Encyclopedia of american business history part 8

H Hamilton, Alexander (ca. 1755–1804) poli-tician Hamilton, an American politician and first secretary of the Treasury, was born on the island of Nevis in the West Indies in 1755. As a boy, he worked for a trading company in St. Croix before being sent to America for further education by his employer. He attended school in what is today Elizabeth, New Jersey, before fur-ther study at King’s College in Manhattan (today Columbia University). Hamilton served in the New York artillery dur-ing the Revolutionary War and was a secretary and assistant to George Washington from 1777 to 1781. He was admitted to the bar in New York in 1782 and also became a delegate to the Congress of the Confederation from New York in the same year. During the Constitutional Convention held in Philadelphia in 1787, he, John Jay, and James Madison wrote a series of letters to newspapers urging approval of the new Constitution. These letters were later collected and reprinted as The Federalist. He became secretary of the Treasury under Washington in 1789. Disputes with Madi-son and Jefferson in the early 1790s led to the development of the Federalist Party, which he led at a critical period in American political history. As first secretary of the Treasury, Hamilton attempted to put the United States on a sound financial footing, especially since debt was con-suming more than 50 percent of annual govern-ment revenues. He had a plan, as did a successor, Albert GALLATIN, to totally extricate the country from debt within 15 years, but the Louisiana Pur-chase would intervene. Hamilton’s main contributions to business were twofold. As Treasury secretary, he favored establishing a national bank and also opposed excessive government spending. He also sup-ported businessmen, whom he believed were the lifeblood of the nation. His essay The Report On Manufactures (1791) strongly supported early forms of manufacturing as a way of developing a strong economy, less dependent upon agriculture and imports of finished goods from Britain. In his view, independence in manufacturing would guarantee economic and political independence in the future. Hamilton resigned as Treasury secretary in 1795 but continued to be involved in politics, taking opportunity to criticize John Adams, a Federalist, as well as Aaron Burr, whom Hamil-ton opposed as a gubernatorial candidate in New 195 196 Harriman, Edward Henry A wood engraving of Alexander Hamilton (LIBRARY OF CONGRESS) York in 1804. His opposition to Burr led to their famous duel, in which Hamilton was severely wounded. He died a day later, in 1804. See also DUER, WILLIAM. Further reading Brookhiser, Richard. Alexander Hamilton, American. New York: Free Press, 1999. Chernow, Ron. Alexander Hamilton. New York: Pen-guin Books, 2004. McDonald, Forrest. Alexander Hamilton: A Biography. New York: Norton, 1979. Harriman, Edward Henry (1848–1909) fin-ancier and railroad developer Born in Hemp-stead, Long Island, New York, by age 14 Harriman was employed on Wall Street. In 1870, Harriman became a member of the NEW YORK STOCK EXCHANGE, specializing in railroad securi-ties. He married Mary Averell in 1879; one of their six children, William Averell Harriman, became a respected statesman and foreign policy expert. Harriman’s association with financier Stuyvesant Fish enabled him to modernize and reorganize the Illinois Central Railroad. Grow-ing conflict with Fish led Harriman away from the Illinois Central and toward the UNION PACIFIC RAILROAD. Harriman realized that Union Pacific’s performance could be improved by restructuring its debt and by making mas-sive physical improvements to accommodate the traffic potential of a region that was begin-ning to emerge from the depression of the 1890s. Within 10 years, Harriman had orches-trated the expenditure of $160 million in capi-tal improvements. In addition to his commitment to modern-ization, Harriman understood the value of com-munities of interest—essentially, interlocking directorates—in the railroad industry in order to prevent overbuilding, guarantee equitable access to the traffic of connecting RAILROADS, and con-trol competition. Harriman envisioned these communities of interest as the precursors of giant rail systems in the West. To that end, he acquired control of the Southern Pacific Railroad in 1901 and began to “Harrimanize” it in much the same manner as the Union Pacific. The Illi-nois Central, the UP, and the SP formed the core of the Harriman system—three technically sepa-rate corporations with similar organizational structures and philosophies, employing stan-dardization to reduce the cost of purchasing, operations, and maintenance. These communities of interest ran counter to the reformist impulses of the Progressive Era and won Harriman the personal displeasure of Presi-dent Theodore Roosevelt. Harriman’s public dis-agreements with former ally Stuyvesant Fish and his association with the financially ailing Equi-table Life further tarnished his reputation. In Hawley-Smoot Tariff Act 197 1907, the INTERSTATE COMMERCE COMMISSION launched an inquiry into Harriman’s railroad and financial enterprises. Harriman pledged his corporate and personal resources to a variety of public works. While Harriman never established a charitable trust, as did so many other philanthropists, he was instru-mental in the creation of a state park near his New York home, sponsored a scientific expedi-tion to Alaska, assisted victims of the 1906 San Francisco earthquake, and helped save Califor-nia’s Imperial Valley from flooding. Harriman succumbed to stomach cancer in 1909. See also BROWN BROTHERS HARRIMAN. Further reading Hofsommer, Don L. The Southern Pacific, 1901–1985. College Station, Tex.: A & M University Press, 1986. Klein, Maury. The Life and Legend of E. H. Harriman. Chapel Hill: University of North Carolina Press, 2000. Albert Churella Harvard Business School Established in 1908, the school became the first postgraduate school of business to require an undergraduate degree for admission. The first dean was Edwin F. Gay, and the new graduate program lasted for two years, leading to the master of business administration, or MBA, degree. The original fac-ulty numbered 15, with 33 regular students and 47 special students. According to an original school announcement, “the school does not pre-tend to graduate men who will begin at the top or high up in their several lines of business. It does aim to teach them how to work and how to apply powers of observation, analysis, and inven-tion to practical business problems.” Among the first faculty members were Her-bert Knox Smith, commissioner of corporations, James Jackson, ex-chairman of the Massachu-setts Railroad Commission, and Frederick W. TAYLOR, the efficiency engineer. In 1912, the school used its first “case study,” adopting an idea used widely in law whereby a particular case is studied both on its own merits and in the con-text of similar cases that have gone before. In 1924, it adopted case studies as its primary edu-cational teaching technique. In the same year, George F. BAKER donated $5 million, and the school opened its own campus in Boston on the Charles River. Within a few years, it had more than 750 full-time students living on campus. The Harvard Business Review, a leading manage-ment journal, was begun in 1922. In 1963, the school admitted women to the MBA program for the first time. The school expanded its offerings to both MBA and doctoral students over the years, and its publishing arm, the Harvard Business School Press, became a diversified publisher of management books after its inception in 1993. The institution continually ranks among the top graduate business schools in the country and is a leader in postgraduate management education. One of its graduates, George W. Bush, became the first MBA to be elected president. See also WHARTON SCHOOL. Further reading Copeland, Melvin Thomas. And Mark an Era: The Story of the Harvard Business School. Boston: Lit-tle, Brown, 1958. Cruickshank, Jeffrey L. A Delicate Experiment: The Harvard Business School, 1908–1945. Boston: Har-vard Business School Press, 1987. Hawley-Smoot Tariff Act A protective tariff introduced in Congress by Representative Willis Hawley and Senator Reed Smoot in 1930. At the time, it became the highest tariff ever introduced in the United States. Widespread disaffection plagued the tariff when it was introduced, but Congress passed it. President Hoover signed it into law in June 1930. The law was passed in the aftermath of the Crash of 1929, at a time when international trade 198 Hill, James J. was beginning to decline and domestic unem-ployment was rising. It was similar in many respects to the Fordney-McCumber Tariff Act in 1922. Hoover favored a tariff that would moder-ately increase duties levied on farm products and select manufactured goods. However, the House and Senate versions of the bill contained a long list of items subject to the tax, and the final prod-uct emerging from both versions was harsh and extensive. More than 900 items could be found in the bill. Disputed items were sent to a Tariff Com-mission, which had the power to investigate inequities in trade and make recommendations to the president. The chief executive had the power to set TARIFFS that would equalize the price of an import so that it did not unfairly compete with American-produced goods. Several hundred economists sent the president a letter protesting the tariff, but Hoover decided to employ it when he believed conditions warranted. The tariff was so severe that it caused an inter-national reaction; many other countries enacted protective tariffs in retaliation. The result was a slowdown in world trade, which exacerbated the Depression and led to problems in the FOREIGN EXCHANGE MARKET that were addressed later in the 1930s when the United States and Britain both abandoned the GOLD STANDARD. Another repercussion of the act was the new monetary system constructed after World War II at Bretton Woods, New Hampshire. Part of the reason for establishing the International Mone-tary Fund was to dissuade countries from acting unilaterally in the future when considering devaluations of their currencies, which in the immediate past had been tied to tariff decisions. See also BRETTON WOODS SYSTEM; FOREIGN INVESTMENT Further reading Eckes, Alfred E. Opening America’s Markets: U.S. For-eign Trade Policy Since 1776. Chapel Hill: Univer-sity of North Carolina Press, 1995. Jones, Joseph M. Tariff Retaliation: Repercussions of the Hawley-Smoot Bill. New York: Garland, 1983. Hill, James J. (1838–1916) railroad builder Hill was born in Ontario and moved to St. Paul, Minnesota, at age 16 after the death of his father. He found work with a steamboat line and soon became a partner in the company. After several other ventures in transportation, he bought, along with two partners, the St. Paul & Pacific Railroad. The line became the basis for the Great Northern Railway Company that would earn him the name “Empire Builder.” Hill envisaged this railroad as reaching the West Coast and set about building the line through the northern tier of states. From Min-nesota, he reached Montana by 1887 and Seattle in 1893. The railroad was notable for being built without any federal government assistance, and, unlike many of the earlier RAILROADS, it suffered no financial scandals or setbacks. The completed line ran from Lake Superior to the Pacific. While a masterful piece of engineering, the line com-peted with the Northern Pacific Railroad, which had been bankrupted in the Panic of 1893. Hill helped reorganize the line, but the courts would not allow a merger between the two rivals. The Northern Pacific was taken over by interests led by J. P. Morgan, a Hill ally. The two again joined forces to attempt to purchase the Chicago, Burlington & Quincy line serving Chicago, in an attempt to prevent E. H. HARRIMAN from buying the line. The battle spilled over to the stock mar-ket, causing the Panic of 1901. As a result, Morgan, Harriman, and Hill established the Northern Securities Company to act as a HOLDING COMPANY for the Great Northern and Northern Pacific. But the company was held in violation of the Sherman Antitrust Act in a Supreme Court decision, the United States v. Northern Securities Co., in 1904. Hill retired as president of the Great Northern in 1907. He also helped construct the Canadian Pacific Railroad and was the author of Highways and Progress, published in 1910. He financed and built a library named after him in St. Paul. Unlike many other railroad tycoons of the 19th century, Hill’s reputation was built upon the soundness of his Hudson’s Bay Company 199 ideas, lack of government assistance, and the absence of financial scandal surrounding his operations. See also MORGAN, JOHN PIERPONT Further reading Malone, Michael P. James J. Hill: Empire Builder of the Northwest. Norman: University of Oklahoma Press, 1996. Martin, Albro. James J. Hill and the Opening of the North-west. New York: Oxford University Press, 1997. holding company A form of industrial organization designed to hold the stock of other companies. In a typical holding company, the parent company is not an operating unit but sim-ply an administrative one, with the subsidiary companies producing actual goods or services. The use of holding companies is quite common and crosses a wide range of business sectors. The first holding company was organized by John D. Rockefeller as a trust in Ohio, the Standard Oil Trust. The term trust was the immediate prede-cessor of the term holding company although its aims were the same. In a trust, a company holds the stock of other companies in trust. The origi-nal Standard Oil Trust did not have stock as such but trust certificates. The purpose of organizing a wide group of businesses into a trust was to con-trol production and prices. Usually, the trust cer-tificates were held by a small group of directors who effectively controlled large sections of an industry. After Standard Oil was moved to New Jersey in 1899, the holding company began to supplant the trusts. Ordinarily, holding companies are organized as acquisition vehicles so that other companies may be brought under the same control. They began to grow after World War I as many compa-nies began to expand, often establishing them-selves in friendly political or tax jurisdictions. Holding companies may also be organized in order to relocate tax liabilities in friendly juris-dictions or to avoid unfriendly legal jurisdic- tions. The Standard Oil Company moved its headquarters from Ohio to New Jersey when its charter was challenged by Ohio after incorpora-tion in that state. In certain industries, holding companies have been regulated. The PUBLIC UTILITY HOLDING COMPANY ACT (1935) and the BANK HOLDING COMPANY ACT (1956) both sought to curtail hold-ing companies in those industries so that they did not circumvent other legislation specifically designed to restrict their expansion activities. Subsequent DEREGULATION eased the original restrictions on many companies established dur-ing the NEW DEAL. After World War II, the CONGLOMERATES also employed holding companies effectively as a means of establishing a portfolio of diverse com-panies under the same roof. By the 1960s, the holding company was the predominant form of industrial organization used by large companies, since many were multinational, and the holding company was used to establish foreign sub-sidiaries and other international operations. See also ANTITRUST; GENEEN, HAROLD S.; GEN-ERAL ELECTRIC; SECURITIES EXCHANGE ACT OF 1934. Further reading Federal Bar Association, Securities Law Committee. Federal Securities Laws: Legislative History, 1933–1982. Washington, D.C.: Bureau of National Affairs, 1983. Stevens, William S. Industrial Combinations and Trusts. New York: Macmillan, 1913. Hudson’s Bay Company The Hudson’s Bay Company is one of the longest-lived business organizations in history. It was chartered by the British Crown in 1670 to trade for furs in the drainage basin of Hudson Bay. Indeed, for much of its life, it was primarily a fur-trading com-pany, purchasing a wide variety of furs, but mainly beaver pelts, at posts along the coast of Hudson Bay and inland and transporting them by ship directly from the bay to Britain. Despite ... - tailieumienphi.vn