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 : The Gilded Age  >   Introduction and Index :  Previous  1 2 - 3 - 45 - 6 - 7 - 8 - 9  Next

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 :  Previous  1 2 - 3 - 45 - 6 - 7 - 8 - 9  Next

The Mining Bonanza Kings

The Railroad Barons



The Trusts


 

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