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Question

Difficulty: MediumRise of Industrial Capitalism and Business Consolidation

"The individual business man is a thing of the past. The time has come for combinations of capital and of effort. The day of the individual has gone, never to return. Combination is here to stay, and it has brought with it great benefits in the cheapening of production and the improvement of products. The Standard Oil Company is a representative of this new order of business..."
— Testimony of John D. Rockefeller before the House of Representatives Committee on Manufactures, 1888

Which of the following actions by the federal government in the late nineteenth century most directly supported the growth of the 'new order of business' described in the excerpt?

  1. Providing land grants to railroads and maintaining high protective tariffs on imported goodsAnswer
  2. B
    Adhering strictly to laissez-faire principles by refusing to intervene in labor disputes or market competition
  3. C
    Enforcing the Sherman Antitrust Act aggressively to break up holding companies and trusts
  4. D
    Implementing a silver-standard monetary policy to increase the money supply for industrial expansion

Answer

Providing land grants to railroads and maintaining high protective tariffs on imported goods
The correct answer is correct because the federal government actively supported industrial growth and business consolidation through policies like the Pacific Railway Acts (which provided land grants and loans to transcontinental railroad companies) and high protective tariffs (such as the McKinley Tariff) that shielded American industries from foreign competition. These interventions directly facilitated the emergence of large-scale corporate consolidation.

Step-by-Step Solution

1
Analyze the historical context of the stimulus
The stimulus shows John D. Rockefeller defending business consolidation and corporate combination ('combinations of capital and of effort') in 1888.
To understand the core historical development being addressed (business consolidation in the Gilded Age).
2
Identify how the federal government interacted with large corporations during this era
Although the era is often described as laissez-faire, the government actively supported industrial growth through tariffs and land grants.
To connect the corporate growth to specific federal policies of the late nineteenth century.
3
Evaluate the options to find the correct government action
The option concerning land grants and protective tariffs correctly identifies government interventions that facilitated national markets and protected domestic manufacturers.
To determine the most historically accurate choice that directly aligns with the Gilded Age's economic policies.

Key Concept

The relationship between federal government policies and the rise of industrial capitalism and corporate consolidation.
Estimated Time:1m 30s
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Topics

Rise of Industrial Capitalism and Business Consolidation

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