Robber Barons: “if the Shoe Fits Wear It”

Robber BaronsRobber Barons, is a phrase used by a number of historians  to characterize a particular group of unscrupulous American businessmen, who, by themselves, significantly transformed the late nineteenth century into their private game of “survival of the fittest”. To simply say that these men  were parasitic thieves absorbed in self-interest alone was for years the accepted interpretation of the facts.  However, today two distinctive views have emerged from two distinctive generations of writers. Clearly,  historians that first tried to explain the unique personalities and behavior of the business leader of the late 19th century saw them as unprincipled swindlers that bribed legislatures, suppressed trade unions, defeated strikes and “choked off rivals” so to monopolize their business interest. On the other hand, revisionists have essentially tried to abandon the “robber baron” concept, replacing it with the more positive term “captains of industry,” suggesting that they provided new markets, more jobs, higher wages,  lower prices, and more goods of better quality. Technically, it could be possible for both definitions to fit these so-called robber barons. Even the worst of the bunch, might appear to have contributed to the economic growth which marked the Industrial Revolution in America. However, evidence to substantiate such a claim is marginal at best. This report will not only question the term “Captains of Industry,” but in addition, provide evidence supporting the claim that these men were greedy, corrupt, manipulative and profit-seeking vultures, who wanted to eliminate all competition by creating a monopoly regardless of the methods used.

J. P. Morgan, Andrew Carnegie, John Rockefeller and Jay Gould, to name a few, are well-known successful businessmen that have the dubious reputation of being “Robber Barons.” From Jay Gould to John Rockefeller these men displayed a dark unethical side of the human spirit. For example, Maury Klein writes that “Jay Gould… endowed with a brilliant analytical mind… pursued his immediate objectives with remorseless logic… He was a dark mysterious genius with a penetrating eye for unearthing the realities of financial opportunity.” Klein suggests that Gould’s involvement with seizing control of the Manhattan Elevated and New York Elevated Railways typified his corrupt unethical approach towards business. “His tactic was to harass management and convince the stockholders to sell out cheaply.” In addition, Gould was able to bring suit to annul the charter to Manhattan Elevated on behalf of the state. Hence, with the help of Attorney General Hamilton Ward, one of Gould’s henchmen, he was able to successfully force Manhattan Elevated’s stock to drop, enabling him to purchase the company at a steal.

The Manhattan Elevated venture revealed Gould at his predatory best. He manipulated men, media and the courts to achieve control of a company. Once in command he deranged its finances to suit his own needs… Having maximized personal profits from the company, he would gracefully retire leaving in his wake a gutted and bankrupt enterprise.

Gould seemed to represent the extreme case of these industrious pirates who believed they were above the law always scheming up new ways to swindle their way for profit.

John D. Rockefeller was no less greedy then Gould, however his particular style of business appears to suggest a more thoughtful and deliberate effort to build rather than wreck. In spite of this desire to build, Rockefeller relentlessly worked towards the monopolization of the oil industry, hiding his greed underneath the Standard Oil Company. Among his many critics was Ida M. Tarbell, who wrote two volumes on the Standard Oil Company. In her essay “John D.: The Ruthless Elimination of Competition” Tarbell explains that Rockefeller first negotiated a lower transportation rate for moving his product then he set out to acquire refineries throughout New York, Pittsburgh and Philadelphia. In addition, Tarbell writes, “If the party approached refused to lease or sell, he was told firmly what Mr. Rockefeller had told the Cleveland refiners when they went to them in 1872.” That is, that there was no hope for him. In other words, either you dealt with Rockefeller or he under-priced you out of business. It is Tarbell’s view that “Rockefeller never did anything spasmodically. He applied underselling for destroying his rivals market with the same deliberation and persistency that characterized all his efforts and in the long run he always won.”

Thus far, the evidence indicates that these men sought to dominate and capitalize on what was intended to be free enterprise. In fact, it appears that Jay Gould’s shady behavior was more than just unscrupulous, it was illegal. So then how could revisionist contradict a picture that seems to obviously reflect history?

Allen Solganick’s article “Pirates” answers the revisionist by suggesting that they were guilty of misinterpreting the facts. The revisionist claim, that there was not one but two pictures that explains the behavior of these businessmen during this period. They assert that people were generally content with their economic condition. However, Solganick writes that “this was an era which witnessed the birth of the Grangers, Greenbackers, Populists, National Labor Union, A.F.L., and numerous other groups of discontented citizens.” Thus, discontent was apparently widespread. Furthermore, the statistics Solganick provides are so persuasive that it becomes difficult to understand the revisionist idea that these businessmen were “captains of industry.” For instance, Solganick writes that the unemployment rate between 1889-1898 was twelve per cent of the total labor force. Other reasons for discontent was the fact that:

The number of deaths and injuries of employees on railroads for the 1890’s was enormous. In 1900 there were 1,018,000 railroad workers employed of whom 2,550 were killed and 39,643 injured that year. By contrast, in 1957 with a work force almost exactly the same size, the number of deaths and injuries on the job declined to 195 and 12,245 respectively.

Finally, it is one thing to say that these men were capitalistic bandits set on establishing monopolies, and it is another thing to provide strong evidence of such. Thus, in addition to all the evidence already presented, there is the 1882 Supreme Court of Ohio’s declaration that Standard Oil’s primary objective was to establish a monopoly. Moreover, Solganick describes an independent study done by Professor C.M. Destler:

who studied 43 notable capitalists of this era, he found that 16 had milked their corporations for their own profit; 23 charged exorbitant rates when a monopoly position made it possible; 13 profited from control and manipulation of the press; at least 13 practiced political corruption; 16 exhibited marked hostility to the labor movement; and favors involving rates or services were important for 11.

The conclusion of Destler’s study indicates that monopoly was the important feature for thirty-six of the forty-three capitalists studied. What’s more, one might expect a very high growth rate in the post-Civil War era. Instead, even the average rate of growth of fixed capital was much higher during the period 1839-1859 than it was between 1869-1899.

Perhaps revisionists have simply misunderstood this important period of American history. The evidence clearly shows that the United States developed more slowly during the period of the “Robber Barons” then in previous years. Thus, the idea that these men were “Captains of Industry” arguably does not represent the facts. The facts as presented in this study seem to indicate that bandits when unchallenged and unrestricted should be therefore classified as the “Robber Barons” they were. In other words, if the shoe fits wear it.

By Barbara Sobel & DiMarkco Chandler

Jones, Peter d’A, ed. The Robber Barons Revisited. Boston: Raytheon, 1968.
Klein, Maury: “The Robber Barons.” Journal of American History Illustrated. 6 (1971): 12-22.
Solganick, Allen: “Pirates” The Robber Barons Revisited.
Ed. Peter d’A. Jones: Boston: Raytheon, 1968. 106-113.
Tarbell, Ida M: “John D.: The Ruthless Elimination of Competition.” The Robber Barons, Saints or Sinners?
Ed. Thomas B. Brewer: Chicago: Holt, 1970. 20-27.
United States Bureau of the Census, “Historical Statistics,” p. 437

Featured and Top Image Courtesy of Recuerdos de Pandora Flickr Page – Creative Common License

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