After Johnny – From Innovator to Robber Baron

I’ve been listening to this book on Audible for the last couple of weeks.  I’ve learned a lot about the interplay of the various threads I’ll be incorporating in my “After Johnny Came Marching Home” Osher class I’m scheduled to teach in April, 2024.

Last week I described my overall approach to my upcoming class focused on the time period between the end of the Civil War and the beginning of the 20^th century.  Today, I want to dig a little more deeply into the developments in technology and business that drove this era

The technological advancements of the last half of the 19^th century were sweeping and life-altering.  The inventors and early proponents of things like the electric lightbulb, telephone, internal combustion engine, steel, and refined oil, had little idea of how these developments would shape the world in the Gilded Age and beyond.  Before this, inventions had generally been adopted over time, and their impacts were gradual.  In the Gilded Age, change was almost immediate and always unpredictable.  The rise of the Robber Barons (or Captains of Industry – names matter) was possible because neither economic nor political systems had been designed to cope with the changes these inventions brought about, and these men – Carnegie, Rockefeller, Vanderbilt, Morgan, and others – took advantage of a combination of vision, energy, avarice, and luck to move into positions that allowed them to accrue great wealth and power.  The story of political efforts to address previously unheard-of concentrations of power is a primary mover of events in the Gilded Age.

As is always the case when I develop a class, I am currently swimming in a sea of unorganized facts and ideas.  But I have begun to shape this subtopic, which I’ll cover in the first hour of the six-hour class.  Here are a few of the people and events I’ve been reading about to get my arms around this part of my topic:

Inventors

Thomas Alva Edison and Alexander Graham Bell, were born less than three weeks apart in 1847.

It’s hard to imagine how astonished people must have been during the last decades of the 19^th century, as they were offered access to technology they could not have dreamed of a few years earlier.  Throughout this era, life-altering inventions were patented and then offered to governments, businesses, and consumers at a breakneck pace:

• 1876 – the telephone, patented by Alexander Graham Bell just hours before a competitor, Elisha Gray.

• 1878 – the phonograph, patented by Thomas Edison.  Although not an immediate commercial success, it spurred further innovations that created the 20^th century entertainment industry

• 1879 – the incandescent bulb, patented by Thomas Edison. By 1900, the “War of the Currents,” which pitted Edison’s Direct Current technology against Alternating Current technology championed by Nikola Tesla and George Westinghouse.  By 1896 The War of the Currents was over, with AC technology the victor over DC.

• 1886 – the automobile, patented by German Engineer Carl Benz in the 1880s. This caught the attention of Henry Ford, who produced his first self-propelled vehicle in 1896.  He funded the Ford Motor Company in 1903.

• 1888 – the Kodak camera, patented by George Eastman.  This made photography equipment cheap and transportable, changing the way people viewed their world.

• 1888 – electric streetcars, first introduced in Berlin in 1881 but brought to America by engineer Frank Sprague, who is credited with building the first full-scale electric trolley system in Richmond, Virginia in 1888.

Industrialists/Captains of Industry/Robber Barons

For the first time, business and financial leaders became so dominant that their names became synonymous with specific industries. The wealth they accrued and the corporate structures they created dominated the economic news of the era.

• John D. Rockefeller – founded Standard Oil in 1870

• Andrew Carnegie – Launched the Carnegie Steel Company in 1889 after 15 years in the business of purchasing smaller steel companies

• J. P. Morgan – Banking. As the head of the banking firm that ultimately became known as J.P. Morgan and Co., he was the driving force behind the wave of industrial consolidation in the United States spanning the late 19th and early 20th centuries.

• Cornelius Vanderbilt – after a varied career in shipping and steamships, Vanderbilt came to own a dozen railroad companies.

Business  models:

As “big business” emerged and then took off in this era, new forms of business organization emerged.

A pool can be defined as a union of different companies in the same or similar arena of business. The main aim behind such 'coming together' is to limit competition among themselves so that each company gets the maximum profits.  A voluntary agreement among companies that sets production quotas fixes prices allocates sales and market territories Monopolistic Emerged before trusts After pools were struck down in courts, trusts emerged

Trusts emerged in the late 19th century. A Trust is Intended to monopolize business as stockholders turn over their stock to a board of trustees.  Competition is reduced as many smaller firms merge into one big company.

A Holding Company is a company whose primary business is holding a controlling interest in the securities of other companies. A holding company usually does not produce goods or services itself. Its purpose is to own stock of other companies to form a corporate group.

Laws Passed to Regulate Trusts

As innovations, capitalists, and business organizations came together toward the end of the 19^th century, the government was pressured to regulate market forces so that workers and non-elites could share in the general prosperity of the time.  Although the political system was slow to respond (then, as now, politicians wanted to appeal to the moneyed interests at the time.) Nonetheless, regulations were passed that ultimately reined in the extremes of capitalist behavior. Here are some of these laws. Several of these actions fall outside of my time period, but I’ve included them here so you can see the pattern.

• 1887 – Interstate Commerce Act (created the Interstate Commerce Commission)

• 1890 – Sherman  Antitrust Act

• 1911 – Standard Oil Trust “busted” by government action

• 1914 – Clayton Antitrust Act

• 1914 – FTC Act

All of this is interwoven with the politics of the time – both domestic and international.  At the same time, the nation was wrestling over the meaning of citizenship, as the dwindling hope for justice for freed slaves was matched by growing racial hostility against Mexicans, Chinese, and Native Americans in the West.  New states were being accepted into the Union at an accelerated pace, with the concomitant disruption to the normal ways of government.  The size of the House and Senate increased and new government agencies were being created and funded.

All of this was also playing out against a backdrop of a population that was more urban than rural, with an increasing percentage of immigrants to fill the jobs being created by the emerging prosperity of the era. Society was changing as well – industrialization created the possibility of some leisure time, and national parks and national pastimes (like baseball and intercollegiate athletics) all developed in this era.

Next Tuesday I’ll focus on the second hour of the course — “From Rural to Urban.”