Early Cap PP Notes

Robber Barons

“…the three foremost exponents of business enterprise: Morgan, Carnegie and Rockefeller. The first because he had created a virtual monopoly in banking, a “money Trust”; the second because of his death-grip on the key industry of the country; the third, Rockefeller, because of his amassing of industrial profit continued at such a high rate that an immense reservoir of cash was accumulated, which sought outlet through investment-banking operations of a size exceeding even those of Pierpont Morgan.” -Josephson p 388
Cornelius Vanderbilt
1794-1877
Born to poor Dutch peasants in Staten Island
Left school at 11 to help his father
Self educated
At 16, borrowed $100 from his parents, bought a small boat and started a ferry service to NYC
1818 sold his ships and became a steam ferry captain, eventually managing the fleet
1829 established a line of steamboats
1846 moved to NYC

During the CA gold rush, devised a plan to sail people to Nicaragua, where he then built a RR that could take them up the coast to CA
The “Commodore” was involved in nautical interests (shipping, etc.), and then RRs
1857 invested in NY & Harlem RR
1875 owned most of the RR systems in coming into NY and in the Midwest/East coast area
Considered one of the greatest Railroad Barons
Never too concerned with philanthropy, but gave $1 million to Central Univ. in Nashville, which thus became Vanderbilt Univ.
When he died he was the richest man in NYC and left his fortune to William, one of his thirteen children

Andrew Carnegie
1835-1919
Born in Dunfermline, Scotland and emigrated in 1848
At 14, worked as a bobbin boy in a textile factory, loved “progress”
Optimistic, by 17 he was a telegrapher ($800 a year)
Always looking for a way to get ahead, never let opportunity pass him by – even if meant breaking some rules

The Gospel of Wealth: the rich should help enrich society, not ‘waste’ it on those who don’t have wealth (social Darwinist)
Made his largest fortunes in steel, mass producing for rail lines
Also owned other businesses (Pittsburgh Locomotive, Car Works)
1901 sold his steel holdings to JP Morgan for $250 million (negotiated in secret by Charles Schwab)
By the time he died, he’d given away $350,695,653 and the last $30,000,000 at his death was also given to various interests
“Rags to Riches”

J.P. Morgan
1837-1913
Educated in Boston and Germany, later did banking for his father and then became a partner in Drexel, Morgan and Co.
Collected antiquity art, books and was a philanthropist
Very secretive, avoided too many public appearances, was embarrassed by a deformed nose
Head of JP Morgan (1895) and member of Cromwell’s banking house
Arranged merger of two major electric companies, creating General Electric


Cromwell helped Morgan create the largest company in the world: United Steel
Owned over 5000 miles of American Railroads
In this he also became in Panama and funded the purchase of the French Canal Company
Also lent the money for Panama’s independence, and later administered the country’s treasury
Had incredible financial prowess with connections in the U.S. and Europe
1904 Northern Securities Corp. dissolved by Supreme Court (violated the Sherman Anti-Trust Act)
Sat on numerous boards and influenced most of the nations’ major corporations; influenced politics, regulatory and financial laws, industry, etc.
Upon his death his art collection (very extensive) was donated to the Metropolitan Museum of Art in NY
John D. Rockefeller
1839-1937
By 16 he worked as book keeper
1859 partner in a small produce business
Within 4 years, he entered the oil refinery business
1870 organized Standard Oil
Came to dominate the oil refinery business (mergers, eliminating competition, gaining large capital, agreements with competitors, crushing small businessmen)

1882 all of his diversified holdings were placed together under the Standard Oil Trust
Also an accomplished financer
Also an accomplished financer
One of the directors of the 1901 U.S. Steel Corp.
Had massive holdings in petroleum
Several times the government forced Rockefeller to dissolve his interests
Also avoided public attention
Deep religious faith
Donated to the Baptist Church, YMCA, etc.
1892 founded the University of Chicago
Would start numerous foundations for public health, medical research, child welfare, etc.