Who Were The Robber
Barons, And Whom Did
They Rob?
Taken from DON’T KNOW MUCH ABOUT AMERICAN
HISTORY
While the U. S. government was robbing
the Indians of their land, big businessmen
known as robber barons were “robbing”
a good portion of the American people.
In feudal times in Europe, some wealthy
landowners would steal from travelers
who passed through their lands. These
not-so-noble noblemen became known
as “robber barons.”
(Baron is a
nobleman’s title, like lord or earl.) After
the Civil War in America, different kinds
of robber barons came along. They
didn’t steal directly from travelers passing
through their lands, but they found other
unethical and even illegal ways to build
enormous fortunes. They became so rich
and powerful that people began to call
them robber barons too. The secret of
their wealth lay in the big businesses they
built—and the way they built them.
Thanks to new machines, America’s rich
natural resources, and plenty of cheap
labor, big industries continued to boom
after the Civil War. Some of the men
who controlled these industries had
made fortunes during the war by making
weapons, uniforms, and food for soldiers.
Most of them hadn’t fought themselves
because they could pay for substitutes to
take their places, which was allowed.
They added to their wartime fortunes by
building railroads, mills, shipyards, oil
wells, and factories. Soon some of these
men controlled whole industries. Using
unethical means, like manipulating stock
and unfair labor practices, they drove
rivals out of business until all competition
was gone. This created monopolies, but
it isn’t a game.
When people control all of the supplies,
they can set prices as high as they want.
Think about it. If you have the only
lemonade stand on the block, you have
a monopoly and can charge whatever
people can afford or will agree to pay.
But if somebody opens a lemonade
stand down the street and charges less,
you either have to lower your price or
lose the business. That is the competition
that is at the heart of a free market. But
the robber barons owned all the
lemonade
stands—along
with
the
lemons, the sugar, the water, and the
glasses.
The American robber barons could get
away with running roughshod over their
consumers and employees because this
kind of large-scale industry was new to
America and there were few laws to
control them. Many government officials
simply went along because they
believed that such businesses were good
for America. Others were dishonest and
took bribes. A few large companies
were becoming larger and richer. At the
same time, many average working
people were stuck in terrible poverty. For
better or worse, America was becoming
the world’s wealthiest industrial nation. A
relatively weak country at the end of the
Civil War, the United States had become,
by 1915, the largest producer of food,
coal, iron, and steel in the world.
The Biggest of the
Businessmen
Cornelius Vanderbilt (1794-1877)
first built a steamship empire, then
the largest single railroad line in
America, the New York Central.
When he died, he left most of his
fortune to his family who built a
seventy-room mansion in Newport,
Rhode Island.
The family once
threw a party where guests dug in
sandboxes filled with diamonds
and other precious gems.
Andrew
Carnegie
(1835-1919)
revolutionized the steel industry
with a new, efficient method of
turning iron to steel. (Steel is a
stronger, more flexible, and lighter
form of iron, and it became the
foundation of the nation’s industrial
growth.) Carnegie had come to
America with his poor Scottish
parents and started working when
he was twelve, and his was truly a
rags-to-riches story. After another
rich businessman, J. P. Morgan,
bought
Carnegie’s
company,
Carnegie gave away most of his
fortune--$324,657,399
in
all—to
schools, artists, and foundations.
He built nearly three thousand
publish libraries and Carnegie Hall
in New York City.
John D. Rockefeller (1839-1937)
founded
the
Standard
Oil
Company in 1870.
Soon the
company owned more than 90
percent of America’s oil refineries.
Rockefeller kept his costs low by
buying up companies that let him
pump, refine, and sell his oil himself.
He also made secret deals with
railroads to get low rates for
shipping. Later in life, Rockefeller
gave away half his fortune—more
than $500,000,000—to start the
University
of
Chicago,
the
Rockefeller Institute for Medical
Research,
and
a
charitable
foundation.
John Pierpont Morgan (1837-1913)
and his bank, J. P. Morgan and
Company, controlled American
shipping, telephones, telegraphs,
electric power, insurance, and, by
1900, half the nation’s railroad
tracks. After he bought Carnegie’s
steel company, Morgan bought
huge amounts of iron ore from
Rockefeller and founded U.S. Steel
Corporation, the nation’s first
billion-dollar corporation. Morgan
was so wealthy and powerful that
in 1907 he was able to arrange
loans
that
bailed
the
U.S.
government
out
of
nearbankruptcy.