The Myth of the Robber Barons

by Burt Folsom

  29Mellon, Taxation, 39, 55. 30Koskoff, The Mellons, 238-40.

  31For a helpful discussion of the tax bills in Congress, see Rader, "Federal Taxation in the 1920s," 415-35.

  32Mellon, Taxation, 221. For Coolidge's support of the Mellon Plan, see New York Times, January 5, 1924, p. 1; January 9, 1924, p. 1; and January 12, 1924, p. 1.

  33O'Connor, Mellon's Millions, 229-30; Koskoff, The Mellons, 230.

  34Lillian Rogers Parks, My Thirty Years Backstairs at the White House (New York: Fleet Publishing Co., 1961), 184. Helpful biographies of Coolidge are Donald R. McCoy, Calvin Coolidge: The Quiet President (New York: Macmillan, 1967); William Allen White, A Puritan in Babylon: The Story of Calvin Coolidge (New York: Macmillan, 1938); and Claude M. Fuess, Calvin Coolidge: The Man from Vermont (Hamden, Conn.: Archon Books, 1965).

  35Parks, Backstairs at the White House,183-84; Mellon, Judge Mellon's Sons, 395; Irwin H. Hoover, Forty-Two Years in the White House(Boston: Houghton Mifflin Co., 1934), 132.

  36Parks, Backstairs at the White House, 178-81; Koskoff, The Mellons, 183. 37Blakey and Blakey, Federal Income Tax, 251-301.

  38Thomas B. Silver, Coolidge and the Historians (Durham, N. C.: Carolina Academic Press, 1982), 111; O'Connor, Mellon's Millions, 127; Murray, "Andrew Mellon," 127-29. Hiram Johnson weighed in with this criticism of the Mellon Plan: "The concern of this tax scheme is not for the man of small income, but for the man of large income, who can best bear the burden." New York Times, January 18, 1924, p. 2.

  39Rader, "Federal Taxation in the 1920s", 433.

  40Silver, Coolidge and the Historians, 112-14; Barnard, Couzens, 165.

  41 Silver, Coolidge and the Historians, 112-21. Silver's study is essential reading for historians who are trying to understand the 1920s. Mellon denied he was using refunds as a political weapon; he called the accusations "simply preposterous." See O'Connor, Mellon's Millions, 159.

  42Mellon's audit of Progressive Senator James Couzens, of Michigan, was a political error. Couzens earned $30 million working for Henry Ford; Mellon challenged the amount of capital gains tax Couzens paid on his stock. The Board of Tax Appeals not only sided with Couzens; it said that the government owed him $900,000 for overpayment. Mellon probably felt foolish and stayed out of refund cases whenever possible. Couzens, meanwhile, won reelection to the Senate, possibly using his $900,000 refund for expenses, and kept up his attacks on Mellon. See Barnard, Couzens, 130, 160-67.

  43Love, Andrew Mellon, 318; O'Connor, Mellon's Millions, 237; Koskoff, The Mellons, 341.

  44From 1929 to 1935, federal revenue from personal income taxes declined from $1,095 million to $527 million, while federal revenue from excise taxes during these years increased from $539 million to $1,363 million. Of course, hard times, as well as higher taxes, contributed to the fall in revenue from personal income taxes. See Bureau of the Census, Historical Statistics, 1107; Koskoff, The Mellons; Mark Leff, The Limits of Symbolic Reform: The New Deal and Taxation, 1933-1939 (London: Cambridge University Press, 1984); Thomas M. Renaghan, "Distributional Effects of Federal Tax Policy 1929-1939," Explorations in Economic History 21 (1984), 40-63; Walter K. Lambert, "New Deal Revenue Acts: The Politics of Taxation" (Ph. D. dissertation, University of Texas, 1970), 1-66.

  45John M. Blum, William S. McFeely, Edmund Morgan, Arthur M. Schlesinger, Jr., Kenneth Stampp, C. Vann Woodward, The National Experience, 8th ed. (New York: Harcourt, Brace, and Jovanovich, 1993), 640.

  46John A. Garraty, The American Nation, 7th ed. (New York: Harper Collins, 1991), 744.

  47Thomas A.Baily, David M. Kennedy, and Lizabeth Cohen The American Pageant.llth ed. (Boston: Houghton-Mifflin, 1998), 768.

  48Irwin Unger, These United States: The Questions of Our Past, concise edition (Upper Saddle River, N.J.: Prentice-Hall, 1999), 591,

  49The issue of changing the tax structure was widely debated during the 1996 presidential election. See, for example, "An 'Untested' Flat Tax?" Wall Street Journal (February 9,1996), A12; and Daniel ]. Mitchell, "Making Sense of Competing Tax Reform Plans," The Heritage Foundation, F. Y. I. (February 22, 1996). For a critical analysis of the income tax, see Stephen Moore, "Ax the Tax," National Review (April 17,1995), 38-42.

  Notes to Chapter Seven

  Conclusion: Entrepreneurs vs. The Historians

  1The term "robber barons" was in use in the early 1900s, but was popularized by Matthew Josephson, The Robber Barons: The Great American Capitalists, 1861-1901 (New York: Harcourt, Brace, and World, 1934).

  2John M. Blum, et al., The National Experience, 8th ed. (New York: Harcourt, Brace, and Jovanovich, 1993), 463.

  3Thomas A.Bailey, David M. Kennedy, and Lizabeth Cohen The American Pageant, 11th ed. (Boston: Houghton-Mifflin, 1998), 540-41.

  4Publishers are sometimes reluctant to disclose sales figures, but discussions with many publishers' representatives show clearly that these three textbooks have been among the best sellers from the 1960s through the 1990s. Bailey's former publisher, D. C. Heath, claimed that The American Pageant has sold over two million copies. Since the 1970s, David M. Kennedy, also of Stanford University, and Lizabeth Cohen of Harvard University have been added as co-authors.

  5p. 471. Woodward wrote the section entitled "The Ordeal of Industrialization."

  6John Garraty, The American Nation, 7th ed. (New York: Harper Collins, 1991), 519-20.

  7The only reference to the Russo-American oil war that I found was in Robert L. Kelley, The Shaping of the American Past, 2nd ed. (Englewood Cliffs, N. J.: Prentice-Hall, 1978), 404.

  8For example, Lane, Vanderbilt; Martin, Hill;Hessen, Steel Titan.

  9Bailey, Kennedy, and Cohen, The American Pageant, 536-54. See also the tenth edition of the Bailey text, especially pp. 535-51.

  10Bailey, Kennedy, and Cohen, The American Pageant, 551.

  11For good surveys of the organizational view, see Louis Galambos, "The Emerging Organizational Synthesis in Modern American History," Business History Review, 44 (Autumn 1970), 279-90; and Alfred D. Chandler, Jr., "Business History as Institutional History," in George R. Taylor and Lucius F. Ellsworth, eds. Approaches to American Economic History (Char-lottesville, Va.: University Press of Virginia, 1971). For books that use the organizational approach, see Alfred D. Chandler, Jr., ed., The Railroads: The Nation's First Big Business (New York: Harcourt, Brace, and World, 1965). See also Chandler's Strategy and Structure (Cambridge, Mass.: MIT Press, 1962), and The Visible Hand: The Managerial Revolution in American Business (Cambridge, Mass.: Belknap Press, 1977). A good book on the impact of corporate organization on American society is Jerry Israel, ed., Building the Organizational Society (New York: Free Press, 1972), especially the essay by Samuel P. Hays, 'The New Organizational Society," 1-15.

  12Thomas, "The Automobile Industry and Its Tycoon," 141.

  I3lbid., 142.

  14Livesay, Carnegie; Hessen, Schwab.

  15Stephan Thernstrom, Poverty and Progress: Social Mobility in a Nineteenth Century City (Cambridge, Mass.: Harvard University Press, 1964); William Miller, "American Historians and the Business Elite," Journal of Economic History 9 (November 1949), 184-208; Edward Pessen, "The Egalitarian Myth and the American Social Reality: Wealth, Mobility and Equality in the 'Era of the Common Man'," American Historical Review 76 (October 1971), 989-1034. See also Frances W. Gregory and Irene D. Neu, "The American Industrial Elite in the 1870's," in William Miller, ed., Men in Business (Cambridge, Mass.: Harvard University Press, 1952), 193-211.

  16Michael P. Weber, Social Change in an Industrial Town: Patterns of Progress in Warren, Pennsylvania, from Civil War to World War I (University Park, Pa.: Pennsylvania State University Press, 1976).

  17Herbert Gutman, "The Reality of the Rags-to-Riches 'Myth': The Case of Paterson, New Jersey, Locomotive, Iron, and Machinery Manufacturers, 1830-1880," in Stephen Thernstrom and Richard Sennett, eds., Nineteenth Century Cities: Essays in the New Urban History (New Haven, Conn.: Yale University Press, 1969), 98-124; and Bernard Saracheck, "American Entrepreneurs
and the Horatio Alger Myth," Journal of Economic History 38 (June 1978), 439-56.

  18Ralph Andreano, "A Note on the Horatio Alger Legend: Statistical Studies of the Nineteenth Century American Business Elite," in Louis P. Cain and Paul J. Uselding, eds., Business Enterprise and Economic Change (Kent, Ohio: Kent State University Press, 1973), 227-46.

  19Pessen, Riches, Class, and Power Before the Civil War, 303. Although I disagree with Professor Pessen's conclusions, I have learned much from reading his books and articles.

  20Baltzell, Philadelphia Gentlemen; Lundberg, The Rich and the Super-Rich; and Ingham, The Iron Barons.

  21See LeeBenson, "Philadelphia Elites and Economic Development: Quasi-Public Innovation during the First American Organizational Revolution," Working Papers of the Eleutherian Mills-Hagley Foundation (1978); Joseph F. Rishel, The Founding Families of Pittsburgh: the Evolution of a Regional Elite, 1760-1810 (Pittsburgh: University of Pittsburgh Press, 1990); Frederic C. Jaher, The Urban Establishment: Upper Strata in Boston, New York, Charleston,Chicago, and Los Angeles (Urbana, fll.: University of Illinois Press, 1982); and Stanley Lebergott, Wealth and Want (Princeton, N.J.: Princeton University Press, 1975). There are a variety of newer studies that discuss the issue of the continuity of leadership. For example, see Edward J. Davies II, "Class and Power in the Anthracite Region: The Control of Political Leadership in Wilkes-Barre, Pennsylvania, 1845-1885," Journal of Urban History 9 (May 1983), 291-334.

  22See Pessen, Riches, Class, and Power Before the Civil War, and Pessen, The Egalitarian Myth," 1020-27; and Gabriel Kolko, Wealth and Power in America (New York: Frederick A. Praeger, 1962).

  23For another essay that pursues this reasoning, see Klein, "The Robber Barons," 13-22.

  24Holbrook, Hill,201.

  25Collier and Horowitz, The Rockefellers.

  INDEX

  Adams, Charles Francis, Jr., 21. Alcoa, 105, 116. Albright, Joseph J., 54. Alger, Horatio, 25.

  American Iron and Steel Institute, 77. American Nation, The, 119, 122, 123. American Pageant, The, 119, 122. American Railroad Journal, 41. American Sugar Refining Company, 36. Ames, Oakes, 21. Amory, Cleveland, 114. Andrews, Samuel, 84, 85, 86. Archbold, John, 88, 92, 93. Associated Oil, 97.

  Bailey, Thomas, 119, 122, 124.

  Bank of the United States, 41.

  Benjamin, Senator Judah P., 10.

  Bessemer Steel Association, 66.

  Bethlehem Steel, 68-74, 75, 76-77, 79, 132.

  Biddle, Nicholas, 41.

  "Big Four" the, 22-23.

  Blair, Austin, 59.

  Blair, James, 43, 51, 52, 59.

  Blair, John, 43, 51.

  Blakey, Gladys, 120.

  Blakey, Roy, 120.

  Blum, John, 118, 122.

  Board of Tax Appeals, 117.

  Boies, Henry, 55.

  Boies Steel Wheel Company, 55.

  Borah, William, 114, 117.

  Bosak, Michael, 60.

  Bureau of Railroad Accounts, 21.

  Burton, William, 90, 91.

  Camden, Johnson N., 94.

  Campbell, Rep. James H., 31.

  Canadian Pacific, 29.

  Carnegie, Andrew, 30, 64-68, 74, 77, 78-79, 95, 126-27, 133

  Carnegie Steel, 64, 66, 67, 74, 75, 95, 126.

  Casey, Andrew, 60.

  Central Pacific, 17-18, 19-20, 22-23, 31-32.

  Chase National Bank, 71.

  Chicago, Burlington, & Quincy (railroad), 36.

  Chinese Eastern Railway, 111.

  Civil War, 11, 14.

  Clark, Maurice, 84.

  Clermont, 2, 5.

  Cleveland, Grover, 75.

  Collins, Edward K., 6-11, 14, 15, 122, 132.

  Contract and Finance Company, 22-23.

  Coolidge, Calvin, 110, 114-15, 117.

  Couzens, James, 106, 159n.

  Credit Mobilier, 20-21, 22, 31, 32.

  Crocker, Charles, 22.

  Cummins, Senator Albert, 77.

  Cunard, Samuel, 5-6, 9, 10-11, 15, 132.

  Daniels, Josephus, 76-77.

  Daugherty, Harry, 111.

  Delaware and Cobb's Gap (railroad), 45.

  Delaware, Lackawanna, and Western Railroad, 46; see Lackawanna

  Railroad

  Dickson, George L,., 50, 58. Dickson Manufacturing Company, 58. Dickson, Thomas, 53, 58. Dickson, Walter, 58. Dillon, Sidney, 21, 66. Dodge, Grenville, 18, 20. Drake, Edwin L., 84, 85. Drew, Daniel, 4. Durant, Thomas, 18, 20-21.

  E. C. Knight Company, 36, 37. Edison, Thomas, 34, 56. Emergency Fleet Corporation, 74. Ericsson, John, 11.

  Federal Trade Commission, 76. Fillmore, Millard, 7. Flagler, Henry, 86. Fletcher, F. F., 74. Fogel, Robert, 30. Ford, Henry, 105, 109-10. Fordney-McCumber Tariff, 114. Frasch, Herman, 90.

  Frick, Henry Clay, 66. Fulton, Robert, 2-3, 15.

  Garner, John Nance, 116.

  Garraty, John, 17, 119, 122, 123, 124.

  Gary, Elbert, 67, 71, 132.

  General Motors, 39.

  Gibbons, Thomas, 2, 15.

  Gibbons v. Ogden, 2-3.

  Gould, Jay, 22, 23, 31, 34, 35, 127.

  Grace, Eugene, 70, 71, 79.

  Grant, Sanford, 43, 51.

  Grant, President Ulysses S., 19.

  Great Northern Railroad, 28, 30, 32, 33, 35, 36, 124, 132, 134.

  Great Northern Steamship Company, 33.

  Grey, Edward, 71.

  Grodinsky, Julius, 24.

  Gulf Oil, 97, 105, 116.

  Gutman, Herbert, 129.

  Gwartney, James, 120.

  Gwin, Senator William M., 32, 34.

  Harding, Warren G., 105, 110-11, 118.

  Harlan, John M., 37-39.

  Harper's Weekly, 4.

  Harriman, Edward H., 36-39.

  Henry, William, 42-43, 47, 50.

  Hepburn Act, 35.

  Hessen, Robert, 70.

  Highways of Progress, 39.

  Hill, James J., 17-39, 93, 124-25, 107, 132-34.

  Hill, Louis, 134.

  Hamilton, Alexander, 104.

  Holmes, Oliver Wendell, 37.

  Hoover, Herbert, 117.

  Hopkins, Mark, 22.

  Hudson River Steamboat Association, 3-4.

  Hull, Cordell, 79.

  Hunter, Senator Robert M. T., 10.

  Huntington, Collis, 22.

  IBM, 39.

  income tax, 106-08, 111-14, 116-17, 120.

  Industrial Workers of the World, 74.

  Inman, William, 10-11, 15.

  Interstate Commerce Commission, 22, 32, 35, 39, 96, 124-25, 132.

  Iron Manufacturer's Guide, 43.

  Jaher, Frederic, 131.

  Jermyn, Edmund B., 59.

  Jermyn, John, 54.

  Jesus, 97.

  Johnson, Andrew, 19.

  Johnson, John G., 37.

  Johnston, Archibald, 70.

  Jones, William "Captain Bill", 64-65.

  Kirby, Fred M., 55-56. Kolko, Gabriel, 131. Kennedy, David, 119.

  Lackawanna Iron and Coal Company, 46,48, 51,58, 66; see Lackawanna

  Steel.

  Lackawanna Railroad, 46, 51. Lackawanna Steel, 73. LaFollette, Robert M., 106, 112, 115, 118. LaFollette, Robert M., Jr., 112. Landis, K. M., 96. Lane, Franklin K., 73. Laski, Harold, 51. Lebergott, Stanley, 131. Lehigh University, 133. Lehigh Valley Railroad, 69, 73. Libby, William H., 92. Liberty bonds, 107. Liggett's Gap (railroad), 45, 46. Lincoln, Abraham, 85. Llyod, Henry Demarest, 87.

  McFeely, William S., 118.

  McNary-Haugen bill, 113.

  Marshall, Chief Justice John, 2.

  McClure'smagazine, 187.

  Meeker, Royal, 10.

  Mellon, Ailsa, 115.

  Mellon, Andrew, 102-20.

  Mellon, Paul, 115.

  Mellon, Richard B., 104.

  Mellon, Thomas, 104.

  Mellon Plan, 111-14, 116.

  Merrimacthe, 8, 11, 12.

  Metropolitan Life Insurance Company, 73.

  Midvale Steel, 75.


  Monitor the, 8, 11.

  Moosic Powder Company, 55.

  Morgan, Edmund, 118, 122. Morgan, J. P., 36, 67, 95.

  National Experience, The, 118, 122.

  National Gallery of Art, 118.

  Nevins, Allan, 95.

  New Deal, 117.

  New York and Erie Railroad, 44-45, 48.

  New York Central Railroad, 14, 87, 123.

  Norris, George, 106, 115-16.

  Norris, Frank, 22.

  Northern Pacific, 22-26, 28, 29, 31, 32, 33, 34, 36, 132.

  Northern Securities Company, 36-37, 125.

  Octopus, The, 22. Oxford Iron Works, 42.

  Pacific Mail Steamship Company, 12-14, 22, 132.

  Pacific Railroad Act, 18.

  Pacific Railway Bill, 30.

  Packer, Asa, 69.

  Panic of 1857, 51.

  Panic of 1893, 36.

  Payne, Oliver, 88.

  Pennsylvania Railroad, 88.

  "People's Line" the, 3.

  Pessen, Edward, 128, 130-31.

  Platt, Joseph C, 43, 51, 52.

  Plum Creek massacre, 19.

  Pratt, Charles, 89.

  Rader, Benjamin, 120.

  Railway World, 96.

  Reading Railroad, 73.

  Richmond, William, 50.

  Robber barons, 1-2, 125.

  Rockefeller Foundation, 99.

  Rockefeller, John D., 82-100, 105, 122-24, 126, 131, 132, 133, 134.

  Rockefeller, John D., Jr., 134.

  Rockefeller, Laura Spelman, 84, 94.

  Rockefeller, William, 86, 109.

  Rogers, H. H., 88.

  Roosevelt, Franklin D., 79, 117, 121.

  Rose, Willie Lee, 122.

  Santa Fe (railroad), 29, 31. Santayana, George, 120. Saracheck, Bernard, 109.

  Schlesinger, Arthur, Jr., 118, 119, 122.

  Schwab, Charles, 63-80, 93, 94, 124, 126, 127, 131-34.

  Schwab, Rana, 68.

  Scott, Tom, 88.

  Scranton, Arthur, 58.

  Scranton, Charles, 50.

  Scranton Electric Construction Company, 56.

  Scranton, George, 42-43, 45-46, 47, 51-52, 58, 132.

  Scranton, James, 58.

  Scranton, Joseph, 42-43, 51, 58, 66, 134.