The Rise Of Monopoly In The Late 1800's Industry

During the Gilded Age, the United States saw an increase in the power of big businesses, many of which monopolized their industries. This time period, although it appeared successful from the outside, was filled with governmental corruption. Manipulated by the robber barons of the Gilded Age, the United States government fell victim to their control. Contrary to this downfall, the nation celebrated much success in the numerous life-changing inventions attributed to this era. With the invention of the internal combustion engine, among others, there also came a major increase in the demand for oil. Entering the flourishing oil business in 1870, John D. Rockefeller created the Standard Oil Company, which later dominated the entire oil industry. Although he had years filled with success in the business, Rockefeller faced a disastrous court case that dissolved his company and years of his hard work. Despite this catastrophic event, Rockefeller found other ways to contribute his knowledge and hard-work by making innumerable philanthropic donations. After many years and countless efforts, John D. Rockefeller had one of the most outstanding and positive influences on the United States through his work in the oil industry and his philanthropic actions.

Although some of these criticisms are well founded, men like Andrew Carnegie and John D. Rockefeller were, in fact, Captains of Industry because they employed millions and created new ways of doing business. Before all these industrialists can along, America was just another country that had little significance to the world. If it was not for them, we as a nation would not be where we are today. The industrialists prospered mainly due to their wit, and the many innovations that they brought to their various fields of business. They created monopolies because they were the most effective forms of enterprise, and there were no laws that prohibited or restricted their use. As John D. Rockefeller himself said, "I believe in the spirit of combination and cooperation when properly conducted….It helps to reduce waste, and waste is a dissipation of power."(Danzer 424) Critics say that these men ruthlessly took over their fields of business, and "did not play fair". What's wrong with striving for success? What's wrong with being efficient? What's wrong with making a product that no one can equal? What's wrong with besting your competitors? Nothing.

1. What did John D. Rockefeller believe was the key to stabilizing the oil industry? He believed that centralizing the administration, hard-working people that applied themselves and work together, and a monopoly – owning as much as they can – would stabilize the oil industry.

The questions that remain in people heads is did the federal government do its job in regulating business? Or was it overstepping its boundaries with these acts? During the Progressive Era Reforms it was thought to address issues that occurred during the Glided Age. Regulating business can be tricky, my thought is that to regulate means the US Government would make laws to oversee, adjust, fine tune and correct the unfair business tactics in industry and big business, not to run

During the building of the Transcontinental Railroad, the railroads themselves created a large market for the steel and iron industries.4 The steel and oil industries were booming and corruption was rampant. Andrew Carnegie had cornered the market in the steel industry and John D. Rockefeller had cornered the oil market. Rockefeller bought up his competition after essentially putting them out of business by flooding the market with refined oil bringing down prices and profits. He was determined to pay no one a profit because he wanted it all for himself. He created a plan called vertical integration which consolidated his businesses into one by creating The Standard Oil Trust.5 These two men became known as barons and got rich beyond belief. In 1890, the Government enacted the Sherman Anti-Trust Act to prevent large firms from controlling one single industry and finally put a stop to these monopolies and trusts, 6 but it was not rigorously enforced until the 1900’s. This act was designed to restore competition and

Ralph W. Hidey and Muriel E. Hidey disagreed with Josephson. In the book Taking Sides, They believe that John D. Rockefeller and his associates created and applied a system for operating a large integrated industrial enterprise, which was one of the earliest representatives of Big Business. He contributed to the development of American petroleum industry and through it to the growth of the economy.

Rockefeller was obsessed with controlling the oil market and used many of undesirable tactics to flush his competitors out of the market. Rockefeller was also a master of the rebate game. He was one of the most dominant controllers of the railroads. He was so good at the rebate that at some times he skillfully commanded the railroad to pay rebates to his standard oil company on the traffic of other competitors. He was able to do this because his oil traffic was so high that he could make or break a section of a railroad a railroad company by simply not running his oil on their lines. Another one of Rockefellers earlier mentioned but not explained tactics was his horizontally integrated monopoly. Rockefeller used this horizontal monopoly to set prices and force his competitors to merge with him. (All with Doc. J) Document J shows that Rockefeller had his tentacles, or his influence and power around every piece of the oil industry. That, also, includes the politicians and their support.

No wonder that only a handful of people can’t distinguish that this old man was a crock and deserves to rot in hell! With all this positive media attention, the public had been fed lies! In real life, this money hungry, greedy villain is the prime reason why the Sherman Antitrust Act was passed. Rockefeller’s dream was to monopolize the oiling industry, and he so successfully did. Because of his great empire (the Standard Oil Co.)

Governmental involvement in the economy during the growth of industrialization had a positive impact on society in many ways. Progressives were people that favored government regulations of business practices to guarantee competition and a free enterprise. Big businesses like John D. Rockefeller’s Standard Oil Corporation, controlled the supply and price of oil. Ida Tarbell, a muckraker, exposed the aggressive business practices of Standard Oil Company in her book, “The History of the Standard Oil Company”. Standard Oil did whatever it took to gain control of their competitors and had a monopoly in the oil business with little or no competition. In 1890, the Sherman Anti-Trust Act was enacted to restore competition and free enterprise and to break up monopolies. In 1906, the government passed several laws to make sure that food and drugs were inspected before they were sold. The Pure Food and Drug Act, passed during Theodore Roosevelt’s administration, was an example of the government safeguarding the people in a positive way. The Pure Food and Drug Act ensured that food and drugs would be inspected for purity and to make sure they were not contaminated. Governmental involvement in the economy during this period allowed American to surpass leading competitors like Great Britain and Germany. The government also vastly increased transportation which helped the economy by getting goods from one place

The government also enacted the Hepburn Act, which made shipping internationally difficult on the railroad. Despite the fact that government grants led to incompetent railroads, the Interstate Commerce Commission and Hepburn Act were put into place, which made it so Hill “could not offer rate discounts on exports traveling on the Great Northern en route to the Orient” which was helping improve the economy with increased trade. Hill and other market entrepreneurs were not corrupt or unfair when choosing to not have subsides, but rather the political entrepreneurs were corrupt and insolvent. Also, Folsom argues that John D. Rockefeller was negatively impacted by government intervention. The Sherman Act was intended “to prevent monopolies and those companies ‘in restraint of trade’. Yet Standard Oil had no monopoly and certainly was not restraining trade” . Rockefeller’s goal was not to create a monopoly but in order to keep his business succeeding he needed directors in each state. By enacting the Sherman Act, Rockefeller’s company struggled, due to competition rising. These laws essentially stopped the growth of successful businesses, such as Hill and Rockefeller, who became so successful due to no government intervention.

Standard Oil was the United States’ first monopoly, and it was a rollercoaster of a ride for the company. Standard Oil started from the ground up and grew into a massive enterprise, that would eventually make John D. Rockefeller the richest man in the world. This would come at a price, the demise of Standard Oil, but multiple companies are born out of the demise of Standard Oil that become some of the largest oil companies today. Standard Oil even caused the United States of America to create a federal act to try and control monopolies from eliminating competition in unethical ways, and from becoming so powerful that they can control not just their markets, but other markets too, and from having the ability to change the price on consumers

It was at that point that John D. began to conceive of the oil industry as one big interrelated mechanism. And you couldn't just change one component, you had to control the entire machine.

The industrial leaders, Robber Barons, of the 19th century are men who are very respected and admired. Andrew Carnegie was a boy from Scotland who came over to this country with nothing. He continued to save and work his way up in the industry until he had complete control over the steel industry. John D. Rockefeller was also one who came from an ordinary home. When he saw an opportunity, he took it, along with the risks. He came to control the oil industry. Another man that took many opportunities to expand and grow was Cornelius Vanderbilt. These men saw what they needed to do to become successful and they did it. These men's' lives reflected the

The monopoly of oil created by Rockefeller caused smaller business to go out of business or make it very unprofitable for them to function. The regular oil companies could not compete with the Standard Oil Company, for they were trying to put smaller companies out of business. Rockefeller joined with competing companies in trust agreements. Participants in a trust turned their stock over to a group of trustees. This made it so you either had to join the bigger company or stop selling oil because it would not be profitable. The first hand account of this happening shows the negative effects to big businesses. How could a business survive when it is being attacked by a monopoly that was formed illegally? The Sherman Antitrust Act made this illegal. The large businesses forming monopolies would say this is the point of capitalism. They can sell their better product for whatever they want. Is it really illegal to undercut prices, but it is morally wrong to do. Unfortunately the owners of the monopolies did not care about others they only cared about themselves. Overall the monopolies formed by Rockefeller, Carnegie, and Pullman were very beneficial to themselves, but to no one else that wasn’t making money. The next document is about how Carnegie feels about giving money away. Carnegie claims that to be rich you must show that you are rich. You must have shunning displays that show wealth. People have to look up to you for answers. People have to want to be you and they must

In the past presidents have warned about corporations becoming too powerful and they have worked to restrict this power. Regulations put in place by past presidents have always been something that corporations have tries to get around. This was taken to the extreme during the presidency of Franklin Delano Roosevelt. Roosevelt realized that America’s economy was weak and he needed to help build the middle class back up. Roosevelt included policies in his New Deal that restricted the power of big business. Corporations did not like this and felt they needed to remove Roosevelt from office. In order to do this they would call upon U.S. Marine Corps General Smedley Butler. General Butler claimed that he and his men were used to “persuade” Mexico to allow American oil companies to operate there. He also forced Haiti and Cuba to allow National City Bank to operate there. He forced the Dominican Republic to allow American sugar companies to use their land. He forced several other countries to allow other American corporations to take resources from their land. Corporations sought out his assistance to end Roosevelt’s presidency because he wanted to bring relief to the middle class by creating more public enterprise and putting tougher regulations on corporations. They wanted General Butler to rally a group of nearly 500,000 military veterans and use them to intimidate Roosevelt into stepping down so the corporate