The Start of the American Corporation

During the Second Industrial Revolution, there was a great deal of momentum which led to the creation of many of America's new industries on a scale never seen before. What was needed was a new way to fund the new industries. The creation of the corporation is what solved that problem. A corporation is a legal entity which is chartered by a state government. To create a corporation, currency is raised from lots of wealthy investors. Every investor then owns a share of the corporation which is represented by the stock certificates that were issued out to the share holders. If the corporation earns a profit, it will divide the profit by the number of investors and pay the dividends. The more shares that an investor owns, the better the dividend becomes. In order to get dividends, the stock must do well. That means going up in the share price range. But if the corporation's stock drops in price of shares that is what kills a profit for the investors.

Two examples of inventors who help shape the face of technology and the American corporation during its gilded age was Americans like Alexander Graham Bell and Thomas Alva Edison. They had advantages over their competitors when the United States Government granted them their patents. They were given the right to profit from their inventions for a specified amount of time. While both of these geniuses were basically inventors and not entrepreneurs, neither one of these gentlemen wasted time before starting companies or granting their rights of their patents to others to manufacture. The Edison Electric Light Company was chartered in 1878 and led to the creation of General Electric Company (also known as GE with the slogan "we bring good things to life"). It was one of America's and the world's largest research centers. The Bell Telephone Company was founded in 1877, and in 1899 became the American Telephone and Telegraph (AT&T). It would become the parent company of the Bell systems.