How did robber barons create monopolies in the United States in the late 1800s?

During the Gilded Age, a number of businessmen made large sums of money by putting themselves in control of whole industries, such as railroading, banking, oil, and others. The practice of being the only person who controls a particular industry is known as having a monopoly over that industry. Four men in particular made names - and, subsequently, much money - for themselves during this time: JP Morgan, Cornelius Vanderbilt, John D. Rockefeller, and Andrew Carnegie.

JP Morgan was born John Pierpont Morgan on April 17, 1837. He dominated the banking and finance industry during the Gilded Age. He had a monopoly over the steel industry after he purchased United States Steel Corporation and merged it with other steel companies. Due to the fact that the country was moving so quickly toward industrialization, there was a tremendous need for steel, which Morgan had in large supply. U.S. Steel wound up being extremely successful. Morgan would go on to become involved in other successful companies, such as General Electric and AT&T. Because of his wealth and his influence within the government, he managed to help the U.S. during periods of economic crises, such as the Panic of 1907.

Cornelius Vanderbilt was an American businessman who built his wealth through the railroading and shipping industries. Born in 1794, Vanderbilt was an early investor in the first railroads right as they were being built; because he got into the industry at the right time, he was able to accumulate an incredible amount of wealth.

In the late 1840s, when people flocked to the West with the promise of finding gold, Vanderbilt took advantage of Americans’ needs to head toward California. He set up the Accessory Transit Company, which many hopefuls used to travel to the West Coast during the Gold Rush.

John D. Rockefeller, another name you may recognize, was an American businessman who founded the Standard Oil Company, the first great U.S. trust. As part of his company, Rockefeller was directly in charge of producing, refining, and transporting the oil around the country. At this time, oil was an important commodity in the United States, as it was first used as a light source and later as a way to power automobiles. In his later years, he became a philanthropist, meaning that he gave great sums of his money to charities and to help fund research in areas such as medicine and education.

Finally, Andrew Carnegie, who was born in Scotland, came to the United States and eventually founded Carnegie Steel. In the late 1800s, the emphasis on railroad building and other industrial pursuits would drive up the need for steel and other materials, which Carnegie was ready to produce and ship out across the country.

It was because he was in charge of the process from the first step to the last that he became so wealthy. JP Morgan would later buy Carnegie Steel and transform it into his U.S. Steel Corporation. Like Rockefeller, Carnegie also became a philanthropist later on in life.

During the Gilded Age—the decades between the end of the Civil War in 1865 and the turn of the century—the explosive growth of factories, steel mills and railroads driven by the Second Industrial Revolution made a small, elite class of businessmen incredibly rich. By 1890, the wealthiest 1 percent of American families controlled 51 percent of the nation’s real and personal property. 

Among the richest of the rich were the so-called robber barons, whose extreme avarice drove them to use unethical business practices and exploit workers to create lucrative monopolies, and in the process amass fortunes that would amount to billions of dollars in today’s money.

Term 'Conspicuous Consumption' Is Coined

The late 1800s super rich had an existence so opulent that it may have been almost unimaginable to the masses of ordinary Americans who labored in the factories and mills they owned. To describe their lifestyle, economist and sociologist Thorstein Veblen coined the term “conspicuous consumption.” 

For the robber barons and their families, Veblen wrote, “the apparatus of living has grown so elaborate and cumbrous, in the way of dwellings, furniture, bric-a-brac, wardrobe and meals, that the consumers of these things cannot make way with them in the required manner without help” from armies of servants.

But the Robber Barons and their families didn’t just enjoy lives of luxury. Just as they competed in business, they were driven to outdo one another with their lavish spending and possessions. Beyond that, they hungered to become the equals of the aristocrats on the other side of the Atlantic.

“The U.S. was a new country, and there was this sense of looking to Europe and emulating royal society,” explains Elizabeth L. Block, a fashion and social historian and editor at the Metropolitan Museum of Art in New York, and author of the 2021 book Dressing Up: The Women Who Influenced French Fashion.

Industrialists who didn’t have early roots in colonial America and belong to an old-money clan would make up for it, Block says, by trying to acquire the persona of a European lord. “They would do that through buying the right things, through their possessions and what they were wearing.”

Here are a few of the most ostentatious ways in which the industrialists and their families flaunted their wealth.

Magnificent Mansions

The Biltmore Mansion of George Vanderbilt was built by the Vanderbilt family in Asheville, North Carolina. The 250-room French Renaissancechateau includes 35 bedrooms, 43 bathrooms, and 65 fireplaces.

The Vanderbilt family’s castle-like 250-room mansion on the 8,000-acre Biltmore Estate in Asheville, North Carolina, was so massive that three separate hills had to be leveled with dynamite and blasting powder to create a flat space for it, and the structure included nearly 10 million pounds of limestone, according to Ellen Erwin Rickman’s 2005 book on the estate.

To entertain the Vanderbilts and their guests, the mansion was equipped with a bowling alley, an indoor pool, and a library with 10,000 volumes, gardens designed by landscape architect Frederick Law Olmsted, and special smoking and gun rooms. They also could warm themselves at one of the mansion’s 65 fireplaces.

Other industrialists lived in elaborate homes as well. Another wealthy Gilded Age family, the Garretts, who made their fortune in railroads, lived in Evergreen, a Baltimore mansion, where a second-floor bathroom featured Roman tile mosaics and a bathtub and toilet covered in 23-karat gold leaf.

Elaborate, Numerous Wardrobes

An 1890 oil-on-canvas portrait of Caroline Astor (1831–1908), painted by Carolus-Duran in 1890.

Sepia Times/Universal Images Group via Getty Images

The industrialists and their wives sailed once or twice each year to Paris, where courtiers at Paris fashion houses kept the women’s measurements on file so that they could have the latest designer dresses ready for them to try on.

“They would come back with five dresses, and roll them out at social events during the year,” Block explains. Back in the United States, “newspapers wrote about what these women were wearing.” The couples also would stop in London, where the men went to Saville Row, where tailors made bespoke suits for them out of the finest materials. (Banker and industrialist John Pierpont Morgan, for example, was a customer of Henry Poole & Co.)

Industrialists’ wives also employed dressmakers back home to make additional clothing for them, because their social status required them to wear a different outfit to each engagement on their calendars. “Many of them were changing outfits five or six times a day,” Block says.

Wealthy Gilded Ave women sometimes even coordinated their clothing with the décor of their mansions, Block says. Caroline Astor, for example, had a life-size portrait of herself in her home’s reception hall, dressed in Paris-made finery. When guests arrived for a dinner party, she would greet them standing beneath the portrait, dressed in the latest fashion for that particular year.

Gilded Age ladies also used jewelry to flaunt their wealth. One socialite, Mrs. Calvin S. Brice, attended a ball wearing what a New York Times account described as a “magnificent” diamond tiara, a pendant of diamonds, and a bracelet and brooch decorated with black pearls and diamonds, according to the book Gilded New York: Design, Fashion and Society, by Phyllis Magidson, Susan Johnson and Thomas Mellins.

Lavish Parties

The Gilded Age super-rich sought to outdo one another by throwing grandiose soirees with massive guest lists. After aspiring socialite Alva Vanderbilt and her husband, William Kissam Vanderbilt moved into their new mansion on Fifth Avenue in Manhattan in 1883, for example, they celebrated by inviting 1,000 guests to a late-night housewarming party in which everyone had to dress in historical costumes.

“Guests wore powdered wigs from the 18th century, and commissioned costumes from French courtiers,” Block explains. They went to the opera, then changed from their opera clothes into costumes. Then they went to the ball, had dinner at 2 a.m. and stayed all night, while their carriage drivers waited outside in the cold.

Another socialite, Cornelia Martin, put on an 1897 ball in which the interior of Waldorf-Astoria Hotel was transformed into a replica of the Palace of Versailles. Her husband Bradley Martin dressed as Louis XV in a suit of brocade, while the hostess took on the persona of Mary Stuart in a gown embroidered in gold and trimmed with pearls and precious stones. Another guest wore a suit of gold-inlaid armor valued at $10,000 ($336,000 in today’s money). “The power of wealth with its refinement and vulgarity was everywhere,” one attendee later recalled.

The popularity of costume parties led super-rich women to come up with outlandish attire. One socialite, Kate Fearing Strong, wore a taxidermied white cat as a headdress and a skirt fashioned from cats’ tails to the Vanderbilts’ housewarming ball, which earned her the nickname “Puss.”

Gilded Age industrialists and their wives decorated the interiors of their mansions lavishly, sometimes importing entire suites of furniture from Europe as a way of demonstrating their well-traveled worldliness and sophistication.

“Others searched beyond Europe to find furniture in Morocco, hangings in Turkey, bowls on the Mount of Olives and fans in Japan,” Arnold Lewis, James Turner and Steven McQuillin write in their book,The Opulent Interiors of the Gilded Age. They took particular pride in owning candelabra previously possessed by the King of Bavaria, or statues that had once graced the homes of a noble French family.

While they had enormous budgets for decorating, the American elite didn’t always have the sophistication to get their money’s worth. “I think we definitely see that with Alva Vanderbilt’s choices for the interior of her home,” Block explains. “Maybe she didn’t know the difference between a medieval and a Renaissance tapestry or one from the 18th century, whereas the Europeans certainly would have.”

Exotic Dining 

Gilded Age industrialists also indulged themselves at the dining table, where they demonstrated their prosperity by consuming the finest food in gluttonous quantities. Perhaps one of the most voracious eaters of the era was railroad magnate “Diamond” Jim Brady, who got his nickname from his habit of wearing so much finery that his biographer H. Paul Jeffers described him as “a walking jewelry store.” 

According to Jeffers, Brady’s mass consumption of calories started with an enormous lunch that typically included two lobsters, deviled crabs, clams, oysters and beef, along with two whole pies for dessert. But that only was enough to hold him until late afternoon, when it was time for dinner. According to Jeffers, Brady would start with “a couple of dozen oysters, six crabs, and bowls of green turtle soup,” and then proceed to a main course that included two whole ducks, six or seven more lobsters, a sirloin steak, vegetables, topped off by pastries and a five-pound box of chocolates.

As a restaurateur who served him recalled, Brady sometimes would invite eight to 10 guests to join him—and then eat the dinners of anyone who didn’t show up. A restaurant owner called him “the best 25 customers I ever had.”

The super-wealthy lived large, but their opulence had a dark side. The wealth that paid for it all often was obtained through corrupt business practices, and served as a reminder of how the income gap between the powerful few and the many who worked for them became even more extreme. To author and journalist Jack Beatty, the Gilded Age actually was the “Age of Betrayal,” in which the obsession with wealth caused Americans to lose sight of the democracy they’d fought to sustain during the Civil War.

What techniques did robber barons use?

What were robber barons of the late 1800s?

What conditions favored the rise of robber barons in the late 1800s and early 1900s?

How did robber barons influence government?