In order to grow, a country needs not only the

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In order to grow, a country needs not only the muscles of labourers but also the wheeling and dealing of entrepreneurs. As these entrepreneurs amassed fortunes for themselves, they brought the United States great advantages. Such entrepreneurs as Cornelius Vanderbilt, Andrew Carnegie, and John Davidson Rockefeller became known as "robber barons." Cornelis Vanderbilt was born on May 27, 1794, into a family of nine children, in Port Richmond, Staten Island, New York (1). When he was sixteen, he entered the transportation business and established a freight-and-passenger ferry service between Staten Island and Manhattan. He had borrowed $100 from his mother to help initiate this business (2). Then, after the business was up and running, he repaid his mother and still had an extra thousand. At the end of that year he gave his mother the additional one thousand dollars and bought partial interest in several other boats (2). Thus, he had devised on a small scale the system that would one day make him one of the wealthiest men in the world.

When he got married and started a family, he set up a larger ferry system and obtained a contract to supply six forts around New York State. It was quite hard to maintain but the profits were large, and new schooners were added to a growing fleet. During the War of 1812, he owned a fleet of schooners and entered the steamer business in 1818, buying his first steamship in 1829. He realized that steamboats were the future of sea travel and, therefore, invested in them. At the time, Robert Fulton, the inventor of the first successful steamboat, had just come out with the Clermont (steamboat) and was creating a monopoly of the business. After seven years of that situation, the US Supreme Court declared that such monopolies were unconstitutional (3). Because of Vanderbilt's independent spirit and vision of the future, he resigned from his position with Thomas Gibbons, for whom he worked commanding steamboats and streamlining procedures. At the age of thirty-five, and with forty thousand dollars, he entered the New York steamboat business (4). He constructed better boats than his competitors and delivered services that were cheaper and more efficient. None of his more than one hundred vessels was ever burned, or wrecked, or destroyed unlike that of his competitors. He chose only the best captains and carried no insurance. He had become an effective competitor by reducing his rates, constantly improving the quality of his ships and crew, and controlling much of the Hudson River trade; when his rivals paid him to take his traffic elsewhere, he set up routes from Long Island Sound to Providence, Rhode Island, and Boston, even taking some of their business. By the time he was forty, he was worth half a million dollars.

By 1864, Vanderbilt had sold his steamships to Daniel B. Allen and Cornelius K. Garrison for a million dollars (5). This began his new interest and investing into the railroad industry. He became more involved in the railroad industry around the winter of 1862 - 1863 by buying heavily the stock of the Harlem Railroad. He originally bought the stock at three dollars a share in 1857; on April 22, 1860, he sold it for seventy-five dollars a share (6). Vanderbilt became the president of the Harlem Railroad, and his son William the vice president. Vanderbilt kept on adding more railroads to his empire, beginning with the stock of the Hudson River Railroad. He was not interested in investing on speculation but rather in making the railroads profitable. With full control of the Hudson River Railroad. Next, he began to buy stock in the New York Central Railroad, using the two million dollars he had made off Harlem, thus repeating his practices in the steamship business (7).

When he was seventy-three, he took over the New York Central Railroad, and the improvements that took place on Harlem and the Hudson River railroads were repeated, this time even more so. In time he owned the Canada Southern, Michigan Central, and Great Western Railroads. The combined railroad was 978 miles long and worth $150 million (8). The man who had fought against monopolies now monopolized 50 % of the railroad business. Ironically, Vanderbilt, who will always be associated with the railroad industry, was nearly killed in a train accident in 1833, when he was thrown from a train, dragged along the track, and flung down an embarkment (9).

By the age of eighty-one, and still in good health, Vanderbilt had accumulated one of the world's greatest fortunes, and, despite his tyranny and ruthlessness, he had created remarkable transportation systems for the United States. At the time of his death, on January 4th, 1877, his wealth was estimated to surpass $100 million dollars, and his endowments were many, including a million dollars to the Vanderbilt University (10) .

Another great influential entrepreneur was Andrew Carnegie, born on November 25, 1835, in Dunfermline, Scotland, into a family of two children. He grew up in Pennsylvania and he became a messenger in a Pittsburgh telegraph office, learning telegraphy at 13; this prepared him for employment with the Pennsylvania Railroad as the private secretary and telegrapher to the railroad official, Thomas Alexander Scott (11). Later, Carnegie was promoted to superintendent of the Pittsburgh division of the railroad. He remained with the Pennsylvania Railroad for a dozen years, acquiring executive skills and a sharp insight into the economic principles of the capitalist economy (12). During the Civil war, Carnegie served under the command of Scott, who was in charge of military transportation and the government telegraph service. After the war, Carnegie returned to Pittsburgh to resume his duties with the Pennsylvania Railroad. Losing interest in his salaried job, he began buying stocks and making investments. In 1856 he purchased six hundred dollars worth of stock in the Adams Express Company, realizing what ease and wealth can come from such investments as those into the Woodruff Sleeping Car Company, the Columbia Oil Company, and the Keystone Bridge Company. In this he held a one-fifth interest, enough to make him the major shareholder.

After living in Europe, Carnegie became dissatisfied with his lot in life; he believed he was too involved in financial matters and wished to look into manufacturing. He chose the steel manufacturing business since he already had great familiarity with the railroad business. Also, he knew there would be large profits in steel, for improved rails would be needed in immense quantities. He finally established the Carnegie Steel Company, Limited, in 1892, which manufactured steel using the Bessemer process (13). The Bessemer process involves burning out carbon and other impurities from pig iron, thereby making a stronger form of steel (13). Always alert to technological improvements that would lower the cost of production and increase sales and profits, within a decade Carnegie introduced to his plants the open-hearth steel production process. In the mid - 1880's, his organization gained the massive Homestead Works Inc., and developed a major new market by selling steel structural units to the elevated railways and skyscrapers that were beginning to appear in major American cities. The 1890's brought more prosperity, as well as some of his greatest disappointments. During the Homestead Strike of 1892, Carnegie remained in Scotland and relied on the business ability of the Chairman of the company, Henry Clay Frick (14). Frick had Carnegie's permission to handle negotiations with the Amalgamated Association of Iron and Steel Workers. After the strike, Carnegie held an interest of more than 50 percent in the firm, resumed a more active role in company affairs, and forced Frick out of company affairs after a disagreement that split the two. This lead the company to its most profitable years. The key to Carnegie's success was increasing the firm's share of the market during the depression of the 1890's, acquiring ownership of more of its basic raw materials, its own railroads and its fleet or ore-carrying ships, and its modernizing facilities. Carnegie Steel's annual profits grew 800 percent between 1895 and 1900 (15). In 1899, he consolidated his interests in the Carnegie Steel Company, where he controlled about 25 percent of the American iron and steel production (15). He sold this in 1901 to the United States Steel Corp. for $250 million and retired (16). He employed the vertical integration system whereby he formed and owned all the dependent companies from mining to refining to making steel rail, relaying on no one but himself. He kept his costs low, and his profits high.

There was no doubt that Carnegie had built one of the most formidable business enterprises of the 19th century. Carnegie steel produced more steel than the combined output of the entire steel industry of Great Britain. Carnegie applied his remaining years to philanthropy - his new big business. He had an understanding of the needs of the working man and for the acceptance of unions. The bitterness of the Homestead Strike had inevitably remained with Carnegie who was determined to show the world that he was not insensitive to the needs of the less privileged. He gave over $350 million to various educational, cultural, and peace institutions. In 1911 he gave $125 million to establish the Carnegie Corporation of New York. Over the years, he has endowed nearly 1700 libraries in the United States and Great Britain, and donated funds for the construction of the Peace Palace at the Hague, Netherlands, for what is now the International Court of Justice of the United Nations (17). His philanthropic organizations continue to provide educational resources to the children of the world.

Like Vanderbilt and Carnegie, John David Rockefeller, born on July 8, 1839, in Richford, New York, into a family of five, was another "robber baron" (18). His education was irregular, but he studied hard and did have two years at Cleveland High School. His father encouraged him to go into business where he first worked as a merchant bookkeeper and a wholesale grocery worker. He was always involved with his family, community, and church. He would teach Sunday school and teach the lessons of the Bible to his parish community.

It was possible for Rockefeller to gain a monopolistic fortune in the oil business because of certain conditions that existed at the time: oil was being used for medicinal purposes, the oil business was chaotic, with numerous small operators, overproduction, cutthroat competition, and alternating periods of boom and bust. Rockefeller perceived that whoever could bring order to this industry could make a fabulous fortune. In 1862 he went into business with Samuel Andrews, the inventor of an inexpensive process for the refinement of crude petroleum (19). In 1865, he got out of the wholesale grocery business, and devoted himself to oil. The firm of Rockefeller and Andrews had an oil refinery that was producing at least twice as much as any other single refinery of Cleveland's nearly thirty refineries. Rockefeller prospered more than his competitors because of his foresight, attention to detail, emphasis on efficiency, lack of tolerance for waste, and growing reputation as a successful businessman. These qualities allowed him to borrow heavily from bankers and to attract partners who brought additional capital to his firm. Henry M. Flagler joined Rockefeller in 1867, bringing with him the ability to negotiate ever lower railroad shipping rates (20). Railroad rates were unregulated then, with railroads commonly giving favoured shippers rebates on their publically advertised rates. Rockefeller was able to play two railroads off against each other and water transportation off against the railroads. Thus, the lower shipping rates allowed him to undersell his competitors, steadily driving them out of business.

As Carnegie had done, Rockefeller also practised vertical integration. To cut his firm's dependence on related businesses, he began making his own barrels and then bought his own timber tracts to supply his cooperage plant. He owned his warehouses, bought his own tank cars, and, wherever possible, owned or produced the raw materials and transportation he needed to operate. He also discouraged waste by using kerosene by-products, and so became the oil industry's leading producer of paraffin and machine lubricants (21). In 1870, he made a partnership in the Standard Oil Company of Ohio. Even though previous railroad and oil companies proceeded to create monopolies but failed because they were declared illegal monopolies and the public became hostile over it, Standard Oil advanced to create its own monopoly of the oil industry (22). Rockefeller offered to buy out nearly all remaining Cleveland oil refineries. Their owners accepted a cash offer, took the offer in Standard Oil stock, or were driven out of business. Few claimed that they had been pressured into taking less than their businesses were worth, but those who acquired Standard stock did make small fortunes. Rockefeller achieved this take-over of his Cleveland competitors within three months. Standard then proceeded to win refineries in Pittsburgh, in Philadelphia, and on Long Island. By 1875, the firm was refining half the oil products in the US. Rockefeller's next step was to gain control of pipelines, oil terminals, kerosene distributors, and additional plants (23). By 1878, Rockefeller had secured his monopolistic position. During the 1880's, Standard Oil continued to grow by receiving new oil fields, built new refineries, and developed new refining methods Standard also expanded into the international market, such as in Asia, Africa, South America, and even Central Europe. Also, Standard Oil became involved in corporate organization. Rockefeller had hired the best legal talent to devise the concept of "the trust." That meant that the stock of Standard's subsidiaries and related companies was combined with Standard's stock; new certificates were issued, and an executive committee with Rockefeller at the head assumed control. Yet, Standard Oil never took total control over the oil industry. While accounting for the eighty to ninety percent of the oil produced in the United States, they did make substantial profits (24). Rockefeller had stabilized a chaotic industry.

His personal fortune was estimated at one point to be $900, 000, 000 (25). With this money he invested in the stock market, and gained control over the Mesabi Range, the richest iron ore field in the US. Also, he did look into philanthropy greatly. The total amount of his philanthropic contributions was approximately $550 million (26). About 80 percent of these funds was given to the Rockefeller Foundation, the General Education Board, the Rockefeller Institute for Medical Research (Rockefeller University), and the Laura Spelman Rockefeller Memorial (26). These generous donations were often acknowledged by hospitals, colleges, and other worthwhile organizations.

Vanderbilt, Carnegie, and Rockefeller were eccentric, daring and enterprising. They were selfish and ruthless, creating monopolies yet criticizing others who attempted to do the same. Yet, these three men united the new world with such great assets as railroads, steamships, and libraries. While they increased their personal fortunes, they increased the many opportunities of common man; hence, their influence could only be judged as positive.

Works Cited 1) Lane, Wheaton J. ,Commodore Vanderbilt : An Epic Of The Steam Age (New York : Alfred A Knopf Inc., 1942) page 10 2) Ibid, page 17 3) Ibid, page 26 - 27 4) Ibid, page 50 5) Ibid, page 78 6) Ibid, page 187 7) Ibid, page 222 - 225 8) Ibid, page 290 9) Ibid, page 59 10) Ibid, page 323 11) Livesay, Harold C., Andrew Carnegie and the Rise of Big Business (Toronto, Canada : Little, Brown and Company, 1975) page 18 12) Ibid, page 45 13) Ibid, page 98 14) Ibid, page 139 15) Ibid, page 166 16) Ibid, page 187 17) Ibid, page 188 18) Chernow, Ron, Titan : The Life Of John D. Rockefeller, Sr. (New York : Random House, 1998) page 9 19) Ibid, page 76 20) Ibid, page 95 21) Ibid, page 116 22) Ibid, page 148 23) Ibid, page 167 24) Ibid, page 343 25) Ibid, page 467 26) Ibid, page 636