Desktop version

Home arrow History

GETTING DOWN TO BUSINESS

The United States went from also-ran to Number One among the manufacturing nations of the world in the 30 years after the Civil War. This amazing growth was based on profits, people, and products:

- The Civil War was terrible where the bullets were flying, but the North came through with almost no destruction and a lot of money earned by supplying the army. It invested much of that profit in new businesses.

- People kept coming to America. Many of them were hard workers willing to put in 12hour days if that's what it took to move their families up the economic ladder.

- The United States almost burst with inventive ingenuity, creating new products like Alexander Bell's telephone (1876), the typewriter, the cash register, and the electric street car. Thomas Edison's electric light (1879), combined with the distribution system he designed to power it, changed the world. Before bright lights, people used to sleep at night. Edison also invented the phonograph (the ancestor of music players) and the movies that still entertain us.

The rise of the big businessman

Ambitious businessmen learned how to take advantage of all this profit, people, and product innovation to become rich.

Andrew Carnegie

Andrew Carnegie (1890) ran a steelmaking operation that proved the power of vertical integration — controlling everything you need to make a product. Carnegie miners dug iron ore out of frozen northern Minnesota and loaded it onto Carnegie ships, which steamed across the Great Lakes to Carnegie trains, which took the ore to Carnegie blast furnaces running night and day in Pittsburgh.

Carnegie also helped fund thousands of public libraries, thus spreading "the poor people's university" all over the country. By 1920, the United States had thousands of free public libraries — more than in the rest of the world combined — and half of them were built with help from Carnegie. Carnegie wrote The Gospel of Wealth, a book that said rich people had a responsibility to spend their money in a way that would help poor people better themselves.

John D. Rockefeller

John D. Rockefeller (1885) built Standard Oil into a company by using horizontal integration — controlling all the outlets for selling a product. Standard Oil drove retail and wholesale competitors out of business. Rockefeller said, "The day of combination is here to stay. Individualism has gone, never to return."

Rockefeller did whales an unexpected favor when he organized Standard Oil in 1870: The kerosene he made from petroleum gave much better light than the expensive whale oil that people had previously burned in lamps. Cans of kerosene from Standard Oil were invariably one of the first American products to arrive as U.S. commerce spread all over the world. Electric lights soon made kerosene obsolete, but freeways would lead to other uses for oil.

J.P. Morgan

J.P. Morgan (1895) controlled banks he didn't even own with interlocking directorates, people who shared seats on many boards of directors. When a group of businesses conspired to fix prices, it was called a trust.

 
< Prev   CONTENTS   Next >

Related topics