Panic, Prosperity, and Progress: Five Centuries of History and the Markets

CHAPTER 8

The Panic of 1893

The years following the conclusion of the American Civil War ushered in a vastly different America than the antebellum nation. In the first part of the nineteenth century, most citizens lived and worked on farms in small towns, lived a largely self-sufficient life, and at times struggled just to keep their families warm and fed. After the Civil War, however, the nation moved from an agrarian to an industrial economy, and as industry’s growth became exponential, the Gilded Age would create characters of American business whose reputations persist to this day.

■ The Robber Barons

If there were ever a great time to be an ambitious American capitalist, it was just after the end of the Civil War. There was no income tax, no antitrust laws, no meaningful regulation, no unions, no minimum wage, vast plains of unexploited natural resources, frontier opportunities, and new industries. Some of the richest capitalists America would ever know would thrive during this period, including such storied names as:

• Jay Gould
• Mark Hopkins
• Andrew Mellon
• J. P. Morgan
• Cornelius Vanderbilt
• Leland Stanford
• Henry Clay Frick
• James Fish
• Charles Crocker
• John Jacob Astor
• Andrew Carnegie
• John D. Rockefeller

These men did not rise to prominence through gentle negotiations; it was a ruthless time for business, and these aristocrats had no reservations about bribing politicians, crushing competition through unscrupulous means, cheating investors, forming cartels, and both treating ...