The Tycoons: How Andrew Carnegie, John D. Rockefeller, Jay Gould, and J. P. Morgan Invented the American Supercompany

by Charles R. Morris

  Appendix I : The Carnegie Company’s 1900 Earnings

  Except as noted below, all the material here is developed from the records in ACLC. For the early citations of the $40 million, see James Howard Bridge, The Inside History of the Carnegie Steel Company, A Romance of Millions (New York: Aldine, 1903), p. 295; Andrew Carnegie, The Autobiography of Andrew Carnegie (Boston: Northeastern University Press edition, 1986), p. 245; and Stanley Committee, I:161–62. In terms of subsequent citations, I have found no historian who, if he/she mentions a number, uses other than $40 million for Carnegie Co.’s 1900 profit totals. Steel pricing data are from Iron Age’s contemporary pricing reports; I used the weekly prices closest to the month end. Annual growth data are from the Appendix tables in Peter Temin, Iron and Steel in Nineteenth-Century America: An Economic Inquiry (Cambridge, Mass.: The MIT Press, 1964), “Appendix C: Statistics of Iron and Steel,” pp. 264–85. The nineteenth-century error in depreciation accounting was apparently first noted by the historian Richard Brief in the 1960s, and is cited in Naomi Lamoreaux, The Great Merger Movement in American Business, 1895–1904 (New York: Cambridge University Press, 1985), pp. 53–54.

  Appendix II: Standard Oil Earnings

  The table is from the breakup trial discovery data, as reported by Allan Nevins, John D. Rockefeller: The Heroic Age of American Enterprise (New York: Charles Scribner’s Sons 1940, 2 vols.), II:719. The “book equity” in this table appears to be properly accounted for, although I don’t have access to the detail. (See notes to chapter 3 for state of the Standard’s archives.) The Rockefeller personal accounts are in RAC, Series F, “Trial Balances, 1890–1915.”

  Index

  Entries in italics refer to illustrations.

  Abernathy, William, 318

  Adams, Brook, 240

  Adams, Charles Francis, Jr., 240–43, 254

  Adams, Comfort, 308–9

  Adams, Henry, 20–21, 71, 74, 160, 240, 294, 297

  advertising, 175, 177–78

  agrarian reform impulse, 216

  agriculture and farming, 5–6, 67, 216

  “bonanza” and factory, 29, 109–12, 111, 115–16, 273n, 278

  crisis of 1873 and, 101

  houses, 169–70

  mechanization and, 40n, 55

  occupational mobility and, 165–66

  New England vs. New York, 38

  productivity and, 272n–73n

  protests and, 99, 115–17

  U.S. vs. British, 278

  women and, 162–63

  Alger, Horatio, 173

  Amalgamated Copper, 252

  Amalgamated Iron and Steel Workers, 196, 199, 202

  American Federation of Labor (AFL), 196, 251

  American Sheet Steel Co., 253

  American Society of Mechanical Engineers (ASME), 127, 169, 299, 301, 305, 307

  American Sociological Society, 296

  American Steel Hoop, 253, 259

  American Steel & Wire, 194, 253, 254, 259

  American Telephone & Telegraph (AT&T), 191, 226, 239, 251

  American Tin Plate, 194, 253

  American Union, 146–47

  America (yacht), 30, 31, 32

  Ames, Fisher, 40

  Ames, Nathan, 48, 50, 53, 59

  Ames, Oakes, 137–39, 240

  Ames, Oliver, 137, 139

  Anderson, John, 53–54

  Andrews, Sam, 18–19

  antitrust law, 89. See also Sherman Act; trusts; and specific companies and cases

  Archbold, John, 85, 151–53, 160, 193, 221, 224–25, 331

  Armory practice, 34–37, 48–50, 53–55

  consumer products and, 180–83

  Ford follows, 311

  Armour, Philip, 114–15, 117

  Atlantic & Great Western Railroad, 68, 85

  Atlantic & Pacific telegraph, 146

  Atlantic Refining, 151

  Atlantic Transport, 267–69

  Autobiography (Carnegie), 262, 319

  automobile manufacturing, 182, 311–12

  Ayer, N. S., 177

  Bacon, Robert, 258, 262

  Baker, George F., 157, 250

  Baker, Ray Stannard, 306–7

  Baltimore & Ohio (B&O) Railroad, 2, 123, 134, 142, 146–47, 152, 154, 240

  Bankers’ Trust, 250

  Bank of England, 235, 247, 250, 266, 290

  banks and banking, 4, 231, 233

  failures of, 99–101, 104, 250

  financing of business and, 192

  mergers and, 252

  Morgan as image of, 266–67

  U.S. vs. Britain, 273n

  Banque de France, 250

  Barings bank, 26, 92, 100, 233, 235, 241, 290

  Barksdale, Hamilton, 312

  Barnard, George, 64, 78

  Beard, Charles and Mary, 10

  “bear raid,” 21, 139n, 146–47

  Beecher, Henry Ward, 183–84

  Bee Line Railroad, 145

  Belden, Henry, 74

  Bell, Alexander Graham, 110, 119

  Bellamy, Edward, 295, 311

  Benson, Byron, 156–57

  Berkman, Alexander, 201

  Bernhardt, Sarah, 115

  Bessemer, Henry, 125, 127

  Bessemer process, 91, 96, 122–23, 125–29, 126, 273–74, 190

  Bessemer Steel Association, 128, 131–32, 189, 287

  Bethlehem Iron Company, 133

  Bethlehem Steel, 128, 228–29, 287, 302–4

  bicycle industry, 180–82, 277

  big companies, xiii, 251–55, 295–97

  Birmingham, England, steel works, 96

  Bischoffheimer & Goldschmidt, 76–77

  Bismarck, Otto von, 101, 279, 281

  Black Friday, 74–75

  Blaine, James G., 140

  Blanc, Honoré, 39

  Blanchard, Thomas, 33–36, 40, 42, 48, 180

  gun-stocking lathe, 34–36, 39, 52, 57–59

  Bloomingdale’s, 162, 174, 176

  Blumin, Stuart, 164, 172

  Boer War, xi, 266, 271

  Bomford, George, 39, 44, 45n, 46–47

  Bonsack, James, 179

  boom, post–Civil War, 11, 28, 75, 115–16

  Bostwick, Jabez, 84

  Boucicault, Aristide, 161

  Bradford, PA, oil strikes, 156n

  Brandeis, Louis D., 89, 266–67, 269, 305–8, 311

  brands, 177–79, 182

  Bridge, James, 207, 319

  bridge industry, 192, 265

  British Corn Laws, repeal (1846), 278

  Brooklyn Bridge, 92, 95, 104, 169

  Browne and Sharpe company, 48, 181

  Bryan, William Jennings, 217, 248

  Bryce, Lord, 20

  Buckland, Cyrus, 37, 48, 59

  Bureau of Corporations, 225

  Burn, D. L., 281

  Burr, Aaron, 25

  Burton, James H., 53

  Butterfield, Daniel, 71, 73

  Cabot, Samuel, 40

  Cadillac automobile, 276

  Calhoun, John, 44, 46

  Cambria Steel Works, 128–34, 287

  Camden and Amboy Railroad, 6

  canning factories, 312

  Carey, Henry, 8

  Carnegie, Andrew, 25, 212, 252, 232, 293

  bond sales and, 192

  Carnegie Co. created by, 206–15

  character and background of, xii, 12–16, 19, 28–29, 61, 205

  early career of, 91–96

  ET works built by, 122–23

  Frick breaks with, 211–13

  Homestead strike and, 15, 196–203, 205–6, 247n

  law-breaking by, under Sherman Act, 227–29

  management style of, 135–36, 159

  mechanization and, 298

  Morgan buys out Allegheny line of, 230–32, 237

  Pennsylvania Railroad and, 14, 79

  pools and, 143

  protective tariffs and, 282, 283, 285–87

  Scott as mentor of, 13–14

  Scott break with, 130–31r />
  steel industry dominated by, 88n, 108, 120, 128–36, 190

  St. Louis Bridge and, 92–94, 95

  telegraph companies and, 146

  U. S. Steel merger and buyout by Morgan, 16, 256–64

  wealth of, 14–15, 130, 151n, 323–24

  Carnegie, Mrs. Andrew, 16, 209, 262

  Carnegie, Lucy (wife of Tom), 128n

  Carnegie, Margaret (mother), 13

  Carnegie, Tom, 93, 128n, 129, 130, 198, 212

  Carnegie Bros., 134

  Carnegie Co.

  creation of, 206–16

  earnings of, 214–15, 262–63, 319–30

  U. S. Steel buyout of, 16, 255–56, 260–66

  Carnegie “Handbook,” 190

  Carnegie, McCandless & Company, 129, 131

  Carnegie Steel, 256, 275

  consolidates properties, 132–33

  costs and productivity of, 202–3

  creation of, 199

  earnings of, 213–15, 286, 320–30

  financial systems of, 194

  Homestead strike and, 196

  integrated structure of, 207

  labor skills and, 195

  paperwork and, 188–89

  partners attempt to buy out, 209–10

  rebates and, 227–28

  ship armor contracts, 228–29

  structural steel and, 190

  U. S. Steel buyout and, 259

  world market and, 279

  cartels, 238, 240–43, 253, 287

  Cartwright, Samuel, 38

  Cass, George, 109, 110

  Cassatt, A. J., 154, 156, 227

  Cass-Cheney farm, 109–10

  “Cast Iron Palace,” 161–62

  cattle industry, 63, 112–14, 139, 144

  “Center firms,” 239, 315

  Central Branch Union Pacific Railroad, 145

  Central of New Jersey Railroad, 145

  Central Pacific Railroad, 137, 140

  Chandler, Alfred, 239, 254–55, 311, 314–18

  “Chapters of Erie” (Adams), 240

  chemical industries, 223, 278, 280

  Cheney, George, 109, 110

  Chernow, Ron, 20, 221

  Chicago, 6, 67, 87, 111

  architectural school, 187–88

  Exposition of 1893, 174, 178, 180, 182

  fire of 1871, 105, 187–88

  meat industry and, 114, 115

  strike of 1877, 99

  Chicago and Alton Railroad, 221, 222, 224

  children

  education, 171–72

  mortality rates, 185

  number of, per family, 184–85

  China, xiii, 186, 290

  Churchill, Winston, 280–81

  Civil War, xii, 8, 10–11, 14, 42, 54, 77, 100, 112, 137, 279

  Clark, Horace, 138

  Clark, James, 18–19, 83

  Clark, John Bates, 217

  Clark, Maurice, 17, 18–19, 83

  Clark, Silas, 139

  Clark, Payne oil refinery, 83–84, 90

  Clay, Henry, 7

  Cleveland, 5, 182

  railroads and, 79–80, 87–88

  oil refineries and, 12, 18, 79–80, 82, 83–86, 89–91, 150–52, 158

  Cleveland, Grover, 201, 246–48

  coal, 5, 67, 68, 99, 104, 120, 132, 163, 192, 285

  labor and, 99, 203n

  Cobden, Richard, 278

  coke, 102, 123, 132

  Coleman, William, 129

  Colfax, Schuyler, 138

  Colgate, 163

  Colt, Samuel, 31, 41–42, 49–51

  Columbia safety bicycles, 175, 181–82

  Columbus and Indianapolis Railroad, 6

  Commercial and Financial Chronicle, 99, 100, 104–7

  common law, 88–89, 218

  Compaq corporation, 253n

  “comparative advantage,” 281n

  Compromise of 1877, 140

  Confidence Man, The (Melville), 184

  Confidence Men and Painted Women (Halttunen), 184

  Conneaut tube plant, 259–61, 265–66

  Connecticut Valley, 38–41, 48–50 53, 127, 182, 292

  consumer products and mass consumption, 5, 49–50

  anxiety and, 183–86

  Armory standards and, 180–83

  growth and, 102, 115, 289–91

  infrastructure and, 182

  kerosene as first global, 81

  middle class and, 173–80

  supply shock and, 108

  contraception, 185–86

  Cooke, Jay, 99–100, 105, 109, 244

  “Copperhead” Democracy, 4

  Corbin, Abel, 70–72, 73, 74

  Cordiner, Ralph, 158

  Corliss, George, 119, 120

  Corliss engine, 121, 295

  Corsair agreement, 230–31, 233, 237, 259

  Coster, Charles, 237, 255n, 258

  cost tracking, 133–34, 189, 194, 298

  cotton, 6, 25, 40–41, 54, 104

  Cotton Oil Trust, 194

  Crash of 1873, 96, 99–106, 120, 129–31, 136, 150, 192, 235–36

  Crash of 1883, 236

  Crash of 1893–95, 194, 235–36, 238, 246–49

  Crash of 1907, 249–51, 265n, 290

  Crash of 1929, 270

  “creative destruction,” xii 28, 289

  Crédit Mobilier scandal, 137–39, 141

  Crocker, Charles, 144

  Crozier, William, 310n

  Crystal Palace Exhibition, 30–32, 32, 35n, 37, 40n, 48, 50, 54, 56, 119, 181, 276, 289

  Cunningham, William, 312–13

  Dabney, Charles, 27

  Dabney, Morgan & Co., 27

  Dalrymple, Oliver H., 110–11, 115

  Damascus Steel, 124

  Darwin, Charles, 294

  DeBeers Diamond Co., 271

  Delaware, Lackawanna & Western Railroad, 145

  Democrats, 201, 213, 246–47

  Denver Pacific Railroad, 144

  Denver & Rio Grande Railroad, 144–45

  Denver & South Park Railroad, 144

  department stores, 161–64, 163, 166–68, 298

  DePew, Chauncey, 230, 232

  Devereaux, J. H., 82

  Dewey, John, 297, 311

  Dillon, Sidney, 139, 145, 240

  Dingel tariff (1897), 280

  Dix, Dorothy, 180

  Dodd, Samuel C. T., 193–94

  Dodge, Grenville, 138n

  Dodge, James, 304–5, 307n

  Douglas, Stephen, 7, 9–10

  Dow Jones Industrial Index, 194, 249

  Draft Riots (1863), 4

  Drake, Col. Edwin, 17, 150

  Drew, Danniel, 21, 62–66

  Drexel, Anthony “Tony,” 27, 230, 233, 238

  Drexel, Morgan & Co., 27, 101, 145–46, 233

  Drucker, Peter, 293

  Dudley, Charles, 190

  Duke, James, 179

  Duncan, William, 76

  Duncan, Sherman & Co., 26–27, 76

  Dunne, Peter Finley, 265

  DuPont, 255, 312, 316

  Duquesne Works, 201–2

  Dwight, Edmund, 40

  Eads, Capt. James, 93, 128, 129

  Eastern Illinois Railroad, 222

  Eastern Rate case (1910), 305, 312

  Eastern Traffic Association, 217

  Eastern Trunkline Association, 143

  Eastman, George, 180

  East St. Louis & Carondelet Railroad, 145

  economies of scale, 107, 129, 257, 258

  Economist, 290

  Edgar Thomson Steel Works (ET), 122–23, 128–35, 192, 274, 285–86, 323

  Homestead strike and, 198–206

  Edison, Thomas, 119, 179, 238, 255

  Edison Electric, 255n

  education, 9–10, 55–56, 172–73, 184, 191

  Education of Henry Adams, The, 294

  Edwards, Jonathan, 25

  efficiency, 255, 257, 261–62, 329–30

  election of 1892, 247

  election of 1896, 248

>   electricity, 170, 182, 255n, 278

  Eliot, S. A., 40

  Ellerman, John, 268

  Ely, Richard, 217

  Emerson, Harrington, 305, 307, 312–13

  Emery, Lewis, 220–21

  Empire Transportation Co., 153–56

  employment, 103–5, 115, 117–18, 167, 172

  Enfield, England, Armory, 53–54, 276

  entertainment industry, 179–80

  EOQ (Economic Order Quantity), 316–17

  Erie Railroad, 81, 84, 87–88, 153, 154

  Gould ousted from, 75–79, 78, 136, 138

  Gould takeover of, 141, 144–45

  “Wars,” 61–67, 70, 82, 95, 101, 136, 240

  Europe, xi, 76, 101, 113, 225–26, 235, 249, 288, 290. See also specific countries

  Evans, Oliver, 57, 58

  Excelsior Oil Works, 18, 19

  exports, 103, 104, 248, 279, 290. See also trade

  Farrar, Gaspard, 290

  Federal Reserve, 250, 251

  Morgan takes role of, 246, 251

  Federal Steel, 228, 255–58, 265, 329–30

  Ferguson, Charles, 225

  Ferguson, Niall, 271–72

  Ferris wheel, 178, 180

  Field, Cyrus, 70, 145, 231

  Field, David Dudley, 78

  Fink, Albert, 88n, 142–43, 217–19, 240

  firearms, 31–32, 34–40, 36, 42–55

  First National Bank, 157, 250

  Fisk, Jim, Jr., 60–61, 63–66, 65, 68, 70, 72–74, 76

  Fitch, John, 43

  Flagler, Henry, 80–85, 160n, 194

  Fogel, Robert, 138n

  food industry, 67, 102–3, 108–9, 115–16, 120, 177–79. See also agriculture

  Ford, Henry, 115, 182, 293, 311–12

  France, 39, 272

  Franco-Prussian war, 101

  Frasch, Herman, 223

  Frémont, Gen. John C., 27

  Freud, Sigmund, 294

  Frick, Henry, 15–16, 102, 134, 159, 250n, 255, 256, 259, 261, 264

  buyout attempt and break with Carnegie, 206–15, 319n

  Homestead strike and, 197–203, 205, 206

  Frick Coke Co. (FCCo), 132, 198, 211–14, 227n, 320, 321, 324–26

  Fritz, George and John, 128, 287

  Gallman, Robert, 102