November 2, 2015
Classes 822, 828
Directions: Choose one of the three industrialist to analyze. Then read the Workingman's Ten Commandments. Using the articles you chose, write a "Letter to the Editor" in your notebooks. (See further directions in that section.)
Robber Baron or Captain of Industry?
z
Robber Baron – a critical term used to describe a
powerful 19th century businessman or banker who use questionable or
unethical business practices to become powerful or wealth.
z
Captain of Industry – a term originally used to describe a
business leader who means of gaining a personal fortune contributes positively
to the country in some way. This may have been through increased productivity,
expansion of markets (trade), providing more jobs, or acts of philanthropy (donating
money).
John
D. Rockefeller: Robber Baron or Captain of Industry?
"What
a Funny Little Government!" Cartoonist Horace Taylor pokes fun at John D.
Rockefeller in this cartoon, which appeared in The Verdict, a
partisan magazine of the day.
He was America's first billionaire.
In a pure sense, the goal of any capitalist is to make
money. And JOHN D. ROCKEFELLER could
serve as the poster child for CAPITALISM.
Overcoming humble beginnings, Rockefeller had the vision and the drive to
become the richest person in America.
At the turn of the century, when the average worker earned
$8 to $10 per week, Rockefeller was worth millions.
Robber Baron or
Captain of Industry?
John D. Rockefeller (1839-1937)
What
was his secret? Is he to be placed on a pedestal for others as a "CAPTAIN OF INDUSTRY?" Or
should he be demonized as a "robber baron." A ROBBER BARON, by definition, was an
American capitalist at the turn of the 19th century who enriched himself upon
the sweat of others, exploited natural resources, or possessed unfair
government influence.
Whatever conclusions can be drawn, Rockefeller's impact on
the American economy demands recognition.
Rockefeller was born in 1839 in Moravia, a small town in
western New York. His father practiced herbal medicine, professing to cure
patients with remedies he had created from plants in the area. John's mother
instilled a devout Baptist faith in the boy, a belief system he took to his
grave. After being graduated from high school in 1855, the family sent him to a
Cleveland business school.
Young John Rockefeller entered the workforce on the bottom
rung of the ladder as a clerk in a Cleveland shipping firm. Always thrifty, he
saved enough money to start his own business in produce sales. When the Civil
War came, the demand for his goods increased dramatically, and Rockefeller
found himself amassing a small fortune.
He took advantage of the loophole in the Union draft law by
purchasing a substitute to avoid military service. When EDWIN DRAKE discovered oil in
1859 in Titusville, Pennsylvania, Rockefeller saw the future. He slowly sold
off his other interests and became convinced that refining oil would bring him
great wealth.
Waste Not...
Rockefeller introduced techniques that totally reshaped
the OIL INDUSTRY. In
the mid-19th century, the chief demand was for kerosene. In the refining
process, there are many by-products when CRUDE OIL is converted to KEROSENE. What others saw as waste, Rockefeller saw as
gold. He sold one byproduct, paraffin to candle makers and another byproduct
petroleum jelly to medical supply companies. He even sold off other
"waste" as paving materials for roads. He shipped so many goods that
railroad companies drooled over the prospect of getting his business.
Rockefeller demanded REBATES, or discounted rates, from the railroads. He used
all these methods to reduce the price of oil to his consumers. His profits
soared and his competitors were crushed one by one. Rockefeller forced smaller
companies to surrender their stock to his control.
Standard Oil — a Trust-worthy
Company?
John D. Rockefeller had to perform a delicate balancing act to maintain his reputation as a philanthropist while living the live of a wealthy businessman.
This sort of arrangement is called a trust. ATRUST is a combination of
firms formed by legal agreement. Trusts often reduce fair business competition.
As a result of Rockefeller's shrewd business practices, his large corporation,
the STANDARD OIL COMPANY,
became the largest business in the land.
As the new century dawned, Rockefeller's investments
mushroomed. With the advent of the automobile, gasoline replaced kerosene as
the number one petroleum product. Rockefeller was a bona fide billionaire.
Critics charged that his labor practices were unfair. Employees pointed out
that he could have paid his workers a fairer wage and settled for being a
half-billionaire.
Before
his death in 1937, Rockefeller gave away nearly half of his fortune. Churches,
medical foundations, universities, and centers for the arts received hefty sums
of oil money. Whether he was driven by good will, conscience, or his devout
faith in God is unknown. Regardless, he became a hero to many enterprising
Americans
________________________________________________________________________________
Andrew
Carnegie: Robber Baron or Captain of Industry?
By the time he died in 1919, Carnegie had given away $350,695,653. At his death, the last $30,000,000 was likewise given away to foundations, charities and to pensioners.
By the time he died in 1919, Carnegie had given away $350,695,653. At his death, the last $30,000,000 was likewise given away to foundations, charities and to pensioners.
Oil was not the only commodity in great demand during the
Gilded Age. The nation also needed steel. The railroads needed STEEL for their rails and
cars, the navy needed steel for its new naval fleet, and cities needed steel to
build skyscrapers. Every factory in America needed steel for their physical
plant and machinery. Andrew Carnegie saw this demand and seized the moment.
Humble Roots
Like John Rockefeller, ANDREW CARNEGIE was not born into wealth. When he was 13,
his family came to the United States from Scotland and settled in Allegheny,
Pennsylvania, a small town near Pittsburgh. His first job was in a cotton mill,
where he earned $1.20 per week.
His talents were soon recognized and Carnegie found himself
promoted to the bookkeeping side of the business. An avid reader, Carnegie
spent his Saturdays in the homes of wealthy citizens who were gracious enough
to allow him access to their private libraries. After becoming a telegrapher
for a short while, he met the head of a railroad company who asked his services
as a personal secretary.
ß Millionaire Andrew Carnegie spoke
against irresponsibility of the wealthy and sharply criticized ostentatious
living.
During the Civil War, this man, THOMAS SCOTT, was sent to Washington to operate transportation
for the Union Army. Soon iron and steel caught his attention, and he was on his
way to creating the largest steel company in the world.
Vertical Integration:
Moving on Up
The Bessemer Process
When WILLIAM KELLY and HENRY BESSEMER perfected a process to convert iron
to steel cheaply and efficiently, the industry was soon to blossom.
Carnegie became a tycoon because of shrewd business tactics.
Rockefeller often bought other oil companies to eliminate competition. This is
a process known as HORIZONTAL
INTEGRATION. Carnegie also created a VERTICAL COMBINATION, an idea first implemented by GUSTAVUS SWIFT. He bought railroad
companies and iron mines. If he owned the rails and the mines, he could reduce
his costs and produce cheaper steel.
Carnegie was a good judge of talent. His assistant, HENRY CLAY FRICK, helped manage
the CARNEGIE STEEL COMPANY on
its way to success. Carnegie also wanted productive workers.
Carnegie’s Parents Influenced his Treatment of his Workers
Carnegie's
mother taught him that he needed to put his own needs before those of others in
order to survive. This is a direct result of the family's poverty, especially
after his father died.
You can see how his mother's values influenced him by some of his
actions. In 1865, someone told Carnegie that the railroad workers were about to
strike and gave him a list of the strike organizers. Carnegie gave the
information to his boss, who fired everyone on the list. So the strike was
broken before it even began. What do you think about what Carnegie did? How do
you think his actions affected him later in life?
All these tactics made the Carnegie Steel Company a
multi-million dollar corporation. In 1901, he sold his interests to J.P.
Morgan, who paid him 500 million dollars to create U.S. Steel.
Giving Back
Retirement did not take him out of the public sphere. Before
his death he donated more than $350 million dollars to public foundations. Remembering
the difficulty of finding suitable books as a youth, he helped build three
thousand libraries. He built schools such as CARNEGIE-MELLON UNIVERSITY and gave his money for
artistic pursuits such as CARNEGIE
HALL in New York.
Andrew Carnegie was also dedicated to peace initiatives
throughout the world because of his passionate hatred for war. Like
Rockefeller, critics labeled him a robber baron who could have used his vast
fortunes to increase the wages of his employees. Carnegie believed that such spending
was wasteful and temporary, but foundations would last forever. Regardless, he
helped build an empire that led the United States to world power status.
J.
Pierpont Morgan: Robber Baron or Captain of Industry?
ß J.P. Morgan invested in everything from Thomas Edison's electric company to railroads and steel companies to insurance firms.
Child of Privilege
Not all of the tycoons of the Gilded Age were rags-to-riches
stories. J. PIERPONT MORGAN was
born into a family of great wealth. His father had already made a name for
himself in the banking industry. With Morgan's family resources, he enjoyed the
finest business education money could buy.
He did not scratch and claw his way to the top of any
corporate ladder. His father arranged for an executive track position at one of
New York's finest banks. Regardless of his family's advantages, Morgan had a
great mind of his own. He set out to conquer the financial world, and conquer
it he did.
Morgan the Banker
Morgan's first business ventures were in banking. By 1860,
he had already established his own foreign exchange office. He knew the power
of investment. Not content to control just the banking industry, he bought many
smaller ventures to make money.
During the Civil War, he paid the legally allowed fee to
purchase a substitute soldier and evaded military service. Morgan made handsome
profits by providing war materials. One of his enterprises sold defective
rifles to the Union army. Upon later investigations, he was declared ignorant
of the poor quality of his guns and was cleared of all charges.
After the war, he set out to corner the nation's financial
markets.
J.P. Morgan was one of the organizers of the World Fair held in Chicago in 1893.
Despite his label as a robber baron, Morgan felt his
investments benefited America. His railroad dealings helped consolidate many
smaller, mismanaged firms, resulting in shorter trips and more dependable
service. Two times during financial panics he allowed the federal government to
purchase his vast gold supplies to stop the spiral of deflation.
He owned a bridge company and a tubing company. His most
renowned purchase was in 1901, when he bought the Carnegie Steel Company for
$500 million to create U.S. Steel. Within ten years U.S. Steel was worth over a
billion dollars.
Morgan's actions marked a shift in thinking among American
industrialists. He proved that it was not necessary to be a builder to be
successful. Smart investment and efficient consolidation could yield massive
profits. Young ENTREPRENEURS shifted
their goals to banking in the hopes of mirroring Morgan's success.
Trouble with the
Government
For all his accomplishments, he was harshly criticized. The
first decade of the twentieth century brought challenges to Morgan from the
government. His NORTHERN SECURITIES
RAILROAD company was deemed illegal under federal ANTITRUST LAW, the first such
action by the national government. Congress investigated him for his control of
the financial markets. Even U.S. Steel was forced to relinquish its MONOPOLY.
Things you don't see everyday: A cancelled check for three million dollars from J.P. Morgan to the Northern Pacific Syndicate.
Jaded by the criticism, Morgan moved to Europe, where he
lived his final days. He was a favorite target of intellectuals who claimed
that such tycoons robbed the poor of their deserved wealth. He was a hero to
enterprising financiers across the land who dreamed of following his example.
That is, of course, unless they were destroyed by his shrewd, fierce tactics.
Name:
______________________________________ Date:
_______________
Instructions: Read the Workingman’s Ten Commandments, and then write a letter to the
editor of the New York Times explaining how your assigned industrial leader
(Andrew Carnegie, J.P. Morgan or John D, Rockefeller) would respond to these
commandments.
The Workingman’s Ten
Commandments
An anonymous writer
wrote the Workingman’s Ten Commandments. It is explaining what he/she believes
they must do in order to survive in the factories of the Industrialists. It
shows that employees and employers had a different perspective or point of view
of working in factories.
First Commandment.—I
am thy lord and master, who has brought thee off and out of British bondage
into a land where there are free institutions and equal rights given to
all—black, red and white men.
Second
Commandment.—Thou shalt have no other master besides myself, and do as I bid
you do; for I am rich, and give you as much wages as I please.
Third
Commandment.—Thou shalt not bow down to any other master, and not belong to
trades' unions, or lecture on the principles of the working party, or do
anything contrary to my wish or command, for, if you do, I will call on the
military.
Fourth
Commandment.—Thou shalt not serve any other master, or work for any more pay
than I give: for I am jealous master. I will have you discharged on the least
provocation, and half starve your wife and children, and have you punished as a
communist, and not treat you as an American citizen, but as a tramp and a
vagabond.
Fifth
Commandment.—Thou shalt not call me any other name but sir and master: for I am
a rich man and have piles of money, and therefore you are my slave, for I own
your body and soul. Six days you must labor and do all I bid, or I will give
you another reduction. If you murmur or growl I will make you work also part of
the night: for I am all-powerful, and I can use the law to suit myself.
Sixth
Commandment.—Thou shalt honor my money-bags, and also my high social standing
in society. Then thy days shall be long on earth and in my employment, which I
give thee with my usual blessing of long hours and small pay. So says thy
master.
Seventh
Commandment.—Thou shall not incite riots with intent to kill. If you do, I will
have you arrested and make you give bonds for three thousand dollars and
promise of good behavior in the future.
Eighth
Commandment.—Thou shalt not strike for any higher wages, so as to be able to
make an honest living, and keep your children from begging, and make you eat
bread and water three times a day—that’s good enough for a greasy and ignorant
mechanic, or a dirty, black miner.
Ninth
Commandment.—Thou shalt not steal or commit any other nuisance, for I will find
you guilty and have you punished; for I am mighty and my name is Capital,
Capital.
Tenth
Commandment.—Thou shalt not covet my money, or own a house or lot, for if you
do I will have it sold by the sheriff and own it myself and shall say “hands
off;” and I will say to the Government, you must protect me in all my
undertakings, for I am mighty, and my name is Capital—0! Capital.
October 8, 1895
To the Editor of the New York Times:
Dear Editor,
Sincerely,
