The Tycoons: How Andrew Carnegie, John D. Rockefeller, Jay Gould, and J. P. Morgan Invented the American Supereconomy - Hardcover

Charles R. Morris is the author of eight previous books, including American Catholic and Money, Greed, and Risk. He is a lawyer and former banker, and was most recently president of a financial services software company.  A regular contributor to the Los Angeles Times, he has also written for The Wall Street Journal and The Atlantic Monthly. He lives in New York City.

Chapter One
Prelude
 
Abraham Lincoln was pronounced dead shortly after seven o’clock on a rain-soaked Holy Saturday morning, April 15, 1865. It was less than a week after Gen. Robert E. Lee’s surrender at Appomattox. The little group of officials and family gathered around the blood-soaked bed in Will Peterson’s boardinghouse across from Ford’s Theater stood silently for several minutes. Then Mary Lincoln’s pastor, Phineas Gurley, said a short prayer, and a detachment of soldiers was summoned into the room. They placed the body in a military coffin and whisked it through the sodden crowd keeping vigil outside to the hearse that would carry it to the White House.
 
The autopsy and embalming were performed in the east wing’s second-floor guest room. Edwin Stanton, the volcanic secretary of war, chose the president’s funeral garb and insisted that the undertaker leave the black residue of intracranial bleeding that had formed under Lincoln’s right eye. Construction started almost immediately on a catafalque, modeled after a Masonic “Lodge of Sorrow,” in the first-floor East Room for the public viewing. As the hammering went on through Easter Sunday and the following Monday, a distraught Mary Lincoln pleaded that the blows sounded like pistol shots. The men who carried Lincoln’s body to the first floor on Monday night removed their shoes so as not to disturb Mrs. Lincoln.
 
There was a public viewing in the East Room on Tuesday. With special trains ferrying tens of thousands of people into the capital, the lines—for the opportunity to file through the darkened room and gaze down for barely a second at the dead president—stretched out for hours. A series of private viewings on Tuesday evening included a delegation of Illinois citizens who had come to demand that Lincoln be buried in his home state; Stanton was planning an interment in Washington. The following morning, six hundred guests packed into the East Room for the funeral service. Even men like Gen. Ulysses S. Grant and Stanton openly wept. Some twenty-five million people attended similar services held more or less simultaneously throughout the United States and Canada.
 
The massive funeral procession on Wednesday afternoon, before some seventy-five thousand spectators, included detachments of black fighting units and crippled veterans, and, most dramatically, the traditional commander-in-chief’s horse following the hearse, with empty saddle and boots facing backward in the stirrups. It was the same image that so stirred television audiences at John F. Kennedy’s funeral procession a century later.
 
The procession terminated at the Capitol, where another ornately rendered catafalque awaited the president’s coffin. After lying in state for two days, the body was transferred to a special Baltimore & Ohio railroad car for the first leg of the trip back to Springfield, for Stanton had finally acceded to the Illinoisans’ demands. Adding a final grace note of sadness, Lincoln’s coffin was accompanied by that of his young son, Willie, whom he had adored, and who had died, probably of pneumonia, in 1862. Willie’s little metal coffin was removed from its crypt in Washington and encased in a finer walnut container to rest with his father’s in Springfield.
 
On the Brink
 
A stop-action frame of the United States at Lincoln’s death would have caught the mourning nation frozen for the moment in mid-leap, aimed headlong into modernity. The route chosen for Lincoln’s last trip home—up the East Coast to New York, then westward along the Great Lakes to the Midwest and Springfield—itself traced a kind of fault line through the stresses of a society moving rapidly away from its preindustrial roots, roughly tracking the shape of a new American commercial geography.
 
Most notably, because it was by railroad, the trip took just days, instead of the weeks or months it would have consumed not many years before. The locomotives appear small and quaint today, with their big inverted-bell smokestacks and wood-burning fireboxes. But when they jumped across the Alleghenies in the 1850s, the nation shrank radically; for the first time, the urban East Coast was joined in a single national system with the farmlands and resources of the “Northwest”—the name still used for the states and territories between the original northern colonies and the eastern banks of the Mississippi.
 
A dozen cities along the route hosted formal funeral ceremonies, all of them vying in the rococo excesses of the catafalques, the funeral orations, and the strutting ranks of portly men in costumes and plumes. The first stop after Washington was Baltimore. Both essentially were the same cities as before the war—the capital, disgracefully enough, a malarial mudhole, although now with an array of almost-finished Greek revival buildings, while Baltimore, a thriving mercantile port, was bloated and bilious from its fat-rich diet of wartime trading.
 
When the trip first turned inland, however, from Baltimore to Harrisburg, it was traversing a brand-new kind of battle salient. Railroads were coming to understand the profits to be made from the country’s quickening internal trade, and there was an oil boom in the woods of western Pennsylvania. Bucolic little towns like Titusville had turned into hellholes where streams ran black and the air was misted with oil. The wells’ garish night flares flickered over swirling mobs of wildcatters, draymen, prostitutes, and small-time con men, all desperately clawing after their one main chance to get very rich very fast. The Pennsylvania fields were the largest yet discovered, by a huge margin, and within just a few years would supply the illuminating oil for almost the entire civilized world. With stakes like those, the nascent railroad wars would be fierce, often violent, and in a world with no system of law for controlling large corporations, deeply corrupting.
 
The next stops on the journey, Philadelphia and New York, were both struggling with over-rapid transitions into diversified manufacturing and financial centers. Philadelphia’s machine-made textile industry got a huge boost from wartime blanket contracts. Its famed Franklin Institute, the oldest technical institute in the country, was organized in the 1820s with more than a thousand membership subscriptions to promote scientific manufacturing. The boom in New York—printing, light manufacturing, securities and banking—was bursting the boundaries of Manhattan island, and plans were afoot for a colossal bridge to expand the city’s footprint across the East River into Brooklyn.
 
Funeral incidents in both cities pointed up the travails of rapid growth. On Sunday in Philadelphia, three hundred thousand people assembled in miles-long lines to view Lincoln’s body, their exhaustion and exasperation sharpened by the city’s Sabbath-day refusal to operate public transportation. When a band of pickpockets swept through the lines and cut the crowd-control ropes, there was a wild melee in which a number of people were injured. In New York, the tensions were ethnic. The city, with a larger Irish population than Dublin, was a hotbed of “Copperhead” antiwar Democracy. Irish suspicions that Republican businessmen used the military draft to break labor organizations and to import cheaper black workers—which was almost certainly true—had exploded into the savage 1863 Draft Riots, the most lethal public disturbance in American history. The local Tammany Democratic machine touched off a minor crisis a few days before the funeral procession by decreeing that it would be closed to blacks. After a forceful intervention by Stanton, a small contingent of blacks marched at the tail of the massive parade up Broadway, and were actually cheered by the crowd.
 
From New York City the funeral train proceeded up the Hudson River to Albany before turning west to cross New York State. Poignantly, unbroken lines of mourners stood vigil over much of the route even during the night, when they marked their presence with bonfires. The only complaint was the speed of the train—in the nineteenth century, twenty miles an hour felt disrespectfully fast.
 
Western New York State was farm country, populated in great part by German, Swiss, and Scots-Irish immigrants. These were not the yeoman farmers romanticized by Thomas Jefferson: by war’s end, some three-quarters of New York’s farmers within wagon distance of a railroad depot were efficiency-minded middle-class businessmen running commercial establishments producing wheat, timber, and dairy products for sale. The transformation of New York’s farms dated from the opening of the Erie Canal in 1825, and accelerated with the spread of regional railroads in the 1850s. Within a generation, they had decimated New England agriculture, forcing a decisive shift to a manufacturing economy in that part of the country.
 
New York farmers spent remarkable amounts of money on consumer items—“a lot of trumpery,” one farmer humphed in his diary. They stood vigil for the funeral train in factory-made shoes, and their best clothes were purchased ready-made, for superior styling and fit. Middle-class farm wives still worked very hard, but there was visible convergence between their lives and their urban sisters’. They bought cloth instead of spinning and weaving it, and ran off new curtains on sewing machines. Household necessities such as soap and candles came from stores, and many farm homes had new oil lamps, so children could study in the evening. Back-breaking kitchen fireplaces had long since been replaced with “civilized” cast-iron stoves, and travelers agreed that the quantity and variety of New York farmers’ food was extraordinary—eons away from the whiskey, salt-pork, and gruel that passed for a reasonable diet earlier in the century.
 
The first stops after the New York countryside were Buffalo and Cleveland, both bustling Lake Erie port cities that were natural collection points for the oil, coal, and iron industries of western Pennsylvania. From there, the cortege turned back inland to Columbus, Indianapolis, and Indiana’s Michigan City—flat, black-earth country, the world’s first laboratory for large-scale mechanized farming. The farmers of the “Northwest” were about to give New Yorkers a dose of their own medicine, seizing control of the grain trade and forcing their eastern brethren to specialize ever more intensively in dairies and fruit orchards.
 
Chicago, the last stop before Lincoln’s final resting place in Springfield, self-consciously tried to put on a show as big as New York’s, for it viewed itself as the city of the American future. Until the war, midwestern grain and meat products flowed eastward on the Great Lakes and the Erie Canal, or, from south of Chicago, by flatboat down the Mississippi to New Orleans for the coastal sail to New York. By war’s end, railroad links east from Chicago had taken over most of the old New Orleans-based trade and were making inroads into the Great Lakes traffic. A grain boom was driving entrepreneurial activity to a fever pitch, while Cyrus McCormick’s reaper factory anchored a promising manufacturing base. George Pullman, struggling to get his sleeping car company off the ground, scored a publicity coup by donating the car that carried Lincoln from Chicago home to Springfield. (Or so legend has it. Recent scholarship suggests that he donated all the cars except the Lincoln car.)
 
Springfield was close to the limits of westward rail penetration. There were no train links to the western banks of the Mississippi, and only three tiny, widely separated railroad lines in the whole vast western territories. Western commerce, such as it was, was based on mining—still mostly men with shovels and mules—but entrepreneurs had already spotted the opportunity for ranches to feed the growing demand for meat from the urban east. The splendid western romance of the cowboy and the cattle drive was rooted in just the couple of decades before the railroads completely penetrated the ranch lands after the Civil War. In the South, railroads were not as intensely developed as in the North, but it hardly mattered. For a long time, the area’s only important export would be low-technology cotton grown mostly by sharecroppers. The white farmers in the hill country, having depleted their once-rich land, gradually sank back into the old subsistence farming tradition.
 
Sharp-eyed contemporaries were already rhapsodizing over America’s coming economic behemoth, but it was very much in an embryonic state. Railroad routes were still cobbled together piecemeal by local entrepreneurs or enterprising towns. It took no less than ten different carriers to connect the Lincoln funeral route—lines with long-forgotten names like the Northern Central, the Camden and Amboy, the Columbus and Indianapolis, the Lafayette and Michigan City. Since few railroads had the resources to build bridges, engines and cars were still routinely ferried across rivers; the hodgepodge of track sizes interfered with long-distance shipping; and any carrier looking for quality rails and rolling stock did its shopping in England. This was a slouching and stumbling boom, which made the feverish grasping for wealth all the more comical to satirists as various as Mark Twain and Anthony Trollope.
 
The Artisanal Eden of Abraham Lincoln
 
Abraham Lincoln would have heartily approved of all of it, even the grasping. As he put it during his first presidential run, “[It is] best for all to leave each man free to acquire property as fast as he can. Some will get wealthy. I don’t believe in a law to prevent a man from getting rich [but] . . . we do wish to allow the humblest man an equal chance to get rich with everyone else.”
 
The Republican party that nominated Lincoln for president in 1860 was an awkward amalgam of old-line Whigs, nativist Know-Nothings, radical abolitionists, and antislavery “Barnburner” Democrats, upset at their party’s control by southerners. The Whigs probably accounted for the majority of members, and dominated the leadership. The core Whig commitment was to the prodevelopment project of Daniel Webster, Henry Clay, and, further back, of Alexander Hamilton. The conservative wing of the Whig party was somewhat more tolerant of slavery than their moderate brethren, in the name of preserving the Union, and also had a snobbish, antiimmigrant streak, largely in reaction to the impoverished Irish crowding into eastern cities.
 
The prodevelopment tradition came easily to Lincoln. His political idol was Henry Clay, the great apostle of canals and American self-sufficiency. Lincoln had been a businessman himself, although not a very successful one. He was a tinkerer, had worked as a surveyor, and held a patent on a device for lifting flatboats over river shoals. Lincoln especially enjoyed patent cases, and once said that the most important discoveries advancing civilization were “writing, . . . printing, the discovery of America, and the introduction of Patent Laws.” It was typical of him that in a case involving reaper patents, he came armed with models of the machines, and gathered the jurors around on their knees to point out the critical details.
 
Lincoln’s fascinati...