Despite their visionary leadership these barons came under intense scrutiny for their [at least perceived] ruthless nature and wanton disregard for public safety, all in the name of greater profits. This perception led to the industry's considerable regulation following passage of three notable bills; the Elkins Act of , Hepburn Act of , and Mann-Elkins Act of Each, in different ways, considerably expanded the Interstate Commerce Commission's ICC power over the railroads, which ultimately led to many failures through the 's.
One of the first and best remembered tycoons was Cornelius Vanderbilt, better known as the " Commodore. At first he worked with his father and then launched his own ferry service between Staten Island and New York City at the young age of He quickly succeeded at this endeavor and pushed for even greater heights, entering the steamboat business in by launching service between New York City and Peekskill. This earned him the nickname " Commodore ," where he became legendary as a no-nonsense businessman.
Of course, Vanderbilt was not the only tycoon. Another noteworthy baron was Collis Huntington, part of the fabled " Big Four " that helped build the Central Pacific. It was directed to " construct a railroad and telegraph line from the Pacific coast, at or near San Francisco, or the navigable waters of the Sacramento River, to the eastern boundary of California.
With the passage of the Pacific Railroad Act the CP's task was broadened after it adopted the agreement on October 7th and formally accepted it through the Department of the Interior on December 24th. James J. Collis P. Huntington: Net Worth, Biography, Background. The railroad's groundbreaking took place on January 8, at K Street in Sacramento along the Sacramento River waterfront.
It faced a difficult proposition in trying to hack out a right-of-way through the impenetrable Sierra Nevada mountain range, made all the more arduous by the lack of mechanized equipment; surveyors had to literally scale cliffs in finding a suitable grade while laborers used picks, shovels, and dynamite to form a roadbed.
Focus this turned to completing the line across the relatively flat deserts of northern Nevada and Utah. Following this event, it was not long before Huntington and his associates were eyeing other endeavors.
Hoping to eliminate the competition the " Big Four " had acquired the fledgling SP by In time the Central Pacific was slowly integrated into the Southern Pacific as the latter system expanded eastward, northward, and southward SP formally leased the CP on April 1, while it remained a corporate entity until June 30, Luis, Salt Lake City, and Portland.
Thousands more, whose owners were afraid to close them for fear of injury by salt water, were pumping the oil on the ground. All the influence of a few leading men was hardly enough to prevent an outbreak and the destruction of railroad and pipe lines. If we turn to the experience of the refiners we find they fared as badly as the producers.
The handful of New York refiners who survived the conspiracy against them testify that they had to keep their capacity limited and to do as little as they could. They did not dare to build large refineries, because they would not be able to get oil enough carried to them to keep them going. Alexander, of Cleveland, tells how he was informed by Rockefeller, of the Standard, that if he would not sell out he should be crushed out.
The Standard had a contract with the railroads which made them master. Refiner after refiner in Pittsburg, buying his crude oil in the open market, manufacturing it at his works, shipping it to the seaboard, met with a continued succession of losses, and was forced into bankruptcy or a sale of his works to the Standard, who always had a buyer on the spot at the right time.
The Germania, which was run to its full capacity as long as the Pennsylvania Railroad gave its proprietor transportation, is now leased to the Standard, but stands idle, as that concern can make more money by limiting the production and maintaining an artificial price than by giving the people cheap light. The Standard became practically the only refiner of oil in Western Pennsylvania, and its rule was bankruptcy to all attempting to lead an independent existence.
Reichardt tells us how the agents of the Standard came to him with the threat that if he did not come into their combination they would drive him to the wall. The Standard called upon this free man to choose between financial ruin and joining them on these terms: he was to refine only half as much as he had been doing, and was to pay them a tribute of one cent a gallon, a tax of five to twelve per cent.
The selling, storing, transporting, and price of his oil he was to leave entirely to the Standard. This testimony with regard to the regulation of prices by the Standard is confirmed by the unwilling evidence of Mr. The Pittsburg Chamber of Commerce reported April 3, , that there were twenty-one oil refineries idle in that city, owing to freight discriminations and combinations.
A minute prepared in by the Hon. A partial list prepared by Mr. Its genius for monopoly has given the Standard control of more than the product of oil and its manufacture. Wholesale merchants in all the cities of the country, except New York, have to buy and sell at the prices it makes. Merchants who buy oil of the Standard are not allowed to sell to dealers who buy of its few competitors.
Some who have done so have been warned not to repeat the offense, and have been informed that, if they did so, the Standard, though under contract to supply them with oil, would cut them off, and would fight any suit they might bring through all the courts without regard to expense. At least one case is known where the deputy oil inspector, in a city to which oil had been shipped by an outside dealer, received from the state inspector peremptory orders by telegraph, before the oil had arrived, to condemn it.
It has now stretched out its hands to grasp the turpentine trade, and its peculiar tactics have already been disastrously felt in the turpentine market. These oil producers and refiners whom the Standard was robbing with and without forms of law fought with every weapon they could command. The struggle has been going on continuously for nine years. All that men could do who were fighting for self-preservation was done. They caused to be introduced into Congress the first original bill to regulate railroads in interstate commerce.
The outrages done by the roads and the Standard were proved before an investigating committee of Congress, but Congress did nothing.
The legislature of Pennsylvania was besought to pass laws to enforce the constitutional provision for equal rights on the railroads of the State, but the money of the Standard was more powerful than the petition of business men who asked only for a fair chance.
Numbers of suits were brought, by individuals and nominally by the State, but by the harmonious efforts of the governor, the attorney-general, the courts, and the defendants they were prevented from coming to any conclusion. Indictments for criminal conspiracy were found by a grand jury, but when Governor Hoyt, of Pennsylvania, in due course of law, was called upon to issue requisitions for the extradition of the two Rockefellers and their accomplices, he refused to do so.
This compromise, signed February 5, , was a victory in forcing a pledge from the Standard and the railroads of the abandonment of the worst of their practices, but there lies in it, as in most compromises, a germ of disaster. It permits the Standard to receive any rebate the railroads have a right to grant, and allows the railroad to give rebates to large shippers, of whom there is but one, — the Standard.
This is the relative position of the parties to-day. The Standard holds it vantage-ground, and America has the proud satisfaction of having furnished the world with the greatest, wisest, and meanest monopoly known to history. To-day, in every part of the United States, people who burn kerosene are paying the Standard Oil Company a tax on every gallon amounting to several times its original cost to that concern. The price of refined at Cleveland was seventeen cents a gallon. Oil that the Standard sells in New York at a profit, at ten and one half cents a gallon, they charge nineteen and three fourths cents for in Chicago.
The price the Standard charges in Chicago is nineteen and three fourths cents a gallon, in which, as the difference between eleven and nineteen and three fourths cents, there is a tax on the public of eight and three fourths cents. This tax is transmitted by the middle-men, jobbers, and retailers to the consumer. When at twenty-five cents a gallon the working-man buys kerosene because it is cheaper than gas, or the student because it is better, each pays the Standard this tax of eight and three fourths cents a gallon.
In Pennsylvania, the tax levied by the Standard above all expenses and legitimate profits is calculated by an expert at fourteen cents a gallon.
The whole country consumed last year, at a low estimate, ,, gallons of kerosene. It can do this, and have millions left to pay the suits of refineries it has leased and keeps idle, its backsheesh to railroad men, the bribes it has had to give judges, state legislatures, and state inspectors, and its salaries of hundreds of thousands of dollars a month to men whom it has turned out of the business, and who are acting as its paid agents.
To-day the only visible hope of cheap light for the people of this country is the discovery, announced by the Atlantic cable on January 28th, that in the Hanover petroleum district in Germany a basin has been found, which is thought by experts to be, beyond doubt, as large and rich as the one in Pennsylvania.
In Europe, such alliances between the railroads and the refiners as created the Standard monopoly are impossible. German oil wells, German refineries, and the Canadian canals may yet give the people of the interior of this continent what the American Standard and the American railroads have denied them, — cheap light.
It is the railroads that have bred the millionaires who are now buying newspapers, and getting up corners in wheat, corn, and cotton, and are making railroad consolidations that stretch across the continent. By the same tactics that the railroads have used to build up the Standard, they can give other combinations of capitalists the control of the wheat, lumber, cotton, or any other product of the United States.
There is more than a suggestion of this in the action, last winter, of the railroads connecting the East and West, in raising rates at a stroke of the pen from fifteen and twenty cents a hundred pounds, between New York and Chicago, to forty and forty-five cents a hundred. Chicago was filled up, and word had to be sent back along the railroads to take no more grain for shipment. The roadside elevators filled up, and the farmers found their market gone. As it happened, on this occasion they had already sold the most of their crop, but the occurrence shows how the outlet for wheat could be cut off by a combination of railroad men and speculators, just as the outflow of oil was cut off by the Standard and the railroads.
Some of the speculators most prominent in the recent wheat speculations are powerful railroad owners and directors. Given the power to raise and change the freight rate at will, these speculating directors can control the prices the West shall get for its grain and cattle, and those of the East shall pay for its bread and meat. Smith, Jackson S. Schultz, Benjamin B. Sherman, Francis B. Thurber, Benjamin G. Arnold, Jacob Wendell, and Charles C. With the favor of the managers of the trunk lines, what is to prevent commerce in the rest of the great staples from being monopolized in a similar manner?
Already it is taking this course. One or two firms in Baltimore, Philadelphia, New York, and Boston, with their branch houses in the West, are, by the favor of the railroads, fast monopolizing the export trade in wheat, corn, cattle, and provisions, driving their competitors to the wall with absolute certainty, breaking down and crushing out the energy and enterprise of the many for the benefit of the favored few.
The case of the Standard Oil Company brings the three great trunk lines and their magnates, Scott, Vanderbilt, and Jewett, a great national export and interstate commerce, into one condensed illustration of our subject, but otherwise it is not peculiar. Vanderbilt assured the public over his own signature that the New York Central made no special rates.
The St. Paul and Sioux City Railroad furnishes the large farmers along its route with rates one half those charged the small farmers.
Who are the large farmers? The investments of these men average a return of twenty per cent the first year, and fifty-five per cent the second year.
One mind invented the locomotive, established the railroad, and discovered the law of this new force. To-day, wherever in this country there is a group of railroads doing business at a common point, you will find a pool.
These pools are nothing more mysterious than combinations to prevent competition. They are continually breaking up into railroad wars, but as constantly forming again with improvements gained from experience.
The Saratoga agreement, the Colorado pool, the Evening system, the Omaha pool, the Southwestern Rate Association, the Southern Steamship and Railway Association, accounts of which are continually appearing in the papers, to be always skipped by the general reader, are all experiments in this one direction, — combination to kill competition. For three years our ablest railroad men have been trying to invent a pool that should put all railroad traffic between the Mississippi River and the ports of Europe under one control.
Albert Fink, the greatest of our railroad experts, have formed a combination under the title of the Trunk Line Executive Committee, which besides themselves included thirty-two Western roads and one great Southern road, — the Louisville and Nashville. This pool fixes for each of these roads the rates which it shall charge and the proportion of the entire business it shall do.
Only two important Western roads east of the Mississippi do not belong to it, the Rock Island and the Northwestern, but they are both in the Gould-Vanderbilt system, and are operated in substantial harmony with the pool. Ex-Governor Seymour, of New York, in an interview at Utica with a special correspondent of the New York World, held that national regulation of the railroads ought to be opposed by New Yorkers, because it would take away from New York its advantage of position in the struggle with Boston, Philadelphia, and Baltimore for the business of the West.
Governor Seymour is apparently not aware that the Fink pool have already done this. One of their main regulations is that rates from common Western points of shipment, like Chicago to Europe, shall be the same whether made through New York, Boston, Philadelphia, or Baltimore. Nearing 60 years old, Vanderbilt was ready for something else.
He purchased a large yacht, christened the North Star , and took his extended family on a grand tour of Europe at the cost of half a million dollars. Forced to capitulate, the Central Railroad sold Vanderbilt controlling interest, and he eventually consolidated his hold on rail traffic from New York City to Chicago. This new conglomerate revolutionized rail operations by standardizing procedures and timetables, increasing efficiency and decreasing travel and shipment times.
During the 19th century, as rapid developments in technology and innovation enveloped society, many Americans sought meaningful forms of spiritual expression. Some gravitated to more traditional religions while others became fascinated with the occult. His family however was not impressed and feared their father would fall victim to charlatans. They introduced him to a distant female cousin, Frank Armstrong so named due to a promise her parents made to name their first child after a family friend , his junior by decades, who became his second wife.
In , Vanderbilt financed a monument to his empire: the Grand Central Depot. The terminal for the New York Central Railroad was constructed with features like elevated platforms, a glass balloon roof spanning all of the tracks and boarding areas only accessible to the passengers.
Towards the end of his life, Vanderbilt had no plans to pass along his fortune to charity. He had lived most of his life in relative modesty considering his stratospheric wealth. His sole extravagance seemed to be buying racehorses.
In , Vanderbilt became ill and began an eight-month death march. He died on January 4, , presumably of exhaustion, brought on by complications associated with intestinal, stomach and heart disorders, which may have also been connected to syphilis.
This would make him the second wealthiest person in American history after Standard Oil co-founder John D. Publisher Edward J. Renehan Jr. Railroad Tycoon Cornelius Vanderbilt. More about Cornelius Vanderbilt on history dot com ».
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