The Rise of Big Business

[Music] [Music] this is a St story of money and power a film about the American dream and three men who made it come true Andrew Carnegie John D Rockefeller and J P Pont Morgan they and others like them took a young nation of farmers and Artisans and produced an industrial complex unsurpassed on the face of the Earth what would they like these men whose lives would have such a profound effect on their fellow man I came to America from Scotland at 12 years of age I started to work in a Pittsburgh cotton mill for $120 a week by the time I was 40 I was making $300,000 a week is it any wonder I consider America the greatest country in the world [Music] they said I never smiled not true every time I bought another oil refinery or made another million dollars I smiled so actually I smiled quite [Music] aik I never thought of myself as handsome I was fat and had a large bulbous nose that was afflicted with a skin condition still I was popular with the ladies perhaps it was partly my wealth I was to die leaving a personal Fortune of $68 [Music] million Andrew Carnegie John D Rockefeller J Pier Pont Morgan three of the country's first and biggest of a new breed of American the big businessman what sort of men were they robber barons or industrial Statesmen whatever they were they were colorful and the subject of many an article editorial and cartoon one humorist who wrote about them constantly was Finley Peter Dunn the creator of Fiction's first Irish American bartender Mr douly J P Pont margan Andrew Carnegie and John D Rockefeller uh I mean Rockefeller funny thing is how everybody you seeing they typify the American success story from Rags to Riches well that's all I think it is a story and if all the facts be known Rags to Riches is the exception rather than the rule in America no matter what they say it's easier to go from riches to riches than it is from Rags to Riches before the Civil War there was much manufacturing but the Enterprises were generally family-owned and operated you got your furniture from the local cabinet maker your shoes from the neighborhood Sho maker and your meat from the local butcher all of this was to change with the war to fight this first modern war great quantities of material had to be manufactured and moved to finance it the government needed money Banks factories and railroads suddenly assumed a new importance as in all wars there were those who died and those who made fortunes among the latter was young Morgan he purchased hundreds of cases of carbines declared defective by the government at 350 a piece and then sold them directly to General Fremont for $22 not a bad profit and anyway they weren't that defective all they did was blow off the thumb of the soldier firing them and that only occasionally with the war finally over and the south in ruins the industrialists and bankers of the north began to make use of the huge masses of capital they had accumulated the war had United North and South the industrialists would join east to west the country was on the move people heading Westward putting down routs and every new town every settlement no matter how remote needed Goods to grow on the land they settled was vast huge forests Plains rivers and mountains 335,000 square miles of coal under the coal and often Beyond it oil and iron Lake Superior rimmed with iron and 75 Mi Northwest of duth the Meritt Brothers discovered the massabi grandmother of them all the richest Iron Range in the world seemingly inexhaustible and easy to get at as one of the Merit boys remarked at the time if we had gotten mad and kicked the ground right where we stood we could have thrown up 64% or we had the resources and we had the natural Avenues of transportation for them to our Atlantic ports came another factor in the rise of industrial America a cheap labor force it's true right here at the dock they sign you up for work and they say if you're lucky you can get a job that pays as much as a half a buck a day we know know what produces Bars of Steel but what produces Men of Steel perhaps the times the times following the Civil War called for a new type of man men to build new empires in railroading industry and finance they were times that called for Men of Steel and the biggest Man of Steel was a small Scottish immigrant by the name of Andrew Carnegie his intelligence industry and charm were to take him in a few short years from working a bobin in a c mail for a120 a week to supervising a telegraph office to running the Pennsylvania Railroad instead of spending the money he earned Carnegie preferred to invest it by the age of 30 he had an annual income of $50,000 from shrewd Investments and when he came across the besser process for converting iron into steel he built on the banks of the mananga hila the greatest steel plant in the country soon it was turning out more eser steel than all of the other American Mills combined bringing the public better steel at lower prices carnegy was understandably proud of his achievement 2 lbs of Iron Stone mined upon Lake superia and transported 900 M to Pittsburgh 1 and 1 half of coal mined and manufactured into Coke and transported to Pittsburgh 1 half pound of lime mined and transported to Pittsburgh and these 4 PB of material manufactured into one pound of steel for which the customer pays 1 cent ah the iron Crown has been placed on the brow of Pennsylvania year by year Carnegie steel empire grew new Mills a fleet of Great Lake Steamers a port Town on Lake Erie a connecting railroad it was an Empire but it wasn't big just for the sake of bigness new technological processes demanded new methods of manufacturing in all Industries in 1889 Carnegie wrote a book called The Gospel of wealth in which he said that the life of a rich man should fall into two periods the first acquiring wealth the second Distributing it for the general welfare there is no doubt that Carnegie lived up to the first part of his plan acquiring wealth his personal income reached 15 million a year but when it came to sharing his wealth with his workers well for working 12 hours a day 7 days a week in an inferno of heat and noise Carnegie's workers average less than $460 a year in wages and when they attempted to better their lot by unionizing and going on strike Carnegie refused to bargain preferring instead to replace them with those more understand standing and hungry rich men are Trustees of their wealth and should administer it for the good of the public hard with his workers he was generous to others for music lovers he built Carnegie Hall in New York for scientific research Carnegie Institute of Technology in Pittsburgh for those interested in stopping War he founded the Carnegie Endowment for International Peace best known of all his philanthropies however were the over 2800 free libraries he built throughout the country built and equipped on condition that the local authorities provided the sight and maintenance has Andrew Carnegie given you a library yet he will you'll not Escape him before he dies he hopes to crowd a library on every man woman and child in the country he's given him to cities Villages towns whistling stations there turned down gas houses and pous to put up libraries in another year every house in Pittsburg that's not a blast furnace or be a library in some places all the buildings is libraries if you write him for an autograph he send your [Applause] library but no beggar has ever turned away empty-handed from the door a panhandler knocks and asks for a glass of milk in a roll no sir says Andrew Carnegie I'll not poize this unworthy man nothing is worse than for a beggar man to be made a poar on yet let it not be said of me that I give nothing to the poor Saunders give the man a library Andrew Carnegie and owning the iron or deposits the steel manufacturing plants and his own railroad line created a forerunner of the first steel trust it was practical for it eliminated wasteful competition and duplication the average citizen benefited because he was able to acquire Iron and Steel products for truly reasonable prices in the rise of big business the trust was to play a vital and constructive role of course not all the trusts benefited the public take the ice trust for example what's going on the price of ice is more than doubled that always goes up in the summertime lady but I can't afford to pay the increase so what do you want from me I don't set the prices but all the food in the ice box the milk hey look lady I only deliver this stuff thousands living in the slums had to do without ice as a result food rotted milk soured and many people particularly children became ill then in the winter the coal trust raised the price of coal thousands had to do without heat making influenza and pneumonia commonplace these poor people filled the charity hospitals supported by the very same millionaires who' been partly responsible for making them Mill in the first place trust Mr douly not to let such things go on without some comment when the average middleclass American sits himself down to breakfast he bacon packed by the beef trust Seasons his eggs with salt made by the Michigan salt trust sweetens his coffee with sugar refined by the American sugar trust lights his American Tobacco Company cigar with a diamond match company match and to work on a Bicycle Built by the bicycle Trust [Music] the rich were not exempt from the influence of the trusts though when they sat down to eat they could be counted on not to worry unly did you hear about arman's dinner party everyone in horseback I understand clever yes Arman such a wit I think he's cute minklin carriages Diamond studded dog cers one millionaire built a replica of a scotch castle with 40 guest sweets and a personal bagpiper whose assignment was to March around in the morning to wake up the guests there were other millionaires who seem to think of wealth as something to be used solely to create more wealth prominent among this group was John D Rockefeller shown here at the age of 95 he had already made and given away billions but for young John D the beginning was less than auspicious his first job as an assistant bookkeeper paid $5 a week the substance he was later to make his fortune in oil was already widely in use hawked at carnivals as rock oil or snake oil and sold as a cure all for chalera liver complaints and consumption purely by accident one of its users discovered that if you put a match to it it made an excellent fuel its value was recognized instantly by Young Rockefeller getting into the refining business Rockefeller went around buying up local refineries and Welding them into a single company he was the most silent and secretive of all the big businessmen shunning ostentation and publicity he made Unholy deals with railroads forcing them to return part of what he had paid them to transport his oil these payments called rebates were paid to him not only for the oil he shipped but the oil Ship by his competitors as well control of the pipelines followed and by 1882 Rockefeller Standard Oil trust controlled 95% of all the oil refining business in the country of course he had to bend a few laws to do it on April 13 1907 judge Kennesaw Mountain Landis fined Standard Oil over $29 million for breaking the federal law against rebating $29 million devil the sent less can't exactly remember what the charge was they arrested him on but the general idea is John D was going around loaded up to the guards with standard aisle exceeding the speed limit in acquiring money the judge says to him you're an old offender and I'll have to make an example of you $29 million or 58 million days call the next case Mr Clark Rockefeller appealed and won the higher Court set aside the penalty and standard oil paid nothing Rockefeller was absolutely ruthless when it came to crushing competition he bought out froze out and some say even bombed out all who stood in his way on more than one occasion the oil fields of competitors who would not yield to him were rocked by mysterious explosions in response to charges of utter ruthlessness Rockefeller replied the American beauty rose can be produced in the Splendor and fragrance which bring cheer to its Beholder only by sacrificing the early buds which grow up around it this is not an evil tendency in business it is merely the working out of a law of Nature and a law of God in 1889 the Supreme Court of Ohio held Standard Oil to be in violation of the Sherman Antitrust Act roeller replaced it with a holding device Standard Oil of New Jersey by the time the United States Supreme Court declared that to be in 1911 Rockefeller had retired from business and decided to devote his time to philanthropy to the University of Chicago he gave 35 million other Millions went to the Baptist Church the YMCA and since he was personally opposed to drinking smoking and other VI the anti- saloon League the money pumped from these Wells through rockefeller's philanthropic pipelines total over $500 million as big business developed it entered a new phase a shift from industrial to finance capitalism Wall Street began to exercise increasingly greater influence over all business activity no Banker was more influential in this new phase than John Pont Morgan unlike the humbly born Carnegie and Rockefeller Morgan was the son of a millionaire Banker but his inherited wealth was nothing compared to the Fantastic personal Fortune he was to amass there was still big money to be made in railroads and it was in railroads that Morgan first displayed his financial genius he Consolidated merged and stabilized all of the major Railway systems in the East placing them on a firm Financial basis he then set about becoming the wizard of Wall Street when criticized for bringing about the financial ruin of many a competitor he replied I am not in Wall Street for my health railroads steamship lines manufacturing and mining companies Morgan financed and controled them all no profit making Venture seemed remote from his grasp Pier Pon margan calls in one of his office boys the president of the National Bank and he says James says he take some change out of the damper and run out and buy Europe for me I intend to reorganize it and put it on a paying basis he says and call the sultan the Zar and the emperor William and tell them we won't be needing their services after next week he says give them a year salary in advance he says and old James that bookkeeper near the door doesn't seem to be doing much these days you better put him in charge of the continent Morgan's greatest business coup began as a discussion in his library and ended on a golf course when it was over he not Carnegie owned United States Steel Mr Carnegie I hope you find these terms acceptable 225 m63 n, for all the bonds and stocks of the company a payment of 400 million to be later increased by the addition of extra common stock for your partners I accept the deal consumated it occurred to Morgan that he and Carnegie had not met for some time he telephoned the Scotsman Mr Carnegie I would like to see you why don't you come to visit me at my office at 23 Wall Street Mr Morgan since the distance from Wall Street to 51st street is no greater than the distance from 51st Street to Wall Street and since I am your senior I respectfully suggested you come to see me Morgan agreed Mr Carnegie I want to congratulate you on being the richest man in the world I made one mistake Pier pant when I sold out to you I should have asked you for a 100 million more well you would have got it if you had in 1895 the wealth controlled by Morgan was so vast that he was able to lend the United States government $62 million in gold to restore its low Reserve to a safe 100 million at the height of his fortune the assets controlled by Morgan were in excess of $1 billion quite an accomplishment for a man whose two major interests outside of business were collecting art treasures and playing Solitaire when criticized for a lack of concern with the public welfare he replied I owe the public nothing the public disagreed particularly those workers in the newly formed United States Steel Corporation were struggling along on a 12-hour day for less than $1,000 the year in 1901 they went on strike we are unalterably opposed any extension of union labor and advise subsidiary companies to take a firm position where these questions are concerned the strikers claim they'd be disappointed in P Pont margan not recognizing their rights but my advice to them is buys never ask for your rights take them and don't let anyone ever give them to you a right that's handed you for enough and has something to matter with it even though President McKinley was a great defender of Labor he was not strongly opposed to the big business trusts but upon his assassination a man who was to make a name for himself as a trustbuster took over the White House Morgan was far from pleased one of the first things the president aimed his sights at was a new Morgan railroad trust the Northern Securities company Morgan offered a simple solution to President Roosevelt tell the president that if we've done anything wrong to send his man to my man and they can fix it up I'm afraid Mr Morgan that that sort of things simply cannot be done in 1907 a financial Panic hit the country in desperation the president turned to Morgan and Morgan saved the day he organized a group of Bankers who managed to stend the tide of panic and preserve the solvency of major Banks and corporations Roosevelt proved appreciative our aim is not to do away with corporations on the contrary these big aggregations are a necessary part of modern industrialism we're not attacking corporations but endeavoring to do away with any evil in them it's a bit puzzling now is it not how our president seems somewhat confused by the question of the trusts he seems to be in the trusts are heis monsters built up by the enlightened Enterprise of the men who have done so much to advance progress in our Beloved Country on the one hand I would stamp them out underf foot on the other hand not so fast John B's comment was brief and to the point the combination is here to stay towards the public at La large Morgan was contemptuous he was however a deeply religious man of the Episcopalian faith and to that church he gave generously with sizable contributions to St George's Church in New York City large gifts towards the construction of St John the Divine and contributed handsomely to St Paul's Cathedral in London in addition to his religious contributions he donated many Priceless art Treasures to the Metropolitan Museum the American Museum of Natural History and the Metropolitan Opera we have seen a pattern emerge that is not untrue of most of the early industrial Titans a rise from humble beginnings to Great personal wealth a seemingly ruthless disregard for what we now consider good business practices and a desire in later years to use their great wealth for the public welfare what effect did all of this have on the country it changed it completely products that now roll endlessly from assembly lines into the American Home are a direct result of this early desire for bigness the industrialists may have been ruthless but one thing is certain they were inevitable products of their times they had the vision to put all of the elements together the influx of new immigrant labor great untapped natural resources an emerging production technology and new worldwide markets what were they then these men whose actions seem so paradoxical Reckless adventurers of Daring and Imagination who made the American dream come true robber barons or industrial Statesmen you decide [Music] [Applause] [Music] [Applause] [Music] [Music]