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There
is a widespread myth, that Civil War and more precisely war
profiteering was at the origin of most of the large fortunes made
during the Gilded Age. This is wrong, especially on the issue of war
profiteering.
It
is true that some of the outstanding capitalists who rose in the
Gilded Age, benefited from better than usual profits due to war
demand and subsequently went on to build their large fortune.
Examples include John Davison Rockefeller, who was a commission
merchant in Cleveland during the war and
Philip Danforth Armour, who
had tried himself as a gold-seeker in California.
Rockefeller
used the above average wartime profits to finance his investment in
Samuel Andrews' oil refinery, which led to the creation of Standard
Oil and his huge fortune. But John D. Rockefeller was an astute
businessman who also knew how to borrow money to finance promising
projects. It is more than probable that such a man would have found
a way to finance his visions, even without the war induced profits
of his commission house. Moreover, most (Northern) businesses
benefited from the war demand and this could hardly be considered
profiteering.
Armour
more directly profited from Civil War or more precisely from his
correct evaluation of the final three months of the conflict.
Rightfully predicting a series of Union victories, which would
result in the Confederate surrender, Philip Danford Armour sold pork
short in New York City and made his first million in the process.
Having founded his wealth on pork, Armour then went to Chicago,
where he built up the greatest pork packing house in partnership
with his brother Herman Ossian Armour. Here again, the war had
defined an environment, where an outstanding opportunity presented
itself to a daring speculator. It must be assumed that such a man
would have found a way to incept his fortune in another environment
too.
It
is also true that the Secession War influenced political and
economic factors in such ways as to enable certain capitalists to
rise from virtually nowhere to national prominence. The building of
the first transcontinental railroad and the emergence of
industrialists like Singer and McCormick are examples.
A
railroad to the Pacific had been projected for many years,
especially after California grew rich and populated, as a
consequence of the gold rush. Many routes to the Pacific had been
surveyed, but a government financing scheme repeatedly failed in
Congress because the interested parties were unable to decide on a
route. As a result of Secession, the main opponents on what became
the Union Pacific route where no longer in Congress and in 1861, the
Pacific Railroad Act lay the ground for
the first US
transcontinental railroad. The subsequent fortunes of the
Thomas C. Durant
and Ames, as well as the Pacific Quartet (Leland Stanford,
Charles
Crocker, C.P. Huntington and
Mark Hopkins), were based on this
monumental construction project. Then again, the transcontinental
railroad would have finally been built anyway, maybe by other men
and at (slightly) lower profits.
The Gilded Age
>
Introduction and Index
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