[Regents Prep U.S. History] Reform: Industrial Reform

Business Organization
Conglomerate	A group of unrelated business owned by a single corporation.
Pool	Competing companies that agree to fix prices and divide regions among members so that only one company operates in each area.
Trust	Companies in related fields agree to combine under the direction of a single board of trustees, which meant that shareholders had no say.
Holding Company	A company that buys controlling amounts of stock in related companies, thus becoming the majority shareholder, and holding considerable say over each company's business operations.

Business Philosophy
The idea that the government should not interfere with economic development, or specific businesses, is known as Laissez-faire. This idea originated with British economist Adam Smith and was published in 1776 in The Wealth of Nations. He believed that the laws of supply and demand, combined with profit motive, would be the most efficient type of economy. Many business leaders in the 1800s echoed these sentiments and wanted the government to leave their businesses alone.

Two social philosophies also seemed to support laissez-faire capitalism. Horatio Alger wrote popular fictional books in which the protagonist poor boys became wealthy through their honesty and hard work. These novels demonstrated the idea of the Puritan Work Ethic which was introduced by the Puritans during the Colonial Era. This ethic held that hard work was its own reward and built character.

Social Darwinism stated that success in society was determined by "survival of the fittest." This interpretation of Charles Darwin's theory caused many to believe that the poor were deceitful and lazy, while the rich were honest and hard-working. This also explained how healthy businesses thrived while unhealthy ones went bankrupt.

As the rich became wealthier, and the poor more so, people began to question these philosophies, and some even attacked leading industrialists calling the Robber Barons, while others maintained that they were Captains of Industry.

Government Involvement
Eventually a grass-roots movement to combat the abuses of business was formed from the farmers' social organization called the Grange. During their informal meetings, members of the Grange discovered that many of their group were being charged enormous amounts by the railroad companies for short hauls, while big businesses like Standard Oil were receiving rebates where they were charged less for long hauls. Through the use of bloc-voting, this group was able to get candidates elected to state legislatures who supported railroad reform legislation. These state laws were eventually challenged in Supreme Court, eventually forcing the Federal Government to pass regulatory legislation.

Populism
Farmers decided to more formally organize their political views and in doing so founded the Populist Party. This third political party was largely unsuccessful, but introduced ideas that were later adopted by the Republican and Democratic parties during the Progressive Era.

Planks in the Populist Party Platform
Direct Election of U.S. Senators	Party bosses controlled state legislatures that elected representatives to the U.S. Senate. To limit this control, the Populists proposed allowing citizens to directly elect U.S. Senators.
Secret Ballot	Privacy at the ballot box would ensure that citizens can cast votes without party bosses knowing how they voted.
Initiative	Would allow voters to petition state legislatures in order to consider a bill desired by citizens.
Referendum	Would Allow voters to decide if a bill or proposed amendment should be passed.
Recall	Would allow voters to petition to have an elected representative removed from office.
Direct Primary	Designed to ensure that voters select candidates to run for office, rather than party bosses.

The demise of the Populist Party after the election of 1896 symbolized how the United States had changed from an agrarian economy to an industrial one. The emerging Middle Class had concerns that differed from those of the farmers.