ROBBER BARONS

The "robber barons" were industrial and financial tycoons of the late nineteenth century. They included banker and financier John Pierpont Morgan (1837–1913); oil industrialist John D. Rockefeller (1839–1937); steel mogul Andrew Carnegie (1835–1919); financiers James J. Hill (1838–1916), James Fisk (1834–1872), and Jay Gould (1836–1892); and rail magnates Cornelius Vanderbilt (1794–1877) and Collis Huntington (1821–1900). Hailed by some for expanding and modernizing the capitalist system, lauded by others for their philanthropic contributions to the arts and education, these businessmen were viewed by many more as opportunistic, exploitative, and unethical.

Many factors converged to make the robber baron businessman possible: the country was rich in natural resources, including iron, coal, and oil; technological advances steadily improved manufacturing machinery and processes; population growth, fed by an influx of immigrants, provided a steady workforce that was often willing to work for a low wage; the government turned over the building and operation of the nation's railways to private interests; and, adhering to the philosophy of laissez faire (non-interference in the private sector), the government also provided a favorable environment in which to conduct business. Shrewd businessmen turned these factors to their advantage, amassing great empires. They reinvested profits into their businesses and their fortunes grew. The robber barons (especially the railroad men and the financiers who gained control of rail companies through stock buy-outs) hired lobbyists to work on their behalf to gain corporation subsidies, land grants, and even tax relief at both the federal and state levels. They converted their business prowess into political might. In Washington, D.C., politicians grew tired of the advantage-seeking representatives of the nation's business leaders. Reform-minded progressives complained that the robber barons lived in opulent luxury while their workers barely eked out a living.

After a decades-long domination of the robber barons over the U.S. economy, changes around the turn of the century worked to curb their influence. In 1890 the federal government passed the Sherman Anti-Trust Act which made trusts illegal (trusts are combinations of firms or corporations formed to limit competition and monopolize a market). Workers continued to organize in labor unions with which corporations were increasingly compelled to negotiate. The Interstate Commerce Commission (ICC) was established in 1887 to prevent abusive practices. In 1913 the Sixteenth Amendment was ratified, allowing the federal government to collect a graduated income tax. Though many American businessmen and women would make great fortunes in the twentieth century, by the end of the 1920s the era of the robber barons had drawn to a close.

Topic overview

The robber barons (especially the railroad men and the financiers who gained control of rail companies through stock buy-outs) hired lobbyists to work on their behalf to gain corporation subsidies, land grants, and even tax relief at both the federal and state levels. They converted their business prowess into political might.