A Level History - America - Practice Exam

Which strategy did Cornelius Vanderbilt employ in the railroad industry?

1. He primarily invested in shipping lines

2. He bought out many railroad companies to reduce costs

3. He established the first national rail network

4. He focused on creating a passenger rail service

The correct answer is: He bought out many railroad companies to reduce costs

Cornelius Vanderbilt's primary strategy in the railroad industry was to buy out many railroad companies to reduce costs and establish dominance in the market. This approach, known as consolidation, allowed him to streamline operations, eliminate competition, and create a more efficient and extensive network of railroads. By acquiring struggling or smaller companies, he was able to integrate their resources and routes into his own operations, leading to greater efficiency and profitability. This strategy contributed significantly to the expansion of the railroad industry in the United States during the late 19th century, as it enabled Vanderbilt to control critical routes and ensure lower transportation costs across the board. His focus on consolidation rather than merely investing in shipping lines, establishing passenger services, or creating the first national rail network distinguish his approach, as it centered around enhancing operational efficiency and market control through strategic acquisitions.