.,Industrial GiantsmIndustrialism led to enormous business enterprises, pioneered by
men who possessed a combination o f leadership, bold risk taking, long-range vision,
and competitive drive. These'industrialgiants, such as John D.Rockefeller and Andrew
Carnegie, consolidated smaller companies and reshaped U.S. businesses into massive
corporations. As thbt companies 'becamewealthy and powerful so did the own&, whose
names acquired household fame that overshadowed that of former statesmen. Wealth, not
birth status, became the new measure of success in the United States.
John D.Rockefeller and Oil One of the forknost business geniuses in the industrial
age was John D.Rockefeller, who came to control 90 percent of the.oil industry in the
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country. Rockefeller, who began as an austere young businessman, believed there was
money to be made in the oil industry. Therefore, in 1863,he and several associates built
an oil refinery in Cleveland, Ohio. By the end of 1865,Rockefeller's refinery was the
largest in Cleveland. By 1868 his refinery business was the largest in tbe world. In 1870
he and six other partners formed the Standard Oil Company of Ohio. At the time of its '
formation, Standard Oil handled abut 10 percent of the country's oil-refining needs. By
1879 Standard Oil controlled over 90 percent of the market. Rockefeller also gained
control over oil pipelines and railroads. Rockefeller attempted to monopolize the oil
industry, arguing that monopolies and trusts ensured eumomicstability and a consistently
high quality of goods. By 1900 Rockefeller had brought order out of chaos in the oil
industry, eliminated his dompetitors, and reduced oil prices for the fust time. In addition
to controlling the oil industry, Rockefeller collected royalties on railroads and boats along
Lake Superior that be allowed other businesses to use.
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Audmw Camegie and Steel Andrew Carnegie, a contemporary of Rockefeller's, was
equally successful in big business. In 1848 Carnegie immigra'ted from Scotland to the
United States with his family at the age of 13.Though he had only five years' schooling
to his credit, Camegie had a shrewd business sense and made $400,000 in stuck
investments by the age of 33. He also possessed a boundless imagination alert for ways to
improve industry, and he believed that "the true road to...success in any line is to make.
yourself master in that line." Perhaps his shrewdest business decision was to build a steel
plant in Pittsburgh, Pennsylvania, using solely the Bessemes process. Within one year,
Carnegie's Bessemer steel was the most sought after in the country, and Carnegie, like
Rockefejler, established strong ties with railroads and shipping lines as he continued to
open new mills. Carnegie was relentless in rising to the top of the steel industry; he kept
tabs on his competitors, rewarded taIented employees and fired incompetent workers, and
slashed prices during recessions to keep production going. In 1900 Carnegie's company
produced one fourth of she nation's Bessemer steel, and his partners divided $40 million
in profits. Carnegje's take amounted to an impressive $25 milIion. Horatio Alger, famous
for writing children's books celebrating the American Dream, declared that Andrew
Carnegie's life was the epitome of a "rags to riches" success story because Carnegie built
a personal fortune from poverty using hard work, courage, and farsighted vision. Indeed,
Carnegie's life illustrated the principle of upward social mobility, the ability to move "up"
.... ---,,-class lincs in a society by accumulating wealth.
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The Rise of Industrial Trusts As industrialism progressed, businesses combined
competing companies inio monstrous firms called trusts. Trusts had centralized
management; stockholders placed their stocb in trustees' hands to make all decisions for
the firm about prices, use of raw matkrials, and labor relatiom..By 1904,319 industrial
trusts had swallowed 5,300 previously independent manufacturers, and 127 utiljt): trusts,
including railroads, had taken over 2,400 small companies. Examples of trusts were in the
oil, steel, coal,tohscm, whiskey, sugar, banking, and farm machinery industries.
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John D. Rockefeller's Standard Oil Trust was among the mdst monstrous trusts bccausc
Rockefeller used ruthless tactics to eliminate his cornpetitjon &d establish control of the
oil industry. When the Ohio courts early on dissolved Standard Oil, he went to New
Jersey and incorporated his trust under the state's looser regulations. He dropped the priac
ofoil at his refineries until other companies were forced out of business, then raised it
again once be had gained control of industry in the area. Although trusts allowed slightiy
lower prices overall because they made production more eScient, firms like Standard Oil
swept up most of the money by leasing its holdings in transpation and shipping lines to
other industries.
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m s t s Influence Government Affairs As they became rich and powerful, owners of
trusts manipulated the government at the federal, state, and local levels. Industrial giants
ran fur govement offices,made generous contributions to political candidates, and
bribed legislators. Trusts called for minimal governmental regulation ofbusiness udess
regulations benefited them, as in the case of high tariffs. By 1865 tariffs on manufactured
imports had increased from 18 to 47 percent, and they remained nearly that high until
1913.For example, the government placed tariffs on imported steel rails at $28 per ton,
which even Andrew Carnegie admitted was too high. Ironicdy, industrial leaders
supported immigration, because federal legislation restricting immigration would have
cut their labor supply. Within cities, trusts found support in l d police forces and antiunion courts who faithfully decided against strikers and union laws.
City Government Cormption Many municipal governments in the late nineteenthcentnry were run by political "machines" and "bosses" that catered to industrial interests.
Common people's political rights eroded under the influence big business held on city
officials.As socia1 reformer Jane Addarns remarked in "Why the Ward Boss Rules,"
laborers needing a job tended to vote for whichever boss promised to promote their
application to employers, In New York City's Tammany Hall, bosses gave families gifts
at weddings and attended their funerals, with the corrupt intent to win their political favor.
Many people believed that these officiais gave money out of their own pockets, but
in reality, bosses agreed with streetcar operators and other businesses to raise public
fares two cents in order to funnel the extra money into "gifts."Bosses such as Geurge
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Other Industry Leaders Several other men emerged as powerful industrial leaders as
well. Cornelius "kommodore" Vanderbilt swept up the railroad industry into smartly
linked trunk lines betwein New York's Grand Central Station and Buffalo, Chicago, and .
the West. Swift and Armour, captains of the meat-packing industry, established control
over the beef market, and he Guggenheirn family controlled billions of dollars' worth of
copper interests. The McCoftiicks, who founded the Internatiohal Harvest Company,
became synonymous witb the reaper business, as did the Duke family with the tobacco
industry. 1. ~ierpoktMorgan's bhking industry, called the House of Morgan, dominateh
finance activity through overseas stocks and loans to major industries including Carnegie
Steel, International Harvest Company, and Rockefeller's ~taddardOil Trust.
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The Gilded Agem As individuals rose to the top of their industries, they amassed'
personal fortunes that led to extravagant living. Industry giants bought multiple
homes, fitted with the most up-to-date technological featurks. Commodore Vanderbilt,
for example, purchased seven'houseswithin seven blocks of New York's luxurious Fifth
Avenue, worth a total of $12 million. Vanderbilt's expensively furnished homes ca&e
complete with elegantly decorated bathrooms that had a bathtub, toilet, and wash basin.
Outrageous parties, each costing thousands of dollars, imposed meticulous standards for
appropriate dinner behavior on the parts of host and guests alike. For example, in Ward
McAllister 's Society As I Have Found It, proper etiquette is described in this way: "In a
dinner of twelve or fourteen entrees...if you use the trume with the filet, making a black
sauce, you must follow it with a white sauce...[and when you serve] Camembert cheese,
with a biscuit, serve...y our Johannisberg, the only place in the dinner where you can
introduce tbis latter wine." Writer Mark Wain labeled this period in history "The Gilded
Age," because the open displays ofwealth among American elite society seemed like a
cheap picture frame-golden on the outside, but rotting on the inside.