The Men Who Built America: Rockefeller, Carnegie & Their Legacy

I’m going to look at and analyze the magnates who built and shaped America. Modern America, the America that became the world's leading economic power, emerging with the end of slavery and the Civil War in 1865.

The Men Who Built America: Rockefeller, Carnegie & Their Legacy

A few key points that you will learn from this story:

  • The Titans Who Shaped America
  • John D. Rockefeller and the Birth of Standard Oil
  • Andrew Carnegie and the Rise of U.S. Steel
  • Teddy Roosevelt and the Fight Against Monopolies
  • Modern Monopolies: From Oil to Tech

The Titans Who Shaped America

After introducing you to the portraits of Silvio Berlusconi and Bernard Arnault, two major figures in the financial world and European stock exchanges—one of whom is highly controversial and deeply involved in politics—today I thought to continue this series by taking a step back in time.

In this context, we’ll examine key personalities like Cornelius Vanderbilt, known as "The Commodore," the pioneer of steamship shipping and railroads who set America in motion; John D. Rockefeller, the creator of Standard Oil, the world’s largest oil company; and Andrew Carnegie, the man who quite literally built America, becoming the first billionaire after selling all his steel mills to John Pierpont Morgan—president and owner of J.P. Morgan, the most important bank in existence today—for the incredible sum of $440 million, which would be worth many billions in today’s money.

We will go through crises, betrayals, fights between them, and so on.

But let's start, obviously, with John D. Rockefeller, born in 1839 in New York State, and Cornelius Vanderbilt, born in the late 18th century, who started and built America into motion.

Cornelius Vanderbilt realized that a simple steamboat, which could cross from Manhattan to Queens and Brooklyn, and from Rio to the Hudson, was just the beginning.

He understood that when you create "roads" on water and railways, goods move faster; and the biggest profit is not made by those who produce the goods, nor by those who sell the goods, but by those who transport them.

Because when you carry a lot, the commission may be small, but if you create a monopoly—and he had a monopoly on the railways at one time—you can make a fortune.

And Cornelius Vanderbilt became the first self-made multimillionaire in the United States.

John D. Rockefeller and the Birth of Standard Oil

John D. Rockefeller, on the other hand, started as a simple accountant. But with the discovery of oil in the Ohio area, he realized that the real fortune wouldn’t come from just finding oil or extracting a lot of it.

You know, at that time, about 10% of what came out of the ground was lost or wasted. Rockefeller thought differently—he wanted to standardize the oil, refine it, and package it. He would sell it for a consistent price of 5 cents and call it Standard Oil.

That Standard Oil product allowed people to extend their days—no longer did the winter sun set at 4 o'clock, leaving everything in darkness. People could stay up until 12 or 1 a.m., under the light of a simple kerosene lamp.

Cities lit by oil lamps started to appear, and so on. This product, Standard Oil, which also became the name of his company, gave America light, then later, heat.

And if the world population was under a billion in the 19th century, look where we are now—thanks to the energy Rockefeller helped refine, we’ve grown to 8 billion people.

John D. Rockefeller realized early on that his only real chance was to create a monopoly. He knew that his success would depend on having everyone who extracted oil sell it to him. He would refine it, set a single price, and dominate the market.

He didn’t need to risk drilling or discovering oil like everyone else, who believed they would strike it rich just by finding oil—what they called black gold, thinking it was like gold itself. You dig, get lucky, find it, and become rich. But Rockefeller knew better.

Many struck it rich for a time, only to lose everything later on. But the one family that has remained the most powerful in the oil industry, even over 150 years later, is still the same: the Rockefellers.

It’s true, though—the shareholders of Standard Oil weren’t just the Rockefeller family. There were also the Pratt family and the Whitney family, who went on to create the famous Pratt & Whitney aircraft engine, used in both World War II and today’s commercial aircraft.

What’s fascinating is that the brilliant idea behind Rockefeller’s success didn’t come solely from him—it came from Cornelius Vanderbilt. Vanderbilt, who had bought and controlled all the railroads in New England and the Eastern U.S., from Chicago to the Atlantic, ran into a problem in the 1870s.

The railroads were oversaturated. There were too many trains, and not enough passengers or goods to transport. The market hit a crack, and the railroads had nothing left to carry.

There were far too many trains for the number of people who could afford to ride them, and goods to transport were sporadic. Vanderbilt realized he needed a steady customer. And that’s when he thought of young Rockefeller, the budding millionaire who refined oil, put it in barrels, and sold kerosene at 5 cents a gallon—the fuel that lit up America.

And with that same oil, planes still fly today.

The interesting part is how Rockefeller got his big break. Cornelius Vanderbilt called Mr. John D. Rockefeller to New York for a meeting, and Rockefeller, all set and confident, had what you might call a stroke of luck—or maybe it was destiny.

On his way to the station, the horse carriage he was in had an accident, and one of the wheels broke. He missed the train. That train, as fate would have it, collapsed on a bridge over the Erie Canal, killing everyone on board. If Rockefeller had caught that train, no one would have ever known his name.

Taking this as a sign, Rockefeller finally reached Cornelius Vanderbilt, convinced that he was about to land the deal of a lifetime. And he was right. He struck a bargain with Vanderbilt, demanded exclusivity for oil transport, and Vanderbilt agreed.

Rockefeller secured a deal to transport his barrels of oil in Vanderbilt’s "Commodore" trains. In doing so, Rockefeller ensured that no one else could sell oil without going through him because he controlled the monopoly on transportation. By owning the transport, he naturally came to dominate the oil refining business as well.

But competition still existed, even though the market was a lawless jungle at the time—no regulations, no oversight like we have today. One of Rockefeller's biggest competitors, the famous Thomas Scott, decided to challenge him.

How? With Vanderbilt and Rockefeller already having an ironclad agreement on the transportation of oil?

Scott came up with an idea that would change everything: the pipeline. And that’s how the oil pipelines we know today were born.

Respectively, a pipeline where he discovered that you can pump oil, and by giving it a certain pressure at one end, it reaches the other end.

It was sabotaged by Rockefeller, but then Rockefeller realized its potential and went ahead and built his own pipeline. What’s certain is that during this period, Tom Scott, a special fellow, was driven into bankruptcy by John D. Rockefeller.

And it wasn’t just him—many were driven to bankruptcy. Those who agreed to sell their refineries to Rockefeller and take a small share, like the Pratts and the Whitneys, are billionaires today.

Those who tried to go to war with Rockefeller in the 1870s lost it, and that’s how Tom Scott ended up dying poor, of a broken heart.

But Tom Scott had a disciple, a young Scotsman, very clever and enterprising, who came up with the business of the century—the building of a bridge over the Mississippi River at St. Louis. You should know, that bridge, which still stands today, helped connect the East and West of America.

The fact that goods and travelers could now easily cross the Mississippi River, which was the most important natural barrier between the East Coast and the West Coast, greatly boosted the American economy.

It opened up access to the wheat and grain fields of the Midwest, which could be transported by rail across the Mississippi to New York; and from NYC and Boston, those goods could be shipped anywhere in the world on American and British ships.

Andrew Carnegie and the Rise of U.S. Steel

What I can tell you is that Andrew Carnegie, at the time he built this bridge, took a huge risk. He had no money. Tom Scott helped him a lot, but Carnegie fought for this project on his own. He believed in it, even when the project had to be halted because he ran out of funds and the banks were demanding their money back.

They also discovered something else—this bridge marked the beginning of a new era for America. It was built with steel, and that steel would become the material that would continue to build the country. Andrew Carnegie focused on steel production.

He was tough on his employees, hiring one of the most ruthless supervisors to oversee the workers. He didn’t accept strikes; there was no democracy in his approach. He wasn’t a socialist looking out for the workers—he, like Rockefeller and Vanderbilt, thought only of maximizing profit. And through that mindset, he succeeded in forming an empire.

Even more powerful than the famous Rockefeller. The idea is that in 1900, Andrew Carnegie gave up everything and sold for a fabulous sum that J.P. Morgan offered him.

And so, J.P. Morgan, along with his shareholders and customers through the bank, managed to buy Carnegie's steel mills. They already had other steel mills, and with that, the largest company in America was formed, even bigger than Standard Oil, called U.S. Steel.

It still exists today, though unfortunately, it's only worth a few billion dollars—about the same amount as it was worth in 1900. But back then, those billions were worth almost a thousand times more than today's dollar. To give you an idea, one dollar from 1900 is nearly a thousand dollars in 2024.

These people—J.P. Morgan, and after that, Westinghouse, together with Tesla, made the first hydroelectric plant and introduced electricity to America—Westinghouse and Tesla. But that's another story I'll cover in another article.

All these men dominated not only the economic world but the entire world. They appointed the presidents, decided who would be elected to the White House, and so on.

Even if the people voted, it was important who financed. And although they were not good friends with each other, Rockefeller and Carnegie were in constant enmity all their lives. When Andrew Carnegie began to give away almost all of his fortune after selling it for 442 million, he built the famous concert hall that still exists today for classical concerts—Carnegie Hall.

Rockefeller, also invited to the launch and inauguration of Carnegie Hall, felt like he remained the country boy, seeing that the Scotsman Andrew Carnegie had even more money than him. So, he too started to get involved in charity.

Later, Rockefeller, and especially his heirs, would go on to do a lot of philanthropy. And you’ve seen that this has carried on to this day. The trend is that, at a certain point, once you've made a lot of money, you start giving it away.

But even this giving—depending on who you give to, when, and how much—can influence the development of society. And I can tell you, they had the power to put the President of America in office.

Teddy Roosevelt and the Fight Against Monopolies

Obviously, they were all backing the Republican Party, which was the party of the rich industrialists. But there was an enemy in their ranks—a 41-year-old man named Theodore Roosevelt, or Teddy Roosevelt.

What happened was that they saw this man as a threat, their enemy within the Republican Party. So, after helping him rise politically, they thought the best way to keep him from causing trouble was to make him vice president.

Why? Simple. The vice president has no real power. He’s just a ribbon-cutter. But if the president dies, suddenly the vice president becomes the most powerful man in the country.

And, as fate would have it, bad luck struck for Carnegie, J.P. Morgan, and especially Rockefeller when President McKinley was assassinated just a few months after taking office in 1901. In September, McKinley was killed, and Teddy Roosevelt—who hadn’t even been elected but was serving as vice president—became the youngest president in American history at just 42 years old, even younger than John F. Kennedy.

And this was a disaster for the big magnates because Roosevelt was their enemy. He did everything in his power to dismantle and destabilize the monopolies they controlled.

The American economy was thriving, but it was in the hands of just 4-5 people. You have to understand, by 1905, Standard Oil was refining 90% of the country’s oil and selling 85% of it. There were different branches: Standard Oil of Ohio, Iowa, California, Texas, New York, and the headquarters in New Jersey.

Through a trial and a Supreme Court decision, using an existing law—the famous Sherman Antitrust Act of 1890—which was designed to combat monopolies and promote free competition, Teddy Roosevelt succeeded in breaking up Standard Oil. After a long legal process and a historic Supreme Court ruling, Standard Oil was split into 34 smaller companies.

This is how Standard Oil of New Jersey became Exxon, the direct heir that still exists today. Standard Oil of New York became Mobil, which later merged with Exxon after 80 years to form what we now know as ExxonMobil.

Standard Oil of California turned into Chevron. Standard Oil of Ohio later led to the formation of British Petroleum (BP). Other companies like Amoco, ConocoPhillips, and more that you know today also came out of that split.

At that point, Jekyll Island saw the formation of the "Seven Sisters," the group of oil companies that divided the global oil market. Rockefeller was still a key figure, but Standard Oil itself was already divided.

Modern Monopolies: From Oil to Tech

A part of Standard Oil eventually ended up in the hands of British Petroleum, merging with Anglo American, which included Persian Oil, and so on. From here, the story changes. What Teddy Roosevelt achieved in 1900—breaking up monopolies—is something an American president should be able to do today.

Yet, we face a different kind of enormous monopoly in the tech industry, which everyone talks about but no one has the courage to confront head-on and break apart like Roosevelt did with Standard Oil.

Today, the market is no longer dominated by Rockefeller, Carnegie, J.P. Morgan, and Ford. Instead, it’s controlled by giants like Microsoft, Google, Amazon, Nvidia, Tesla, and so one.

What I’m saying is, we’ll continue the comparison, from the destruction of monopolies in the 1900s to what the American and European governments should be doing now.

The Europeans have started to act, but timidly, with fines of 4, 5, or 6 billion dollars. But when a company like Microsoft has a stock market capitalization of 3 trillion, those fines are as insignificant as pocket change—a pack of cigarettes.

We’ll explore this parallel, so you understand that today's world is simply a repetition of the past, in a different industry and at a different level. While the market is more regulated than it was in 1900, it’s still not regulated enough to apply the same laws that destroyed monopolies back then.

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