The Myth of the Robber Barons

by Burt Folsom

  Scranton, Selden, 42-43, 46, 48, 51, 54, 58.

  Scranton Steel Company, 58, 66.

  Scranton, Walter, 66.

  Scranton, William, 58, 66.

  Scrantons, the, 41-60, 124, 132-34.

  Seep, Joseph, 89.

  Seward, Senator William, 7.

  Sherman Anti-Trust Act, 4, 35-36, 37-39, 96, 100, 124-25, 132.

  Sherman, General William T., 21, 26.

  Sillman, Benjamin, Jr., 84.

  Silver, Thomas, 120.

  Smoot-Hawley Tariff, 77, 79.

  Sobel, Robert, 39.

  South Improvement Company, 88.

  Southern Pacific (railroad), 22.

  St. Paul and Pacific Railroad, 26.

  Stampp, Kenneth, 118, 122.

  Standard Oil Company, 83, 86, 87, 88, 89-94, 95-97,100, 105, 109,133.

  Stanford, Leland, 22, 34.

  Stanton, Edwin, 11.

  Stone Arch Bridge, 28.

  Tarbell, Ida, 87. Tax-exempt bonds, 108-09. Taylor, Frederick W., 68. Thernstrom, Stephan, 128-29. These United States, 120. Thomas, Robert, 125-26. Thompson, Senator John B., 10. Throop, Benjamin, 47, 53, 58-59. Throop, Benjamin II, 59. Thurman Law, 21, 32. Thurston, John M., 21. Tillman, Senator Ben, 76-77. Toombs, Senator Robert A., 13. Trowbridge, J. W., 85. Tuskegee Institute, 133.

  Unger, Irwin, 120.

  Union Pacific, 17-22, 23, 29, 30-31, 32, 33, 34, 36, 66.

  University of Chicago, 99, 133.

  U.S. Mail Steamship Company, 12-14.

  U.S. Steel, 67, 68, 70-71, 75.

  Vanderbiltthe, 10, 11.

  Vanderbilt, Cornelius, 1-15, 87, 93, 94, 95, 122, 123, 124, 131, 132-34.

  Vanderbilt University, 113-14.

  Vanderbilt, William, 114.

  Villard, Henry, 23-25, 26, 27, 28, 29, 34, 127, 132.

  Walker Tariff, 44.

  Walker, William, 13.

  Walter, Phillip, 54-55.

  Wealth Against Commonwealth, 87.

  Weber, Michael, 108.

  Weyerhauser, Frederick, 34.

  Wheeler, Thomas, 93, 94.

  Wightman, Merle J., 56.

  William Inman Line, 10.

  Wilson, Woodrow, 73-74, 76, 107-08.

  Woodward, C. Vann, 118, 122, 124.

  Woolworth, Charles S., 55-56.

  Woolworth, Frank, 55.

  Wyoming Coal and Mining Company, 20.

  Bibliographic Essay

  The major sources for this book are cited in the footnotes after each chapter. In this bibliographic essay, therefore, I will briefly indicate the origins of the Robber Baron concept and then explain other useful sources in the Robber Baron controversy, some of which were written after 1987, when this book was first published.

  The idea of referring to certain businessmen as robber barons is an old one. Matthew Josephson, The Robber Barons: The Great American Capitalists, 1861-1901 (New York: Harcourt, Brace and World, 1934) popularized it for twentieth century readers, but it goes back at least 800 years before that. According to Eli Heckscher, Mercantilism, the Rhine River was a central trading route in Europe during the Middle Ages. During the 1100s, the Rhine had nineteen toll stations, replete with armed guards, to tax traders sending goods up and down the river. These early "robber barons" did not create wealth; they extorted it from others. They resemble America's nineteenth century robber barons—Henry Villard, Edward Collins, and Leland Stanford—who had toll stations in Washington, D.C. and assessed taxpayers to support their inefficient steamships and railroads. All of these robber barons are classic political entrepreneurs, who used politics, not innovation and low prices, to gain wealth. In the case of the medieval robber barons, the number of toll stations along the Rhine River increased to 44 in the 1200s, and to over 60 in the 1300s. Likewise in the U.S., with the growth of government in the twentieth and twenty-first centuries, the opportunities for political entrepreneurship have also increased. The key error that Josephson made was to mix both market and political entrepreneurs, and not to separate their differing impacts on American life.

  The best text in U. S. business history, one that puts the Robber Baron conflict in excellent historical perspective, is Larry Schweikart, The Entrepreneurial Adventure (New York: Harcourt and Brace, 2000). A shorter, useful text is Gerald Gunderson, The Wealth Creators (New York: E. P. Button, 1989). A study that focuses on recent entrepreneurs, one that indirectly dispels the robber baron idea, is George Gilder, Recapturing the Spirit of Enterprise (San Francisco: ICS Press, 1992).

  Historians often tend to be woefully trained in basic economics. Two short, helpful primers on economics are Henry Hazlitt, Economics in One Lesson (New York: Laissez Faire Books, [1946,1962,1979] 1996), a readable book that has sold one million copies; and James Gwartney and Richard Stroup, What Everyone Should Know about Economics and Prosperity (1993). A

  short and venerable primer on economics is Frederic Bastiat, The Law, written in 1850 and recently (1998) published by the Foundation for Economic Education, in Irvington, New York. Finally, the first two chapters of Milton and Rose Friedman, Free to Chose(New York: Avon Books, 1980), are an eloquent and informative introduction to economics.

  The growth of government in the U. S. has spawned several important works of political philosophy. In fact, the first major contribution to political philosophy written in the United States, The Federalist Papers (1788), was not only a defense of the Constitution, but a response by Alexander Hamilton, James Madison, and John Jay to the question of what should be the proper role of government in American society. In the late 1800s, the increasing of subsidies to Robber Barons and other groups prompted Yale professor William Graham Sumner to defend limited government in a series of essays, recently collected and edited by Robert Bannister, entitled On Liberty, Society, and Politics (Indianapolis: Liberty Fund, 1992). During the rapid spurt in the growth of government during the New Deal, a devastating critique of political entrepreneurship was Walter Lippmann, The Good Society (Boston: Little, Brown, and Co., 1937). It was followed by Friedrich A. Hayek, The Road to Serfdom (Chicago: University of Chicago Press, 1944). A brief and readable defense of free markets, written by Hayek's mentor, is Ludwig Von Mises, The Anti-Capitalistic Mentality (South Holland, 111.: Libertarian Press, 1972).

  About the Author

  BURTON W. FOLSOM, JR. is the Charles Kline professor of history and management at Hillsdale College in Michigan. He received his Ph.D. in American history from the University of Pittsburgh and has taught at the University of Nebraska, the University of Pittsburgh, Northwood University, and Murray State University. He has also been a senior fellow at the Mackinac Center for Public Policy in Midland, Michigan; and historian in residence at the Center for the American Idea in Houston, Texas.

  Professor Folsom's first book was Urban Capitalists (Johns Hopkins University Press, 1981; second ed., University of Scranton Press, 2000). His later books include Empire Builders (Rhodes and Easton, 1998); No More Free Markets or Free Beer: The Progressive Era in Nebraska, 1900-1924 (Lexington Books, 1999). He has two edited books, The Spirit of Freedom (Foundation for Economic Education, 1994); and The Industrial Revolution and Free Trade (Foundation for Economic Education, 1996). His articles have appeared in the Journal of Southern History, Pacific Historical Review, Journal of AmericanStudies, Great Plains Quarterly, The American Spectator, and The Wall Street Journal. He is a columnist on economic history for The Freeman for Ideas on Liberty.