American Economy – From Business to Capitalism (II)

Despite the existence of such operations, railway companies and factories have acquired the necessary capital to expand the regular size, so the joint stock company has become the main organizational form of American business enterprises. Although the number of joint-stock companies established in 1919 was less than one-third of the total number of industrial and commercial enterprises in the country, they employed nearly 90% of wage earners. As an organization form of business enterprises, joint stock companies have several advantages. Allowing companies to substantially increase capital by selling stocks and bonds to many shareholders. Shareholders have limited responsibilities; shareholders are not liable for personal liability for debt or illegal activities of the company. The only risk he has to bear is that if the company is bankrupt, the stock he buys will be worthless. In order to facilitate the sale of shares, shareholders are allowed to choose participate or leave a company. As a business organization, the company also has some drawbacks. Since hundreds or even thousands of shareholders are usually in a decentralized state, the most difficult thing for them is to actually control the directors of the stock company. Operators can deceive shareholders, speculative stocks, and generally cause management errors in joint-stock companies and shareholders knowing nothing.

Oil industry

Click Here For More.The modern oil industry began in the 1950s when refined oil was found to be more radiant than the unrefined oil used at the time, making refined oil a profitable industry. In the first decade of its development, the brutal competition caused the industry to be torn apart, and the time-consuming decline caused by blindly digging methods exacerbated this split. However, in the 1860s, individuals entered the oil refining industry, and this person would have a profound impact on the industry. Moreover, because this person developed the oil industry into a large enterprise, it may be more respected than any other person. This person is John D. Rockefeller. Rockefeller was involved in the business world when he was sixteen, when he worked as an accountant for a manufacturer in Cleveland, Ohio. At the age of twenty, he became a partner at the Clark-Rockefeller Product Distribution Company in Cleveland. That year, he showed his keen sense of business and his ambition to surpass his parents’ income.

In 1871, as a strategic expansion, Rockefeller organized some refineries to support the “front line”, that is, the formation of the well-known Southern Reform Company, and reached an agreement with certain railway companies, all the oil transported by these refineries always give a discount. He also requested that some of the rates quoted by these railway companies be returned to the refinery in the form of rebates. Rockefeller began to enter other refineries in the Cleveland area, suggesting that the oil mill owners would sell their business to him in return, giving them the shares of a standard oil company. Most small oil mill owners realize they have no choice. So by 1872 the standard oil company had annexed almost all of the refineries in the Cleveland area, and the refining business it controlled exceeded one-fifth of all crude oil refining operations in the country.

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