The Rise Of Big Business
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The Rise of Big Business
The decades after the Civil War rapidly changed the face of the United States. The rapid industrialization of the nation changed us from generally agrarian to the top industrial power in the world. Business tycoons thrived during this time, forging great business empires with the use of trusts and pools. Farmers moved to the cities and into the factories, living off wages and changing the face of the workforce. This rapid industrialization created wide gaps in society, and the government, which had originally taken a hands off approach to business, was forced to step in.
Many individuals took advantage of the rapid industrialization and high influx of cheap labor in the form of immigrants. Among these entrepreneurs were John D. Rockefeller, Andrew Carnegie, Cornelius Vanderbilt, and George Pullman. Each made a name for themselves by forging their own corporate empire.
Rockefeller was an industrialist and philanthropist who made his fortune by founding the Standard Oil Company in 1870. Attempting to monopolize the industry and squeeze out the middle man, Rockefeller slowly gained almost complete control of the oil industry. He formed the powerful Standard Oil Trust in 1882, which united all of his companies and secured 95% of oil production in the United States for himself. Rockefeller was an industrialist who stamped out all of his competition with his trust, eventually leading to Congress intervention.
Andrew Carnegie found his fortune in steel. Arriving in America in 1848, he quickly made his way up society’s ladder and in 1870 founded the Carnegie Steel Company in Pittsburgh. Carnegie was opposed to monopolistic practices, but succeeded in eliminating the middle man. He pioneered the tactic of “vertical integration”, combining all phases of manufacturing into one organization. This increased efficiency and by 1900 Carnegie was produced one-fourth of the nation’s steel.
Cornelius Vanderbilt was a steamship and railroad tycoon. He made millions in the steamship business before turning to the promising railroad industry. He began to take capital from the steamship business to buy railroads, starting with the New York and Harlem Railroad in 1862. Vanderbilt eventually amassed over $100 million from his railroad empire and his wealth and power was virtually untouchable. He was a ruthless businessman, once saying to a competitor “You have undertaken to cheat me. I wont sue you, for the law is too slow. I will ruin you.” His New York Central rail line operated from New York to Chicago along more than 4,500 miles of track at the time of his death.
George Pullman was the developer of the Pullman Palace Car, creating his own factory town of Pullman, Chicago. With the massive success of the railroads, Pullman made a fortune producing his luxury sleeping cars. He is well known for suppressing his striking workers in Pullman. When a depression struck the country, he slashed wages the wages of his workers while keeping the wages of his associates and the price of living the same. This created uproar and led to a strike amongst his workers, eventually backed by Eugene Debs’ American Railway Union. The strike was violently put down, showing that labor unions had little power to negotiate.
These five industrialists and entrepreneurs took advantage of the industrializing America and became “robber barons”, amassing huge personal fortunes, sometimes at the expense of others.
The end of the 19th Century saw the development of many new industries. The vast natural resources of the nation, huge influx of cheap labor from Europe, and techniques of mass production brought on rapid industrialization. Several new industries sprung up in the wake of this movement, such as steel and oil. The expansion helped to start off the rapid expansion of the industrial life style in the United State as well.
Railroads provided work for a large pool of unskilled labor and the rail lines allowed quick transportation for other industries, such as steel and oil. Railroad tycoons such as Cornelius Vanderbilt and Jay Gould controlled much of the railways, and they both used shrewd business techniques to expand their corporation. The federal government also aided in the development of a transcontinental railroad by offering compensation and land for each mile that Railroad companies built. Because of this, the United States was quickly brought together from east to west by the railroad. Time zones were implemented because the railroads needed a standard time to go by, a prime example of the power of change that industry possessed. Steel sprung up as a major industry in the late 19th century as well. Carnegie started his steel factories in Pittsburgh, opening many new jobs and aiding in the trend of urbanization. The steel industry flourished and in 1901 the United States Steel Corporation was worth over $1.4 billion, the country’s first billion dollar corporation. The oil industry also grew exponentially as America expanded. John D. Rockefeller created the Standard Oil Company, monopolizing the competition on the way to becoming the richest man in history. The demand for oil products was bolstered tremendously by the invention of the automobile and the gas powered engine gave the oil business a highly profitable market. One of the most influential inventions of the time period was the telephone, introduced by Alexander Graham Bell in 1876. An enormous communications network was rapidly constructed on this invention. The invention of telephones attracted many women from the