¹ Lloyd, Henry D., “The Political Economy of Seventy-Three Million Dollars,” The Atlantic Monthly, L (1882), 69–81Google Scholar; Springfield Republican, July 7, 1882, which editorialized upon Carl Schurz's Phi Beta Kappa oration at Harvard University in which he coined the phrase “the robber barons” in application to contemporary business leaders under the inspiration of Lloyd's article; Lloyd's editorials in The Chicago Tribune of the early eighties made repeated comparisons between the great railroad magnates and the nobility of the Medieval Rhine.

² Ideas in America (Cambridge: Harvard University Press, 1944), p. 145Google ScholarPubMed.

³ I-XX (New York: Charles Scribner's Sons, 1928-1936).

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⁶ In a circular memorandum sent in advance by Arthur H. Cole to the contributors to the program on entrepreneurial leadership at the annual meeting of the Economic History Association at Johns Hopkins University on September 14, 1946, the suggestion was made that each select “the typical entrepreneur” of his epoch and then analyze his career in reference to his personal life, relation to the community, and a number of categories relating to the administration and conduct of his business enterprises.

A cursory examination of the personalities and careers of the so-called “robber barons” revealed that there was no one figure who might be regarded as typical of the group. Instead of the study of an individual career, therefore, an analysis of a relatively large group of “robber barons” seemed called for if significant results were to be attained.

Taking eight of Mr. Cole's categories, others were added until a total of twenty-four were entered at the top of as many separate columns on a large chart, which made it possible to make entries opposite the name of each “robber baron” under each category so far as objective and reliable data on him could be gathered.

The categories adopted from Mr. Cole's suggestions were: risks borne; the rationalization aspect of operations; the group of advisers consulted; ancillary institutions leaned on; training or apprenticeship for administrative responsibilities; the age at which each enter-priser took control of an independent business unit; the incentives that led him to enter and continue in business; the incentives that led him to retire.

To these were added the following: the generation of entrepreneurship to which each belonged and his family-occupational origins; the type or types of entrepreneurs developed according to a modification of Sombart's classification as indicated in the text; type or types of business organizations employed; the degree and character of entrepreneurial innovation shown; the extent to which railroad rate favors were an important factor in business success; whether political corruption was an important method resorted to; whether monopoly was a significant feature of the individual's entrepreneurial method; was hostility to organized labor a significant aspect of entrepreneurship; did the “robber baron” rig the exchanges as an important aspect of his entrepreneurial activity; did he milk his own corporations for private profit in defiance of obvious fiduciary obligations; did he discriminate between favored and unfavored customers; did he charge exorbitantly for his goods and services when a monopoly position made this possible; was speculation in opportunities created by the individual's enterprise an important feature of his activities; did he speculate in the stock of his own company; did he control and manipulate the press i n order to further his business objectives; the territorial extent of the enterpriser's activities; whether he operated open and/or disguised subsidiaries.

When pressure of time cut short the analysis before complete data could be secured upon each of the forty-three men reported upon, the information relative to each was checked against available sources as totals were drawn for each category. The results, which are summarized in the second portion of this paper, are for some categories, therefore, necessarily incomplete. Enough data is presented, it is believed, to indicate with some exactness the character of entrepreneurial leadership among the “robber barons.” No attempt is made in the subsequent analysis to differentiate between the amoral and socially approved entrepreneurial methods practiced by the forty-three men. The extent and degree of entrepreneurial amoralities committed was subject at the time to sharp differences of opinion and is still the butt of controversy. It could legitimately be the subject of an independent investigation which might well have as its object the separation of strict “robber baron” practice from the entrepreneurial methods that made a more solid and enduring contribution to the technique of business leadership and management. For the present, the object is to survey in some detail, although tentatively so far as conclusions are concerned, the range of entrepreneurial methods of both types so far as it has been possible t o gather material upon them.

Some practices, such as railroad pooling, which were monopolistic, were illegal in common law and widely attacked as antisocial in character and effect down to 1900. How-o ever, it was generally recognized in business and public circles at the time that, if pooling on the railroads could be divorced from rate discriminations, stock watering, and attempts t o charge more than the traffic would bear, it would have beneficial effects in stabilizing railroad traffic, incomes, and the value of railroad securities. In the twentieth century, as the Interstate Commerce Commission gained in ability to eliminate antisocial rate and service policies, it looked with favor on several occasions upon the development of regional railroad transportation monopolies as productive of results beneficial to all parties. This view has been controverted, of course, in some quarters, among which the United States Department of Justice in 1946 might be listed.

⁷ Age of Enterprise, pp. 69-73, 75.

⁸ Ibid., pp. 79-81.

⁹ , Gras and , Larson, Casebook, pp. 362–63Google Scholar; Dictionary of American Biography, V, 450-51; Ibid., XIX, 169-73.

¹⁰ Pierce, Bessie L., History of Chicago (New York: Alfred A. Knopf, Inc., 1937), I, 84–86Google Scholar. Steamboat combinations existed in the years 1833-1835, 1839-1849.

¹¹ Report of the Special Committee on Railroads, appointed under a Resolution of the Assembly to Investigate Alleged Abuses in the Management of Railroads chartered by the State of New York (New York, 1879), pp. 15–17Google Scholar.

¹² Ripley, William Z., ed., Trusts, Pools and Corporations (Boston: Ginn and Company, 1905), pp. 1–21Google Scholar; Brinkerhoff, General Roeliff, Recollections of a Lifetime (Cincinnati: Robert Clarke Company, 1900), pp. 198–203Google Scholar.

¹³ Dorfman, Joseph, The Economic Mind in American Civilization (New York: Viking Press, Inc., 1946), 2 vols., passim;Google ScholarJohn R. Commons and Associates, A Documentary History of American Industrial Society (Cleveland: The A. H. Clark Company, 1910), IX, 20Google Scholar.

¹⁴ Stovall, Floyd, American Idealism (Norman: University of Oklahoma Press, 1943), pp. 97–100Google Scholar.

¹⁵ Ghent, William H., Our Benevolent Feudalism (New York: The Macmillan Company, 1902), p. 29Google Scholar, quoted by Hofstadter, Richard, Social Darwinism in American Thought, 1860-1915 (Philadelphia: University of Pennsylvania Press, 1944), p. 31. Italics mineGoogle Scholar.

¹⁶ Autobiography of Andrew Carnegie (Boston: Houghton Mifflin Company, 1920), p. 339Google Scholar, also quoted by , Hofstadter, Social Darwinism, pp. 31–32Google Scholar.

¹⁷ New York Evening Post, 1864-1872, particularly the editorials and d-ta on the American Free-Trade League, but also the editorials on the modern corporation.

¹⁸ Financial page and financial editorials, The Chicago Tribune, November 1874-1885.

¹⁹ Cf. , Nussbaum, History of Economic Institutions, p. 133Google Scholar.

²⁰ , Sombart, “Capitalism,” Encyclopedia of the Social Sciences, III, 203Google Scholar.

²¹ Phillip D. Armour, August Belmont, Joseph E. Brown, Andrew Carnegie, Alexander J. Cassatt, Jay Cooke, Charles Crocker, Daniel Drew, James B. Duke, Marshall Field, James Fisk, Jr., Henry M. Flagler, Henry Clay Frick, Elbert H. Gary, John W. Gates, Jay Gould, Franklin B. Gowen, Edward H. Harriman, James J. Hill, Mark Hopkins, Collis P. Huntington, Benjamin P. Hutchinson, John H. Inman, James F. Joy, Cyrus McCormick, William H. Moore, John Pierpont Morgan, Oliver H. Payne, Charles A. Pillsbury, George M. Pullman, John D. Rockefeller, William Rockefeller, Henry H. Rogers, Russell Sage, Jacob Schiff, Charles M. Schwab, Leland Stanford, James Stillman, Gustavus Swift, Cornelius Vanderbilt, William H. Vanderbilt, Henry Villard, John Wanamaker.

²² Encyclopaedia Britannica (14th ed., 1928), VIII, 629.

²³ Of the nine “robber barons” who belonged to the second generation, three were sons of merchants, two of bankers, and one each of a farmer-contractor, a circus operator, a railroad magnate, and a farmer-manufacturer.

Three of the forty-three belonged to the third generation, deriving one each from two generations of bankers (Judge William H. Moore), two generations of brickmakers (John Wanamaker), and of merchants (Oliver H. Payne).

The origins of two of the forty-three remain obscure, although one of them, Mark Hopkins, probably belonged to the first generation.

²⁴ Belmont, Carnegie, Hill, Villard, Schiff.

²⁵ Dictionary of American Biography, VII, 188-90; , Tarbell, Gary, pp. 75–76Google Scholar.

²⁶ These were as follows: profits derived from looting their own corporations, war contracts, railroad construction, manufacturing, transportation, speculation, trade or merchandising, promotion, underwriting, commercial banking; banking, manufacturing, railroading asfieldsfor business careers; empire building; corporate power or imperialism; self-vindication; business as a means to a larger cultural life; desire to found a family; desire to continue a family business tradition.

The subdivisions of the profit motive, mainspring of the private enterprise system, will no doubt seem overrefined to some readers. They were identified, in part, by accepting the findings of competent biographers and students of American business for the period 1860-1903, in part by applying the pragmatic test of judging a man's incentives in the profit area by discovering the specific fields of business activity in which he invested his funds, took risks, and devoted a good portion of his talents. For example, no difficulty will be found in distinguishing between the lure of speculative profits that drew Phillip Armour into the Chicago Board of Trade, the expectation of banking profits that induced him to organize the Continental National Bank of Chicago, and the attraction of manufacturing profits that kept him engaged in meat packing for an entire generation. Thus, Phillip Armour may fairly be said to have been motivated by three readily identifiable varieties of the profit motive.

The same sources, namely, the findings of reputable scholars and the results of the pragmatic test, were drawn upon in determining whether the entrepreneurs under analysis were motivated by any of the other incentives listed. A more detailed search of the published and unpublished statements made by these enterprisers concerning the:'- business careers would, no doubt, somewhat revise the statistical totals.

²⁷ , Sombart, “Capitalism,” Encyclopedia of the Social Sciences, III, 197Google Scholar.

²⁸ Hutchinson, McCormick, passim.

²⁹ Dictionary of American Biography, XIX, 175-76; , Lane, Vanderbilt, pp. 203, 205, 211, 215 ffGoogle Scholar.

³⁰ , Nevins, Rockefeller, I, 288Google Scholar.

³¹ The three supporters were William Rockefeller, Oliver H. Payne, and Henry H. Rogers.

³² , Sombart, “Capitalism,” Encyclopedia of the Social Sciences, III, 201.Google ScholarUsher, Abbott Fayson, A History of Mechanical Inventions (New York: McGraw-Hill, 1929), p. II, for a statement of basic character of invention as including the establishment of “relationships that did not previously exist,” the “completion of an incomplete pattern of behavior or…. the improvement of a pattern that was unsatisfactory and inadequate.” As the “constructive assimilation of preexisting elements into new syntheses, new patterns,” managerial innovations of the type described by Sombart lie clearly within Usher's conception of the inventive processGoogle Scholar.

³³ At least he patented a machine for the separation of naphtha from crude oil in 1871.—Dictionary of American Biography, XVI, 95.

³⁴ Further study of the development of marketing practices by the group reveals that Standard Oil and two leading meat packers set up branch offices to service retailers directly; Standard Oil and Cooke pioneered in selling direct to consumers; McCormick developed the system of manufacturer's retail agents now in vogue in the automobile industry; eight, Armour, Swift, Carnegie, and the Standard Oil men, promoted new uses of basic products and their by-products; Field, Wanamaker, and the Standard Oil men developed new retail merchandising techniques; Cooke, Pillsbury, Wanamaker, and Duke were especially notable for their development of advertising; six, led by Pullman, Gould's telegraph lines, and the Huntington group, made outstanding use of exclusive service contracts in order to build up their concerns by monopolizing the market, although perhaps Norvin Green was the pioneer.innovato r here. The Standard Oil men were outstanding in the employment of disguised subsidiaries and “fighting brands” as well as in local price cutting in their successful attempt to maintain their monopoly. Five, Armour, McCormick, Pillsbury, Swift, and Duke, were notable for developing the public demand for new products.

³⁵ Cooke, in developing the techniques of mass distribution of securities, Stillman as the first to bring a national bank into the underwriting and promotional, or investment banking, field.

³⁶ Drew, Gould, Morgan, Gates, and the Huntington group.

³⁷ Hutchinson, Drew, Gould, Rogers, Sage, C. Vanderbilt.

³⁸ Drew, Gates, Hill (defensively, only, perhaps?), Gould, Inman, Moore, Rogers, Sage, C. Vanderbilt, Fisk. Probably W. H. Vanderbilt, W. Rockefeller, and Schwab should be included.

³⁹ Armour, Belmont, Carnegie, Cooke, Field, Hopkins, Hutchinson, Morgan.

⁴⁰ Washington Gladden to Henry D. Lloyd, September 11, 1895, Henry D. Lloyd Papers (State Historical Society of Wisconsin, Madison); Roger Sherman to Henry D. Lloyd, December 30, 1895 (courtesy of the late William Bross Lloyd, Winnetka, Illinois); Chicago Sunday American, January 14,1906.

⁴¹ Hudson, James F., The Railways and the Republic (New York: Harper and Brothers, 1886), p. 84Google Scholar; , Tarbell, Standard Oil, I, 227Google Scholar. Cassatt was a powerful factor in support of the Elkins Act and the Hepburn Act.

⁴² Dictionary of American Biography, III, 564-67,

⁴³ Faulkner, Harold U., The Quest for Social Justice, 1898-1914 (New York: The Macmillan Company, 1931), pp. 44-51. 117–10; Ripley, ed., Trusts, chaps, vi, xivGoogle Scholar.

⁴⁴ Clews, Henry, Twenty-Eight Years in Watt Street (New York: Irving Publishing Company, 1887), p. 626Google Scholar.

⁴⁵ Ibid., p. 625, for a sarcastic summary of Gould's methods of railroad manipulation; , Riegel, Western Railroads, pp. 160–78Google Scholar, for a considered condemnation of the methods whereby Gould exploited the southwestern railroads; Adams, Charles' F. Jr, and Adams, Henry, Chapters of Erie, and Other Essays (Boston: Osgood, 1871), pp. 1–191Google Scholar.

⁴⁶ Destler, Chester McArthur, “The Standard Oil, Child of the Erie Ring, 1868-1872: Six Contracts and a Letter,” The Mississippi Valkv Historical Review, XXXIII (1946), 89–114CrossRefGoogle Scholar.

⁴⁷ Washington, D. C: United States Government Printing Office.

⁴⁸ , Peckham, Report on Petroleum, pp. 93, 162-65, 168-70, 173Google Scholar; Giddens, Paul H., The Birth of the Oil Industry (New York: The Macmillan Company, 1938), pp. 92-93, 143-47, 151–32Google Scholar; , Nevins, Rockefeller, II, 7–8Google Scholar.

⁴⁹ H. H. Goldin, “Governmental Policy and the Domestic Telegraph Industry,” a paper read before the Economic History Association, September 14,1946, to appear in the JOURNAL, May 1947.

⁵⁰ TarbelI, Standard Oil, II, chap, xvii; Nevins, Rockefeller, passim.

⁵¹ Tarbell, Standard Oil, II. chap, xvi; Jenks, Jeremiah W., “Industrial Combinations and Prices,” in Industrial Commission, Preliminary Report on Trusts and Industrial Combinations (Washington, 1900), pp. 48–50Google Scholar, also pp. 125 ff. for digest of evidence.

⁵² Daggett, Stuart, Chapters on the History of the Southern Pacific (New York: Ronald Press, 1922)Google Scholar, passim, but particularly pp. 18, 71-82, 104-53, 181-98, 199-222, 237-56, 226, 234, 244-46, 454-56; The Chicago Tribune, December 27-28, 1883, for “Huntington's Letters,” and the remarkable revelations contained in his correspondence with Colton.