The Gilded Age Many people viewed businessmen of the nineteenth century as robber barons. They believed that these businessmen were so emerged into giant corporations and were so dedicated in striving for monopolistic power that their only pursuit was wealth and power in lieu of accomplishments. This entry counterbalances the idea of robber barons. John Chamberlain emphasizes the creative accomplishments of these business leaders. He explains the effects they had on the American public, while also realizing the shameful aspects of their actions.
In the following essay, I will summarize Chamberlains views on Vanderbilt, Rockefeller and Carnegie, their achievements and their pursuit to deal with the American economy. The period after the Civil War resulted in a significant growth in the industrialization of the American economy. Many new faces started to emerge out into industrial enterprises. One of these new faces was Cornelius Vanderbilt. People believed that he was a man that used trickery to control properties that he wanted. When involved with something, Vanderbilt was a man who was determined to have physical and economical improvements for the company.
He began his career from his love of steamboats, but as the steamboats era came to an end Vanderbilt became involved with railroads. With his profit made from steamboats and oversea affairs, he purchased shares of the Harlem Railroad. This would later help him gain stock control of Canada Southern, Lake Shore and the Michigan Central. These first steps lead him to much fame in the economical world. He relayed the Centrals tracks from New York to Chicago with new steel rails and stronger steel bridges. He produced a more efficient type of locomotive and the traveling time was drastically shortened. Vanderbilt helped link the east and west worlds of America together.
Vanderbilt may have watered the Centrals stock. But as fast as he watered it he solidified it and the worst that can be said about his is that he was a shrewd capitalizer of future earnings.(59) Chamberlain next examined John D. Rockefeller and his Standard Oil Company, the nations first big trust. Standard Oil Co. offended the nations traditional competitive ethics. People were used to small regional businesses and could not comprehend Rockefellers determination for his company to become absolutely perfect.
He became involved with a small refinery run by Samuel Andrews, this first partnership lead to new partners. His company increased its profits by making its own barrels in its own cooperage plants, shipping its products in large quantities and plowed most of its profit back into the business. As time went by, Rockefellers company absorbed all but five out of a total of some 25 local refineries. Many could not resist Rockefellers decision of seizing their refinery. We will take you burdens, we will utilize your ability, we will give you representations; we will all unite together and build a substantial structure on the basis of co-operation. (63) As time passed, people began to reject Rockefellers pursuits of buying their refineries.
Western Pennsylvania oil refineries banned together and several joined the Acme Oil Co., which was a rival of the Standard Oil Co. The Southern Improvement Co. was a device said to be invoked by Rockefeller. One of its purposes was to exact rebates running up to 50% of the carrying charges on all of its oil transported by the Pennsylvania, Erie, and the New York Central. Most manufacturers considered it to be quite legitimate to get discounts for bulk shipments and for a guarantee of a steady flow of business.
A controversy over this issue began and the news spread. Railroads quickly respond to the problem and said that all future oil shipments would be based on equality for everyone. Rockefeller used the Southern Improvement contract to draw in Cleveland refineries into his corporation. He was able to stabilize the oil market by exterminating competition. From a monopoly angel, people have said that Rockefeller brought the industrial age of America to an incredible height.
Two points have resulted from this point of view: 1st he was probably the most able competitor of the 19th century and 2nd the Standard Oil Co. was able to keep competition from returning as the 20th century approached. In 1892, the Supreme Court of Ohio outlawed the Standard Oil Co. Some people still believe that it was not the Supreme Court, but instead it was nature and the inexorable working of the market that killed the first American trust. Andrew Carnegie was one of the first among many men involved with the steel industry.
He was a genius for going through bad times and even through depression his organization would gain strength. Carnegies 3rd job was with Pennsylvania Railroad. One day when his boss was absent, he took matters into his own hand and kept things running. His boss, Tom Scott, was very impressed and began to throw investment opportunities toward his way. In time, Carnegie established a great income and joined the Kloman and the Piper and Shiffler iron companies as a sleeping partner.
As time went on, Carnegie dominated the steel industry even though he knew very little about the technical details of steel making. In a time when there were many advantages, he would be involved with steel price and production pools. But in bad times, he would be the first to abandon. He had coerced his partners to signing an ironclad agreement stating that they would return their stock to the company at book value if they decided to resign or retire. Allegations of Carnegie getting rich-quick on labors of ingenuity of men who knew more about steel than he did was true. If it wasnt for Carnegies unique character the enterprise could not have stayed together.
He displayed a special talent for going in taking control when timing was just right. Carnegie had kept the organization on the top things and during a time of depression he would buy out his rivals. Here lies the man who knew how to get around him men who were cleaver than himself. (69).