Economic Developments: Railroads, Steel and Oil Flashcards
What industry did Vanderbilt start in?
Steamboats
How much money did Vanderbilt make from the Steamboat Inudstry?
$11 million
What did Vanderbilt do with his money when he ended his time in the Steamboat Industry?
He invested all of his money in railroads
When did Cornelius Vanderbilt die and what was his networth when he died?
He died in 1877 with a Networth of $100 million
How many MILES of railroads were there in the USA in 1865? Where were most rails located?
35,000 miles mostly in the North and East
How many miles of rails were there by 1893? Where were they located?
200,000 miles connected throughout all of North America
Why was there lots of competition in relation to willingness of investment by private banks?
Private banks were keen to invest in any railroad networks
Give an example of a failed railroad network which the New York Private Bank invested in
Jay Cooke’s railroad network
Why would the rise in steel and oil production mean that it was essential for rails to keep being made?
So that transportation of raw materials could continue as well as transportation of the finished steel and oil
How many tons of steel were produced in 1875 compared to 1900?
360,000 tons of steel in 1875. 60 million tons produced in 1900
What was the annual growth rate on average for steel production from 1875-90?
7% a year on average
What was a significant discover which massively helped increase Steel Production? Why?
The discovery of the Bessemer Process. Because it meant good quality steel could be produced quickly
How did Andrew Carnegie start off?
He was a poor Scottish Immigrant
What did Carnegie do with his Steel Company in 1900?
He sold it to J.P Morgan for $400 million
What was significant with the way that Carnegie took over the steel industry different to other monopolies?
Instead of buying up other companies he focussed on keeping prices low and quality high for his steel
How did Carnegie monopolise steel?
Through vertical integration
What is vertical integration?
Buying up other businesses which help you to make your product
What was Carnegie criticised for in business?
His ruthlessness of succeeding
How was Carnegie ruthless with his factory workers?
He employed armed guards to observe workers to make sure they were not trying to make any unions
What did Carnegie do socially which got him criticised? Why?
He was very philanthropic, and people said he was a socialist
What did Rockefeller do in 1860? What did he find?
He visited an oil company and found it was inefficient and unorganised
What did Rockefeller realise for himself when he visited the oil company in 1860?
He realised it would be better to get into the oil refinery industry rather than the oil acquisition industry
How was Rockefeller ruthless with how he owned properties and shares?
He had lots of properties and shares outside of his business through trusts
What did Rockefeller do in Cleveland that was Ruthless? What was this called?
He bought 22 of 26 potential competitors against Standard Oil but told them to keep it as a secret. The ‘Cleveland Massacre’
When did Rockefeller set up Standard Oil?
1870
How much of the oil refinery industry did Rockefeller own by 1871?
10%
What percentage of the Oil Refinery Industry did Rockefeller own by 1877?
90%
What was Rockefellers fortune in 1899?
$200 million
What was significant about Rockefellers fortune in 1913?
He became the first billionaire in the world
What did Rockefeller say he wanted for the size of businesses competing in the oil refinery industry?
Only the “big ones”
What was significant about what Rockefeller did with his wealth? How much did he give to what institutes?
He was a philanthropist, giving $550 million in total throughout his life to Medicine and African-American Educational Institutions
What do defenders of Rockefeller say? Why?
They say he saved the Oil Industry because of his drive to eliminate competition and be more organised
What do critics of Rockefeller say? Why?
They say he was too ruthless, because he made it so that no smaller businesses could ever compete with him
