Robber Barons or Captains of Industry?

ROBBER BARONS OR CAPTAINS OF INDUSTRY?

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 productex. Carnegie-steel

Horizontal integration: former competitors are brought under a single corporate umbrellaex. Rockefeller-oil

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.

Standard Oil

Rockefeller CenterThe Rockefeller 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.

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

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)

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.

Carnegie Mellon University

Carnegie Hall

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

Vanderbilt University

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

Rough Point in Newport, Rhode Island

William Kissam Vanderbilt1849-1920660 Fifth Avenue, New York

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

“Marble House” in Newport, Rhode Island

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

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

Cornelius Vanderbilt II (1843-1899)New York Residence

“The Breakers” in Newport, Rhode Island

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

Emily Thorn Vanderbilt“Elm Court” in Lenox, Massachusetts

J. Pierpont Morgan-Consolidations and mergers

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” 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.)