Rise of Corporations

    As industrialization spread, investments became riskier due to intense competition, and more expensive due to higher starting costs of machinery and factories. Business ventures became too much for a single entrepreneur to handle, and the new corporate form of business was established after the Civil War. The corporate form had been used in the past, mostly in the formation of banks and the building of turnpikes and railroads, but now extended to all business fields.

    Many operations were established solely for the purpose of eliminating competition in business. This has been popularly deemed detrimental to industrial development and the public interest.

    In response much legislation has been passed to make illegal those corporate forms that were commonly abused in this manner. The business community was then forced to invent new corporate forms to pursue this end, such as pools, trusts, holding corporations, and mergers.

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