The Robber Barons
A site created for high school students about the robber
An exploration of E. L. Doctorow's novel Ragtime
includes information about Carnegie, Rockefeller, American Dream, labor
Edwin Drake drilled the first successful oil well in PA in 1859. 1870s --
Cleveland OH became the center of oil refining.
John Davison Rockefeller (1839-1937) brought order and stability to a
wasteful and often violent industry when he bought and merged 70 companies
into Standard Oil of Ohio , the first trust. As a result of price
wars and ruthless business practices, Rockefeller controlled almost 90% of
the nation'srefineries by 1879, when the trust was formed. He spied on his
competitor's to ruin them, demanded and received rebates from railroads
and built his own factories and warehouses to eliminate the middleman.
The elder philanthropic Rockefeller gave $550 million to the University of
Chicago and four foundations.
Information on John D. Rockefeller: http://www.micheloud.com/FXM/SO/rock.htm
In the 1850s, two men, American William Kelly and Englishman Henry
Bessemer, independent of each other, developed the open hearth method,
which forced a blast of cold air into molten metal removing more carbon
Plants opened near sources of iron ore and coal in PA, near Pittsburg and
in TN and VA and near Birmingham AL.
With the precise control of carbon removal, cheaper iron ore could be
Andrew Carnegie (1835-1919) -- Leader in the Steel Industry. Carnegie
exercised direct control over his company, allowing only close friends to
be stock holders, using a system of partnerships to integrate a production
line, which combined coal and ore mines, limestone quarries, coke ovens,
ore-carrying ships and railroads.
1901 - Carnegie sold his holdings to a J.P. Morgan (1837-1913) combine who
created US Steel , the first billion dollar corporation.
Carnegie followed the "Stewardship of Wealth", turning to
philanthropy. "Gospel of Wealth" -- a concentration of wealth
was needed if humanity were to progress, but the rich were obligated to
use their wealth for the public's benefit.
He disposed of $350 of $400 million before his death, endowing libraries,
building public buildings and establishing foundations.
Andrew Carnegie timeline: http://www.pbs.org/wgbh/amex/carnegie/timeline/timeline2.html
Andrew Carnegie tribute: http://www.clpgh.org/exhibit/carnegie.html
With the development of a cheap long-life incandescent bulb, Thomas Alva
Edison (1847-l93l) formed the Edison Company, opening his first commercial
electric station in NY City in 1882, using direct current, low voltage
His chief competitor George Westinghouse (1846-1914) developed the use of
alternating currents in 1886, with his Westinghouse Electric Company
Between 1889-92, J.P. Morgan financed the merger of several interests and
competitors with Edison to form the General Electric Company.
- Communications and Entertainment Industry
Edison and George Eastman perfected a motion picture camera (kinetograph)
Alexander Graham Bell (1847-1922) developed the telephone in combination
with a carbon transmitter which improved voice quality. This plus a
switchboard made the telephone commercially feasible. In 1880, 50,000 phones were in use in the US. By 1890, 250,000 phones were
in use. By 1900, 800,000 phones were in use.
1885 - Bell and Associates consolidated over 100 companies to form the
American Telegraph and Telephone Company , communications giant by 1900.
- Meatpacking Industry
Three phases of the meatpacking industry developed: (a) slaughtering -
(b) storage - distribution (c) byproducts.
Gustavus Franklin Swift established Swift and Co in Chicago, perfected the
use of ice-cooled refrigerator cars in 1877, shipped the first load of
dressed beef to Boston in warm weather and greatly enhanced the growing TX
- Canning and food preservation industry
The Union army required huge quantities of canned goods which greatly
enhanced the growth of this industry.
Gail Borden opened a condensed milk factory in NY in 1861.
By 1900, A.J. Heinz and others opened preservation plants which became
widely acceptable as good canners.
- Tobacco - first exported American crop
Tobacco returned prosperity to parts of the New South by aggressive
advertising, new cigarette-making machines and exploiting new markets.
James B. Duke formed the American Tobacco Company (1890) which sold
ready-rolled cigarettes and introduced coupons to be exchanged for
Early Attempts at Government Regulation
- Social Darwinism
As Darwin's theories of evolution permeated the fabric of American
society, the concepts, when applied to the social order, were more accepted.
This allowed Big Business to prosper by creating trusts and monopolies
through the destruction of competition in the marketplace.
- Eventually, a public outcry against ruthless practices of Big Business
led to attempts to control the monopolistic tendencies of American industry.
Regulation of the Railroads - Began with the state legislatures
Munn vs Illinois 1876 - a partial victory for Midwestern
Wabash [St. Louis & Pacific Railway Co] vs Illinois 1886. The Supreme Court 6 - 3 restricted the state's power to
Interstate Commerce Act 1887
(1) Outlawed unfair discrimination against shippers with the use of
rebates, pools, drawbacks and long-short haul
(2) Declared that railroad rates must be reasonable and just and published
and could not be changed without
sufficient public notice.
(3) It created the Interstate Commerce Commission
Regulation of Trusts and Monopolies -- Sherman Anti-Trust Act 1890
It forbade business combinations which resulted in restraint of trade. It did not recognize a good trust from a bad one. Although weak against Big Business, it was used effectively during the
Gilded Age against unions, whose strikes were interpreted by the courts as a labor combination which
US vs E.C. Knight Co January 1895
The Court 8 - 1 ruled that the American Sugar Refining Company 's
acquisition of the stock of its leading
competitors, allowing it to control almost all sugar refining in the US,
was not in violation of the Sherman Anti-Trust Act. This decision paved the way for the great mergers of the 1890s.