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 -- 4 - 5 - 6  Next  

What Rockefeller did in oil, James Buchanan Duke did in tobacco products and the Havemeyers in sugar refining. Founded in 1890, the American Tobacco Company grew mainly by acquisitions until it controlled most of the smoking tobacco industry in the USA. Its sister, the Continental Tobacco Company, was organized (in 1898) to control the plug tobacco sector as where the American Snuff and American Cigar companies to control their respective segments of the tobacco trade. These companies were merged into the Consolidated Tobacco Company of New Jersey in 1901. To expand into foreign markets, the British American Tobacco Company was formed and the Havana Tobacco Company, to control the cigar supplies from that Caribbean island. Duke, a self-made-man like Rockefeller, was supported by a powerful group of Northern financiers, who had built the street railway systems in New York, Philadelphia and other cities. This group essentially consisted in William Collins Whitney, Thomas Fortune Ryan, Peter A. B. Widener and Anthony N. Brady. Oliver Hazard Payne, the long-time treasurer of Standard Oil and estranged brother-in-law of William C. Whitney, was also a large shareholder.

Unlike the Rockefellers and the Dukes, the Havemeyers who reorganized the sugar industry in the 1890's, were already wealthy and well established in the sugar refining business. The first pair of Havemeyer brothers, William and Frederick Christian, immigrated from Schaumburg-Lippe (Germany) in 1802 and established their first sugar refinery on Vandam Street in New York three years later. Their family prospered in New York and made the city to the premier sugar refining center in America. A scion of this family, Henry Osborne Havemeyer, who was linked by marriage to the Elder family, whose fortune was also made in sugar refining, consolidated the industry under his American Sugar Refining Company in 1891. By 1907, the Sugar Trust controlled 98% of US sugar production. Thereafter it came under litigation with the US government and was forced to relinquish control of its member firms, thereby effectively loosing its dominant position. When a settlement was reached in 1922, the market share of American Sugar Refining had sunk to 32%. In modern times, sugar refining ceased to be the profitable business it used to and the industry, once New York's most important, declined.

During the 1890's and into the first decade of the Twentieth Century, trusts were organized in every major American industry. Some were loose agreements between major firms, such as the infamous "Meat Trust", which pooled the large Chicago and St. Louis packers (Armour, Cudahy, Morris, Swift and Wilson) in one strong combination, using essentially the same methods as Standard Oil, notably in relation with the railroads, to fix prices and drive competitors out of business. Others took the form of holding corporations, usually chartered in New Jersey or Delaware and frequently organized with speculative rather than economic motives. To these, we may count a number of the companies, which were set up by a former shipping merchant, turned investment banker, whose involvement in industrial consolidation earned him the nickname "father of trusts" : Charles Ranlett Flint. Although generally weak at their beginnings, some of the Flint trusts later became successful corporations, like American Woolen (later Textron) or the Computing-Tabulating-Recording Company (now IBM). The Moore brothers of Chicago were also prominent trust organizers of the rather speculative nature. They created the National Biscuit Company (Nabisco), the Diamond Match Company and four companies, which were absorbed by the United States Steel Corporation in 1901. The Moores stood also behind one of the last great railroad empires to be organized in the USA.

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

The Mining Bonanza Kings

The Railroad Barons

The Trusts



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