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

Chronicles of American Wealth / Nr 5 / February 28, 2002

 Content :

     The richest Americans :
     1.  Profile of Andrew Carnegie - the King of Steel
     2.  Profile of John Davison Rockefeller - Standard Oil trustee

Andrew Carnegie (1835-1919) from Pittsburgh, Pennsylvania and New York

When he came to America at age 13, Andrew Carnegie was but one of many Scottish immigrants who lived the American Dream, getting from rags to riches by hard work, thriftiness and a good portion of luck. Yet when he died in 1919, he had passed through the stage of richest man in America and had given away most of his large fortune. Carnegie's business career started when he became the telegraph operator and later assistant of Thomas Alexander Scott, then district superintendent of the Pennsylvania Railroad at Pittsburgh. Under Scott's protection the young man rose in the management ranks of America's best organized railroad and was presented with lucrative investment opportunities, such as Adams Express, Woodruff Sleeping Car and Keystone Telegraph. Like many men in Pennsylvania, Andrew Carnegie also profited from the oil boom, as he put 11'000 $ into the Columbia Oil Company, an investment which eventually yielded one million dollars. In 1865, Andrew Carnegie left the Pennsylvania Railroad and started his way to become a steel tycoon as a leading partner of the Keystone Bridge Company. By that time he already owned shares in the Cyclops Iron Company and his younger brother Thomas Morrison Carnegie was a partner in Kloman-Phipps & Co. By merging these two companies into the Union Iron Mills, the Carnegies were soon in control of the combined entity. In 1870, the Carnegies and their partners expanded their operations by Lucy Furnaces, which were later followed by the Isabella and the Carrie Furnaces. Adopting the Bessemer process for steel making, Andrew Carnegie, with new partners William Coleman and David McCandless, hired Bessemer pioneer Alexander Holley to build the Edgar Thomson Works on the Braddock battlefield. Andrew Carnegie was not the first to use the Bessemer process to make steel in America, but through close cost controls and continuous technical improvements, his steel works became the most competitive in an industry he eventually dominated. Carnegie's main skill was to recognize and further talented managers. Among the men, Andrew Carnegie handpicked and promoted were Captain Bill Jones, Henry Clay Frick and Charles Michael Schwab. Frick, who had already built his own industrial empire in Connellsville coke properties, became the operative head of Carnegie Steel and Andrew Carnegie started to think of retiring. After writing the "Gospels of Wealth" in 1889, Andrew Carnegie was more and more convinced that wealth had to be redistributed for philanthropic purposes. Thus when John Pierpont Morgan proposed to absorb Carnegie Steel into his United States Steel Corporation, Andrew Carnegie asked for 480'000'000 $, sold out and retired. With his share of $ 220 million in 5% US Steel first mortgage bonds, Andrew Carnegie now had ample means to devote his life to philanthropy, which he did, endowing 2'811 libraries and offering 7'689 pipe organs to churches all around the country. Carnegie philanthropies differed from those of most of his contemporaries, in that he supported common schooling and churches, rather than the prestigious educational institutions. In 1911, Andrew Carnegie established the Carnegie Corporation, with a capital of 125'000'000 $, the first of the great private foundations, and the largest until the Ford Foundation was established in 1947.
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John Davison Rockefeller (1839-1937) from Cleveland, Ohio and New York

Born into a family where a devout Baptist mother sheltered her children from their abusive bigamist father, John Davison Rockefeller learned to bear responsibility at an early age. After schooling at Central High School of Cleveland and a short commercial course at Folsom, John D. Rockefeller got his first job as assistant bookkeeper of Hewitt & Tuttle, commission merchants on Merwin Street, Cleveland. There he learnt the trade and in 1859, he was able to start his own mercantile business, in association with Maurice B. Clark. Clark & Rockefeller prospered during Civil War, thanks to lucrative contracts to supply the Union armies. In 1863, the partners backed Samuel Andrews in the erection of an oil refinery at Cleveland. In these days, Rockefeller visited the oil regions and was appalled by the anarchic conditions he found there. He nevertheless stuck to his share in the oil refinery and in 1965 bought out the Clark brothers, paying with his share in the commission business and 72'500 $. The firm of Rockefeller & Andrews soon found additional capital from Henry Morrison Flagler and his wealthy relative Stephen Vanderburgh Harkness. Together with Rockefellers brother William and the latter's brother-in-law Oliver Burr Jennings, these men made up the original founders of the Standard Oil Company of Ohio, which emerged from their refining business in 1870. Standard Oil then was only one of many refineries in Cleveland, albeit a well endowed and profitable one. Through the South Improvement scheme Rockefeller and his partners get special rebates from railroads as well as kickbacks for oil carried for non-participating firms. A scandal arose around these unfair practices and the scheme was put to an end in 1972. But by that time Standard Oil had increased its capital to $ 2.5 million, merged with Clark & Payne and acquired 18 refineries in Cleveland. Now firmly controlling the refining capacity of Cleveland, John D. Rockefeller extended the Standard Oil's influence on the other refining centers, New York, Pittsburgh and Philadelphia, bringing in such major players as Pratt, Rogers, Warden, Lockhart, Vandergrift and John Dustin Archbold from the oil regions. By 1882, when the Standard Oil Trust was officially created with a capital of $ 70 million, the firm controlled 95% of America's oil refining capacity as well as the essential part of the country's pipeline systems. John Davison Rockefeller owned about 25% of the capital of Standard Oil, which in the years following the trust agreement became one of the most profitable business enterprises in the world. Because of health problems, he retired from active business in 1892, but remained a director of the various Standard Oil companies for many more years. Heavily criticized for his role in building the oil trust, John Davison Rockefeller succeeded Jay Gould as America's most hated millionaire. Always generous to causes which suited his Baptist education, John Davison Rockefeller devoted his later years to repair his image by large scale philanthropies. He left his business in the able hands of his lieutenant John D. Archbold and groomed his son John Davison Rockefeller jr for the administration of the Rockefeller foundations, to which he left about half of his large fortune, the first billion dollar accumulation in American history. From his marriage to Laura Celestia Spelman, Rockefeller also had three daughters. He built himself a country estate "Kykuit" in the Pocantico Hills of New York, with ample space for his family to settle around it.
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Find out about the men who held the title of "Richest American" prior to Andrew Carnegie and John D. Rockefeller at "Encyclopedia of American Wealth" with profiles of Robert King Carter, Elias Hasket Derby, Stephen Girard, John Jacob Astor and Cornelius Vanderbilt, as well as many other wealthy Americans of the 18th and 19th century.