19 robber barons who built and ruled America

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America’s 19th- and early-20th-century tycoons, pejoratively nicknamed “robber barons,” built massive empires and accumulated unprecedented wealth.

Many of these men gained their fortunes either at the expense of their factory workers or by methods that were considered unscrupulous even back then — a time when insider trading wasn’t yet outlawed.

However, many of them also gave away their fortunes to build universities, hospitals, libraries, and museums that still stand to this day.

Given that the debate about morality and business practices rages on to this day, we figured it was a good opportunity to take a look at the ruthless business practices and accomplishments of 19 tycoons who built — and ruled — America.

John Jacob Astor was America’s first multimillionaire and built America’s first monopoly.

John Jacob Astor was a German immigrant who got involved in trading furs with Native American tribes. Eventually, he built the American Fur Company, which is referred to as America’s first business monopoly.

He was also briefly dabbled in smuggling opium to China via his American Fur Company ships — even though China banned the drug about two decades earlier.

His will left a huge sum of money to create a free, public library, which eventually became the Astor Library.

Source: Britannica, History

Cornelius Vanderbilt dominated the steamship business in Long Island Sound, and built an empire of railroads around New York City.

Cornlius Vanderbilt, aka the “Commodore,” bought his first small ferry boat with a $100 loan at age 16 and turned it into the world’s largest shipping empire.

He sold everything before the Civil War to invest in railways, and became the richest man in the US by the war’s end. However, he also lost his favorite son in the war, which caused him to fall into a “drink-fueled depression.”

He later assumed control of railroads around New York City, and also opened the Grand Central Depot. (Notably, today the station is adjacent to Vanderbilt Ave.) And he donated $1 million to Vanderbilt University, where the sports teams are now called “the Commodores.”

Bonus fact: Once, in a letter to business rivals, Vanderbilt wrote, “Gentlemen: You have undertaken to cheat me. I won’t sue you, for the law is too slow. I’ll ruin you.”

Source: History

Jay Cooke is known as the man who financed the Union in the Civil War.

Jay Cooke opened his own bank, Cooke & Co., in 1861. Soon after the beginning of the Civil War, Cooke floated a war loan of $3 million to the state of Pennsylvania.

The Treasury Department later engaged him for the sale of $500 million worth of bonds in 1862 — and he reaped a huge commission from the sale.

He was forced into bankruptcy in the aftermath of the Panic of 1873, but eventually rebuilt his fortune by 1880 after investing in a Utah silver mine.

Source: Britannica, National Parks Service

James Buchanan Duke was the powerhouse behind the modern cigarette industry.

James Duke acquired the license to use the Bonsack machine, the first automated cigarette-making machine, which provided a mechanized alternative to the older method of rolling cigarettes by hand.

He also innovated in the field of promotional events, giving out free samples of cigarettes to immigrants, hoping that they’d come back as paying customers later.

By 1889, his business produced 45% of all cigarettes sold in the US. Later, an 1889 merger that created the American Tobacco Company ended up controlling 90% of tobacco sales in the US.

Bonus fact: He later established the Duke Endowment. A portion of which went to Trinity College — which was later renamed Duke University.

Source: Encyclopedia, Duke Library

Andrew Carnegie built Carnegie Steel Company, and later donated 90% of his fortune.

Carnegie got his first job at age 13 as a bobbin boy in a cotton mill for $1.20 a week after his family moved to the US. He first made his wealth from managing railroads, but eventually moved into steel. His Carnegie Steel Company transformed steel production in the US, and was the largest of its kind in the world by 1889.

In 1892, the company tried to lower wages at a steel plant, but the employees responded with the Homestead Strike. Carnegie was away at the time, but did not escape criticism.

He was also active in philanthropy: He established the New York Public Library, Carnegie-Mellon University, and the Carnegie Endowment for International Peace.

Bonus fact: When he was young, Carnegie took advantage of a library for working boys, which had been opened by Colonel James Anderson and was super rare at the time. He was so thankful for the library that he vowed to help others in a similar fashion if he ever made money.

Source: Biography, Carnegie.org, “Andrew Carnegie” by David Nasaw

John D. Rockefeller founded the Standard Oil Company in 1870, which would control about 90% of US refineries and pipelines by the 1880s.

John D. Rockefeller founded the Standard Oil Company in 1870, which would control about 90% of US refineries and pipelines by the 1880s.

Wikimedia Commons

Rockefeller formed the Standard Oil Company with his brother and Henry Flagler in 1870. It grew into a huge monopoly, controlling about 90% of US refineries and pipelines by the 1880s, and was nicknamed “The Octopus” by muckraker journalists. The firm even built its own oil barrels and employed scientists to find new uses for petroleum by-products.

Rockefeller retired from the day-to-day operations by the mid-1890s. He donated over half a billion dollars to educational, religious, and scientific causes, including the establishment of the University of Chicago.

He also established the Rockefeller Sanitary Commission, which was the first attempt at organized disease eradication and significantly reduced the incidence of hookworm in the southern states.

The Supreme Court found Standard Oil in violation of antitrust laws and ordered it to dissolve in 1911.

Bonus fact: Rockefeller commemorated September 26, the day he started his first “real” job as an office clerk at age 16, with an annual celebration.

Source: History, PBS

J.P. Morgan was the major American financier behind the General Electric merger. He once bailed out the US government.

J.P. Morgan was involved in reorganizing and consolidating railroads after the industry overheated — and so gained control of a lot of railroads’ stock in the process.

He was also the major force behind the General Electric merger in 1892, and helped consolidate US Steel.

Notably, the US didn’t have a central bank back then, so Morgan helped save America’s gold standard in 1895 by loaning the government over $60 million. He also helped Wall Street get through the 1907 crisis.

Bonus fact: “Jingle Bells” was written by J.P. Morgan’s uncle, James L. Pierpont. The song was actually written about Thanksgiving — and was thought to be a total failure when first published.

Source: History, Britannica

Henry Morrison Flagler was the mastermind behind transforming the Standard Oil Company into a monster monopoly. He also built up Florida as a huge tourist destination.

Flagler was the one of the cofounders of Standard Oil and, according to Rockefeller himself, was the “brains” behind the operation.

Later in life, Flagler noticed that Florida had become a hotspot for the wealthy, and so he decided to develop the land in the state. He built up hotels, refurbished the decrepit railroads, established Florida’s east-coast cities as tourist destinations, and more or less “founded” the Palm Beach and Miami we know today.

Tellingly, the man described himself as “contented, but … never satisfied.”

Bonus fact: The residents of Miami tried to rename the city after Flagler, but he insisted that they keep the original name. The word “Miami” derives from Myaamia” (or Myaamiaki in plural), which was what the Native Americans who originally inhabited the region called themselves.

Source: Encyclopedia

Henry Huttleston Rogers invented the machinery that separated naphtha from crude oil and came up with idea of using pipelines to transport oil.

Henry Huttleston Rogers invented the machinery that separated naphtha from crude oil and came up with idea of using pipelines to transport oil.

Wikimedia

Rogers and his close friend, Mark Twain. Rogers helped Twain reorganize his finances.

Henry Huttleston Rogers came up with the machinery by which naphtha could be separated from crude oil and was also the guy who thought of using long pipelines to transport oil instead of railway cars.

When the Rockefellers were building up the Standard Oil Company, they took over the business that Rogers worked at, and he quickly rose up the ranks within Standard Oil.

Notably, Rogers became close friends with writer Mark Twain after he helping him reorganize his finances.

Bonus fact: At a dinner, one guest once pulled Twain aside and whispered, “Your friend Rogers is a good fellow. It’s a pity his money is tainted,” to which Twain responded: “It’s twice tainted — tain’t yours, and tain’t mine.”

Source: The Millicent Library, “Mark Twain” by Ron Powers

John C. Osgood experimented with welfare capitalism by housing his employees in a Colorado town.

John C. Osgood was one of the founders of the Fuel and Iron Company. After his company merged with William J. Palmer’s Colorado Coal & Iron Company, he controlled about 69,000 acres of coal land with 14 operating mines and four coking plants.

He also created the town of Redstone, Colorado, in which he experimented with welfare capitalism by housing his workers.

A glowing New York Times article from 1902 reports that he improved his employees’ standard of living. Redstone had schools for children, libraries and clubs for men, and “comfortable” homes. There were also “magnificent hospitals,” which were partly supported by the company.

Source: Mining Hall of Fame, New York Times

Charles M. Schwab was negatively portrayed as a “merchant of death” after his company profited from WWI.

Charles M. Schwab — not related to Charles R. Schwab of brokerage-firm fame — became the president of Carnegie Steel in 1897 and later the first president of the US Steel Corporation when it was created. He was reportedly a very effective manager and devised a clever plan to get his workers to increase steel production by introducing competition between teams.

He left in 1903 to run Bethlehem Steel, which he grew into the second-largest steel maker in the country. It eventually supplied munitions for the Allied forces in World War I. After raking in huge profits during the war, Schwab and his firm were negatively portrayed as “merchants of death.”

Source: Britannica

Andrew Mellon built huge enterprises in aluminum and coke, and later served as US Treasury secretary.

Andrew Mellon was a successful financier who provided capital for corporations in industries including aluminum, steel, oil, coal, and coke.

He helped create the Aluminum Company of America, the Gulf Oil Company, and the Union Steel Company.

In 1921, President Harding appointed Mellon as Treasury secretary. He was asked help reduce the huge federal debt resulting from WWI, and Mellon tackled the problem by reforming the tax structure.

His strategies proved successful, but the Great Depression ultimately caused debt to balloon again.

Source: Federal Reserve, Britannica

Charles Crocker was the chief contractor of the Central Pacific Railroad.

Charles Crocker moved out west to California following the gold rush. Although he didn’t make it in mining, he eventually became quite wealthy as a dry-goods merchant. He also later got involved in politics, winning elections to the Sacramento city council and the California state legislature.

He’s most famous for being the chief contractor in the creation of the Central Pacific Railroad, part of the first transcontinental railroad in the US. He was one of the “Big Four” — along with Collis P. Huntington, Leland Stanford, and Mark Hopkins — who spearheaded the operation.

He later became president of the Southern Pacific Railroad, which ended up absorbing the Central Pacific.

Source: Britannica, PBS

Marshall Field basically invented the modern department store.

Marshall Field’s first employer told his father that his son would never be able to run a store.

Years later, Field would go on to be the inventor of the modern department store.

He pushed customer service, liberal credit, the one-price system, and even allowed the returning of merchandise. According to Britannica, he introduced the concept of department-store restaurants.

Source: Britannica, Encyclopedia

Henry Clay Frick played a pivotal role in the steel industry, and later turned his huge art collection into a museum.

Henry Clay Frick played a huge rule in the expansion of the Carnegie Steel Company as chairman. However, relations between Frick and Carnegie soured over the years, and, ultimately the two men never spoke again after a lawsuit.

Frick was a “lifelong opponent” of organized labor. His refusal to allow union workers at his mines eventually led to the Homestead strike in 1892, in which 10 men were killed and 60 were wounded.

He was a huge art collector in his later years, and eventually left his house and his art to be turned into a gallery. You can still visit it today in New York.

Bonus fact: Frick once managed to stop an assassination attempt by an anarchist who stabbed him several times and shot him twice. Frick then went on to finish his day’s work.

Source: The Frick Museum, Britannica, Encyclopedia

Daniel Drew was an aggressive stock manipulator who eventually lost everything in the Panic of 1873.

Daniel Drew used the profits from his successful steamboat business to open a Wall Street banking and brokerage firm in 1844 called Drew, Robinson, and Company.

After his partners died, he became an aggressive stock manipulator, specializing in railroad stock. He was also involved in the so-called Erie War over control of one of the most lucrative rail lines in the states.

He reportedly used “every means available, including fraud and deception, to make a fortune in investments in the transportation industry.”

He eventually lost his fortune in the Panic of 1873.

Source: Encyclopedia, Britannica

Jay Gould was an infamous gold and railroad speculator who was involved in the Erie War.

Jay Gould bought and reorganized the Erie Railroad, and, along with Daniel Drew and James Fisk, worked to keep Vanderbilt from taking control of the railroad in the so-called Erie War. Gould ultimately ended up in control of the railroad, and reportedly teamed up with Boss Tweed and Peter Sweeney to further profit from speculations on the stock.

He later took control of the Union Pacific Railroad in 1873 and several other railroads.

And he was also involved in the infamous Black Friday gold panic with James Fisk — detailed in the next slide.

Source: Biography, Britannica, PBS

James Fisk tried to corner the gold market with Gould by inflating the price, which led to the 1869 Black Friday.

James Fisk, nicknamed the “Barnum of Wall Street,” was an aggressive Wall Street broker. Fisk was also one of the players involved with Daniel Drew and Jay Gould in protecting their control of the Erie Railroad from Vanderbilt.

He also tried to corner the gold market by inflating the price with Jay Gould — which led to the 1869 Black Friday, as falling gold prices caused market panic. Gould managed to escape complete disaster because he sold most of the gold before prices started to fall. This episode also ended up hurting then-President Ulysses S. Grant’s popularity.

Source: Britannica, History, PBS

Leland Stanford was a railroad magnate turned politician. He also founded Stanford University.

Leland Stanford left his law career in New York for the California gold rush. Eventually, however, he grew his wealth as one of the founders of the Central Pacific Railroad along with Collis P. Huntington, Mark Hopkins, and Charles Crocker.

He also was involved in politics. He served as a leading member of the Republican Party, the governor of California, and eventually a US senator.

He and his wife also opened Stanford University in 1891. The “first” student was president Herbert Hoover.

Source: PBS, Stanford University