Three titans of big business
THE FIRST OF THE BARONS Cornelius Vanderbilt 1794–1877
Wealth: At his death, Vanderbilt’s fortune was estimated to be around US$100m which, as a share of US GDP at the time, makes him perhaps the second-wealthiest American in history, after only John D Rockefeller.
How he madede his money: Shipping, then railroads.. Vanderbilt began work as a ferryman in Newew York City harbour, soon working his wayay into a partnership with the operator of a state- of-the-art steamboat. By the 1850s he ran a transatlantic passenger linee and was competing hard, using every trickick in the book to dominate the lucrative transportransport route to California. (At that time by far the cheapest and quickest way to the goldfields was to take a ship from Newew York to Panama or Nicaragua, makeake an overland crossing from the east coast to the west, then embark again for the sea journey up the North Americanan Pacific coast.) After 1860, Vanderbilt soldd his shipping interests and invested inn railroads instead. He spent the finall 10 years of his life building up the New Yorkork Central, the principal route from Neww York City to Chicago. How he spentnt it: Establishing one of his sons as his heir.eir. Not one of the great philanthropists,s, he nevertheless endowed Vanderbilt Universityiversity in Tennessee. Legacy: Vanderbiltderbilt was the first of the so-- called ‘robber barons’.s’.
THE TOUGH PHILANTHROPIST Andrew Carnegie 1835–1919
Wealth: He sold Carnegie Steel for US$480m – if calculated as a share of GDP today, at least US$370bn.
How he made his money: Steel. Carnegie was born in Fife into a family of struggling weavers who emigrated to western Pennsylvania in search of a better life when young Andrew was 13. He worked his way up from telegraph messenger boy to a senior position in the Pennsylvania Railroad, thanks to the patronage of railroad president Tom Scott. Avoiding service in the Civil War by paying for a substitute to fight in his place, Carnegie made his mark, and the basis of his fortune, by investing in steel companies. His innovation was to find ways of using new processes and technologies to produce steel more cheaply and in vastly greater quantities than ever before. Driving out competition and buying out all his suppliers, Carnegie’s companies provided, among other things, the rails that crisscrossed America in the late 19th century. How he spent it: He gave away 95 per cent of his fortune in his lifetime, endowing libraries, universities and concert halls, and campaigning for international peace. Legacy: He was culpable for vicious labour relations, but was also a great philanthropist.
THE OIL BILLIONAIRE John D Rockefeller 1839–1937
Wealth: The world’s first dollar billionaire, his fortune at the time of his death was estimated to be around US$1.4bn, making him by far the richest man in the country, then or since. How he made his money: Oil. The son of a bigamist father and a devout mother,m from a young age Rockefeller had a steely determination to make money. Like Carnegie, he avoided military serviceserv in the Civil War, going into partnershipartnership to build his first oil refinery in 1863. In the 1870s he built a near-monopoly, sqsqueezing out the competition and agreeing exclu-e sivesive discounts with railroads to trtransport his products. He was a great prapractitionerner of vertical integration, bringingbring every element of the supply traitrain, from western Pennsylvania oil drillers to distributors and retailers, into hihis business empire. His Standard OilO was the first ‘ trust’, a new kind of vasvast corporate entity that contained, in this case, 41 other corporations. At its height, Standard Oil controlled 95 per cencent of the oil business in the US. How he spent it: Creating foundfoundations supporting education and sciencescience. Legacy: He was an innovator in ccorporate structure – the great monopolist.