Robber Baron Industrialists [Archive]

Tormented by Treachery

17th February 2006, 04:17

Well, here's a quote from a History book (I'm assuming you're speaking of Americans in the gilded age):

The years after the Civil War witnessed explosive industrial grotwth as well. In 1869, there were 2 million factory workers; by 1899 that number more than doubled to 4.7 million. Moreover, the nation, which produced 20,000 tons of steel in 1867, was generating ten million tons a year by 1900. John D. Rockefeller and Andrew Carnegie created vast monopolies known as trusts. By 1900, just 1 percent of American corporations controlled 33 percent of all manufacturing output. With this power, these "robber barons" amassed great fortunes. For example, 1 percent of American families controlled 88 percent of the nation's assets in 1900.

Names to include:

Andrew Carnegie

John D. Rockefeller

William Graham Sumner (created 'Social Darwinism,' the theory that rationalized capitalism for the rich)

J.P. Morgan

Jay Gould (see quote below)

Cornelius Vanderbilt (see quote below)

The shady financial practice of the railroad men earned them the albel of "robber barons," an epithet soon extended to other "captains of industry" as well. They were shrewd, determined, often dishonest men, driven more by greed than glory. The building of both the Union Pacific and the Central Pacific -- as well as other transcontinentals -- induced shameless profiteering through contruction companies controlled by insiders, which overcharged the railroad companies. The Credit Mobilier Company, according to congressional investigators, paid off congressmen and charged the Union Pacific $94 million for contruction that cost $44 million.
Eastern rail lines engaged in similar acts of financial buccaneering. The prince of the railroad "robber barons" was Jay Gould, a secretive trickster who mastered the fine art of buying rundown railroads, making cosmetic improvements, and selling out at a profit, meanwhile using corporate funds for personal speculation and judicious bribes. Ousted by a reform group after having looted New York's Erie Railroad, Gould moved on to richer spoils in western railroads. Nearly every enterprise he touched was either compromised or ruined, while Gould was building a fortune that amounted to !100 million upon his death at age fifty-six.
Few railroad fotunes were built in those freewheeling times by purely honest methods, but compared to opportunists such as Gould, most railroad owners were saints. They at least took some interest in the welfare of their companies, if not always in that of the public. Cornelius Vanderbilt, called "Commodore" by virtue of his early exploits in steamboating, stands out among the railroad barons. Already rich before the Civil War, he decided to give up the hazards of wartime shipping in favor of land transport. Under his direction, the first of the major eastern railroad consolidations took form.
Vanderbilt merged separate trunk lines connecting Albany and Buffalo into a single powerful raild network led by the New York Central. This accomplished, he forged connections to New York City and then tried to corner the stock of his chief competitor, the Erie Railroad. But the directors of that line beat him there by the simple expedient of printing new Erie stock faster than he could buy it. In 1873, however, he bought the Lake Shore and Michigan Southern Railroad, which gave his lines connections into the lucrative Chicago market. After the Commodore's death in 1877, his son William Henry extended the Vanderbilt railroads to include more than 13,000 miles in the Northeast. The consolidation trend was nationwide: about two-thirds of the nation's railroad mileage fell under the control of seven major groups by 1900. This colossal national rail network was a major factor in stimulating the growth of the economy.

Good luck!