger workforce, purchase more raw materials, and distribute more products. Some of the main advantages of big business in the late 1800s were the ability to produce more goods cheaply and efficiently, the ability of the companies to continue operating in poor economic times, and the ability of big businesses to exchange discounts from the railroads in order to lessen distribution costs. The success of corporations in difficult economic times led to the closing of many small corporations, this was the only downfall to the rise of big business. The creation of corporations in the late 1800s laid a strong foundation for America which can be seen even in today’s society.