The Men Who Built America
The Men Who Built America
A new HISTORY series profiles the men whose imagination, daring, foresight--and some shenanigans--made the United States the economic power it is today.
The Men Who Built America
POSTED BY: Kim Gilmore
September 04, 2012
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All eyes were on the elephant as it ambled across the St. Louis Bridge. The longest arch bridge in the world at the time, it stretched gracefully across the Mississippi River. The pageantry that accompanied the completion of the spectacular structure was matched with an equal amount of anxiety. Careers and reputations, not to mention lives, were on the line through the construction process. Over budget and months past its deadline, the bridge was among the most massive American construction projects to date. When it officially opened in 1874, less than a decade after the end of the Civil War, the bridge was important both practically and symbolically. The success of such projects could show that the United States was back, and open for business.
The man who provided the steel for the bridge, Andrew Carnegie, was a rising industrialist. His reputation seemed like it might rise or fall on the outcome of the project. With so many people skeptical of such a massive bridge, the “test elephant” was sent across to bring peace of mind to the American public that its structure was sound. The elephant survived the test—and so, too, did Carnegie. He would go on to become one of the nation’s foremost business tycoons, having transformed himself from a young Scottish immigrant to a corporate leader and philanthropist whose name still echoes prominently throughout American society today.
At the end of the Civil War the nation was in tatters, both financially and psychologically. Both North and South had poured resources into the war effort, draining the economy, not to mention the optimistic spirit, of the nation. The assassination of President Abraham Lincoln in April 1865, just days after the end of the war, dealt another blow to the American psyche. The nation mourned too many of its sons, and now, its president. Given this state of affairs, some would have predicted a deep national decline would follow. How, then, in the course of just a few decades after the war, did the United States become one of the world’s leading economic and political superpowers?
The Men Who Built America, a new series premiering on HISTORY in October, captures the astonishing growth of the United States in the wake of the Civil War, attributing this amazing industrial and national expansion to the prowess and grit of a handful of men: Vanderbilt, Carnegie, Rockefeller, Morgan, Frick, and Ford. Their names resonate throughout our society today, a testimony to the power and reach of the companies they built. Now, for the first time, viewers can see how exactly these men forged a nation from the ashes of Civil War, buoyed by their own determination to compete, take chances, and consolidate power. While their individual stories have been told many times over, this series explores the deep connections between these men, showing the behind-the-scenes deals and unexpected links that united—and, at times, divided—them in their thirst for success.
The story starts in the immediate aftermath of the Civil War. Cornelius “Commodore” Vanderbilt, who already had amassed a fortune through his
Shipping and transportation businesses by the mid-1840s, was determined to continue to grow his wealth and connect the nation through expansion of the
Railroads. He had slowly been buying up small railroad systems in the 1860s. By 1870, he had consolidated the New York and Hudson River Railroads,
creating one of the nation’s largest corporations.
Vanderbilt’s control of the railroad industry was not without conflict. In fact, it was a powerful example of the ruthlessness of competition among American industrial leaders. Vanderbilt’s might was matched by oil tycoon John D. Rockefeller. Born in 1839, the much-younger Rockefeller had built an enormously successful oil business by the 1860s. As it became clear that their business interests were connected, Vanderbilt tried to play hardball with Rockefeller by charging steep prices to ship oil on his trains. Rockefeller famously took a trip to New York to see Vanderbilt in person. He boldly demanded that Vanderbilt keep rates reasonable or lose his valuable business, among other imperatives. The two struck a deal, paving the way for both companies to flourish. In 1870, Rockefeller formed what would become one of the nation’s most prosperous corporations, the Standard Oil Company.
The intense competition to control the railroad industry took a bitter turn when Vanderbilt tried to buy up shares of the Erie Railway Company after a disagreement with the company’s treasurer, Daniel Drew. Vanderbilt was incensed to learn that two Erie board members, Jay Gould and James Fisk, had undercut his plans by issuing “watered stock.” The extra stock was forbidden by state laws that put limits on the amount of stock a company could issue. Vanderbilt sued, eventually winning this railroad war. But the incident was a portent of things to come. The drive to achieve dominance in American industry would be marked by wild competition and experimentation in a rapidly changing economy.
The Men Who Built America shows the interlocking ties between the nation’s industries. While Vanderbilt and Rockefeller had focused on transportation and oil, Andrew Carnegie (below) set his sights on building American infrastructure through steel. A Scottish immigrant whose family had settled in Allegheny, Penn., in the 1840s, Carnegie landed under the wing of Tom Scott, the superintendent of the Pennsylvania Railroad Company. Carnegie rose rapidly through the ranks and started investing in companies ranging from the Keystone Bridge Company to the Union Iron Mills. Carnegie, like other American industrialists, had quickly learned how to grow capital through investment.
By the early 1870s, Carnegie was focused on steel. Although he was not the first steel pioneer, Carnegie was the first to introduce the Bessemer steelmaking process on a large scale in the United States. This process was the critical building block in the mass production of steel, making it possible to create structures on a grand scale. Carnegie also introduced the open-hearth furnace into his mills in the 1890s, making it easier to melt mass amounts of steel.
What Carnegie and other industrial leaders shared was an unceasing drive for success. Throughout the series, viewers hear from contemporary business leaders like Jack Welch, Donald Trump, Mark Cuban, Steve Wynn, and Russell Simmons. These modern-day corporate pioneers and philanthropists shed light on how their counterparts from an earlier era were able to achieve so much in a relatively short period of time. As Steve Wynn, chairman and CEO of Wynn Resorts, says, “These were very determined, high-strung focused men who had the capacity to be brutal competitors, swash-buckling entrepreneurs, and then turn around and be soft as butter, as generous as you can imagine anyone being.”
Despite the efforts of men like Carnegie and Rockefeller to blaze ahead with little restraint, there were always factors that were out of their control. Their operations required the blood and sweat of countless workers who frequently refused to abide by the stark conditions of their workplaces. Just as corporations were growing, so were labor unions. Carnegie was confronted with the power of organized workers during the infamous strike at his Homestead Steel Works plant in 1892. He had recently consolidated his steel operations into the Carnegie Steel Company, appointing Henry Clay Frick as chairman.
The striking workers were locked out of the Homestead plant after the company rebuffed their efforts to negotiate; they attempted to take control of the mill and prevent “scab” (non-union) workers from entering. In response, Frick hired hundreds of private detectives from the Pinkerton Detective Agency to forcibly re-open the plant. A violent clash ensued, leaving nine workers and seven detectives dead, and many more wounded. Eventually, the state militia had to be called in to quell the strike, as thousands of local citizens had arrived at the plant to support the workers. Carnegie Steel won out over the demands of the union, but the episode demonstrated the stark reality that corporations would not simply be able to will their workers into accepting unilaterally imposed wages and working conditions.
Carnegie had placed his trust in Frick even after the Johnstown Flood of 1889. The catastrophic flood in the town of Johnstown, Penn., was the result of the failure of the South Fork Dam. More than 2,200 people were killed when the dam let loose an enormous surge of water through the area. Frick was considered to be partly responsible for the flood because of his role in having the dam modified to suit the needs of a private resort he and a group of speculators had built in the area. The flood was one of the worst disasters in American history, and it was the first time the American Red Cross, led by Clara Barton, oversaw a relief effort. The flood was deemed to be an “act of God,” and Frick and his colleagues were let off the hook, but the lawsuits against the resort owners by flood victims would help shape the future of state law from a purely fault-based system to one that focused on liability.
In addition to challenges presented by workers, the American economy was also subject to instability in the midst of rapid expansion. One of the most severe depressions in U.S. history, known as the Panic of 1893, emerged as the result of unstable railroad financing and bank failures. A financier named John Pierpont (J.P.) Morgan, son of banker Junius Morgan, was ready to take his place on the national stage. J.P. Morgan helped restore the U.S. government’s gold reserves in exchange for a 30-year bond deal, helping alleviate the economic chaos unleashed by the 1893 depression. Morgan, of course, went on to become one of the titans of American banking and finance.
One of the fascinating angles explored in The Men Who Built America is the cases in which American business titans chose unity over division, working together to expand their enterprises. In the aftermath of the Homestead Strike, Carnegie had put a young engineer who had been a plant superintendent in charge of repairing relationships between workers and managers at Homestead. Charles Schwab excelled at the position, and Carnegie promoted him to president of the Carnegie Steel Company in 1897 at the age of 35. Just a few years later, in 1901, Schwab and J.P. Morgan united to form the United States Steel Corporation, otherwise known as U.S. Steel.
Morgan had diversified his investments, which included an increasing number of railroad companies. He also was a significant financial backer of Thomas Edison’s experiments with the light bulb. Though the public was skeptical of the safety of electricity, Morgan’s backing helped fund Edison’s efforts to make electric lights a mainstay in American households. Edison was an active promoter of the safety and utility of electricity. In 1884, he organized an “Electric Torch Light Procession” in which hundreds of his employees at the Edison Electric Lighting Company marched through New York City with light bulbs on their foreheads; the lights were connected by wires up the marchers’ shirtsleeves and powered by a horse-drawn generator.
Morgan’s decision to back Edison ended up being a complicated gamble. Edison promoted the use of the direct current (DC) electric standard while Nikola Tesla and other engineers vowed that they had a better method in the alternating current (AC) standard. Edison fiercely challenged Tesla’s method, charging AC power was inefficient and unsafe. In 1903, Edison conducted an infamous and controversial experiment in which he electrocuted a circus elephant using AC power to prove that it was dangerous. Despite Edison’s fierce campaign, Tesla, together with George Westinghouse, won a bid to build the largest electric generator ever built in Niagara Falls, N.Y. Although he had miscalculated in his support for Edison, Morgan quickly cut him loose and went on to form General Electric, which adopted the AC standard.
As the 19th century was drawing to a close, the captains of industry continued to grow and consolidate their companies. In the 1896 presidential election, they had heavily backed pro-business candidate William McKinley, hoping he would protect their interests. And although the Sherman Antitrust Act of 1890 established limits on corporate monopolies, it was not actively used against corporations in the years after it was passed.
Things took a shocking turn, however, when McKinley was assassinated in September 1901 and Vice President Theodore Roosevelt was sworn into office. Roosevelt, who had placed curbs on corporate power while governor of New York, would go on to push for limitations on monopolies, gaining a reputation as a “trust buster.” Roosevelt’s clampdown powerfully culminated in the 1904 U.S. Supreme Court ruling in Northern Securities Co. v. United States. The Northern Securities Company, which had been formed by Rockefeller, Morgan, E.H. Harriman, James J. Hill, and others, was a railroad trust and holding company that controlled several of the major railways. The Supreme Court decision ruled the trust unfairly eliminated competition and the company was broken up.