Robber Baron or Captain of Industry?

Who were the Gilded Age giants? Robber Baron or Captain of Industry? Analyze Carnegie, Vanderbilt, and Rockefeller.

What are Robber Barons? Introduction Video Watch the Video to introduce you to the concept of the "Gilded Age" Rober Barrons and learn about some very important men who helped shape America after the Civil War in EXTREME WAYS! Andrew Carnegie A Scottish immigrant who quickly found success in managing railroad expansion, Andrew Carnegie is sometimes thought of as the best example of the American Dream. He was commissioned to build the St. Louis Bridge but the distance the bridge needed to travel was too long to be supported by iron. He spent years trying to find a solution and finally ran into Sir Henry Bessemer and his new method of making steel. Taking back the technique to Pittsburgh, Carnegie invested all of his money into a steel mill the size of 80 football fields. Despite going into massive debt, the plant was able to produce 10,000 rails of steel a month by reducing the average time to construct a rail from two weeks to 15 minutes.Over the next few decades, he created a steel empire, maximizing profits, and minimizing inefficiencies through ownership of factories, raw materials, and transportation infrastructure involved in steel making. In addition to improving his own manufacturing operation, Carnegie attempted to control as much of the steel industry as he could. He did this mainly by vertical integration, a process in which he bought out his suppliers— coal fields and iron mines, ore freighters, and railroad lines—in order to control the raw materials and transportation systems. Carnegie also attempted to buy out competing steel producers. In this process, known as horizontal integration, companies producing similar products merge.Carnegie was fiercely anti-union, and a strike as his mill in Homestead, Pennsylvania turned into a small war. Pinkerton guards attacked strikers and wound up being captured. But as the controversy in the press played out, Carnegie was off at a castle he had bought in Scotland. Having gained control over his suppliers and having limited his competition, Carnegie controlled almost the entire steel industry. At a time when steel was needed for railroads and other industrial purposes, Carnegie's mills produced much of the nation's supply.In an article he wrote titled “Wealth”, Carnegie described his belief that it was the moral responsibility of the rich (especially the self-made rich) to tackle wealth inequality by giving their surplus wealth to those who were less fortunate. Carnegie argued that the rich should give to any number of public institutions, including libraries, museums, and concert halls. donated about 90 percent of the wealth he accumulated during his lifetime; his fortune still supports the arts and learning today. Robber Baron or Captain of Industry? Sort Carneige's actions into either being a characteristic of a Captian of Industry or a Robber Baron. Remember a Robber Baron took advantage of people and opportunity. Captain of Industry is what we would call a successful business person. Captain of Industry Worked his way up from being a poor immigrant to one of the richest men in the world Introduced the Bessemer Process to the United States that helped revolutionize the railroad and construction industries Donated 90% of his total wealth to various charities Robber Baron Created multiple monopolies by using horizontal and vertical integration to completely control the steel making process Slashed workers wages and increased hours to get a larger profit Brutally crushed a strike at one of his steel factories Cornelius Vanderbilt Shipping and railroad tycoon Cornelius Vanderbilt (1794-1877) was a self-made multi-millionaire who became one of the wealthiest Americans of the 19th century. As a boy, he worked with his father, who operated a boat that ferried cargo between Staten Island, New York, where they lived, and Manhattan. After working as a steamship captain, Vanderbilt went into business for himself in the late 1820s, and eventually became one of the country’s largest steamship operators. In the process, the Commodore, as he was publicly nicknamed, gained a reputation for being fiercely competitive and ruthless.In the 1860s, he shifted his focus to the railroad industry, where he built another empire and helped make railroad transportation more efficient. Vanderbilt quickly gained control of most of the railroad industry. He offered rebates to customers and refused service for people traveling on competing railroad lines. He lowered the rates on his railroad in order to gain more business. He drove competing railroad companies out of business and bought up their railroad lines. Small railroads were swallowed up by Vanderbilt’s massive corporation.Vanderbilt led the drive for consolidation and gained control of most of the railroad business. Vanderbilt also tried to “corner”, or completely control, the stock in the Erie Railroad Company, leading to a dispute between railroad millionaires. He encouraged these battles because he usually won and benefitted. His control of the New York railroad system led to the development of what is now Grand Central Station, and one of the nation’s first giant corporations, N.Y. Central Hudson River Railroad.Vanderbilt also used his money to help others. He donated 1 million of his money to build and endow Vanderbilt University in Nashville, Tennessee. (In a nod to its founder’s nickname, the school’s athletic teams are called the Commodores.) . He lived modestly, but his children built a number of mansions (many on Long Island), which came to symbolize what was known as the “Gilded Age.” Robber Baron or Captain of Industry? Sort Vanderbilt's actions into either being a characteristic of a Captian of Industry or a Robber Baron (Consult your notes from today if you are not sure) Captain of Industry Donated the money needed to build Vanderbilt University Helped develop Grand Central Station Made shipping goods from the East to West much easier and efficient Robber Baron Drove competing companies out of business by slashing prices Refused service to customers who used other railroad companies Consolidated smaller railroads to control most of the industry Secret Rebates given to “best” customers. John D. Rockefeller John D. Rockefeller (1839-1937), the founder of the Standard Oil Company, became one of the world’s wealthiest men and a major philanthropist. Born into modest circumstances in upstate New York, he entered the then-fledgling oil business in 1863 by investing in a Cleveland, Ohio refinery.In 1865, Rockefeller borrowed money to buy out some of his partners and take control of the refinery, which had become the largest in Cleveland. Over the next few years, he acquired new partners and expanded his business interests in the growing oil industry. At the time, kerosene, derived from petroleum and used in lamps, was becoming an economic staple. In 1870, Rockefeller formed the Standard Oil Company of Ohio, along with his younger brother William (1841-1922), Henry Flagler (1830-1913), and a group of other men. John Rockefeller was its president and largest shareholder.Standard Oil gained a monopoly in the oil industry by buying rival refineries and developing companies for distributing and marketing its products around the globe. In 1882, these various companies were combined into the Standard Oil Trust, which would control some 90 percent of the nation’s refineries and pipelines. In order to exploit economies of scale, Standard Oil did everything from building its own oil barrels to employ scientists to figure out new uses for petroleum by-products.Rockefeller’s enormous wealth and success made him a target of journalists, reform politicians, and others who viewed him as a symbol of corporate greed and criticized the methods with which he’d built his empire. As The New York Times reported in 1937: “He was accused of crushing out the competition, getting rich on rebates from railroads, bribing men to spy on competing companies, of making secret agreements, of coercing rivals to join the Standard Oil Company under threat of being forced out of business, building up enormous fortunes on the ruins of other men, and so on.”Although criticized by journalists for his corrupt business practices, he was able to improve his public image throughout his life by philanthropy, or giving his money away to charitable causes. He donated more than half a billion dollars to various educational, religious, and scientific causes through the Rockefeller Foundation. Among his activities, he funded the establishment of the University of Chicago and the Rockefeller Institute for Medical Research (now Rockefeller University). Robber Baron or Captain of Industry? Sort Rockefeller's actions into either being a characteristic of a Captian of Industry or a Robber Baron (Consult your notes from today if you are not sure) Captain of Industry Built oil refineries that purified oil which allowed people to use oil in everyday items Funded the establishment of the University of Chicago Donated 500 million dollars through the Rockefeller Foundation to various charities Managed to become incredibly wealthy despite a poor background Robber Baron Created a Trust that led to his ownership of 95% of the oil in North America Bribed officials to spy on rival companies Made secret deals with railroad companies that made him rich through rebates Crushed and ruined rival businessmen who resisted his takeover of their companies J.P Morgan One of the most powerful bankers of his era, J.P. (John Pierpont) Morgan (1837-1913) financed railroads and helped organize U.S. Steel, General Electric, and other major corporations. The Connecticut native followed his wealthy father into the banking business in the late 1850s, and in 1871 formed a partnership with Philadelphia banker Anthony Drexel. In 1895, their firm was reorganized as J.P. Morgan Company, a predecessor of the modern-day financial giant JPMorgan Chase. Morgan was heavily involved in reorganizing and consolidating a number of financially troubled railroads. In the process, he gained control of significant portions of these railroads’ stock and eventually controlled an estimated one-sixth of America’s rail lines.The process of creating a monopoly through the elimination of competition and the maximization of profits by slashing the workforce and reducing their wages is named after JP Morgan.Ultimately, Morgan’s most notable investment, and greatest consolidation, was in the steel industry, when he bought out Andrew Carnegie in 1901. Initially, Carnegie was reluctant to sell, but after repeated badgering by Morgan, Carnegie named his price: an outrageously inflated sum of $500 million. Morgan agreed without hesitation, and then consolidated Carnegie’s holdings with several smaller steel firms to create the U.S. Steel Corporation. U.S. Steel was subsequently capitalized at $1.4 billion. It was the country’s first billion-dollar firm.Morgan also believed that electricity was the power source of the future. He invested heavily in Thomas Edison and provides a workshop for him to experiment and test out new usages for the resource. Against his father’s advice, Morgan helped form the Edison Electricity Company and created the world’s first power station, which quickly powered half of Manhattan. Morgan would spend the next 30 years of his life attempting to secure a monopoly on the electric market by planting scare stories in the press and undermining Nikola Tesla's work. He was successful in 1897, after almost bankrupting his competition, Westinghouse, through a costly legal battle over patents.During Morgan’s era, the United States had no central bank so he used his influence to help save the nation from disaster during several economic crises. In 1895, Morgan assisted in rescuing America’s gold standard when he headed a banking syndicate that loaned the federal government more than $60 million. In another instance, the financial panic of 1907, Morgan held a meeting of the country’s top financiers at his New York City home and convinced them to bail out various faltering financial institutions in order to stabilize the markets.Morgan had also been known to use his wealth in positive ways. He contributed various donations to libraries, hospitals, and schools. He supported many organizations, including the Red Cross, the Episcopal Church, and the New York Lying-In Hospital, during his lifetime. He also provided a donation to create a museum for the rare book and manuscript collection of the Morgan Library.A subsequent U.S. congressional committee, in 1912, reported that his firm held 341 directorships in 112 corporations that controlled over $22 billion in assets. In comparison, that amount of wealth was greater than the assessed value of all the land in the United States west of the Mississippi River. Robber Baron or Captain of Industry? Sort Morgan's actions into either being a characteristic of a Captian of Industry or a Robber Baron (Consult your notes from today if you are not sure) Captain of Industry Single-handedly bailed the United States Government out of an economic crisis Helped found multiple libraries, universities, and museums Created the first billion dollar company Led the way in the use of electricity as a power source and was a patron of Thomas Edison Robber Baron Aggressively consolidated the railway industry. He owned 1 of all of the railroads in the United States Increased the work hours and slashed worker's wages to make maximum profit Drove Westinghouse Tesla out of business Which of these 4 men do you believe did the most good for America, and why? Answer in complete sentences. Do you think any of these men deserve the title "Robber Baron", why or why not? "Traits of a Titan" After watching the video clip. Answer the Writing Prompt. List several of the similar personality traits and characteristics that all of the men in the video above and that you read about have in common that helped them succeed as "Captains of Industry". You may want to watch the video again, and take notes to help you.