Ever since the colonization period in the 1600s, many settlers had come to North America as a land of opportunity. As civilizations became developed in America, many will see that this hope will be realized. After the Civil War and towards the end of the 19th century, America will have became an industrial empire, creating the term “millionaires. ” With the discovery of new raw materials and the enhancement of the technological era, many people took on the jobs of becoming businessmen.
People such as John D. Rockefeller, Andrew Carnegie, and J. P. Morgan, invested their lives and money into creating corporations that either thrived or died. The ones who did manage to make it big, many of whom were owners of the major railroads, factory bosses, or stockbrokers, became major contributors to the American society. With the increase of power of these corporate leaders, many people began to question whether they were using these trusts and monopolies to gain a greater gain for themselves or for society. As competition rose, many leaders developed “pools” and techniques to eliminate them, the nicknames of “robber barons” or industrial statesmen rang in many consumers’ minds.
It is justified that many could call these leaders “robber barons” because many of them exploited employees, used competitive techniques that manipulated the market, and cooperated in untrustworthy “pools” that would create a different kind of aristocracy in America. Prior to the second Industrial Revolution, industries and factories had existed primarily in the Northeast and on the city coasts. However, after the booming rise of advancement in technology, such as the invention of the Bessemer Process that allowed for the mass production of steel, many corporations spurred from the once tiny factories.
Conveniently, around the 1820s to the 1870s America experienced the second wave of immigration that brought many people whom were seeking jobs. Business owners saw this as a great opportunity to have an abundant amount of workers that were willing to work long hours for little pay. Despite many business owners claiming that their factories were run with the utmost respect of the worker and had no intention of any manipulative gains (as stated in Thomas Alva Edison’s, owner of the Edison Laboratory, letter), the reality of the average worker’s life was strenuous.
The worker that worked 12 hours a day, seven days a week, lived in fear of losing their job because the worker needed the factory more than the factory needed the worker. Contrary to the reality, Russell H. Conwell had stated that the enterprises that made the most money were run by the most honest men. Had factory owners who claimed that the worker was the most important factor of running a factory remained true to their word, the degree of exploitation of workers would not have been so high. William Graham Sumner summed up that the wealth gained by the enterprise owners were for only themselves.
The creation of the transcontinental railroad was one major factor that spurred the start of the second Industrial Revolution. The railroad was a convenient addition to American life because it allowed for faster transportation of people as well as merchandise, and created many opportunities for people from across the country. It became such a convenience that the railroad companies began to use this demand to their advantage by creating unfair rates. Farmers who were competing with the factories needed to deliver their products in a fast but low rate.
However, railroad companies hid their rates in order to gain profit. Even William H. Vanderbilt, president of the New York Central ; Hudson River railway, had stated that the railroad rates were not created with the public in mind. He had said that the railroad’s main goal was to make profit, not benefit the public. Even though Congress passed the Interstate Commerce Act of 1887 that demanded for railroads to have a set rate, it proved to be unsuccessful. Aside from the railroads ripping off the public, business leaders used trusts to manipulate the market.
Andrew Carniege, owner of the steel company, used a technique called vertical integration that allowed every process of steel production to distribution to be administered by his company. Combined with John D. Rockefeller’s horizontal integration (which allowed him to ally with his competitors to create a monopoly for his oil empire), the public could not escape from the control of these business leaders. The drawing depicted in Document F displays how these competitive techniques gave the Standard Oil Company, as well as other businesses, too strong of a grasp on the economy.
The American corporation world waged a war between different enterprises competing for profit. Amidst the rate wars came the creation of corporate “pools”, which were agreements that allowed a business to be divided in order to share the profit. James B. Weaver states in his A Call to Action that monopolies were created with the sole purpose to make money, allowing businesses to be masters of a given market. He concludes that because trusts create fraudulence, laborers are the ones who suffer from them, tying back to the concept of exploitation of labor.
Pools were seen in railroad companies, where these barons would give secret rebates when they wanted to. They created a division between the social classes of the wealthy and the poor. Andrew Carnegie’s belief on Social Darwinism which meant that the most “fit” were the ones who survived, caused him to express that the division between the rich and the poor was beneficial. However, this was not the case since the reality of society was that the poor greatly outweighed the rich. While the wealthy lived in luxury, carelessly exploiting their workers and manipulating the market, the poor lived in cramped “dumbbell” tenements.
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