The poor generally remained poor during the Industrial Revolution, but a few ambitious men made huge fortunes. These men saw the changing times and seized opportunities. They made their businesses as efficient and streamlined as possible. And they used ruthless business practices to drive competitors out of business. Some people saw them as greedy robbers; others thought they were smart businessmen.

• Cornelius Vanderbilt had already made a fortune with his fleet of steamships, but he saw that railroads were the future. At the age of 71, he sunk his fortune into buying railroads to create a 14,000-mile line of track called the New York Central. When he died 12 years later, his estate was worth $100 million. His gamble had paid off for both his family and the public. His railroad track made a trip from New York to Chicago both faster and cheaper.
• Andrew Carnegie, a poor Scottish immigrant, started as a steel mill worker. Smart and hardworking, he quickly saved enough money to buy several ironworks and went on to build the nation’s largest steel plant. He bribed railways to drive out the competition and eventually sold his company for $492 million to banker J. Pierpont Morgan.
• Colonel E.L. Drake invented a process for turning oil, found throughout western Pennsylvania, into petroleum for heaters and lamps. After he dug his first well, the oil industry boomed. John D. Rockefeller saw an opportunity here. He started Standard Oil of Ohio and convinced the railroads that if they would give him a discount, he would eventually buy out all the other oil companies. When this happened, he would give all his business to the railroads that helped him. Soon, he had bought up all the other oil companies, as well as steamships, barrel companies, railroads, and docks – everything he needed for his business. He owned 25 percent of the nation’s oil-refining companies. After he retired, he gave most of his $530 million away.

Vocabulary

1. Ruthless: without mercy
2. Ambitious: determined to succeed

Questions and Answers

Question: Were these businessmen good or bad?

Answer: Probably a bit of both, depending on who you ask. They didn’t care about destroying another man’s business, nor did they do much to improve factory conditions for their workers. On the other hand, they gave away a great deal of their fortunes to libraries, concert halls, museums, and hospitals. They believed that they had a responsibility to use their wealth wisely and generously to bless society. Rockefeller’s mother taught him as a child to give money to his church each week. Carnegie also made a habit of giving to those less fortunate, even when he was poor himself. They gave jobs to millions of Americans and created new products. Their inventions and innovations are still used today. They helped Americans believe in the American dream – that hard work could lead to prosperity.

Learn More

Visit PBS to watch a documentary about the Rockefellers.