Case Study: Were Nineteenth-Century Entrepreneurs Robber Barons

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Were Nineteenth-Century Entrepreneurs Robber Barons? Between 1860 and 1914 the United States was transformed from a country of farms, small towns, and modest manufacturing concerns to a modern nation dominated by large cities and factories. During those years, the population tripled, and the nation experienced astounding urban growth. A new proletariat emerged to provide the necessary labor for the country’s developing factory system. Between the Civil War and World War I, the value of manufactured goods in the United States increased twelve fold, and the capital invested in industrial pursuits multiplied 22 times. In addition, the application of new machinery and scientific methods to agriculture produced abundant yields of wheat, corn, and…show more content…
With this object, the branches of the Selling and Accounting Department of those packing companies which have charge of the purchasing, killing, and dressing and selling of fresh meat, are organized in the manner most extensive and thorough manner. The Central Office is in constant telegraphic correspondence with the distributing houses, with a view to adjusting the supply of meat and the price as nearly as possible to the demand. As this statement suggests, the other meat packers followed Swift’s example. To compete effectively, Armour, Morris, Cudahy, and Schwarzschild & Sulzberger had to build up similar integrated organizations. Those that did not follow the Swift model were destined to remain small local companies. Thus by the middle of the 1890s, the meat-packing industry, with the rapid growth of these great vertically integrated firms had become oligopolistic (the “Big Five” had the major share of the market) and bureaucratic; each of the five had its many departments and several levels of management. This story has parallels in other industries processing agricultural products. In tobacco, James B. Duke was the first to appreciate the growing market for the cigarette, a new product which was sold almost wholly in the cities. However, after he had applied machinery to the manufacture of cigarettes, production soon outran supply. Duke then concentrated on expanding the market through extensive advertising and the creation of a national and then world-wide selling organization. In 1884, he left Durham, North Carolina, for New York City, where he set up factories, sales, and administrative offices. New York was closer to his major urban markets, and was the more logical place to manage an international advertising campaign than Durham. While he was building his marketing department, Duke was also creating the network of warehouses and
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