A Classification of American Wealth
History and genealogy of the wealthy families of America - Sponsors

 Part 1 : Colonial and Mercantile America  Part 2 : America in the Gilded Age
 Part 3 : America in the Twentieth Century  Encyclopedia of American Wealth

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   Part II-Chapter 11 :  The Trusts  > Index and Introduction  :  Previous  1 - 2 - 3 - 4 - 5 - 6  Next  

     The Trusts 
 A list of major industrial trusts or corporations organized between 1882 and 1904
     A list of other industrial trusts or corporations organized between 1882 and 1904

The rise of Standard Oil, John Davison Rockefeller and his associates
       Rise of a Baptist capitalist : John Davison Rockefeller
       Birth of the Standard Oil Company
       Standard Oil : the Trust Agreement of 1882
       The Standard Oil families

The Dukes of American Tobacco

NEW  Kings and Princes of Steel  NEW

If the Gilded Age was the era of railroads, industrialization and frenzied finance, the real characteristic of this period was the unprecedented concentration of wealth and power in the hands of a few capitalists and promoters. Neither the railroads, nor industry or banking were invented in the period between 1865 and 1914, generally accepted as the time limits of what was called the Gilded Age. The new element which drove the concentration of wealth was consolidation in search of economies of scale and the strive for monopoly.

When the great Cornelius Vanderbilt acquired both the New York & Haarlem and the Hudson River railroads, he achieved a monopoly on railroad transportation between New York City and Albany. This he later parlayed into a controlling interest of the New York Central Railroad, which he promptly merged with his Hudson River railroad, thereby establishing a through line between New York and the Great Lakes. His interest in the Erie Railroad, which ran a parallel line along the Southern border of New York state, was entirely motivated by the intention to extend his monopoly. What Vanderbilt did or sought to do in New York, the Pennsylvania Railroad did in Pennsylvania and other railroads did elsewhere. Mergers created larger and more efficient systems and a reduction of competition, which in turn promised higher profits. Thus, when the new generation of industrialists started to expand their scope of activity from local factory owners to national operators, they merely followed the railroads in their economic logics.

The concepts of pooling and artificial price fixing, were not invented during the Gilded Age, but the period was characterized by the typical short economic cycles, the boom and bust cycles, which favored their application. In times of rapid growth, high profits tended to attract an excess of investors and overcapacities were rapidly built up. When the excessive offer hit the markets, prices had to sink and spelled doom over the concerned industries. Leading firms then often tried to maintain high prices by pooling and collectively reducing production. Such pools (or cartels) were more or less loose and the looser they were, the less they were effective. Only in a few cases did these cartels succeed to control prices effectively for a prolonged period. One such example is the Gunpowder Trade Association, which was organized by the leading gunpowder manufacturers, including E.I. Du Pont de Nemours, after the end of Civil War threatened the industry, which then naturally suffered from overcapacity.

The Trusts  > Index and Introduction  :  Previous  1 - 2 - 3 - 4 - 5 - 6  Next  

The Mining Bonanza Kings

The Railroad Barons

The Trusts



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