ROBBER BARONS How to get rich in America

HOW DO YOU GET TO BE A ROBBER BARON? • The term was used to describe business men who got INCREDIBLY RICH through • unethical, immoral and monopolistic methods • Took advantage of political connections to get laws and treaties passed that would help them corner their markets • Manipulated trade, stocks, resources for their own gains • Took advantage of weak labor power and organization

JOHN JACOB ASTOR 1763 -1848 • German immigrant • Settled in New York City Fort Astor, Astoria, Oregon • Got into the fur business, made a ton of money • Got into wars with other fur trading companies in the Northwest • Built forts on British land in Canadian territory before the War of 1812. • Traded furs with China for tea and sandalwood. Made a ton of money • Sent illegal Opium into China to make money, hidden in furs on his trading ships, made a ton of money Then he bought Aaron Burr’s land from him after his duel with Alexander Hamilton, and bought up all the free land in Manhattan. That’s how he got to be the richest man in history. Real estate in Manhattan.

WILLIAM BACKHOUSE ASTOR 1792 -1875 • Inherits the bulk of his father’s fortune. • The rest divided between the other siblings. • His uncle dies childless and leaves him his fortune. • He also invested in real estate in Manhattan • He invested in railroads, coal, and insurance too. • He left his children an estate worth $50, 000, which is $1, 363, 828, 342. 58 $ today.

OTHER ASTORS John Jacob Astor III • He moved the family to England became a ‘peer’ • Viscount of England • His son was William Astor, Viscount Astor • His son was Waldorf Astor, and they started the famous luxury hotel, the Waldorf Astoria William Backhouse Astor Jr. • Started buying real estate in Florida by Jacksonville, laid railroad tracks all the way to Daytona • His son was the famous John Jacob Astor IV who died on The Titanic

CORNELIUS VANDERBILT • “Commodore” Vanderbilt • Shipping and railroad tycoon Cornelius Vanderbilt (1794 -1877) was a self-made multi-millionaire who became one of the wealthiest Americans of the 19 th century. As a boy, he worked with his father, who operated a boat that ferried cargo between Staten Island, New York, where they lived, and Manhattan. After working as a steamship captain, Vanderbilt went into business for himself in the late 1820 s, and eventually became one of the country’s largest steamship operators. In the process, the Commodore, as he was publicly nicknamed, gained a reputation for being fiercely competitive and ruthless. In the 1860 s, he shifted his focus to the railroad industry, where he built another empire and helped make railroad transportation more efficient. When Vanderbilt died, he was worth more than $100 million.

CORNELIUS VANDERBILT One way he made so much money was by offering transportation from the East Coast to the West Coast during the Gold Rush and after. People were sailing all the way around South America or to Panama and crossing in a carriage and picking up another ship to finish the journey. He created a line through Nicaragua for $200 less than the Panamanian route. ($500) His company took 2, 000 people a MONTH. He went on a world tour and left Charles Morgan and Cornelius Garrison in charge of the line.

CORNELIUS VANDERBILT "GENTLEMEN: YOU HAVE UNDERTAKEN TO CHEAT ME. I WON'T SUE YOU, FOR THE LAW IS TOO SLOW. I'LL RUIN YOURS TRULY, CORNELIUS VANDERBILT. " • They decided to double cross him in 1855 and join up with a competitor. • Then he sent in TWO soldiers of fortune to recruit Costa Ricans to help overthrow the fake government. • They overthrew the Nicaraguan government and cancelled Vanderbilt’s contracts with the Nicaraguan government. • They won. • He told them he would ruin them and he did. • He built a new line through Panama and undercut the price of their lines. • He also got contracts with the US Postal Service and then got the US Govt and the governments of Honduras, Guatemala, and Costa Rica to refuse to recognize the new Nicaraguan govt. • Then he built the Biltmore Estate for a summer home.

JAY GOULD • Jay Gould, original name Jason Gould (born May 27, 1836, Roxbury, N. Y. , U. S. —died Dec. 2, 1892, New York, N. Y. ) American railroad executive, financier, and speculator, an important railroad developer who was one of the most unscrupulous “robber barons” of 19 th-century American capitalism.

JAY GOULD • Got rich on Railroad stocks. • Vanderbilt was close to controlling most of the major railroad lines in America. One line, the Erie Railroad, could give him control over nearly all of the major lines. • He made a deal with the owner, Daniel Drew, to start buying up shares. He and Drew had a shady past, and Drew works out a second deal with Jay Gould and Jim Fisk to cheat Vanderbilt. (1866 -1868)

JAY GOULD • The three men conspired to issue fake shares of the company, which Vanderbilt bought. • When it became apparent that they had illegally issued an extra 7 million dollars worth of stock, they hid in New Jersey in a hotel room protected by hired thugs to avoid being served by a New York Judge.

JAY GOULD • Eventually, the drama moved to Albany, where Jay Gould apparently paid off New York State legislators, including the infamous Boss Tweed. And then Commodore Vanderbilt finally called a meeting. • The end of the Erie Railroad War has always been fairly mysterious. Vanderbilt and Drew worked out a deal, and Drew convinced Gould and Fisk to go along. In a twist, the younger men pushed Drew aside and took over control of the railroad. But Vanderbilt exacted some revenge by having the Erie Railroad buy back the watered stock he had purchased. • In the end, Gould and Fisk wound up running the Erie Railroad, and essentially looting it. Their former partner Drew was pushed into semi-retirement. And Cornelius Vanderbilt, though he didn’t get the Erie, remained the richest man in America. • In another incident, Gould and Fisk tried to corner the gold market and started Black Friday of 1869, where the value of American Gold coins fell 35% in one day.

JOHN D ROCKEFELLER JULY 8, 1839 – MAY 23, 1937 • Got rich in oil. • Until the 1840 s whale oil was what was used to light lamps. • In 1846, a way of safely distilling kerosene from oil was discovered. After that kerosene was in great demand. • Whales becoming more scarce, oil untapped across America.

JOHN D ROCKEFELLER • Started in the produce business. • Got a chance to buy an oil refinery. • Got really rich really fast. • Super religious, observant Baptist. (No drinking, smoking, dancing) • Began to create an enormous company that was expanding vertically and horizontally • Horizontal business expansion- buying more similar companies and creating a monopoly • Vertical integration- buying companies that do other things with your product so you can make money at every step. • Oil drilling, oil drilling equipment, oil refining, trucks to transport oil, oil sales, kerosene companies, etc.

JOHN D ROCKEFELLER • Oil booms spread across the country. • Standard was growing horizontally and vertically. It added its own pipelines, tank cars, and home delivery network. It kept oil prices low to stave off competitors, made its products affordable to the average household, and, to increase market penetration, sometimes sold below cost. It developed over 300 oil-based products from tar to paint to Vaseline petroleum jelly to chewing gum. • By the end of the 1870 s, Standard was refining over 90% of the oil in the U. S. Rockefeller had already become a millionaire ($1 million is equivalent to $25 million in 2015 dollars) • In the kerosene industry, Standard Oil replaced the old distribution system with its own vertical system. It supplied kerosene by tank cars that brought the fuel to local markets, and tank wagons then delivered to retail customers, thus bypassing the existing network of wholesale jobbers. • This drastically cut the price of kerosene to customers, but it was such a large monopoly that 85% of the world’s petroleum was coming from Pennsylvania and from Standard Oil in 1880 s. • Rockefeller also expanded into coal and steel industry, and discovered a use for the byproduct of kerosenegasoline for car engines.