Apush Essay on Monopolies

Michayla Knight

March 13, 2014

The development of monopolies in the late nineteenth century was both beneficial and harmful to the United States’ economy. I say this because each of the men that I will be writing about could all be seen as robber barons, or captains of industry.

Andrew Carnegie was the leader of Carnegie Steel, and he created his monopoly through vertical integration. Vertical integration is controlling the entire production process, from the iron mines, all the way through the steel production and distribution. His methods were both beneficial and harmful to the United States’ economy. They were beneficial to the economy because it helped make American railroad travel both safer, and faster. This ultimately caused transportation to skyrocket. Carnegie also believed in the Gospel of wealth, which meant that he would use his money to better the community. Carnegie’s methods could be seen as harmful to the economy because he bought everything that was needed for steel and iron production, eliminating the middlemen. This put many people out of work, making times even harder for the working class. For those that still had jobs, hours were long, wages were low, and conditions were dangerous.

John D. Rockefeller built his monopoly over the oil business in less than a decade and brought order into the chaotic industry. Similar to Carnegie’s ways, Rockefeller used horizontal integration to eliminate all competition. He negotiated secret contracts in which he leveraged his growing market share for lower transportation rates. These "rebates" enabled him to ship oil at a lower cost, undercutting his competitors by selling at a lower price. But rebates were just the first step in his scheme. As his share of the oil refining business grew even larger, he was able to demand "drawbacks" from the railroads that desperately wanted his business—that is, a percentage of the hauling fees paid to them by other refineries.  By the mid- 1880s, John D....