How did the huge industrial trusts develop in industries such as steel and oil, and what was their effect on the economy?

Toward the end of the 1800s, huge trusts began to form in various industries, including the steel and the oil industries. This occurred in various ways. One factor that influenced the formation of trusts was the benefits of forming a corporation over a non-corporation. With a corporation, businesses can raise money more quickly by selling stock. The owners are also protected from lawsuits. Only the corporation can be sued, not the owners of the corporation.

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Toward the end of the 1800s, huge trusts began to form in various industries, including the steel and the oil industries. This occurred in various ways. One factor that influenced the formation of trusts was the benefits of forming a corporation over a non-corporation. With a corporation, businesses can raise money more quickly by selling stock. The owners are also protected from lawsuits. Only the corporation can be sued, not the owners of the corporation.

Andrew Carnegie and John D. Rockefeller formed huge trusts in their respective industries. Carnegie had a big trust in the steel industry while Rockefeller had a big trust in the oil industry. They would often undersell the competition, forcing the competition to sell their businesses to Carnegie or Rockefeller. By buying out the competition, these men were able to dominate their industries.

The economy was affected by these actions. For consumers, fewer choices are not a good thing. Businesses are able to charge whatever prices they want when there is little or no competition. Workers are often negatively affected because they are working in huge companies. These workers are easily replaced. This makes it hard for them to get better pay and working conditions. The economy is dominated by a handful of influential businessmen. These people often influence major economic decisions because of the power they have.

The development of these trusts helped lead to the start of the Progressive Era. People became upset with the abuses they saw in politics, the economy, and the business world. This led to a series of laws and the development of government agencies to regulate the actions of businesses.