Summary on “The Emergence of Big Business” by Mansel G. Blackford

Blackford begins this article by describing an 1841 train crash where two trains collided head on. This crash killed 2 people and injured many others and showed how unorganized the railroad system was. He goes on to show that the railroad business was not like any other businesses at the time. The railroad business employed hundreds to thousands more people than even the biggest textile mills. Also, different railroad companies were spotted across the US and had to communicate so a disaster like the one Blackford described could be prevented. So, what is the railroad business to do? The answer is bureaucracy, the first business bureaucracy in American history.

Many of the railroad companies were began with the help of the military. So, most of the companies based their company’s organization on the organization of the military. The company was organized into a hierarchical system where the conductors and employees that dealt with the operation of the train reported to a middle manager over a specific railroad. This middle manager would then report to the top management so they could, with the top management from other companies, organize the whole railroad system.

Since the railroad business was comparably different to other large companies at the time, it needed a new way to account for its funds. Most other companies at this time used a different form of accounting that did not correlate well with how the railroad business ran. To answer this need, the railroad companies started the use of cost accounting to account for capital being made by the company. This cost accounting is just one of the accounting that most companies use today to assess how lucrative the company is.

The railroad company became the first big business in the United States. It was also the first business to control the prices on what it provided rather than the allowing the market to control the price. The railroad business grew from many different companies to an organized monopoly that controlled transportation for the next century.

Word Count: 337

Other Sources

https://www.loc.gov/collections/railroad-maps-1828-to-1900/articles-and-essays/history-of-railroads-and-maps/the-beginnings-of-american-railroads-and-mapping/
https://www.youtube.com/watch?v=r6tRp-zRUJs 3:25-5:04

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