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John Davison Rockefeller (1839-1937) was an American industrialist. Rockefeller was born in Richford, New York, on July 8, 1839, and educated in the public schools of Cleveland, Ohio. He became a bookkeeper in Cleveland at the age of 16. In 1862, he went into business with entrepreneur Henry Flagler and with Samuel Andrews, the inventor of an inexpensive process for the refinement (improvement) of crude petroleum. In 1870 their firm, Rockefeller, Andrews & Flagler, changed its name to the Standard Oil Company, often referred to as the Standard Oil Company of Ohio. Rockefeller, his brother William, Andrews, and Flagler ran the business.

In early 1872 Rockefeller helped form the South Improvement Company, an organization that joined many oil refiners in Cleveland with the Standard Oil Company. Since Standard Oil used railroads daily to transport huge amounts of cargo, Rockefeller was able to make a deal with railroad conductors that would profit both industries. Railroad companies decided to set high freight, or cargo, rates but agreed to award largerebates, or discounts, for members of the South Improvement Company. This plan prevented price wars among railroad companies and forced smaller oil refiners to go out of business if they didn’t join the organization. Most of Rockefeller's competitors in Cleveland had already been forced to sell out to the Standard Oil Company. By 1878,Standard Oil also owned the major refineries (oil processing plants) in New York City, NY; Pittsburgh, PA; and Philadelphia, PA.

In 1882, Rockefeller and his partners formed the first corporate trust, Standard Oil Trust, to merge many oil businesses throughout the United States into a single company. Rockefeller soon controlled 90 percent of the oil refineries in the country. Journalists, small oil refiners, and many others heavily criticized Standard Oil for monopolizing, or dominating, the industry. In 1892, the Ohio Supreme Court ordered the Standard Oil Company of Ohio to separate from the trust and become an independent business. As a result, the trust dissolved (ended) and Rockefeller and his associates reorganized and consolidated (combined) the Standard Oil conglomerate (company) into 20 businesses.

The largest Standard Oil Corporationbecame the only holding company for all of Standard Oil in 1899. However, in 1911 the Supreme Court of the United States ruled that Standard Oil had continued to act as a monopoly. The Court’s antitrust ruling forced all of the Standard Oil companies to become independent businesses. That same year, Rockefeller, at age 72, retired as president of Standard Oil.

At its peak, Rockefeller's personal fortune was estimated at almost $1 billion. The total amount of his philanthropic, or charitable, contributions was about $550 million; about 80 percent of these funds were given to four charitable organizations founded by Rockefeller. These were the Rockefeller Foundation; the General Education Board; the Rockefeller Institute for Medical Research (now Rockefeller University); and the Laura Spelman Rockefeller Memorial, established in 1918 and incorporated into the Rockefeller Foundation in 1929. Rockefeller died at Ormond Beach, Florida, on May 23, 1937.

Carnegie, Andrew (1835-1919), American industrialist and philanthropist. Carnegie was born in Dunfermline, Scotland. He came to the U.S. in 1848 and began work in a cotton mill in Allegheny, Pennsylvania, for $1.20 per week. The following year he became a messenger in a Pittsburgh telegraph office. He then worked for the Pennsylvania Railroad as the private secretary and telegrapher. Carnegie was promoted quickly until he became superintendent of the Pittsburgh division of the railroad. He served in the Civil War and worked with transportation and government telegraph services. After the war, Carnegie left the railroad and formed a company that produce iron railroad bridges.

Carnegie founded a steel mill and was one of the earliest users of the Bessemer process of making steel in the United States. He hired the best people in steel technology and plant management. Carnegie was extremely successful, getting controlof other large steel plants. He cleverly held on to complete control of his business. When he consolidated, or combined, his interests in the Carnegie Steel Company, he dominated the American iron and steel production. He did this by using the business skills he learned from working for the Pennsylvania Railroad. He kept his workers wages and salaries low; he used the latest technology, kept the cost of production down as well as the cost of his product to out do his competitors. He vertically integrated his company. In other words, he controlled everything from the raw iron (pig iron) to the final, finished product.

Carnegie’s workersdid not favor his remarkable business practices. In 1889, a strike had won Carnegie’s steelworkers in Homestead, Pennsylvaniaa good contract. Carnegie, however, was determined to break the union that his workers belonged to. His plant manager, Henry Clay Frick, increased the production demands on the workers. When the union refused to accept these new conditions, Frick began locking the workers out of the plant. On July 2, they all were dismissed from their jobs. The union voted overwhelmingly to strike. They eventually took over the company town that the steel mill owned. Frick sent for three hundred guards, but when they arrived by barge on July 6 they were met by ten thousand strikers, many of them were armed. After an all-day battle, nine strikers and seven guards were killed and many strikers and guards were injured. The Governor of Pennsylvania had to call in the state’s militia. Slowly, with the militia’s protection, strikebreakers got the plant running again. Frick's life was then threatened by an anarchiston July 23, which caused him to lose any sympathies for the strikers. Meanwhile, the Carnegie Steel Corporation had more than a hundred strikers arrested, some for murder. The strike lost itspower and ended on November 20, 1892. The union was practically destroyed. Carnegie Steel moved quickly to start longer hours and lower wages. Overall, the Homestead strike inspired many workers, but it also showed how difficult it was for any union to win against the combined power of the corporation and the government. In 1901, Carnegie sold his company to the United States Steel Corp. for $250 million and retired.

Despite his wealth-getting, wage-cutting, and his responsibility for a bloody labor dispute at his Homestead plant in 1892, Carnegie had not forgotten the society that made him rich. He believed that he had a duty give back the money throughphilanthropy. Even though he did not have a formal education, Carnegie developed a life-long interest in books and education. During his lifetime, he gave more than $350 million to various educational, cultural, and peace institutions, many of which still bear his name. His first public gift was in 1873 for baths in the town of his birth; his largest single gift was in 1911 for $125 million to establish the Carnegie Corporation of New York. He contributed millions to many colleges and libraries. He funded over 2,800 libraries throughout the world, and he donated funds for the construction of the PeacePalace at The Hague, Netherlands, for what is now the International Court of Justice of the United Nations. Carnegie was honored throughout the world during his lifetime.

Cornelius Vanderbilt(1794-1877), was a steamship and railroad promoter and financier. Cornelius Vanderbilt was born in Staten Island, New York, and left school at the age of eleven to help his father. When he was sixteen, Vanderbilt purchased a small sailing vessel with a hundred dollars loaned by his parents and started a ferry service to New York City. Between 1814 and 1818, he acquired several boats for service in Long Island and the coastal trade from New England to Charleston, SC. He sold his sailing vessels in 1818 and became a steam ferry captain for Thomas Gibbons who was challenging the Aaron Ogden steam navigation monopoly in New YorkState. Soon he was managing Gibbons's fleet and by 1828 had accumulated over thirty thousand dollars.

In 1829, Vanderbilt established a line of steamboats from New York to New Brunswick, New Jersey, with service on to Philadelphia. Soon he moved his operations to the Hudson River, Long Island Sound, Providence, and Boston. Vanderbilt made his ships safe, comfortable, and fast. Before he was fifty, he was a millionaire and was called "Commodore" because of his primacy among New York shipmasters. In 1846, Vanderbilt left Staten Island for New York City. As traffic to California grew during the gold rush, Vanderbilt built fast steamersand he constructed roads to the PacificCoast. This line prospered, and by 1853, Vanderbilt was worth $11 million. Vanderbilt vessels set speed records, but he found it difficult to compete against the heavily subsidized British ships. During the Civil War, Vanderbilt offered several of his ships to the federal government to aid the Union war effort.

Commodore Vanderbilt was a hardheaded businessman, big, arrogant, loud, and coarse in speech but honest and faithful to his word once he had given it. He entered upon new businesses only after careful thought. He was quickto entering railroading. In 1857, he invested in the New York & Harlem Railroad and in 1863 was its president. By 1865, he also controlled the Hudson River Railroad. Both lines connected New York and Albany. West of Albany the New York Central served Buffalo but used barges and steamboats along the Erie Canal and the Hudson River to reach New York City. In January 1867, with the Hudson thick with ice, Vanderbilt refused to accept any New York Central freight headed for New York. The New York Central gave in, and Vanderbilt was soon in control of the line to Buffalo. Vanderbilt in 1869 merged the Hudson River and the New York Central and later acquired a long-term lease of the New York & Harlem. His oldest son, William H., helped run the busy, overwhelm system, He urged his father to addthe Lake Shore & Michigan Southern in 1873 and the Michigan Central in 1875, lines that served Chicago. He did.

Although Vanderbilt dealt in millions of dollars of watered stock, his rail system was efficiently managed and paid good dividends even during the long panic of 1873. Commodore Vanderbilt, oldest and perhaps the greatest of the nineteenth-century railroad barons, died the richest man in New York City. Wanting his fortune and railroad to remain intact, he left the bulk of his $100 million estate to his son William (one of his thirteen children) and William's sons.

Robert L. Frey, ed., Railroads in the Nineteenth Century (1988); Wheaton J. Lane, Commodore Vanderbilt: An Epic of the Steam Age (1942).

Henry Ford (1863-1947) was an industrialist. Ford did not invent the automobile, but he developed designs, ideas and production techniques that allowed it to be manufacture in high numbers and at a low cost. Doing this brought it within reach of the average wage earner. It can be said that he, more than any other individual perhaps, invented the twentieth century.

Ford was born on a farm near Dearborn, Michigan. From his earliest days, he displayed anobvious mechanical skill.All his life he delighted in working with machinery. In 1879, he became an apprentice in a machine shop in Detroit. He repaired watches at night to make ends meet. In the early 1890’s, he began experimenting with the new internal combustion engine. In 1896,he produced his first car that was built in the garage of his home. In 1903, he established the Ford Motor Company with $28,000 in capital provided by others. Even though it made money from the start, it made even more money when he introduced the Model T in 1908.

Ford developed his production ideas and he slowly but completely introduced the assembly line in 1913. When he did this, the price of the Model T dropped steadily.

In 1908, the company made 10,607 cars and sold them for $850 apiece
In 1916, it manufactured 730,041 priced at only $360.

Originally, Ford held ¼ of the company’sstock. By 1920, he had become the only owner of one of the largest industrial enterprises on earth. In 1927, when the last Model T's was produced, (after 15 million) the company claimed to have earnings of nearly $700 million along with billions more in plants and equipment.

In 1914, when workers were averaging about $11.00 a week, Ford announced that his employees would be paid $5.00 for an eight-hour day. His wanted to motivate his workers to experience the hard work of the assemblyline. By doing this, he also wanted to bring his automobiles within economic reach of Americans. This policy made Ford famous around the world, and it seemed for a time that he might have a political career.

Ford was oncethought of as an industrial revolutionary. But in his later years, Ford became set in his ways. He refused to make changes in his production system, his automobiles, or his labor policies, even though the need and the signals were clear. Finally, a falling market left him with no choice but to shut down production of the Model T and redesign to produce the new Model A. Other automobile companies,like General Motors, took advantage of the downtime. The Ford Motor Company never regained its once overwhelming dominance.

Ford, a mechanical genius, was sometimes viewed as ignorant, narrow-minded, and naive. He published many insultingracist articles and fought unions and unionization with everything he had. He even hired a private police force. He would not allow modern management techniques to interfere with his tyrannical, cruel and oppressive ways. By the mid-1930’s, the company was splitand no one was really in charge at all. A decade later the Ford Motor Company, once the most extraordinary and powerfulforce of moneymaking in the American economy, was on the brink of ruin, losing a million dollars a day. Two years before his death, his family finally forced him to cede control to his grandson, Henry Ford II.

Peter Collier and David Horowitz, The Fords: An American Epic (1987); Allan Nevins and Frank Ernest Hill, Ford, 3 vols. (1954-1963).

John Steele Gordon

By 1900, tough-minded journalists, or muckrakers, like Lincoln Steffens and Ida Tarbell were realizing that politicians no longer ran America; big business did. Tammany Hall and Boss Tweed's power was nothing compared to that of Morgan's. Morgan was a massive man, with a mean glare and a purple, hideously disfigured nose, the result of a childhood skin disease. He smoked Havana cigars so big they were called Hercules' Clubs. And he had a tremendous physical effect on people. One man said that a visit from Morgan left him feeling "as if a [windstorm] had blown through the house."

Unlike Carnegie, Morgan was born rich. He grew up in a well-known banking family and got his start in his father's London business at the age of 19. After the Civil War, Morgan began investing in railroads and soon ruled the transportation empire. He didn't build railroads. He took over railroads that had run into financial trouble and consolidated or merged This process came to be called “Morganization.”

Morgan was a different type of capitalist than Andrew Carnegie. Carnegie built a business and loved competition. Morgan took over other people's businesses and hated competition. Morgan wanted to stabilize the boom and bust American economy. He argued that a stable economy would prevent price wars between business rivals and destroy big corporations.

Morgan's plan was compatible with many corporate giants, who wanted to swallow up their competition by forming giant trusts and monopolies. John D. Rockefeller had done this by creating the greatest monopoly of them all, the Standard Oil Company. But no other capitalists in the country, except Carnegie, had money to form such gigantic combinations. Empire-building industrialists were drawn to Morgan. This brought many corporations to New York. Powerful capitalists like Philip Armour, the meat king, and Collis Huntington, the railroad king, moved to New York in the 1890s to be near big investment houses like Morgan. By 1895, New York was the headquarter city for American corporations. Almost half the American millionaires lived in the New York metropolitan region. And Morgan controlled a Wall Street group that the writer John Moody called "the greatest financial power in the history of the world."

At the peak of his powers, in the early 1900s, Morgan dominated a hundred corporations with more than $22 billion in assets. Among them was the first billion dollar corporation in history, U.S. Steel. Morgan had formed this giant steel trust in 1901 out of mills he'd purchased from Carnegie in a huge cash deal. Morgan's defenders said he never abused his power. But the question was: should any person in a democracy have this much power? Morgan saw himself as a force for the good. He believed his banks had helped to transform America into the world's most powerful nation. Privately, secretly, he gave money to the urban poor.

His partners claimed he could have made a lot more money than he did. Well that's true, but only because he lived a life of self-indulgence, spending time collecting paintings, rare books, tapestries, tremendous houses and ocean-going yachts. When Morgan died in 1913, he had as estate of $80 million, that's $1.2 billion today (compared to Rockefeller's worth of nearly a billion, that's $l90 billion today).