Robber Barons or Captains of Industry?

1. Robber Barons or Captains of Industry? Did they acquire their wealth through exploitation and ruthless tactics? OR Did they serve the nation positively?

2. The Gilded Age • Coined by Mark Twain • A number of extremely rich people living lavishly for the first time (around 4000 millionaires) • A time of extreme wealth and power (a thin layer of gold) covering a larger part of society filled with poverty and corruption • Not necessarily getting poorer, just more people who are poor (immigration)…many were better off • 1/8 controlled 7/8 of the wealth

3. Growth and Business • Rapid industrial growth after the Civil War transformed American business and society • Led to investments of huge amounts of resources and money to develop companies • Corporations formed, where a # of people share the ownership and/or risk, allowing for greater access to large amounts of capital (invested money)=funding new technology, industries or plants across the country • To gain an edge, businesses might decrease cost of producing goods by lowering wages or paying less for raw materials, advertised widely, larger companies could squeeze out competition by temporarily lowering the price of goods below cost or buying smaller competitors out, essentially trying to gain a monopoly, then prices could then be raised back to normal once the competition was eliminated

4. Vertical vs. horizontal integration • Vertical integration: a company would control every stage of the industrial process, from mining the raw materials to transporting the finished product…”pay nobody a profit” ex. Rockefeller’s Standard Oil (produces own barrels, cans, etc…whatever else it needed)-set out to control trans. needs, etc. • Horizontal integration: former competitors are brought under a single corporate umbrella

5. The Leaders • Rockefeller, J.P. Morgan, Carnegie and Vanderbilt became extremely wealthy as the sole producers of a good or service Robber barons or captains of industry? Did they acquire their wealth through exploitation and ruthless tactics? OR Did they serve the nation positively?

6. Rockefeller-The Oil Industry • He was the 1st American billionaire • His company, the Standard Oil Trust, controlled 90% of the oil refinery business by 1881 • By eliminating waste in production, the monopoly was able to keep prices low for consumers • At the time of his retirement, Rockefeller’s fortune amounted to $900 million • In 1911, the Supreme Court ordered the monopoly be broken up into 34 companies, including Conoco, Amoco, BP, Chevron, Exxon, Mobil, etc.

7. Standard Oil

9. Scrooge McDuck, Flintheart Glomgold, John D. Rockerduck

10. Rockefeller CenterTheRockefeller Center officially opened in May 1933. It incorporated his business venture of a “city within a city” and gainfully employed over 40,000 people at the height of the depression. is a complex of 19 commercial buildings covering 22 acres between 48th and 51st Streets in New York. Built by the Rockefeller family, it is located in the center of Midtown Manhattan, spanning between Fifth Avenue and Seventh Avenue. It was declared a National Historic Landmark in 1987.

11. Carnegie-The Steel Industry • In the 1850s, Henry Bessemer discovered a process for producing high-quality steel; the Great Lakes Region with its abundant coal reserves and access to iron ore emerged as the leading steel producer • Carnegie, in the 1870s, started manufacturing steel in Pittsburgh (had also done telegraphy, railroading, bridge building) • By 1900, Carnegie Steel topped the steel industry, employing and producing more steel than all the steel mills in Britain • Carnegie sold his company in 1900 for over $400 million to a new steel combo headed by J.P. Morgan-U.S. Steel (1st billion dollar co., largest enterprise in the world, controlled over 3/5 the nation’s steel business)

12. Carnegie Steel-Pittsburgh“Steelers”The Steelers logo was introduced in 1962 and is based on the "Steelmark," originally designed by Pittsburgh's U.S. Steel and now owned by the American Iron and Steel Institute (AISI). In fact, it was Cleveland-based Republic Steel that suggested the Steelers adopt the industry logo. It consists of the word "Steelers" surrounded by three astroids (hypocycloids of four cusps). The original meanings behind the astroids were, "Steel lightens your work, brightens your leisure, and widens your world." Later, the colors came to represent the ingredients used in the steel-making process: yellow for coal, red for iron ore, and blue for scrap steel.[24] While the formal Steelmark logo contains only the word "Steel," the team was given permission to add "ers" in 1963 after a petition to AISI.

13. Carnegie Mellon University

14. Carnegie Hall

15. Vanderbilt-The Railroad Industry • The nation’s first big business was the railroad • After the Civil War, railroad mileage increased more than fivefold in a 35 year period • “Commodore” Cornelius Vanderbilt used his millions earned from a steamboat business to merge local railroads into the New York Central Railroad (1867)-ran from NYC to Chicago

16. Vanderbilt University

17. Frederick William Vanderbilt1856-1938Hyde Park in Hyde Park, New York

18. Rough Point in Newport, Rhode Island

19. William Kissam Vanderbilt1849-1920660 Fifth Avenue, New York

20. “Idle Hour” in Oakdale, Long Island, New York

21. “Marble House” in Newport, Rhode Island

22. William Kissam Vanderbilt IIEagle’s Nest at Centerport, New York

23. George Washington Vanderbilt II(1862-1914)“Biltmore” in Asheville, North Carolina

24. Cornelius Vanderbilt II (1843-1899)New York Residence

25. “The Breakers” in Newport, Rhode Island

26. Florence Vanderbilt(1854-1952)“Florham” in Convent Station, New Jersey

27. Emily Thorn Vanderbilt“Elm Court” in Lenox, Massachusetts

28. J. Pierpont Morgan-Consolidations and Mergers • Dominated the corporate finance and industrial consolidation arenas • Had financial investments in many large corporations • Arranges mergers, such as Edison General Electric and Thompson-Houston Electric and Carnegie Steel and other steel and iron businesses to form the United States Steel Corporation

29. Sears and Roebuck-Mail-order • Goal to extend commerce to all the people who lived on isolated farms and small towns • Montgomery Ward in early 1870s starts first mail-order catalogs • Sears, Roebuck and Company begin offering goods by mail in early 1890s • Catalog in 1897 was 786 pages long-groceries, drugs, tools, furniture, iceboxes, stoves and household utensils, clothes, books, farm implements, sporting goods, etc. • Ability to buy goods in high volume allowed them to sell goods at a lower price • By 1907, they were one of the largest business enterprises in the nation • By turn of century, 6 million catalogs were being distributed each year; was the most widely read book after the Bible

30. Economic Theories • Laissez faire: economist Adam Smith-business should not be regulated by govt., but rather, by an “invisible hand” of supply and demand • Social Darwinism: “survival of the fittest” Fueled discrimination-the poverty-stricken condition of many minorities was evidence of their unfitness per many whites • Gospel of Wealth: utilized religion to justify their wealth (applying the Protestant work ethic and saying hard work and material are signs of God’s favor) Carnegie argued the wealthy had a God-given responsibility to carry on projects of civil philanthropy for the benefit of society (he distributed over $350 million to support libraries, universities, public institutions, etc.)

31. Regulations imposed by govt. • Industrialists’ methods worried many Ex. The railroad industry, renowned for its unjust business practices, including random and unfair rates • 1887-Interstate Commerce Commission (ICC) is formed to oversee railroad operations; it is the first federal body to monitor business operations • 1890-Sherman Antitrust Act outlaws any trust (separate companies operating under the control of a single board in order to form a monopoly) operating in restraint of trade or commerce