Much credit was given to six men, for creating the foundation of America. The first 4 were Cornelius Vanderbilt, John D. Rockefeller, Andrew Carnegie, and J.P. Morgan. Through shipping and trains, oil and its development, steel and construction, and corporate finance, these men constructed the foundation of our country. Through their careers, these men saw much change during prosperous times that effected business then and ultimately in the long run.
Cornelius Vanderbilt was an American industrialist and philanthropist. His claim to fame and fortune was through shipping and railroads, becoming one of the richest men in American history. Vanderbilt took an interest in railroads in the 1850’s and served on the boards of directors of the Erie Railway, the Central Railroad of New Jersey, the Hartford and New Haven, and the New York and Harlem. In 1863, he took control of the Harlem after buying most of its stock and was elected president of the railway. He realized the value of this railroad as it was the only steam railroad to enter the large city of Manhattan and ended up in New York where it connected with other railroads there. He then purchased the Staten Island Railway. Vanderbilt ran into some problems with the Harlem and connecting lines between other railways. But after some trouble, he bought control of the Hudson River Railroad in 1864, the New York Central Railroad in 1867, the Lake Shore and Michigan Southern Railway in 1869, and soon after he bought the Canada Southern railway also.
Vanderbilt then consolidated his two most important railroads into the New York Central and Hudson River Railroad in 1870, making this one of the first large corporations in American history. Just years earlier in 1868, Vanderbilt and Daniel Drew, who had just become treasurer of the Erie Railway, fell into a dispute over control of the Erie Railway Company which owned and operated the Erie Railroad. James Fisk and Jay Gould were brought onto the board and began to conspire with Daniel Drew to water down stock, knowing that Vanderbilt planned to buy the majority of shares of the Erie stock. After losing over $7 million, he ended up gaining control of the railroad after all. In total, he also controlled the Michigan Central Railroad, New York, Chicago and St. Louis Railroad, West Shore Railroad, and more. By the age of 82, his fortune amounted to over $100 million (Stiles).
Vanderbilt handled change very well. Expanding and controlling over 10 railways and making the large fortune that he did shows that he managed slow, methodical change very well. Even though he lost over $7 million in the Erie War, that change did not hardly effect his companies because he controlled so many and between all of them, he managed his losses very well so that it wouldn’t negatively effect his business. John D. Rockefeller was an industrialist and philanthropist and the founder of the Standard Oil Company. This company dominated in the oil industry making him one of the richest men in the world at that time. Rockefeller also revolutionized the petroleum industry.
In 1870 when Rockefeller formed the Standard Oil Company, it quickly became the most profitable refiner in Ohio. Railroads were fighting to ship his product because his company grew to become one of the largest shippers of oil and kerosene. Replacing the old distribution system with its own vertical system, Standard Oil’s kerosene was delivered by tank cars to markets and wagons delivered it to retail customers. At the end of his career once he retired, Rockefeller was worth about $1,500,000,000 (Folsom). For Rockefeller, he planned to change the market with his ways of handling his kerosene and oil business. Once he found the most efficient way to transport his product,
Rockefeller became a billionaire and left other companies in last place. Though the invention of electricity was a huge threat to his company and a huge innovative change, he didn’t allow that to ruin his success. Andrew Carnegie was an industrialist who led the expansion of the steel industry in America. He made his fortune in the steel industry, controlling the most iron and steel operations ever owned by any individual in America. In the 1880’s, his steel company was the largest manufacturer in the world of pig iron, steel rails, and coke. The company had the capacity to produce about 2,000 tons of pig metal per day. In 1892, he launched the Carnegie Steel Company which was combined of Homestead Steel Works and a line of lake steamships which he bought in 1888. In all, by 1889, Carnegie’s empire consisted of Edgar Thomson Steel Works, The Lucy Furnaces, Pittsburgh Bessemer Steel Works, the Union Iron Mills, the Keystone Bridge Works, the Union Mill, Hartman Steel Works, the Frick Coke company and the Scotia ore mines. In 1901, Carnegie was 91 and considering retirement.
He made all the necessary preparations to his end and made negotiations with J.P. Morgan to sell his company. March 2, 1901, the United States Steel Corporation was formed and was the first corporation in the world with a market capitalization over $1 billion (History.com). While Andrew Carnegie was building his steel empire, he realized that in order to exceed production, he would have to make some changes. In 1892, labor declared a general strike in New Orleans as did coal miners in Tennessee, railroad switch-men in New York, and copper minders in Idaho. In order to keep production moving smoothly at Homestead, Carnegie left it up to his general manager, Henry Frick to cut wages and break the Amalgamated Association of Iron and Steel workers, one of the strongest craft unions in the country. Frick’s job was to produce as much armor plate as possible before the union’s contract ran out in the middle of summer. Frick cut wages and extended work hours through brutal, unsafe working conditions. 3,000 of 3,800 of the workers at Homestead went on strike. Frick responded by barricading the plant but the workers still gathered and guarded workers from the plant by threatening to shoot. Shots were fired and after 14 hours of gunfire and the union’s retaliation, 9 workers were left dead or dying, but they claimed victory (PBS.org). These small changes that Carnegie had Fisk make, were changes that ultimately ruined his reputation but also affected the people who worked for his company.
J.P. Morgan was an infamous banker, philanthropist and dominated in corporate finance at his time. What was well known as “Morganization” was Morgan’s process of taking over troubled businesses. He would do this by reorganizing businesses’ structure and management in order to return them to profitability. In 1892, Morgan arranged a merger between Edison General Electric and Thomson-Houston Electric Compnay which formed General Electric. In 1896, Adolph Ochs secured financing with Morgan to purchase the struggling New York Times which eventually set the standard for American journalism. Carnegie also bought out Andrew Carnegie’s steel business, merged it with several other steel, oil, and mining companies and created the United States Steel Corporation (Bowen). Morgan’s area of business was constantly changing. He was involved in the steel, electric, oil, and mining industries and much more. Change didn’t even disturb this magnificent businessman, banker and financier.
Citations
“The Homestead Strike.”PBS.org. PBS, 2009. Web. 11 Oct. 2013.
“Andrew Carnegie.”History.com. N.p., 2013. Web. 11 Oct. 2013.
Stiles, T.J. “Cornelius Vanderbilt.”The New York Times. N.p., n.d. Web. 11 Oct. 2013.
Folsom, Burton. “John D. Rockefeller and the Oil Industry.” Fee.org. N.p., 1 Oct. 1988. Web.
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Bowen, Liz. “J.P. Morgan: A Biography by Liz Bowen.”Fordham University.edu. N.p., 2013.
Web. 11 Oct. 2013.
