Andrew Carnegie

Birth: Nov. 25, 1835DunfermlineFife, ScotlandDeath: Aug. 11, 1919LenoxBerkshire CountyMassachusetts, USABusinessman, Industrialist, Philanthropist. He is best known as the founder of what is now USX Corporation. Born in Dunfermline, Scotland, in 1848 his family immigrated to the United States and settled in Allegheny, Pennsylvania. He went to work at age 13, first as a mill hand, then as a telegraph messenger boy, learned telegraphy on his own time. After becoming a full time telegraph operator in 1851, he was hired at the age of 17 as a personal telegrapher and secretary to the local division superintendent of the Pennsylvania Railroad, having earned a reputation as the best telegraph operator in town. He soon became the superintendent's right hand man, and in 1859 Carnegie took over the superintendent's job at age 24. In 1865 he resigned from position to devote himself to the bridge business, which he was confident would boom after the Civil War with transcontinental railroads being built and the railroads in the South being reconstructed. He founded the Keystone Bridge Company and was awarded several major contracts to build bridges across the Mississippi and Missouri Rivers. In 1867 he moved from Pittsburgh, Pennsylvania to New York City, New York and made regular trips to Europe to sell bonds to finance his bridges. In 1869 he met influential investment banker Junius Morgan (J. P. Morgan's father) in London, England. With Morgan's help, he placed issues for various bridge construction projects and several railroads. Carnegie had entered into the iron business as early as 1861 and rapidly expanded by acquiring additional companies and new partners. His aim was to ensure his Keystone Bridge Company a reliable and cheap supply of iron beams and plates -- in short, vertical integration. Because of his experience on the Pennsylvania Railroad, he was convinced that the American railroads were going to switch to from iron rails to steel rails as soon as they were cheaply available. The newly developed Bessemer steelmaking process showed promise for making low-cost steel rails possible for the first time. During his tour of the Bessemer plants in England during 1872 Carnegie resolved to build a brand new, large plant devoted solely to making Bessemer steel railroad rails. This was to be The Edgar Thomson Works, completed in 1875. He became the chief salesman for the endeavor, and used his contacts with the railroad leaders in the United States to sell them his Bessemer steel rails, so the business became an immediate success. In October 1883 Carnegie bought the Homestead Works from a group of Pittsburgh investors, which was a highly efficient steel rail works that had been plagued with labor troubles for some years. Carnegie expanded the plant and installed large new open hearth furnaces and by 1885 converted Homestead to rolling beams and angles in order to diversify his products. By this time the sheer size and complexity of the business had grown to the point that Carnegie felt the need to have a single top manager to oversee all the mills. He had long admired Henry Clay Frick's abilities from past associations with him in the coke business. To obtain Frick's help with the management of his diverse steel interests, he brought him into the partnership in 1886. In 1892 Frick persuaded Carnegie to merge all the Carnegie steel interests into one vast company – Carnegie Steel. It was formed on July 1, 1892. Carnegie owned 55%, Frick 11%, industrialist Henry Phipps Jr. 11%, and nineteen others 1% each. The remaining 4% was held in reserve to reward top performers in the plants. The same day that Carnegie Steel came into existence, a strike began at Homestead. Carnegie and Frick agreed upon a two-point plan before Carnegie left on a long vacation to Scotland. First, the wage scale would be lowered; and second, Carnegie Steel would no longer recognize the Amalgamated union as the bargaining agent. Frick was left in charge and ultimately emerged victorious but at a very high personal price both for himself and Carnegie. He broke the union and the men were eventually forced to sign individual labor contracts in order to return to work. By 1900 Carnegie Steel was an industrial colossus. It was vertically integrated controlling its own ore, coke, limestone, and shipping facilities on the Great Lakes and from the Great Lakes to Pittsburgh. Despite prosperity, a rift grew between Carnegie and Frick, which eventually resulted in Frick's departure. In the end Carnegie's desire to finally retire himself produced the famous handwritten sales offer of $480,000,000 to J.P. Morgan and the formation of the United States Steel Corporation (now USX) in March 1901. He created seven philanthropic and educational organizations in the United States, including Carnegie Corporation of New York, and several more in Europe. One of Carnegie's lifelong interests was the establishment of free public libraries to make available to everyone a means of self-education. There were only a few public libraries in the world when, in 1881, Carnegie began to promote his idea. He and the Corporation subsequently spent over $56 million to build 2,509 libraries throughout the English-speaking world. During his lifetime, Carnegie gave away over $350 million. He died in Lenox, Massachusetts, in 1919. 

Jay Cooke

Birth: Aug. 10, 1821Death: Feb. 18, 1905Union Civil War Financier. Jay Cooke was born in Sandusky, Ohio. The family estate was named Ogontz in honor of an Indian chief who once lived on the same land. The limestone dwelling overlooked Sandusky Bay and Lake Erie. Jay's father, Eleutheros Cooke a lawyer, and mother Martha Caswell, were well educated easterners and very active politically. They braved a difficult journey from the east before settling in the untamed region around Sandusky in 1827. Eleutheros went on to serve in Congress as a Whig. The area was a paradise of teeming deer, waterfowl and fish. While growing up here, Jay developed his lifelong passion for hunting and fishing. His early education was mainly from home schooling. At age 14, he began work at a Sandusky dry goods store where he became the head clerk while the owner taught him business and financial procedures. Then barely sixteen, a job led him to St. Louis and employment with Seymour & Bool where he earned an unheard sum of $600 a year. He was on his way at age 18, landing a clerk position with the banking firm E.W. Clark & Company which five years later led to a full partnership. Upon retirement, Cooke founded his own banking house known as Jay Cooke & Company of Philadelphia. His Bank was chosen by Secretary of the Treasury Salmon P. Chase (former Ohio senator and governor) to issue United States bonds to finance the Civil War. He raised over a billion dollars with the sale of various types of treasury bonds which allowed the Union to finance the war providing horses, guns and supplies while paying the men until victory over the South was achieved and the Union restored. In the postwar, Cooke became interested in the development of the Northwest and his bank financed the construction of the Northern Pacific Railway which was his undoing. In advancing money for the project, funds were lacking and during the Panic of 1873, the project was suspended with Cooke himself forced into bankruptcy. However, some six years later, he was again solvent and managed to meet all the financial obligations incurred during his insolvency. He was a Philanthropist on a grand scale, with the Episcopal Church receiving the bulk with donated funds for the construction of a number of churches. One is located at Put-in-Bay, Ohio. Legacy...He was the creator of municipal bonds. The practice where bankers stabilize the price of new bond issues and still used today by investment institutions was pioneered by Cooke. His residency and construction of a palatial home in Cheltenham Township, Pennsylvania which he dubbed Ogontz (Ohio Indian Chief) after his boyhood home in Sandusky influenced the naming of many area Philadelphia landmarks. Two decades later, the estate and dwelling became the exclusive Ogontz School for Girls and the surrounding area became the city of Ogontz, Pennsylvania. Ogontz Avenue is a main avenue transecting the city of Philadelphia. The Jay Cooke Elementary School in the Logan section of the city bares his name and further away near Duluth, Minnesota lies the jewel of state parks: The Jay Cooke State Park, originated from land donated by the Northern Pacific Railroad, which Cooke owned. However, the Cooke Castle in Ohio is the ultimate; Cooke constructed the many room limestone dwelling on Gibraltar Island located in the harbor of South Bass Island on Lake Erie, which he purchased. He and his family spent every summer here until his death The island has the highest land elevation in the Put-In-Bay area which became the lookout point for Commander Oliver Perry in the fight against the British during the War of 1812 when he and his men defeated a fleet of British vessels during the famous Battle of Lake Erie. Today, Gibraltar Island and the Castle belong to Ohio State University and is a lake laboratory for the purpose of teaching, learning and research. The Castle is a Federal Historical Site and is currently being refurbished. Many books pertaining to Jay Cooke and his financial expertise has been written, but the best was "Jay Cooke, Financier of the Civil War" author E.P. Oberholtzer published in 1907. (

John Jacob Astor

ASTOR, John Jacob, American merchant: b. Waldorf, Baden, near Heidelberg, 17 July 1763; d. 29 March 1848. He came to America in 1783, where his elder brother had settled and invested his savings in the fur trade. In 1784 he went with a cargo of furs to London; sold them and formed connection with fur houses there, and as his capital increased, made annual trips to Montreal, buying furs there and shipping them direct to London, as Canada was allowed to trade only with the mother country. In 1794 Jay's treaty removed this embargo, and Astor, then in London, at once made a contract with the Northwest Company of Montreal and Quebec (then the magnate of the Canadian Northwest fur trade), imported furs from Montreal to New York, and shipped them to all parts of Europe and China. The surrender of the lake posts under the treaty also greatly extended the trading limits, and Astor in a few years became one of the leading merchants and capitalists of the country, having a quarter of a million in 1798, and double that a few years later. In 1807 he embarked in direct trade with the Indians by way of the Mohawk, and with the English fur companies; but found the American trade chiefly monopolized by the Mackinaw Company, and knowing our government's desire to keep its home trade in home hands, proposed with its protection to accomplish this himself. In 1809 he secured a New York charter for the "American Fur Company," but the War of 1812 suspended operations, and after it a government prohibition of British fur trade in the United States broke up the company. Meantime a grander scheme had been initiated. Sir Alexander Mackenzie, after crossing the continent far north in 1793, had suggested establishing a line of trading posts from ocean to ocean, with terminal, coast and island stations, to draw all except the Russian fur trade into one channel. Lewis and Clarke's transcontinental expedition in 1804 proved its practicability on American soil, and Mr. Astor evolved the plan of distributing such posts along the Missouri and Columbia rivers, with a central station at the mouth of the latter, where all the peltries from the interior and those gathered by coasting vessels were to be collected and taken by a yearly ship to Canton, loading in return with Chinese goods. A later development was to operate a line of ships from the Pacific coast to the Chinese and East Indian ports, with a Hawaiian island for an intermediate port. The Russian Fur Company had already complained to the United States of the casual American trading vessels selling liquor and firearms to their Indians; the American government had consulted Astor for a remedy and his idea was to abolish this irresponsible trading by making his yearly supply ship take its place. To prevent ruinous competition he offered the Northwest Company a one-third interest in the enterprise; but they declined it and sent a company to seize the mouth of the Columbia before his party could arrive. He succeeded in spite of them, however, in planting a settlement, which was named Astoria; but on the breaking out of the War of 1812 the English seized it. It reverted to the United States by the Treaty of Ghent, and Astor wished to revive the project, but the government was cool, and he dropped it, still however, buying his furs direct and trading with many countries, more particularly China, at that time the best fur mart in the world. He also made large amounts by buying depreciated government securities, which afterward commanded a considerable premium. But his chief investment was the one which has founded the family greatness on a rock. Foreseeing the immense growth of New York city, he bought large tracts on Manhattan Island far beyond the then city limits, taught his son to invest his accumulations in the same way, and established the system of handling them described under Astor Family. In 1827 he and his son William, who had been his partner since 1815, withdrew from the China trade and formed the American Fur Company, chiefly managed by the great expert; but a few years later he retired from business altogether, thenceforth devoting himself to his investments, and devising, in consultation with others, plans for a public library suggested by Washington Irving, — afterward the Astor Library, for which he left $400,000 in his will. He made gifts and bequests to other objects; among them $50,000 for a school for poor children and a home for the indigent aged in his birthplace, Waldorf, called the Astor House. He was much more than a great trader: he had a breadth of conception, a combined energy and patience of execution, a mastery of detail, a retentiveness of memory and a sagacity of judgment, which in the opinion of his intimates would have raised him to greatness in any line. He left two sons, William B. and John Jacob, and three daughters.

John Pierpont (J.P.) Morgan

John Pierpont (J.P.) Morgan was born in Hartford, Connecticut on April 17, 1837. His father, Junius Spencer Morgan, was a prosperous financier, with holdings in America and Europe, who taught his son from an early age how to manage the family assets that he (J.P.) would someday inherit. J.P. was a willing student. J.P. was educated at Boston's English High School, and then he enrolled in Germany's prestigious University of Gottingen. By the time he was 15, J.P. had traveled throughout much of Europe, and had already begun collecting art, which would remain a passion throughout his life. When he was 20, he graduated from Gottingen, and returned to New York to begin his career in finance. He started as an accountant for Duncan, Sherman & Co. in New York City. This position provided a good base for J.P. Morgan's introduction into the world of banking and finance, especially because of its ties to the powerful London firm of George Peabody & Co. As the Civil War broke out, Morgan joined his father's financial ventures, and operated out of both New York and London, all the time increasing his personal holdings. From 1864 to 1871 he was an increasingly influential member of the firm Dabney, Morgan & Co., and in 1871 he became a partner in Drexel, Morgan & Co. In 1895, this firm became J.P. Morgan & Co., and was recognized here and abroad as one of the most powerful financial institutions in the world.As J.P. Morgan's fortune grew, he continued to make investments and acquisitions. He funded Thomas Edison throughout the 1870's and 1880's, and laid the financial foundation for Edison Electric Company. When many small companies and railroads ran into tough times after the Civil War, Morgan saw opportunities and acquired those with potential. By the mid 1880's, he had significant railroad holdings, and owned some 5,000 miles of rail by 1900. He consolidated and restructured many of his rail companies, bringing his own regulations and standards to an industry that the government had failed to regulate. Morgan's rail holdings included the New York Central, New Haven and Hartford, Lehigh Valley, Pennsylvania, Reading, Erie, Southern, Chesapeake and Ohio, and the Northern Pacific systems. The rails and trains, of course, required huge quantities of steel. Knowing this, Morgan founded and acquired huge steel-making operations, in effect owning the steel operations that supplied his rail companies with their steel. In 1901 he established the U.S. Steel Company by merging Carnegie Steel Works and several other steel companies into the dominant steel producer in the country.Morgan's realm expanded into many other areas in the financial and industrial worlds. He acquired and/or financed shipping interests, coal mines, insurance, and communications industries, and he provided financial backing for the U.S. government itself. He backed an 1895 government bond issue of $62 million dollars, and in 1901 he secured a $50 million dollar American issue for the British war loan. In the early 1900's he provided backing that assisted the U.S. Treasury in stemming a stock market panic. And, of course, anyone with as much power and influence as J.P. Morgan is bound to attract his share of detractors. He was investigated by the U.S. House of Representatives, and he testified in his own defense, denying charges of undue influence in his control of the country's industries and financial institutions. In spite of the allegations of reform-minded crusaders and muckrakers, J.P. Morgan continued to be America's foremost financier throughout his life.Morgan's personal wealth was enormous, and during his life he used substantial portions of his wealth in philanthropic endeavors. He donated to charities, churches, hospitals, and schools. He also accumulated a huge collection of art. When he died in 1913, much of his collection went to the Metropolitan Museum of Art.

The Life of Thomas A. Edison

 of the most famous and prolific inventors of all time, Thomas Alva Edison exerted a tremendous influence on modern life, contributing inventions such as the incandescent light bulb, the phonograph, and the motion picture camera, as well as improving the telegraph and telephone. In his 84 years, he acquired an astounding 1,093 patents. Aside from being an inventor, Edison also managed to become a successful manufacturer and businessman, marketing his inventions to the public. A myriad of business liaisons, partnerships, and corporations filled Edison's life, and legal battles over various patents and corporations were continuous. The following is only a brief sketch of an enormously active and complex life full of projects often occurring simultaneously. Several excellent biographies are readily available in local libraries to those who wish to learn more about the particulars of his life and many business ventures [see Bibliography].Edison's Early Years (TOP)Thomas A. Edison's forebears lived in New Jersey until their loyalty to the British crown during the American Revolution drove them to Nova Scotia, Canada. From there, later generations relocated to Ontario and fought the Americans in the War of 1812. Edison's mother, Nancy Elliott, was originally from New York until her family moved to Vienna, Canada, where she met Sam Edison, Jr., whom she later married. When Sam became involved in an unsuccessful insurrection in Ontario in the 1830s, he was forced to flee to the United States and in 1839 they made their home in Milan, Ohio.Thomas Alva Edison was born to Sam and Nancy on February 11, 1847, in Milan, Ohio. Known as "Al" in his youth, Edison was the youngest of seven children, four of whom survived to adulthood. Edison tended to be in poor health when young.To seek a better fortune, Sam Edison moved the family to Port Huron, Michigan, in 1854, where he worked in the lumber business.Edison was a poor student. When a schoolmaster called Edison "addled," his furious mother took him out of the school and proceeded to teach him at home. Edison said many years later, "My mother was the making of me. She was so true, so sure of me, and I felt I had some one to live for, some one I must not disappoint."(1) At an early age, he showed a fascination for mechanical things and for chemical experiments.In 1859, Edison took a job selling newspapers and candy on the Grand Trunk Railroad to Detroit. In the baggage car, he set up a laboratory for his chemistry experiments and a printing press, where he started the Grand Trunk Herald, the first newspaper published on a train. An accidental fire forced him to stop his experiments on board.Around the age of twelve, Edison lost almost all his hearing. There are several theories as to what caused his hearing loss. Some attribute it to the aftereffects of scarlet fever which he had as a child. Others blame it on a conductor boxing his ears after Edison caused a fire in the baggage car, an incident which Edison claimed never happened. Edison himself blamed it on an incident in which he was grabbed by his ears and lifted to a train. He did not let his disability discourage him, however, and often treated it as an asset, since it made it easier for him to concentrate on his experiments and research. Undoubtedly, though, his deafness made him more solitary and shy in dealings with others.Telegraph Work (TOP)In 1862, Edison rescued a three-year-old from a track where a boxcar was about to roll into him. The grateful father, J.U. MacKenzie, taught Edison railroad telegraphy as a reward. That winter, he took a job as a telegraph operator in Port Huron. In the meantime, he continued his scientific experiments on the side. Between 1863 and 1867, Edison migrated from city to city in the United States taking available telegraph jobs.In 1868 Edison moved to Boston where he worked in the Western Union office and worked even more on his inventions. In January 1869 Edison resigned his job, intending to devote himself fulltime to inventing things. His first invention to receive a patent was the electric vote recorder, in June 1869. Daunted by politicians' reluctance to use the machine, he decided that in the future he would not waste time inventing things that no one wanted.Edison moved to New York City in the middle of 1869. A friend, Franklin L. Pope, allowed Edison to sleep in a room at Samuel Laws' Gold Indicator Company where he was employed. When Edison managed to fix a broken machine there, he was hired to manage and improve the printer machines.During the next period of his life, Edison became involved in multiple projects and partnerships dealing with the telegraph. In October 1869, Edison formed with Franklin L. Pope and James Ashley the organization Pope, Edison and Co. They advertised themselves as electrical engineers and constructors of electrical devices. Edison received several patents for improvements to the telegraph. The partnership merged with the Gold and Stock Telegraph Co. in 1870. Edison also established the Newark Telegraph Works in Newark, NJ, with William Unger to manufacture stock printers. He formed the American Telegraph Works to work on developing an automatic telegraph later in the year. In 1874 he began to work on a multiplex telegraphic system for Western Union, ultimately developing a quadruplex telegraph, which could send two messages simultaneously in both directions. When Edison sold his patent rights to the quadruplex to the rival Atlantic & Pacific Telegraph Co., a series of court battles followed in which Western Union won. Besides other telegraph inventions, he also developed an electric pen in 1875.His personal life during this period also brought much change. Edison's mother died in 1871, and later that year, he married a former employee, Mary Stilwell, on Christmas Day. While Edison clearly loved his wife, their relationship was fraught with difficulties, primarily his preoccupation with work and her constant illnesses. Edison would often sleep in the lab and spent much of his time with his male colleagues. Nevertheless, their first child, Marion, was born in February 1873, followed by a son, Thomas, Jr., born on January 1876. Edison nicknamed the two "Dot" and "Dash," referring to telegraphic terms. A third child, William Leslie was born in October 1878.Edison opened a new laboratory in Menlo Park, NJ, in 1876. This site later become known as an "invention factory," since they worked on several different inventions at any given time there. Edison would conduct numerous experiments to find answers to problems. He said, "I never quit until I get what I'm after. Negative results are just what I'm after. They are just as valuable to me as positive results."(2) Edison liked to work long hours and expected much from his employees."Interior of Edison's Machine Shop where his experiments are conducted." The Daily Graphic (New York), April 10, 1878.In 1877, Edison worked on a telephone transmitter that greatly improved on Alexander Graham Bell's work with the telephone. His transmitter made it possible for voices to be transmitted at higer volume and with greater clarity over standard telephone lines.Edison's experiments with the telephone and the telegraph led to his invention of the phonograph in 1877. It occurred to him that sound could be recorded as indentations on a rapidly-moving piece of paper. He eventually formulated a machine with a tinfoil-coated cylinder and a diaphragm and needle. When Edison spoke the words "Mary had a little lamb" into the mouthpiece, to his amazement the machine played the phrase back to him. The Edison Speaking Phonograph Company was established early in 1878 to market the machine, but the initial novelty value of the phonograph wore off, and Edison turned his attention elsewhere.Edison focused on the electric light system in 1878, setting aside the phonograph for almost a decade. With the backing of financiers, The Edison Electric Light Co. was formed on November 15 to carry out experiments with electric lights and to control any patents resulting from them. In return for handing over his patents to the company, Edison received a large share of stock. Work continued into 1879, as the lab attempted not only to devise an incandescent bulb, but an entire electrical lighting system that could be supported in a city. A filament of carbonized thread proved to be the key to a long-lasting light bulb. Lamps were put in the laboratory, and many journeyed out to Menlo Park to see the new discovery. A special public exhibition at the lab was given for a multitude of amazed visitors on New Year's Eve.Edison set up an electric light factory in East Newark in 1881, and then the following year moved his family and himself to New York and set up a laboratory there.In order to prove its viability, the first commercial electric light system was installed on Pearl Street in the financial district of Lower Manhattan in 1882, bordering City Hall and two newspapers. Initially, only four hundred lamps were lit; a year later, there were 513 customers using 10,300 lamps.(3) Edison formed several companies to manufacture and operate the apparatus needed for the electrical lighting system: the Edison Electric Illuminating Company of New York, the Edison Machine Works, the Edison Electric Tube Company, and the Edison Lamp Works. This lighting system was also taken abroad to the Paris Lighting Exposition in 1881, the Crystal Palace in London in 1882, the coronation of the czar in Moscow, and led to the establishment of companies in several European countries.The success of Edison's lighting system could not deter his competitors from developing their own, different methods. One result was a battle between the proponents of DC current, led by Edison, and AC current, led by George Westinghouse. Both sides attacked the limitations of each system. Edison, in particular, pointed to the use of AC current for electrocution as proof of its danger. DC current could not travel over as long a system as AC, but the AC generators were not as efficient as the ones for DC. By 1889, the invention of a device that combined an AC induction motor with a DC dynamo offered the best performance of all, and AC current became dominant. The Edison General Electric Co. merged with Thomson-Houston in 1892 to become General Electric Co., effectively removing Edison further from the electrical field of business.An Improved Phonograph (TOP)Edison's wife, Mary, died on August 9, 1884, possibly from a brain tumor. Edison remarried to Mina Miller on February 24, 1886, and, with his wife, moved into a large mansion named Glenmont in West Orange, New Jersey. Edison's children from his first marriage were distanced from their father's new life, as Edison and Mina had their own family: Madeleine, born on 1888; Charles on 1890; and Theodore on 1898. Unlike Mary, who was sickly and often remained at home, and was also deferential to her husband's wishes, Mina was an active woman, devoting much time to community groups, social functions, and charities, as well as trying to improve her husband's often careless personal habits.In 1887, Edison had built a new, larger laboratory in West Orange, New Jersey. The facility included a machine shop, phonograph and photograph departments, a library, and ancillary buildings for metallurgy, chemistry, woodworking, and galvanometer testings.While Edison had neglected further work on the phonograph, others had moved forward to improve it. In particular, Chichester Bell and Charles Sumner Tainter developed an improved machine that used a wax cylinder and a floating stylus, which they called a graphophone. They sent representatives to Edison to discuss a possible partnership on the machine, but Edison refused to collaborate with them, feeling that the phonograph was his invention alone. With this competition, Edison was stirred into action and resumed his work on the phonograph in 1887. Edison eventually adopted methods similar to Bell and Tainter's in his own phonograph.The phonograph was initially marketed as a business dictation machine. Entrepreneur Jesse H. Lippincott acquired control of most of the phonograph companies, including Edison's, and set up the North American Phonograph Co. in 1888. The business did not prove profitable, and when Lippincott fell ill, Edison took over the management. In 1894, the North American Phonograph Co. went into bankruptcy, a move which allowed Edison to buy back the rights to his invention. In 1896, Edison started the National Phonograph Co. with the intent of making phonographs for home amusement. Over the years, Edison made improvements to the phonograph and to the cylinders which were played on them, the early ones being made of wax. Edison introduced an unbreakable cylinder record, named the Blue Amberol, at roughly the same time he entered the disc phonograph market in 1912. The introduction of an Edison disc was in reaction to the overwhelming popularity of discs on the market in contrast to cylinders. Touted as being superior to the competition's records, the Edison discs were designed to be played only on Edison phonographs, and were cut laterally as opposed to vertically. The success of the Edison phonograph business, though, was always hampered by the company's reputation of choosing lower-quality recording acts. In the 1920s, competition from radio caused business to sour, and the Edison disc business ceased production in 1929.Other Ventures: Ore-milling and Cement (TOP)Another Edison interest was an ore-milling process that would extract various metals from ore. In 1881, he formed the Edison Ore-Milling Co., but the venture proved fruitless as there was no market for it. In 1887, he returned to the project, thinking that his process could help the mostly depleted Eastern mines compete with the Western ones. In 1889, the New Jersey and Pennsylvania Concentrating Works was formed, and Edison became absorbed by its operations and began to spend much time away from home at the mines in Ogdensburg, New Jersey. Although he invested much money and time into this project, it proved unsuccessful when the market went down and additional sources of ore in the Midwest were found.Edison also became involved in promoting the use of cement and formed the Edison Portland Cement Co. in 1899. He tried to promote widespread use of cement for the construction of low-cost homes and envisioned alternative uses for concrete in the manufacture of phonographs, furniture, refrigerators, and pianos. Unfortunately, Edison was ahead of his time with these ideas, as widespread use of concrete proved economically unfeasible at that time.Motion Pictures (TOP)In 1888, Edison met Eadweard Muybridge at West Orange and viewed Muybridge's zoopraxiscope. This machine used a circular disc with still photographs of the successive phases of movement around the circumference to recreate the illusion of movement. Edison declined to work with Muybridge on the device and decided to work on his own motion picture camera at his laboratory. As Edison put it in a caveat written the same year, "I am experimenting upon an instrument which does for the eye what the phonograph does for the ear."(4)The task of inventing the machine fell to Edison's associate William K. L. Dickson. Dickson initially experimented with a cylinder-based device for recording images, before turning to a celluloid strip. In October of 1889, Dickson greeted Edison's return from Paris with a new device that projected pictures and contained sound. After more work, patent applications were made in 1891 for a motion picture camera, called a Kinetograph, and a Kinetoscope, a motion picture peephole viewer.Kinetoscope parlors opened in New York and soon spread to other major cities during 1894. In 1893, a motion picture studio, later dubbed the Black Maria (the slang name for a police paddy wagon which the studio resembled), was opened at the West Orange complex. Short films were produced using variety acts of the day. Edison was reluctant to develop a motion picture projector, feeling that more profit was to be made with the peephole viewers.When Dickson aided competitors on developing another peephole motion picture device and the eidoloscope projection system, later to develop into the Mutoscope, he was fired. Dickson went on to form the American Mutoscope Co. along with Harry Marvin, Herman Casler, and Elias Koopman. Edison subsequently adopted a projector developed by Thomas Armat and Charles Francis Jenkins and re-named it the Vitascope and marketed it under his name. The Vitascope premiered on April 23, 1896, to great acclaim.Competition from other motion picture companies soon created heated legal battles between them and Edison over patents. Edison sued many companies for infringement. In 1909, the formation of the Motion Picture Patents Co. brought a degree of cooperation to the various companies who were given licenses in 1909, but in 1915, the courts found the company to be an unfair monopoly.In 1913, Edison experimented with synchronizing sound to film. A Kinetophone was developed by his laboratory which synchronized sound on a phonograph cylinder to the picture on a screen. Although this initially brought interest, the system was far from perfect and disappeared by 1915. By 1918, Edison ended his involvement in the motion picture field.Edison's Later Years (TOP)In 1911, Edison's companies were re-organized into Thomas A. Edison, Inc. As the organization became more diversified and structured, Edison became less involved in the day-to-day operations, although he still had some decision-making authority. The goals of the organization became more to maintain market viability than to produce new inventions frequently.A fire broke out at the West Orange laboratory in 1914, destroying 13 buildings. Although the loss was great, Edison spearheaded the rebuilding of the lot.Detail of Thomas A. Edison's 70th birthday, in Edison Amberola Monthly, March 1917, p. 9. In picture: Mr. R. A. Bachman, Mr. Henry Ford, Mrs. Edison, Mr. Charles Edison, and Mr. C. H. Wilson.When Europe became involved in World War I, Edison advised preparedness, and felt that technology would be the future of war. He was named head of the Naval Consulting Board in 1915, an attempt by the government to bring science into its defense program. Although mainly an advisory board, it was instrumental in the formation of a laboratory for the Navy which opened in 1923, although several of Edison's suggestions on the matter were disregarded. During the war, Edison spent much of his time doing naval research, in particular working on submarine detection, but he felt that the navy was not receptive to many of his inventions and suggestions.In the 1920s, Edison's health became worse, and he began to spend more time at home with his wife. His relationship with his children was distant, although Charles was president of Thomas A. Edison, Inc. While Edison continued to experiment at home, he could not perform some experiments that he wanted to at his West Orange laboratory because the board would not approve them. One project that held his fascination during this period was the search for an alternative to rubber.Henry Ford, an admirer and friend of Edison's, reconstructed Edison's invention factory as a museum at Greenfield Village, Michigan, which opened during the 50th anniversary of Edison's electric light in 1929. The main celebration for Light's Golden Jubilee, co-hosted by Ford and General Electric, took place in Dearborn along with a huge celebratory dinner in Edison's honor attended by notables such as President Hoover, John D. Rockefeller, Jr., George Eastman, Marie Curie, and Orville Wright. Edison's health, however, had declined to the point that he could not stay for the entire ceremony.For his last two years, a series of ailments caused his health to decline even more until he lapsed into a coma on October 14, 1931. He died on October 18, 1931, at his estate, Glenmont, in West Orange, New Jersey.

Andrew William Mellon (March 24, 1855 – August 26, 1937)

Andrew William Mellon (March 24, 1855 – August 26, 1937)  The 'bank' branchTo understand the Mellons of today, you need to understand their origins. There are four branches of the family, tracing back to the mid-1850s with the sons of Thomas Mellon and Sarah Jane Negley. Thomas Mellon was a lawyer, judge and banker, founding Mellon precursor T. Mellon & Sons in 1869.The most prominent son, the one most like his father, was Andrew Mellon, who became a banker and venture capitalist before he became U.S. Treasury Secretary. This is the family line that has the weakest connections to southwestern Pennsylvania; people interviewed for this story could not place any of Andrew Mellon's descendants in the Pittsburgh area.It was Andrew and his brother Richard Beatty Mellon who took pre-World War I investment risks on coal, steel, aluminum, oil pipelines, railroads -- thus supporting Pittsburgh's rise as an industrial power and creating an immense amount of wealth for the family.The Richard Beatty line remains strong here. His son Richard King Mellon ran the family's banking interests in the middle part of the 20th century and was a strong civic figure who helped Pittsburgh rebuild after World War II.Richard King Mellon's adopted children and grandchildren all remain connected to the Pittsburgh area in one way or another -- the link being the $2 billion Richard King Mellon Foundation, one of the largest philanthropic groups in the country and provider of $92 million in grants last year, many to Pittsburgh-area causes.Two of Richard King Mellon's children and seven of eight grandchildren are now serving on the foundation's board, the latest addition being the appointment last year of Bruce Henderson, son of Cassandra Milbury (Cassandra King Mellon), who lives in Ligonier. The only grandchild and board member who does not have a home in the Pittsburgh area is Alison Byers.Two of the eight grandchildren also run businesses in the Pittsburgh area -- Armour Mellon, son of foundation Chairman Richard Mellon, owns Glenn Cook Real Estate Company in Ligonier, and Richard Mellon's other son, Richard, owns a trucking company, R.A.M. Transit in Saxonburg.Another well-known member of the Richard Beatty branch is Richard Mellon Scaife, who publishes the Pittsburgh Tribune-Review and is the chairman of several foundations, including the Sarah Scaife Foundation and the Allegheny Foundation. His mother was Sarah Cordelia Mellon, the daughter of Richard Beatty Mellon.There was a time when Mr. Scaife had a direct connection to the family institution; he was a member of Mellon Financial's board back when it was Mellon Bank from 1958 to 1979. "I'm sad to see Mellon leave town," the publisher told his own newspaper recently. But "life goes on, time marches on."Mr. Scaife had two children, and one of them, David, still lives in Shadyside. The 41-year-old is the chairman of DSF Charitable Foundation. In 2000 he purchased a Shadyside nightclub and turned it into a car museum and dealer of Porsches and Spykers called Auto Palace. David Scaife also invests some of his own money in local businesses, acting as a venture capitalist.Asked about the presence of the Mellon family in Pittsburgh, he said, "It's obviously waning to a certain degree...." At the same time, he added, "you still do have quite a few Mellons living in Southwestern Pennsylvania" and "I still have an affinity for Pittsburgh."The 'oil' branchAnother large source of Mellon wealth is the legacy of Gulf Oil, a company established in 1907 with help from Andrew and Richard Beatty Mellon, the two brothers in charge of the banking enterprise.A key member of that Gulf team was co-founder William Larimer Mellon, the son of James Ross Mellon and nephew of Andrew and Richard Beatty. Gulf became one of the world's largest companies before being purchased by Chevron in 1984. Before his death in 1949, William Larimer Mellon proclaimed Gulf to be "so big I have lost track of it."Gulf is no longer in Pittsburgh, but at least 11 descendants of William Larimer Mellon remain with homes or board affiliations. They include Jim Walton, vice chair of The Heinz Endowments and former president of the Carnegie Institute; Mr. Walton's son Joe, interim president of the Children's Hospital of Pittsburgh Foundation; Peter Stephaich, partial owner of Campbell Transportation Co., a barge operator in Charleroi; Joshua Whetzel III, a board member of the Western Pennsylvania Conservancy; and Alexander Laughlin, a supporter and board member of the Laughlin Center in Sewickley.Among family members from this branch, "there seems to be an appreciation for the area," said Chris Mellon, the great-grandson of William Larimer Mellon."There is still a connection."The 'Thomas' branchThe least-known collection of Mellons still in the Pittsburgh area are the descendants of Thomas A. Mellon, the eldest son of "Judge" Thomas Mellon. They include an attorney in the North Hills, a photographer in the Ligonier area and a former director of Fallingwater, the Frank Lloyd Wright-designed house in Somerset County.Some claim they have little in common with other branches of the family. "We certainly don't have any Mellon money at all," said 88-year old Samuel McClung III, who lives in a retirement home in Oakmont and is the grandson of Thomas A. Mellon. Mr. McClung remembers "Uncle Andy" -- Andrew Mellon -- coming over to his mother's house on Murray Hill Avenue to smoke cigars, and the childhood fear of being kidnapped because of his family affiliation.For 30 years Mr. McClung owned the Universal Metal Molding Co. in Oakmont, but now he is retired, though still lively. Asked about the civic power once belonging to the Mellons, he said, "I don't think the Mellon influence has been all that great for the last 20 to 30 to 40 years. I think it gradually faded away."Stephen Stone III agrees with that assessment. The great-grandson of Thomas A. Mellon lives in Monroeville and works as East Coast regional manager for a Portland, Ore., inventory verification firm. Mr. Stone never left the area, even for a few years. It is his belief, though, that "the power and influence of the old Mellon name has certainly lost the punch that it's had in years past."Thomas Schmidt, 67, of Squirrel Hill, is one descendant of Thomas A. Mellon who maintains friendships across other branches of the family and argues that the family influence remains strong locally. His father, Adolph Schmidt, worked for Paul Mellon, the son of U.S. Treasury Secretary Andrew Mellon. His mother, Helen, still lives in Ligonier.The director of Fallingwater from 1975 to 1996, Mr. Schmidt still serves on a number of boards, from the National Aviary to the Pittsburgh Parks Conservancy. While it is true, he said, that the family is now "scattered" across all parts of the country, the Mellons who remain have done a "huge amount for Western Pennsylvania."

William Randolph Hearst

William Randolph Hearst was born on April 29, 1863, in San Francisco, California, as the only child of George Hearst, a self-made multimillionaire miner and rancher, and Phoebe Apperson Hearst. In 1887, at 23 he became "Proprietor" of the San Francisco Examiner which his father, George Hearst, accepted as payment for a gambling debt... In 1903, Mr. Hearst married Millicent Willson in New York City. The couple had five sons together during their marriage: George, William Randolph Jr., John and twins Randolph and David. Hearst died in Beverly Hills, Calif., on Aug. 14, 1951, at age 88. He is interred at the Cypress Lawn Cemetery in Colma, California. Inspired by the journalism of Joseph Pulitzer, Hearst turned the newspaper into a combination of reformist investigative reporting and lurid sensationalism. He soon developed a reputation for employing the best journalists available. This included Ambrose Bierce, Stephen Crane, Mark Twain, Richard Harding Davis and Jack London. Hearst was a member of the United States House of Representatives (1903-07) In the 1920s Hearst built a castle on a 240,000 acre ranch at San Simeon, California. At his peak he owned 28 major newspapers and 18 magazines, along with several radio stations and movie companies. The Great Depression weakened his financial position and by 1940 he had lost personal control of his vast communications empire. Hearst upset the left-wing in America by being a pro-Nazi in the 1930s and a staunch anti-Communist in the 1940s. William Randolph Hearst @ spartacus.schoolnet.co.ukHe studied at Harvard, then took over the San Francisco Examiner in 1887 from his father. He acquired the New York Morning Journal (1895), and launched the Evening Journal in 1896. He sensationalized journalism by the introduction of banner headlines and lavish illustrations. Believed by many to have initiated the Spanish--American War of 1898 to encourage sales of his newspaper, he also advocated political assassination in an editorial just months before the assassination of President McKinley. His national chain of newspapers and periodicals grew to include the Chicago Examiner , Boston American , Cosmopolitan , and Harper's Bazaar . His life inspired the Orson Welles film Citizen Kane  Though the term was originally coined to describe the journalistic practices of Joseph Pulitzer, William Randolph Hearst proved himself worthy of the title. Today, it is his name that is synonymous with "yellow journalism." The Sensational Beginnings of Yellow Journalism... where "yellow journalism" got its start. In a classic example of the power of ownership, Hearst responded to illustrator Frederic Remington's request to return from a Havana that was quiet, "Please remain. You furnish the pictures and I'll furnish the war." --Spanish--American War of 1898When an explosion sank the Maine and killed hundreds of sailors in the Havana Harbor on 15 February 1898, journalists, including those from the Journal, recommended caution in speculating the cause of the disaster. Hearst had other ideas. When he learned of the explosion, he called the Journal city desk and asked the editor on duty what other stories were to be played on the front page. When the editor replied “just the other big news,” Hearst exploded that there was no other big news and the sinking of the Maine meant war. Two days later the Journal was banging the war drum with such headlines as “War? Sure!” Coverage of the Spanish-American War, soon to become the Journal’s war, established a template for the next century of how journalists were to cover significant events. After thirty-five years of this type of journalism, newsmen and women at competing papers were amused when Hearst issued a bulletin in 1933 that established editorial guidelines for his newsrooms across the country: - Introduction, Red Ink, White Lies: The Rise and Fall of Los Angeles Newspapers 1920-1962 by Rob Wagner, Robert Leicester Wagner [amazon]Ernest L. Meyer wrote: "Mr. Hearst in his long and not laudable career has inflamed Americans against Spaniards, Americans against Japanese, Americans against Filipinos, Americans against Russians, and in the pursuit of his incendiary campaign he has printed downright lies, forged documents, faked atrocity stories, inflammatory editorials, sensational cartoons and photographs and other devices by which he abetted his jingoistic ends." --Chapter 17: Farewell: Lord of San Simeon, Lords of the Press, George Seldes  Marion Davies, born Marion Cecilea Douras on January 3, 1897, ... When Marion moved to California, she had already met William Randolph Hearst. They lived together at San Simeon, a very elaborate mansion, nicknamed Hearst's Castle, which stands as a California landmark today. At San Simeon, they threw very elaborate formal parties and LOTS of costume parties. Guests included Carole Lombard, mary Pickford, Sonja Henie, Dolores Del Rio, basically all of Hollywood. Also other people like the Mayor of New York City and Charles Lindbergh. ... She went through alot, even getting polio in the 1940's. She got cancer of the jaw, which is what finally killed her. -- Biography for Marion Davies @imdbThe rumor mill ...[Thomas] Ince died in November 1924, while celebrating his forty-third birthday aboard William Randolph Hearst's yacht. The abruptness of his death and his stature in the industry generated a series of sensational rumors. The most enduring is that Hearst caught his mistress, Marion Davies, kissing Charlie Chaplin and shot at him, accidentally hitting and killing Ince. The small party on board--including Louella Parsons, who later made a deal with Hearst for a syndicated gossip column--was sworn to secrecy --Hollywood Haunted - excerpts / from Angel City PressWilliam Randolf Hearst hated minorities, and he used his chain of newspapers to aggravate racial tensions at every opportunity. Hearst especially hated Mexicans. Hearst papers portrayed Mexicans as lazy, degenerate, and violent, and as marijuana smokers a nd job stealers. The real motive behind this prejudice may well have been that Hearst had lost 800,000 acres of prime timberland to the rebel Pancho Villa, suggesting that Hearst's racism was fueled by Mexican threat to his empire. -- William Randolf Hearst and Lammont Dupont , HALL OF CONSPIRACYThe morning papers would headline "Movie producer shot on Hearst yacht!". The evening papers would not carry that headline and the rival Hearst paper would print the next day that Ince died of acute indigestion. The mysterious bullet, if there was one, in Ince may have been meant for Charles Chaplin, who was allegedly carrying on with Hearst's mistress, Marion Davies --Biography for Thomas H. InceCitizen KaneIt was a clash of the titans. William Randolph Hearst, the lord and ruler of San Simeon. And Orson Welles, the ambitious young man with a golden touch, who set out to dethrone him. It was a fight from which neither man ever fully recovered. Long before Orson Welles' Citizen Kane was released in 1941, there was a buzz about the movie and the "boy genius" who made it. At a preview screening, nearly everyone present realized that they had seen a work of brilliance--except Hedda Hopper, the leading gossip columnist of the day. She hated the movie, calling it "a vicious and irresponsible attack on a great man." Citizen Kane was a brutal portrait of newspaper magnate William Randolph Hearst. When Hearst learned through Hopper of Welles' film, he set out to protect his reputation by shutting the film down. Hollywood executives, led by Louis B. Mayer, rallied around Hearst, attempting to buy Citizen Kane in order to burn the negative. At the same time, Hearst's defenders moved to intimidate exhibitors into refusing to show the movie. Threats of blackmail, smears in the newspapers, and FBI investigations were used in the effort. - The Battle over Citizen Kane [pbs.org]Citizen Kane (1941) [imdb.com]- Considered by many as the best film ever made, this is the story of Charles Foster Kane. The film opens with a long shot of Xanadu - the private estate of one of the world's richest men. In the middle of the estate is a castle. We see, inside the castle, a dying man examining a winter scene within a crystal ball. As he drops it, it smashes, and one word is heard - "Rosebud"... What follows are pieces of newsreel like footage detailing how Kane amassed his fortune, and turning around full circle at the end. 

Edward H. Harriman

Edward H. HarrimanEdward Henry Harriman was born in New Jersey in 1848. His father was an ordained deacon in the Presbyterian Church, his mother a well-connected socialite from New Jersey. Young Edward attended school in New Jersey and New York, but dropped out at age 14 to take a job as a Wall Street message boy. He moved up quickly, becoming a managing clerk and then, in 1870, a stock broker with a seat on the New York stock exchangeHe began investing his own money in railway stocks, and even married into a railroad family. He had other interests, of course; as an adult he took boxing lessons, bought horses, and served as a private of the 7th Regiment of the National Guard. But in 1881, he bought his first rail company outright, thirty-four miles of track in upstate New York, and his name soon became synonymous with "railroad."During the financial panic of the 1890s, Harriman was able to seize control of the Union Pacific railroad. In 1898 he made a tedious, day-light-hours-only trip from the Missouri River to the Pacific on that line, inspecting every mile, every station, every flatcar and engine. One superintendent said that "he saw every poor tie, blistered rail, and loose bolt." He fixed every problem, and within months had the ailing railroad in excellent health. But he himself was exhausted, and his doctor ordered him to take a little vacation.There are many theories at to why Harriman chose an Alaskan cruise. Some claim he planned to build a railway across the territory, or perhaps that he originally just wanted to hunt the great grizzly. Others say it was because the cruise-turned-expedition would make Harriman appear better educated and more refined. (He was, after all, a grade school dropout.) Whatever the reason, he worked with lightning speed to make the trip happen. In a few short months, he enlisted C. Hart Merriam to choose the scientists for the trip. He refitted the steamer, the George W. Elder, plotted the itinerary, and arranged for travel to the port city of Seattle. The expedition that carried his name set sail on May 31, 1899.Once underway, Harriman let it be known he intended, himself, to collect at least one major specimen of a large Alaskan mammal: he was obsessed with hunting bear, specifically the grizzly bear, the largest carnivore in the world. He even changed the itinerary when a local Indian guide reported that bears had been seen recently on the Kodiak Island in the Aleutians.Once ashore on Kodiak, several guides and assistants flushed a sow and cub down a valley. The entire party took great care to ensure their patron's safety. Trevor Kincaid, the zoologist, recalled that, "lest the bear behave in an unpleasant manner a group of hunters were grouped about [Harriman] with enough firepower to tear the bear to pieces." But it was Harriman who shot and killed his prey."Nothing in his way could daunt him or abate one jot the vigor of his progress toward his aims, no matter what -- going ashore through heavy breakers, sailing uncharted fiords, pursuing bears, etc," wrote John Muir.So it was when the watch espied a thin inlet of water behind the Barry Glacier. Harriman -- against warning of imminent grounding from both the captain and the pilot -- ordered the Elder to proceed into the passage at "full speed, rocks or no rocks." Harriman's determination paid off. The inlet opened up into a long fjord, revealing a shimmering glacial wonderland. Later, maps would call the waterway "Harriman Fjord" and the largest glacier along it, the "Harriman Glacier."After the trip, Harriman paid for Merriam and a team of researchers to analyze and publish the data gathered on the voyage. He himself was plagued by ill health, business problems, even a serious charge of anti-trust violation; but he continued to support the work of the expedition well after the journey's end. John Muir said Harriman never stopped. He kept "his lieutenants about him, and through them and a telegraph wire kept in touch with all his work and world affair in general." Edward Harriman died at the family home, Arden, in New York's Ramapo Highlands, on September 9, 1909, at the age of 62. (top) 

Joseph Pulitzer

Joseph Pulitzer, the son of a grain dealer, was born in Budapest, in the Austro-Hungarian Empire in April, 1847. He emigrated to the United Statesin 1864 and settled in St. Louis. He worked as a mule tender, waiter and hack driver before studying English at the Mercantile Library. In 1868 Pulitzer was recruited by Carl Schurz for his German-language daily, the Westliche Post.Pulitzer joined the Republican Party and was elected to the Missouri State Assembly. In 1872 he, like many Radical Republicans, supported Horace Greeley against Ulysses S. Grant, the official Republican candidate. Despite the efforts of Pulitzer and Carl Schurz in Missouri, Grant won the presidential election by 286 electoral votes to 66.In 1872 Pulitzer was able to purchase the St. Louis Post for $3,000. This venture was a success and six years later was able to buy the St. Louis Dispatch for $2,700. He combined the two newspapers and launched crusades against government corruption, lotteries, gambling, and tax fraud.By 1883 Pulitzer was a wealthy man and was able to purchase the New York World for $346,000. The newspaper, which had been losing $40,000 a year, was turned into a journal that concentrated on human-interest stories, scandal and sensational material. Pulitzer also promised to use the paper to "expose all fraud and sham, fight all public evils and abuses, and to battle for the people with earnest sincerity".Pulitzer also used the New York World to advocate a ten-point program of reform: tax luxuries, tax inheritances; tax large incomes; tax monopolies; tax the privileged corporations; institute a tariff for revenue; reform the civil service; punish corrupt office holders; punish vote buying; punish employers who coerce their employees in elections. crusades against lotteries, gambling, and tax fraud.Two years after Pulitzer purchased New York World in 1883, he recruited Richard F. Outcault as one of his artists. Outcault's comic cartoons based on life in the slums were extremely popular with the readers and sales reached 600,000, making it the largest circulating newspaper in the country.In 1887 Pulitzer recruited Nellie Bly, a journalist working for the Pittsburgh Dispatch. Over the next few years she pioneered the idea of investigative reporting by writing articles about poverty, housing and labour conditions in New York. This often involved undercover work and feigned insanity to get into the insane asylum on Blackwell's Island. Her scathing attack on the way patients were treated led to much needed reforms.After reading Jules Verne's Around the World in Eighty Days in 1889, Nellie Bly suggested to Pulitzer that theNew York World should finance an attempt to break the record illustrated in the book. Pulitzer agreed and held a competition which involved guessing the time it would take Bly to circle the globe. Over 1,000,000 people entered the contest and when she arrived back in New York she was met by a massive crowd to see her break the record in 72 days, 6 hours, 11 minutes and 14 seconds.In 1890 Pulitzer withdrew from the editorship of the New York World. Although only 43, Pulitzer was now virtually blind and for the rest of his life he was unable to return to the newsroom. However, he continued to manage the editorial and business direction of his newspapers.In 1896 the New York World began producing a colour supplement, Richard F. Outcault created a new young character that wore a yellow nightshirt. Known as the Yellow Kid, this cartoon became so popular that William Randolph Hearst, owner of the New York Journal, offered him a considerable amount of money to join his newspaper. Pulitzer now employed George Luks to produce the Yellow Kid.Hearst also reduced the price of the New York Journal to one cent and including colour magazine sections. Pulitzer's New York World and Hearst's New York Journal became involved in a circulation war, and their use of promotional schemes and sensational stories became known as yellow journalism.Pulitzer continued to promote investigative reporting and in 1909 the New York World exposed a fraudulent payment of $40 million by the United States to the French Panama Canal Company. The federal government indicted Pulitzer for criminally libeling President Theodore Roosevelt and the banker John Pierpont Morgan. However, Pulitzer won an important victory for the freedom of the press when the courts dismissed the indictments.Joseph Pulitzer, whose eyesight deteriorated rapidly during his later years, died in 1911. In his will left $2 million for the establishment of a school of journalism at Columbia University. He also left a fund that established annual prizes for literature, drama, music and journalism. Since 1922 Pulitzer Prizes have also been awarded to cartoonists.

JAMES J. HILL

J. Hill was the Empire Builder who started with nothing but a vision of the future. It was the vision that made him special and different from others involved in business. He saw what he was working toward and used his business strategies to always plan for the future. Unlike other railroad builders such as Cornelius Vanderbilt who built their railroads around a population, Hill built a population around his railroad. This technique was unsuccessful for others but Hill's business skill, experience, and planning made his railroad progress rapidly. The land he built on was considered a wasteland, unsuitable for population. Hill was not a selfish man but instead one who used his business skills to develop the best railroad network possible. His railroads went from the Great Lakes to the Puget Sound and from Canada to the South. As his railroads grew, he extended his empire across the Pacific to the Orient. Hill's railroads were impressive in length, growth rate, and revenue.James J. Hill was born on September 16, 1838 in the small town of Rockwood, Ontario. His father's death interrupted his early education and Hill had to help with the family finances. He showed a lot of academic growth and the head of the Rockwood Academy gave Hill free tuition.(1) His loss of one eye by an accidental arrow shot prevented him from the career in medicine that his parents wished him to have. By age 18, Hill was enthusiastic about the Far East and determined to be a trader in the Orient like Marco Polo. He was unable to leave from the east coast, so he headed west in hope of joining a team of trappers.(2) Hill arrived in St. Paul on July 21, 1856 by steamboat.(3) St. Paul was a popular town for trappers. However, Hill missed the last brigade of the year by a few days and would have to wait a full year for another one. During his wait in St. Paul, he became attached to the town and decided that it would be his business base.(4)Hill's first job in St. Paul was as a forwarding agent for the Mississippi River Steamboat Company. He set fixed freight and passenger rates there and learned steamboat operation.(5) Hill then enlisted for the Civil War but was rejected because he had lost one eye. He organized the First Minnesota Volunteers. Hill saw the demands of war and learned the important skills needed. During the war, Hill pressed and sold hay, learned to buy and sell goods at a profit, chose the least expensive method to move products, and served as a warehouseman.(6)After the war, in 1866, Hill became an agent for the First Division of the St. Paul & Pacific Railroad.(7) The St. Paul & Pacific currently used wood for fuel. Hill thought that coal would be better fuel so he made a contract with the railroad to supply it with coal. Hill soon formed a business with Chauncey W. Griggs, a Connecticut man in the wholesale grocery business. Together they made Hill, Griggs & Company, a fuel, freighting, merchandising, and warehouse company. They had a monopoly on the fuel business in the city and nearby region.(8)Hill was closely watching the Red River of the North that flowed north to Lake Winnipeg. Fort Garry (presently Winnipeg) was an important Hudson Bay Company post. It was trying to keep control over Canadian fur trade but did not serve independent traders. Hill transported the freight of individuals and the Hudson Bay Company found this competition dangerous. Norman Kittson of the Hudson Bay Company joined with Hill to form the Red River Transportation Company. Hill traveled up Red River in 1870 to investigate the cause of a French and Indian mob who captured the Hudson's Bay Company post in Fort Garry. During that trip and others, Hill saw the rich soil of the region and watched the St. Paul & Pacific's steady decline. Grasshoppers devoured everything in the area making it impossible to farm and even made it difficult for locomotives to get traction on the rails.(9) Hill thought that if he could buy the railroad line then he could make a profit from it by extending it to Fort Garry. The St. Paul & Pacific was already in bad physical and financial condition but the panic of 1873 made it even worse. The Northern Pacific Railroad had planned to buy the railroad but the Panic of 1873 put it under receivership. Hill saw his chance to acquire the St. Paul & Pacific and other lines in similar crises.(10)Hill first went to Norman Kittson, who had previously worked with him on the steamship line. Kittson and Hill both had a little money but needed much more. Together they went to Donald Smith of the Hudson's Bay Company and told him their plan for making the St. Paul & Pacific a profitable line. Smith offered money and talked with George Stephen, president of the Bank of Montreal.(11) The four of them bought the St. Paul & Pacific for $280,000 which Hill estimated as 20% of the railroad's value.(12) Hill's next mission was to make it a productive route.Hill purchased rails, rolling stock, locomotives, and laborers. He pushed the workers hard and they laid more than one mile of track daily.(13) It connected with a Canadian Pacific branch from Fort Garry at St. Vincent, Minnesota in 1879. Canadian Pacific's transcontinental route was not completed yet so all traffic through Fort Garry had to use Hill's route. Hill received two million acres of land in the Minnesota Land Grant for completing the rail line on time.(14) He rearranged his railroad into the St. Paul, Minneapolis, & Manitoba. Hill had perfect timing in buying the St. Paul & Pacific. Two great harvest seasons followed his purchase which brought more business to the railroad. A great increase in immigrants from Norway and Sweden enabled Hill to sell homesteads from the Minnesota Land Grant for $2.50 to $5 an acre.(15)Hill's success came from planning for the future, which other builders of that time did not do. He looked toward the future to achieve his goals and overcame the doubts of others.(16) He studied areas in close detail and planned exactly where the track would be best laid by locomotive, handcar, passenger coach, caboose, and horseback. Hill did all the analysis of grades and curves himself and often argued with his engineers and track foremen demanding changes when he felt them necessary. Hill insisted on having the best in everything he did. He wanted huge bridges made with thick granite. He wanted the biggest locomotives and the best steel, too. He was a great financier, even against J.P. Morgan.During his planning of his St. Paul, Minneapolis, & Manitoba route, Hill got involved in the construction of the Canadian Pacific Railway. Donald Smith and George Stephen who had worked with him on the purchase of the St. Paul & Pacific were leaders behind the Canadian transcontinental route. They invited Hill to join them on the Canadian Pacific Railway and Hill accepted. He gave advice about selected routes and construction policies.(17)The greatest contribution Hill made was his recommendation of William Cornelius Van Horne to be construction manager. Van Horne drove his construction crews hard and got the Canadian Pacific Railway to the Pacific quickly.(18) Because the Canadian Pacific would soon become a competitor to his own transcontinental route, Hill resigned from the Canadian Pacific and sold all of his stock in 1882.(19)Only one year after the purchase of the St. Paul & Pacific Railroad, Hill had already planned to build his railroad to the Pacific. Many people thought Hill could never accomplish such a goal. Never before had someone tried building such a railroad without government land and loans. Railroads like the Union Pacific, Central Pacific, and Northern Pacific were each given millions of acres of public land to build their transcontinental routes. People thought that even if Hill could construct his dream, how could he possibly compete with government-funded lines? Hill's idea to build a railroad to the Pacific became known as Hill's Folly.(20)Planning for the westward expansion of the St. Paul, Minneapolis, & Manitoba went well.(21) Construction started quickly and reached Minot, North Dakota in 1886.(22) The route ran north of the Northern Pacific Railway. The Northern Pacific was poorly built through worthless land. It had steep grades, high interest charges, and high property taxes. Hill's planning resulted in a much better route. A railroad line would help any town during that era and Hill was able to get a good right-of-way for the railroad. However, the town of Fort Benton, Montana rejected Hill's request for a track through town. Hill decided that if the town wanted to be difficult about construction, than he would cut them off from the world and build his railroad around it. He left the town one mile from any location on the railroad. This shows Hill's attitude toward those who tried to slow his construction.(23)They reached Great Falls in October of 1887 through surprisingly quick construction. Hill was employing 8000 men and 3300 horse teams when building his transcontinental route.(24) Hill connected his line with the Montana Central Railroad at Great Falls which went to Helena, Montana and brought a lot of business. (25)Hill encouraged settlement by letting immigrants travel halfway across the country on his railroad for $10 if they would settle along the route. He rented entire families freight cars for little more money. These were strategies that other railroads rarely used during this era and encouraged a lot of business.(26)Hill created the Great Northern Railway Company and the St. Paul, Minneapolis, & Manitoba became a part of it. In 1893 it reached the Puget Sound at Everett, Washington. During that same year, a panic put the Santa Fe and Union Pacific in receivership. The Northern Pacific was put into a worse situation. Hill's Great Northern was the only railroad in the Pacific to remain in good condition through the panic. Hill made an agreement to take over the Northern Pacific Railroad with Edward Tuck and Bank of Montreal associate Lord Mount Stephen. A Great Northern stockholder objected using the Minnesota law prohibiting the combining of parallel and competing railroads. The agreement was stopped. Hill soon got around it though by having his associates help in buying Northern Pacific stock as individuals instead of as a company.(27) The plan succeeded and the Northern Pacific became part of the Great Northern in 1896.(28) The Great Northern now became known as the Hill Lines by most people living in the West.(29)Hill knew that the only eastbound traffic for the first few years would be lumber until the region got developed. Hill was interested in acquiring a line to Chicago and St. Louis where he could ship the lumber. However, shipping lumber east would require empty freight cars returning west if he could not find anything else to ship back west. Hill sent men to Japan and China to study all of their imports and exports. He also sent men to New England, the Atlantic states, and the South searching for things that could be made or grown and exported to the Orient.(30)Hill researched the Chicago, Burlington & Quincy that stretched from the Great Lakes to the Rocky Mountains. It was very strong around Mississippi and Missouri. If Hill could get the Chicago, Burlington & Quincy, he would have a direct cotton-hauling route to St. Louis and Kansas City, and a route to the smelters of Denver and the Black Hills. Most importantly, Hill could have a direct line into the lumber-consuming region of the prairie states. Hill worked with J.P. Morgan and successfully purchased the Chicago, Burlington & Quincy.Edward Henry Harriman, head of the Union Pacific, was also trying to buy the Chicago, Burlington & Quincy. Harriman first attempted to buy the Burlington from Hill by purchasing their stock. This didn't work so Harriman ordered all of his men to purchase a total of 40,000 shares of stock. Again he failed so Hill and Morgan kept control.Hill's agents were productive in finding products to ship to the Orient. Now that Hill had the Chicago, Burlington & Quincy, he arranged to ship products to the Orient via Seattle. He supplied Japan with cotton from the South and shipped New England cotton goods to China. Northern goods such as Minnesota flour and Colorado metals also made Hill a profit when shipped to the Orient.(31)Hill kept prices low and sold products just above cost. He sold lumber along many rail routes in the Northwest to encourage the construction of towns. Hill's dream was to build a civilization that used all of the "wasteland" between the Great Lakes and the Puget Sound so there would be little open land remaining. He even imported cattle and gave them to farmers along his railroads for free to encourage growth. Hill began sending agents to Europe to show slides of Western farming to urge Scotsmen, Englishmen, Norwegians, and Swedes to settle in the Pacific Northwest. As a result of Hill's strategies, more than 6,000,000 acres of Montana land was settled in two years.(32)This rapid growth did cause some problems for the region after Hill's death. Between the years of 1910 and 1922, homesteaders settled 42% of Montana. More than 80% of this settled area was not ready for agriculture which was the main use of it. Deep plowing caused heavy erosion and the consistent strong winds of Montana and the Dakotas blew away much of the soil. Wheat production dropped from 25 bushels an acre in 1916 to 2.4 bushels an acre in 1919. Many homesteaders left and this became one of Hill's few failures.(33)In 1905, the battle between Hill and Harriman began again over Oregon land. Harriman considered Oregon his own territory because of his successful Union Pacific and Southern Pacific railroads in the region. Harriman became worried in 1905 when Hill announced his plans for development in Oregon. Hill had already surveyed the land and began grading and laying track. Harriman set up fake railroad companies as a trick to conflict with Hill's construction. This battle was fought mostly in the court but fist fights, night raids, and the dynamiting of equipment was common. During this struggle, Harriman got appendicitis and had to go to the hospital. As soon as he could sit up in bed, he called Hill to say that he would soon be back in the fight. Hill won the battle though and took control of the Spokane, Portland, & Seattle Railway.(34)Hill saw an opportunity in Central Oregon and took quick action. He built a 165-mile line from Columbia along the Deschutes River to the unknown town of Bend. Very few people populated the entire region around that line and Harriman knew that Hill would not end the line at Bend. Harriman thought Hill was building a direct line to San Francisco and wanted to stop him. Harriman sent a huge construction crew to start laying track on the opposite side of the Deschutes River and called the route the Deschutes Railroad. This quickly became a news story throughout the West as the two railroads battled through the canyon. The railroad crews set off dynamite to interfere with the construction of the other railroad and sent boulders down the canyon walls at the other work crews.(35) They reached a location in the canyon with only one way through. The rancher who owned the land sold a right-of-way to Harriman. Hill had no other route through and had to make a deal with Harriman. Hill agreed that he would not build past Bend and in return he could use that section of Harriman's track that was necessary.(36)Hill had no interest in creating a truce with Harriman and just used it for the Deschutes River line. Harriman's Southern Pacific Railroad still dominated Western Oregon. Hill bought several electric rail lines to operate as competition with the Southern Pacific. Hill also bought an ocean terminal at the mouth of the Columbia River near Astoria. He put two large steamships to operate from this ocean terminal to San Francisco. This proved to be good competition with Harriman's Southern Pacific.(37)In 1907 at age 69, Hill gave the leadership of the Great Northern to his son Louis W. Hill. James Hill stayed active in his railroad empire and came to office every day in St. Paul. In May 1916, he became ill with an infection that spread quickly. Doctors were unable to save him and Hill went into a coma and died on May 29 at age 77.(38)Hill's funeral was at 2:00 p.m. on May 31 and every train and steamship on the Great Northern came to a five minute stop in honor of the builder of the Great Northern Empire.(39)James J. Hill truly did build the Pacific Northwest with his railroads. He started with a huge region that people thought could never be developed. Hill saw the struggling St. Paul & Pacific Railroad and had a vision of expanding it to the Pacific. The states of Minnesota and the Dakotas became popular states for immigration because of Hill. The small town of Seattle, Washington became an international shipping port. America was linked with an excellent railroad network which encouraged rapid growth. Where other railroad builders were searching for ways to get every cent possible, Hill was surveying the land himself, looking to create the most efficient railroad network. Hill had a successful railroad because of the long length of track, wide region it covered, high profits it made, and the expansion it brought to America. He became known as the Empire Builder because of his involvement with the stock market, banking, international trade, and mining. In 1915 at the Panama-Pacific Exposition in San Francisco, Hill was named State of Minnesota's "greatest living citizen."(40)There is no doubt from Hill's accomplishments that he was very successful in his business. He was a self-made man who started from nothing and built one of the most successful railroad networks in America. Hill had a critical effect on the development of our country through his railroad empire. His involvement in many parts of business made James Jerome Hill deserving of his title, The Empire Builder, a legend of success that remains today.

John D. Rockefeller Senior, 1839-1937

John D. Rockefeller was born July 8, 1839, in Richford, New York about midway between Binghamton and Ithaca. His father, William Avery Rockefeller, was a "pitch man" -- a "Doctor" who claimed he could cure cancers and charged up to $25 a treatment. He was gone for months at a time traveling around the West from town to town and would return to wherever the family was living with substantial sums of cash. His mother, Eliza Davison Rockefeller, was very religious and very disciplined. She taught John to work, to save, and to give to charities.By the age of 12 he had saved over $50 from working for neighbors and raising some turkeys for his mother. At the urging of his mother, he loaned a local farmer $50 at 7% interest payable in one year. When the farmer paid him back with interest the next year Rockefeller was impressed and said of it in 1904: "The impression was gaining ground with me that it was a good thing to let the money be my servant and not make myself a slave to the money…"From 1852 Rockefeller attended Owego Academy in Owego, New York where the family had moved in 1851. Rockefeller excelled at mental arithmetic and was able to solve difficult arithmetic problems in his head -- a talent that would be very useful to him throughout his business career. In other subjects Rockefeller was an average student but the quality of the education was very high.In 1853 the Rockefellers moved to Cleveland, Ohio, and John attended high school from 1853 to 1855. He was very good at math and was on the debating team. The school encouraged public speaking and even though Rockefeller was only average, it was a skill that would prove to useful to him.Early Business Career: 1855-1863In the spring of 1855 Rockefeller spent 10 weeks at Folsom’s Commercial College -- a "chain College" -- where he learned single and double-entry bookkeeping, penmanship, commercial history, mercantile customs, banking and exchange. From his father he had learned how to draw up notes and other business papers. His father was very meticulous in matters of business and believed in the sacredness of contracts.In August of 1855 at the age of 16 Rockefeller began looking for work in Cleveland as a bookkeeper or clerk. Business was bad in Cleveland at the time and Rockefeller had problems finding a job. He was always neatly dressed in a dark suit and black tie. Cleveland was not a large city in 1855 and Rockefeller could easily visit every business in under a week’s time. He returned to many businesses three times. Finally, on September 26, 1855, he got a job as an assistant bookkeeper with Hewitt & Tuttle, commission merchants and produce shippers.Rockefeller soon impressed his employers with his seriousness and diligence. He was very exacting and scrupulously honest. For example, he would not write out a false bill of lading under any circumstances. He went to great lengths to collect overdue accounts. He was pleasant, persistent, and patient and he got the company’s money from the delinquents. (For all this work, he was not well paid. But whatever he was paid, he always gave to his Church and local charities.)By 1858 Rockefeller had more responsibilities at Hewitt & Tuttle. He arranged complicated transportation deals that typically involved moving a single shipment of freight by railroad, canal, and lake boats. He began to engage in trading ventures on his own account. He was naturally cautious and only undertook a business venture when he calculated that it would be successful. After he carefully weighed a course of action he would then act quickly and boldly to see it through to fruition. He had iron nerves and would carry through very complicated deals without hesitation. This combination of caution, precision, and resolve soon brought him attention and respect in the broader business community in Cleveland.On March 1, 1859 -- several months before his 20th birthday -- Rockefeller went into business for himself, forming a partnership with a neighbor, Maurice Clark. Each man put up $2000 and formed Clark & Rockefeller -- commission merchants in grain, hay, meats, and miscellaneous goods. At the end of the first year of business, they had grossed $450,000, making a profit of $4400 in 1860 and a profit of $17,000 in 1861. The commission merchant business was very competitive and Clark & Rockefeller’s success was due in large part to Rockefeller’s natural business abilities.During the Civil War their business expanded rapidly. Grain prices went up and so did their commissions. Most of their selling was done on commission, so Clark & Rockefeller took no risks from price fluctuations. Rockefeller’s style was very precise and calculated. He was not a gambler but a planner. He avoided speculation and refused to make advances or loans.Rockefeller was extremely hard working. He traveled extensively, drumming up business throughout Ohio, and then would go to the banks and borrow large sums of money to handle the shipments. This aggressive style built the business up every year.However, by the early 1860s, Rockefeller realized that the future of the commission merchant business in Cleveland was going to be limited. He had become convinced that the railroads were going to become the primary means of transportation for agricultural commodities. This would be to the disadvantage of Cleveland, because its position as an important Lake Erie port was its primary transportation advantage. He saw that the rising grain output of the Midwest and the Northwest of J. J. Hill would change the nature of the business for good. The huge elevators on Lake Michigan and the flour-millers of Minneapolis would be the dominant players in the business. Rockefeller came to believe that the future of Cleveland lay in the collection and shipment of raw industrial materials -- not agricultural commodities. This would allow Cleveland to exploit its geographical advantages -- mid-way between the Eastern seaboard and Chicago -- and accessible to both rail and water transportation. He saw his chance in 1863 -- oil.Oil Refining 1863-65On August 27, 1859, Edwin Drake struck oil near Titusville, Pennsylvania, setting off a frenzied oil boom in what soon became known as the "oil regions" of northwestern Pennsylvania. Drake was the employee of a group of New Haven, Connecticut, investors in the Pennsylvania Rock Oil Company. They had obtained a sample of the Pennsylvania oil and had a Yale University chemist analyze it. The chemist determined that the Pennsylvania oil was of very high quality and could be refined into a variety of useful products.The technology used by Drake was not new. What was new was the idea of drilling for oil -- the idea that you could pump oil out of the ground like you could pump water.The technology for drilling wells was quite advanced by 1859. To that time, wells were drilled for either water or salt (more accurately, brine which would be refined to get the salt). In the process of drilling for salt all over the United States in the early 19th century it was not uncommon -- especially in the Pennsylvania area -- to get oil seepage into the salt well. Most of the time this was regarded as a nuisance, but some enterprising merchants went into the business of selling the oil in small bottles as a "Natural Remedy" or "Curative Agent".The technology for refining oil was also known by the early 1850s. Doctor Abraham Gesner, a Canadian, in August 1846 patented a method for distilling kerosene (a name he invented from the Greek "keros" -- wax -- and "elaion" -- oil) from coal. In 1850 a Scottish industrial chemist, James Young, patented a method of obtaining "burning oils" from petroleum through destructive distillation. In 1852 two Boston chemists, Luther and William Atwood, began making lubricants from coal tar. Finally, in 1856, Samuel Downer, a whale-oil merchant, bought out the Atwoods and boosted production to 650,000 gallons of refined oil a year. By 1861 coal-oil lamps were widespread and coal-oil was even made in Cleveland.Rockefeller began investigating the feasibility of entering the oil refining business in 1862 and the firm of Andrews, Clark & Company was formed in 1863. (Samuel Adams had experience with shale-oil refining, and Clark brought in his brothers.) Probably figuring in Rockefeller’s decision to enter the business was the entry into Cleveland later that year of the long-planned Atlantic & Great Western Railroad. The A&GW line went east to Meadville, Pennsylvania, then northeast to Corry, Pennsylvania, and then across the border into New York state, where it connected to the Erie Railroad. The A&GW also had branches into the heart of the oil regions -- Titusville and Franklin. This gave Cleveland two routes to New York City -- the New York Central-Lake Shore system, and the A&GW-Erie connection. This immediately gave Cleveland a transportation advantage over Pittsburgh, which was dominated by the Pennsylvania Railroad.The Pennsylvania oil was of high quality. One barrel yielded 60-65% illuminating oil, 10% gasoline, 5-10% benzoyl or naphtha (a volatile inflammable liquid used as a solvent in dry cleaning, varnish making, etc.), with the remainder tar and wastes.Rockefeller abhorred waste and devoted considerable energy to increasing the efficiency of his refining business. He believed that the secret of success was attention to detail -- to wringing little efficiencies out of every aspect of his business. He hired his own plumber and bought his own plumbing supplies. He built his own cooperage shop and made his own barrels for the oil. He bought tracts of white-oak timber for making the barrels. Instead of transporting the freshly cut green timber directly to the cooperage shop, he had kilns built on the timber tracts to dry the wood on site, to reduce the shipping weight of the lumber. He bought his own wagons and horses to transport the wood to the cooperage shop in Cleveland. (We would call this" vertical integration" today.)Oil Refining 1865-1870In February 1865, at the age of 24, Rockefeller bought out the Clark brothers (Maurice Clark had brought his brothers into the refining business) for $72,500 and gained complete control of the business. The Clarks had resisted borrowing money to expand and Rockefeller was convinced of the correctness of his course, so he bought them out. He immediately moved to greatly extend his enterprise. He borrowed heavily and plowed all his profits back into the business in order to expand it further, and took decisive steps to strengthen and increase the efficiency of all aspects of the firm.In 1866 John D. brought his brother William Rockefeller into the partnership and they built another refinery in Cleveland which they named the Standard Works. They also opened a New York City office with William Rockefeller in charge, to handle the export business, which eventually became larger than the domestic business.Henry M. FlaglerIn 1867 Henry M. Flagler (1830-1913) became a partner, and Rockefeller, Andrews & Flagler was formed. Flagler had left school at age 14. Not wanting to burden his poor family any further, he walked to the Erie Canal in 1844 and took it to Lake Erie, and then went to Ohio via a lake steamer. Flagler and Rockefeller had met years earlier in Bellevue, Ohio, when Rockefeller was buying grain for his commission house and Flagler was a grain merchant. Flagler had gone into the salt well business but went broke in 1865. He began to recoup his fortune in 1865 in Cleveland as a manufacturer of oil barrels and had an office in the same building as Rockefeller. Flagler and Rockefeller were very much alike — ambitious and shrewd, with a taste for expansion. Flager’s wife’s uncle, Stephen V. Harkness, became a silent partner and made substantial investments in the partnership, though he never took an active part in running the business. These investments by Harkness and Flagler were used to expand the business even further.By 1868 Rockefeller, Andrews & Flagler was the largest refiner in the world. Flagler and Rockefeller understood that the only way to make profits consistently in oil refining was to make the business as large as possible and to utilize all their "waste" products. The refining process during this early period was very primitive -- refining consisted simply of cooking the oil and purifying it somewhat. The physical plant was simple: some large vats, stills, the piping, and a few chemicals. A small refinery could be set up with just $10,000, and a large one with $50,000. In modern language, the barriers to entry were very, very low. It would be like setting up a small business in today’s business climate.Consequently, if the price of kerosene was high, even the small and inefficient refiners could make good money. So, even when the price of kerosene fell sharply, driving some refiners out of business, the entry costs were so low that when times were good many small operators could enter the business cheaply, making it a very competitive market.It was the logic of this competitive structure that determined Rockefeller and Flagler's course of action.They built high-quality, larger, better-planned refineries. They built permanent facilities using the best materials available.They owned their own cooperage (barrel making) plant, their own white-oak timber and drying facilities, and bought their own hoop iron. Consequently, they cut the cost of a barrel from about $3.00 to less than $1.50.They manufactured their own sulfuric acid (which was used in the purification process) and devised technology to recover it for re-use.They owned their own drayage service, consisting of at least 20 wagons in 1868.They owned their own warehouses in New York City and their own boats on the Hudson and East Rivers to transport their oil.They were the first to ship oil via tank cars (albeit big wooden tubs mounted in pairs on flat cars -- later to evolve into the modern form of a tank car). And they owned their own fleet of tank cars.They built huge holding tanks near their refineries for storing crude and refined oil, with the equipment for drawing off the oil from the tank cars into the holding tanks.Their huge size made it economical to build the necessary physical plant to handle all the "waste" products from the refining of kerosene. They began manufacturing high quality lubricating oil that quickly replaced lard oil as a lubricant for machinery. Gasoline, which many refiners surreptitiously dumped into the Cuyahoga River at night (the river often caught fire), Rockefeller and Flagler used as fuel. They manufactured Benzene (used as a cleaning fluid; a solvent for fat, gums, and resin; and to make varnish), paraffin (insoluble in water, used for making candles, waterproofing paper, preservative coatings, etc.), and petrolatum (used as a basis for ointments and as a protective dressing; as a local application in inflammation of mucous membrane; as an intestinal lubricant, etc. -- white petrolatum later marketed under the brand name Vaseline). They shipped Naphtha (volatile inflammable liquid used as a solvent in dry cleaning and in wax preparations, varnish and paint making, burning fluid for illumination, and as a fuel for motors) to gas plants and other users.In short, nothing was left to chance, nothing was guessed at, nothing left uncounted and measured. Efficiencies down to the smallest detail of the business were the order of the day. Economy, precision, and foresight were the cornerstones of their success.The sheer size of the business and the fact that Cleveland was served by two railroad systems -- the New York Central (via the Lake Shore), and the Erie (via the Atlantic & Great Western -- which Jay Gould bought in 1868) -- and had access to the Lake for water-borne shipping, gave Rockefeller and Flagler tremendous leverage with the railroads. Consequently, Flagler was able to negotiate big rebates from the railroads. The combination of size, efficiency, and the rebates gave Rockefeller and Flagler an advantage over other refiners that they would never relinquish.The railroad situation benefited not only Rockefeller and Flagler; other Cleveland refiners also benefited at the expense of the refiners in Pittsburgh. Pittsburgh was a prisoner to the Pennsylvania Railroad, which had a monopoly in that city. The Pennsylvania Railroad wanted to ship everything to Philadelphia because it meant more money for them. Consequently, Cleveland refiners had a built-in advantage over Pittsburgh. In this regard, the railroads -- the Erie and New York Central -- were not "victims" of the "crooked" refiners; rather, the railroads looked upon the refiners as associates and co-workers. They had a commonality of interests.The Standard Oil Company: 1870-1882On January 10, 1870 the Standard Oil Company of Ohio was created by John D. Rockefeller (30%), William Rockefeller (13.34%), Henry Flagler (16.67%), Samuel Andrews (16.67%), Stephen Harkness (13.34%), and O. B. Jennings (brother-in-law of William Rockefeller, 10%). It held about 10% of the oil business at the time of its formation.In Rockefeller’s eyes, the state of the oil business was chaotic. Because entry costs were so low in both oil drilling and oil refining, the market was glutted with crude oil with an accompanying high level of waste. In his view, the theory of free competition did not work well when there was a mix of very large, efficient firms and many medium and small firms. His view was that the weak firms, in their attempts to survive, drove prices down below production costs, hurting even the well-managed firms such as his own.Although his economics may be suspect in modern eyes, his solution -- a market with a few (maybe one!) large, vertically integrated firms -- in effect an oligopolistic market -- was what other industrial sectors eventually evolved into. What makes oil stand out is that it happened by design -- as the result of a plan formulated by a single person -- John D. Rockefeller.During 1871 Rockefeller formulated his plan for consolidating all oil refining firms into one great organization with the aim of eliminating excess capacity and price-cutting. Although no written records exist, both Rockefeller and Flagler 30 years later claimed this was when they worked out the master plan which they later implemented. That the plan was formulated in 1871 is evidenced by the fact that all the major Cleveland banks joined the Standard Oil organization in 1871 and later backed Rockefeller and Flagler to the hilt in their rapid expansion.The South Improvement SchemeWhat interrupted Rockefeller and Flagler’s careful planning was the emergence of the South Improvement Scheme of 1871. Tom Scott of the Pennsylvania Railroad came up with the idea. The scheme was inspired by the Anthracite Railroad combination of 1868-71 in which five railroads and two coal companies bought up all the coal pits along the five railroads in order to control output and prices.The South Improvement Company had been created by the Pennsylvania Legislature in 1870 and its charter allowed the Company to hold the stocks of other companies outside the state. This was an unusual power at the time and made it ideal for Scott’s scheme. Scott arranged for the purchase of the charter by a group of Philadelphia and Pittsburgh refiners with Scott in the background.The Scheme was essentially a plan to unite the oil-carrying railroads in a pool; to unite the refiners in an association, the South Improvement Company; and to tie the two elements together by agreements which would stop "destructive" price-cutting and restore railroad freight charges to a profitable level.To enforce the cooperation of refiners, a set of rebates was agreed to for participating refiners. This alone would have undoubtedly forced all the refiners into the combine, but the scheme did not stop there. In what turned out to be a public relations disaster, the participants decided to add a drawback on every barrel shipped by a non-participant equal to the ordinary rebate! In effect, this would be a tax on non-participants the proceeds of which would be transferred to the participating oil refiners.What the planners forgot, however, was to include the producers in the scheme as well. Despite efforts to reassure the drillers in the Oil Regions that the Scheme would benefit them as well by keeping prices up, the Oil Regions Men revolted and organized an effective boycott of all the refiners and railroads they suspected of being part of the Scheme. Consequently, the Scheme collapsed in 1872 before it was ever implemented.Subsequent historians repeated the view of many at the time that Rockefeller had been one of the originators of the South Improvement Scheme. In fact he had not been, but he and Flagler did agree to participate, and worked hard to set up the Scheme. Rockefeller’s most important error of his career was to not go public at the time with his side of the story. This was the first time that a broad public became aware of Rockefeller and the episode was to forever tarnish his reputation. He said of it later, "Our silence encouraged the wildest romancers to spread wild tales about us;" and on another occasion, "I shall never cease to regret that at that time we never called in the reporters."In December 1871, during the dust-up over the South Improvement Scheme, Rockefeller and Flagler set in motion their plan to consolidate the industry. They begin by buying up all their competitors in Cleveland. The strategy and tactics were Rockefeller’s and he handled the negotiations with the rival refiners personally. He began with the strongest refineries first. He believed that if he had bought up the weak refineries first then he would be faced with higher prices later and stiffer resistance. Consequently, he approached the strongest first and bought them out.His technique was always the same. The merger would be effected by an increase in the capitalization of The Standard Oil. The rival refinery would be appraised and the owners would be given Standard Oil stock in proportion to the value of their property and good will and they would be made partners in Standard Oil. The more talented owners would also be brought into the Standard Oil management. If they insisted upon cash they received it.Later some owners who had been bought out complained to the press that they had been treated unfairly. The evidence is overwhelming that the Standard’s rivals were paid fair -- even generous -- prices for their property, and if they had the wisdom to take Standard Oil stock, they ended up very rich indeed.By March or April 1872 Rockefeller had bought up and/or merged with almost all the refineries in Cleveland. The inefficient and poorly constructed refineries were dismantled, while the better-quality ones were upgraded to Rockefeller and Flagler’s standards.After the conquest of Cleveland, the Standard inexorably expanded. All the transactions were kept as secret as possible. The leaders of the Standard were so successful in this secrecy at times that many rival independent refiners were totally unaware of what was going on.In 1872, Jabez A. Bostwick was brought into the Standard along with his important oil facilities on Long Island and on New York Harbor. In 1873, Standard acquired Devoe Manufacturing Company (Long Island) and Chess, Carley and its important distribution system in the Kentucky region (Louisville, KY). In 1874, Standard began building its own pipeline system using Bostwick & Co.The teamsters, men who drove commercial wagons drawn by horse-teams, fought pipelines tooth and nail, but were destined to lose because it was so much cheaper and easier for the producers to send their crude through pipes as opposed to wagons. It was a short logical step to extend those pipelines directly to refineries. Rockefeller made a deal with the Erie Railroad and gained control of important terminal facilities in New York harbor in exchange for shipping half of Standard’s oil on the Erie.The Standard expanded into the Pennsylvania Oil Regions, gaining control of the Imperial Refinery near Oil City and bringing J.J. Vandergrift into the Standard management. Two large refineries in Titusville joined the Standard and John Archbold (later the President of Standard Oil) was brought into the management. The Standard expanded into Pittsburgh by merging Warden, Frew & Co. and Lockhart, Frew & Co., thereby acquiring half the refining capacity of Pittsburgh. The Standard expanded into Philadelphia by buying the largest refinery.In 1875 the Standard bought more pipelines and firms in the oil buying business and merged them all into the United Pipe Lines in 1877. Flagler and Rockefeller negotiated an agreement with the railroads: the Pennsylvania Railroad would carry 51% of Standard Oil shipments; the Erie 20%; the NY Central 20%; and the Baltimore & Ohio 9%; and obtained rebates from all the railroads for being an "evener" (that is, the Standard was charged with making certain that the railroads all got their "fair" share).In 1875-76, Johnson N. Camden (later a senator from West Virginia) came into the Standard secretly and moved to buy up all the West Virginia oil supply to squeeze the Pittsburgh independents. By 1876 Camden gained control of most of the West Virginia refineries.In 1877 Standard bought the Columbia Conduit Co. of PA and gained control of its pipelines and refineries. Columbia had tried to bypass the Pennsylvania Railroad by building a pipeline from the Oil Regions down to the new B&O railroad line near Pittsburgh. The Pennsylvania Railroad used armed guards to prevent them from laying a pipeline under its right-of-way north of Pittsburgh. The Standard gained control of most of the property of the Empire Transportation Company -- a subsidiary of the Pennsylvania Railroad that had its own fleet of tank cars, pipelines, lake steamers, and terminals in New York harbor. The Empire had briefly threatened the Standard, but Rockefeller built 600 new tank cars, cut prices, and cancelled all his shipments over the Pennsylvania Railroad. The railroad capitulated and sold Rockefeller the Empire's assets.In 1877-78, the Standard and the trunk lines agreed on a new split: Pennsylvania Railroad 47%; NY Central 21%; Erie 21%; B&O 11%. New York City was to get 63% of the total traffic and Baltimore and Philadelphia 37%. On refined oil, non-Standard companies shipping from Cleveland, Pittsburgh, and Titusville paid $1.44.5 per barrel while the Standard paid $.80!In 1878, the Standard forced the railroads to pay a drawback of 20-35 cents a barrel of crude oil shipped by any other party. In effect, this was a tax levied by the Standard upon its competitors. This combination of rebates and "taxes" (some authors dub this a "drawback" -- but that term is also used to refer to a specific type of rebate) is what forced the remaining independent refiners to capitulate to the Standard. Production increased in the Pennsylvania Oil Regions because of a large discovery in the Bradford area. Standard was forced to frantically build as many large holding tanks as possible to hold the market glut of oil.By 1879 the Standard Oil Company did about 90 percent of the refining in the United States, with almost 70 percent being exported overseas. The business had become so large and so complex that Rockefeller only dealt with the major problems and the larger outlines of his affairs. Rockefeller was only 40 years old.The Standard’s only serious competitor -- the Tidewater Pipe-Line Company (later the Tidewater Oil Company) -- emerged in 1879-83. It took Rockefeller by surprise and succeeded in building a pipeline from the Oil Regions east across northern Pennsylvania to Williamsport, where the oil was transferred to the Reading Railroad. The Reading then took the oil down to a refinery at Chester, Pennsylvania on the Delaware Bay. Rockefeller tried to gain control of Tidewater but failed, and his rival had about 10% of the market in 1888.The Standard Oil Trust: 1882-1892On January 2, 1882 the Standard Oil Trust was formed. Attorney Samuel Dodd came up with the idea of a trust. A Board of Trustees was set up and all the Standard properties were placed in its hands. Every stockholder received 20 Trust certificates for each share of Standard Oil stock, and all the profits of the component companies were sent to the nine trustees who determined the dividends. The nine trustees elected the directors and officers of all the component companies.The Trust was capitalized quite conservatively at $70,000,000 -- the true value was about $200,000,000 (no stock watering at the Standard!). The nine Trustees controlled 23,314 of the 35,000 shares with J.D. Rockefeller holding 9585 shares.Rockefeller, at age 43, was the leader of the Trust because he was "primus inter pares" (first among his peers), not a dictator. As such, he could not dictate policy even when he felt strongly that he was right. An example of this was the Lima Oil field in Ohio. The field had been discovered in the early 1880s. The problem was that the oil was "sour" -- that is, it had a very high sulfur content so it smelled like rotten eggs. Even worse, when it was refined into kerosene and used in lamps it produced too much soot, which coated the lamp chimneys. Rockefeller wanted to buy up as much of the oil as possible and worry about solving the sulfur problem later. The other directors were unenthusiastic about this policy and John Archbold began quietly selling some of his Trust shares in the Standard. By 1888 the Standard owned 40,000,000 barrels of the Lima oil, which were stored in huge tank farms at the fields. Rockefeller hired a great chemist, Herman Frasch, who, with the aid of talented Standard engineers, devised a process using copper oxides to remove the sulfur from the oil. The result was a bonanza for the Standard, vindicating Rockefeller’s judgement.By 1890 The Standard had set up an elaborate nationwide distribution system that reached nearly every American town. By 1904 80% of American towns were served by Standard Oil carts that delivered the various products directly to businesses and homes. Standard Oil’s campaign to dominate even the smallest of the retail markets is probably the single most important reason that company became so disliked by the American public. The Standard was aggressive in its marketing practices and tried to force all grocery and hardware stores that sold kerosene and lubricants to sell only Standard products. This policy -- though successful in the short run -- made the Standard widely unpopular and simply increased its vulnerability to political attack.On March 21, 1892 the Trust was formally dissolved. The Attorney General of Ohio had brought suit against the Trust in 1890 and it lost in 1892. Each trust certificate was to be exchanged for the proportioned share of stock in the 20 component companies of the Standard. The irony is that this had no practical effect on the Combination. The same men were still in charge, only now they were simply the majority shareholders of all the component companies.Rockefeller Exits: 1892-1897During 1891-92 all the evidence suggests that Rockefeller had a partial nervous breakdown from overwork. He lost all of his hair, including his eyebrows, and suffered from ill health in the early 1890s.During this period Rockefeller’s wealth had increased to such an extent that his major problem was what to do with it all. He solved this problem by hiring Frederick T. Gates in September of 1891 as a full-time manager of his fortune. By this time, Rockefeller was literally inundated with appeals from individuals and charities for funds. Gates not only removed this burden; he also oversaw all of Rockefeller’s investments, which were becoming huge in their own right. For example, by 1897 Rockefeller owned large holdings of the Missabe iron range in Minnesota, a railroad to carry the ore to Lake Superior, and a fleet of huge ore-carrying lake steamers. In 1901 Rockefeller sold his iron ore-related business to J.P. Morgan for $80,000,000 with an estimated profit of at least $50,000,000 -- a huge fortune in its own right, but it was just one of his investments. Morgan added the Rockefeller properties to the U.S. Steel Corporation.By 1896 Rockefeller stopped going to his office daily and in 1897 he retired, at the age of 58. He took part in some management activity until 1899 but none to speak of thereafter. John Archbold ran Standard Oil from the mid-1890s onward. Archbold disliked prominence and asked Rockefeller to remain as the nominal president of Standard. Not publicly announcing his retirement was a great mistake on Rockefeller’s part. Rockefeller had resisted the temptation to exploit the Standard’s near-monopoly position by raising prices "too" much. Although Rockefeller’s pricing policies did result in some "monopoly profits" for the Standard, they were fairly mild. Not so Archbold. He raised prices aggressively, and the dividends rolled in. The consequence was that Rockefeller got all the blame for the policies even though he had almost no further role in management.Retirement and PhilanthropyFrom the mid-1890s until his death in 1937, Rockefeller’s activities were philanthropic. Rockefeller’s fortune peaked in 1912 at almost $900,000,000, but by that time he had already given away hundreds of millions of dollars. His son, John D. Rockefeller Jr., in 1897 joined Gates in the full time management of the fortune.The University of Chicago -- which Rockefeller was largely responsible for creating -- alone received $75,000,000 by 1932.He set up, at the urging of his son, the Rockefeller Institute for Medical Research (now Rockefeller University) and his gifts to it totaled $50,000,000 by the 1930s.He founded the General Education Board in 1903 (later the Rockefeller Foundation). The General Education Board helped to establish high schools throughout the South by providing free professional advice on improving instruction and education. The effort was a cooperative one, and local money was used to build the high schools. In 1919 Rockefeller donated $50,000,000 to the Board to raise academic salaries, which were very low in the wake of WWI.The Rockefeller Foundation was officially established in 1913 and Rockefeller transferred $235,000,000 to it by 1929.In 1909 Rockefeller established the Rockefeller Sanitary Commission which was largely responsible for eradicating hookworm in the South by 1927.When Rockefeller died, on May 23, 1937, his estate totaled only $26,410,837. He had given most of his property to his philanthropies and to his son and other heirs.Rockefeller was a Schumpeteran entrepreneur. He clearly changed "the stream of the allocation of resources over time by introducing new departures into the flow of economic life" by creating the modern oil industry. His emphasis on size and efficiency and the use of modern chemistry resulted in the development of a wide variety of new products that made the lives of ordinary people better as a consequence. He made light cheap for untold millions and his great creation was ready, willing, and able to provide the cheap gasoline when it was needed, thus ushering in the age of the automobile in America.Last, but not least, he set the standard for philanthropy. Just the eradication of hookworm in the South alone would merit his place as one of the great humanitarians of the 20th Century. But his reputation was so sullied that he never received the credit that he was due for this great act on behalf of humankin