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The Rise of Big Business
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During the late 1800s and early 1900s, the United States
experienced many technological and economic changes as the
country went through a period of rapid industrialization. New
innovations improved efficiency, making it easier and cheaper to
mass produce many different types of goods. Powerful business
leaders created large corporations, earning an unprecedented
amount of wealth.
The Robber Barons
Andrew Carnegie
Andrew Carnegie was a very successful businessman
who helped develop the steel industry. After establishing
or purchasing a number of steel mills, he founded the
Carnegie Steel Company in 1892. By using the
Bessemer process developed by Sir Henry Bessemer
of England, Carnegie was able to mass produce steel
and revolutionized the industry in the United States.
Carnegie used the policy of vertical integration to gain
control over all of the factors of production in steel. These
factors included the mills that produced the raw materials,
the factories that produced the finished steel, as well as the mode of distribution.
This streamlined approach meant that the Carnegie Steel Company was able to
mass produce steel and become the largest and most profitable company in the
industry. At the end of his career, Carnegie was very intrigued by philanthropy. In
1889, he wrote "The Gospel of Wealth," in which he encouraged businessmen
to use their fortunes for the benefit of society. He personally was an advocate for
education and established a number of public libraries within the United States
and in Europe.
John D. Rockefeller
Another successful businessman in the 1880s was John D. Rockefeller.
Rockefeller is best known as the oil tycoon who founded Standard Oil. Rockefeller
was a ruthless businessman who was very aggressive in building his company. In
1882 he reincorporated his company as a trust, which is defined as a combination
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of corporations under a central board. With the trust
created, Standard Oil could use the more dynamic
business practice, horizontal integration, to create a
monopoly within the oil industry. As a reaction to the
monopoly, Congress passed the Sherman Anti-Trust
Act in 1890 that forbade any combination of companies
that restricted economic competition. In the first decade,
the legal parameters of the law were very ill-defined. As a
result, Standard Oil was not prosecuted under Sherman
until 1911 when they lost the case Standard Oil v. New
Jersey in the Supreme Court. Though not as charitable as Carnegie, Rockefeller
did engage in philanthropic missions, most notably in education.
Cornelius Vanderbilt
Cornelius Vanderbilt was an entrepreneur involved in the
transportation business. Vanderbilt built his fortune in the
steamboat and railroad businesses. Vanderbilt started
within the steamboat industry, and expanded to railroads
after the Civil War. The railroad industry was an emerging
business market at the time, and Vanderbilt made most of
his fortune owning the majority of railroads around New
York City. Though a more reluctant philanthropist then
Carnegie and Rockefeller, Vanderbilt gifted a million
dollars to a university in Nashville, Tennessee. The school
later was renamed Vanderbilt University in his honor.
Other Notable Figures
Thomas Edison
Thomas Edison was perhaps the most famous inventor of the late 1800s. He
was a very prolific inventor as he holds 1,093 U.S. patents as well as numerous
patents in Europe. He is credited with the invention of the phonograph (1877) as
well as the perfection of objects like the incandescent light bulb, electric
generator, and motion picture camera. As well as working on objects, Edison
spent a significant time researching properties of electricity. He was an advocate
for the use of direct current in providing electricity. In 1882, the Edison Electric
Illuminating Company began transforming American society when it began to
supply the people of New York City with electric power.
George Westinghouse
George Westinghouse and Thomas Edison were rival inventors of the late
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1800s. Westinghouse promoted alternating current, which means that the flow
of the electric charge periodically reverses. Alternative current (AC power) is a
common source of electricity today.
Alexander Graham Bell
Another important inventor of the time was Alexander Graham Bell.
Communication was an area of interest to Bell who was influenced by his work
with the deaf. Bell received a patent for his invention of the telephone in 1876, a
devise of communication that transmits sound by electric currents. After inventing
the telephone, Bell would continue to work on inventions and as such is
considered a leader of the communications industry.
Henry Ford
Henry Ford created the Ford Motor Company in 1903. By creating the first
moving assembly line, Ford was able to drastically reduce the amount of time it
took to make a car. As a result, production of automobiles increased, and the
price decreased. For the first time, average Americans could afford to buy
automobiles. Almost 17 million cars were produced all over the world from 1908 to
1928.
George Pullman
A leading figure in the railroad industry, George Pullman was influential with
increasing the amount of passenger travel in railroads. Pullman created the
Pullman sleeping cars, which were designed to provide comfort and a place to
relax for passengers on trains.
Gustavus Swift
Gustavus Swift was an entrepreneur and inventor who is most well-known for
his development of the first practical refrigerated railroad car. Prior to this
invention, livestock was shipped from ranches and farms directly to the cities in
which it would be distributed. Swift's work in the meatpacking industry gave him
insight into the need for cooled railroad cars that could keep meat fresh even on a
long train ride. Due to this invention, Swift's company was able to ship refrigerated
meat all over the United States.
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