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Celestine Omin @cyberomin
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My yearly ritual - watching "The Men Who Built America."
Cornelius Vanderbilt started his rail empire by borrowing $100 to buy a small ferry boat. He quickly earned the reputation of a shrewd business man.
He always got ahead by any means necessary. By hook or crook, it was pretty much win or lose.
His single ship quickly became a fleet of ship and he was christened The Commodore. He quickly understood the power of transportation - own the infrastructure and call the shot.
At his peak, he does the unthinkable, he sold all his ships and invested in railroads. In today's speak, he disrupted/reinvented himself/business.
He saw the future and was willing to bet everything on it. His decision paid off greatly and r became the richest man in America with a networth of $68M that will roughly translate to about $75B today. He would be the 3rd richest man in the world today, just after Buffet.
Then around 1806, tragedy struck. Vanderbilt lost his favourite son George, in a war. He was devastated. The lost of his child had far reaching consequences, almost threatening his empire.
Vanderbilt's rival sensing this, they swooped in. They wanted to take the old man out. Vanderbilt had sent his other son, William, to a trade negotiation, his rivals laughed his son away and sent him back to his father.
Vanderbilt, upon hearing this, was very upset. He called his son into a room, pulled out a map and declared "they want war, I will give them war."
Vanderbilt owns the only rail bridge to NYC, it's the gateway to the country's largest port and market. He understood this leverage and he wasn't going to spare anything to bring his competition to their knees. You don't mess with Vanderbilt and expect to walk away unscarred.
This was also an opportunity to teach William what it meant to be a Vanderbilt. Vanderbilt commanded his son to close the bridge, essentially blocking other rail operators access into the country's biggest port and market. NYC was a gateway into the continent.
With this move, he was asserting his power as the rail king. He said to his son "we are going to watch them bleed."
And bled, they did. The presidents of the company had no option than to sell. Their stock holdings were on a free fall. William, sensing another opportunity, came to his dad and informed him about the free fall, Vanderbilt commanded him to buy everything he can.
He dealt his rivals a knockout punch.
In just days, he bought out all his rivals, creating the largest, single rail company in America.
Vanderbilt wasn't contented with being the rail king, he wanted the world to know about it. He commission they building the Grand Central depot. It will harmonise Harlem, Hudson and Central. He wanted it in the heart of New York.
This rail magnet also pioneered the concept of a hostile takeover.
As time passed, he came to the realisation that at the end of the day, transportation will be a bigger business than owning the railroads. Kerosene was fast becoming an essential comodity and Vanderbilt wanted to become the sole transporter.
He then learnt about a refinery built just close to the railroads. He quickly reached out to the owner. That owner was John D. Rockefeller. Rockefeller, at 27/28, was just starting out in the oil business.
Vanderbilt understood that if he controls oil transport, he will come back on top. He invited Rockefeller to a meeting an this was going to become a pivotal moment for both men.
Vanderbilt invites Rockefeller for a meeting in NYC. As Mr. Rockefeller sets out to meet Vanderbilt, he missed his train that morning and the train had a fatal accident. That incident had a profound impact on his life.
At the meeting, Rockefeller promised to fill up Vanderbilt's rail line in exchange for an exclusive transportation contract. The problem here is that Rockefeller had over promised, he had no means to fulfill this order. Undaunted, he set out to explore more oil.
Not too long, he struck gold. He didn't want to continue drilling oil, so he turned to refining. He believed gamblers drill for oil, business men refine this oil into finish products. He wanted to play in the refining value chain of oil.
He named his company Standard Oil, signifying a company that will offer standard quality kerosene for all American household. He wanted to do to oil what Vanderbilt did to rail. After raising money from investors, he became the largest refiner in the country.
Soon, Rockefeller had more oil than Vanderbilt can carry. Tom Scott, another of Vanderbilt's fierce rival, saw this as an opportunity and moved in quickly to seal a deal with Rockefeller. Rockefeller played the rail kings against themselves.
With new cash inflow, he bought other refineries and at 33, he owned over 90% of the market, creating the first ever monopoly, essentially becoming the most powerful man in the America.
Vanderbilt and Scott formed an alliance, the cut Rockefeller away from their rail lines. This was declaration of war. With this move, Rockefeller sort an alternative, this was what gave rise to petroleum pipelines.
Rockefeller's workers worked round clock to lay pipelines. The laid more than a mile everyday. The pipeline stretch between Ohio & Pennsylvania cutting through 10s of refineries. Vanderbilt and Scott's railroads didn't matter again. He has laid more than 4,000 miles of pipe.
This move hit the stocks of the rail company. The effect was so bad, it wiped out 1/3 of the country's 360 rail road company. The crash was the worst America had seen its history. The market shutdown for 10 days, triggering the first national depression.
The pipeline became the advantage of Rockefeller. At the height of the depression, Vanderbilt dies at 82 leaving an empire of $100m to his son, William. Scott, seeing pipeline as the future, he invested in his own pipeline. Scott, with his protege, Andrew Carnegie, were ready.
Rockefeller asked his COO not to send any more oil through Scott's line, forcing Scott to fire 10s of thousands of people and cutting wages. This was devastating. Rockefeller became the richest man in America, amassing a networth of $150M or $225B today.
In 1882, Scott died. His protege, Andrew Carnegie was livid. Rockefeller was partly responsible for his death. Scott took Carnegie in at the age of 12, he was more than a mentor. He was a father figure. At 24, Scott promoted Carnegie to the manager of his rail business.
Andrew wanted to avenge the death of the most influential man in his life, Tom Scott. And in other to do that, he must go against his boss's and now his fiercest rival, John D. Rockefeller.
Before Scott's death, Scott took Andrew to the banks of the Mississippi River and charged him with building a rail bridge over the river. The bridge will be a mile long. Andrew stepped up to the plate and threw everything behind the project.
Andrew was told it will be impossible to undertake a project of this nature, he declared to the project managers that nothing is impossible. Then the PM said the only way it will work s if the build the project with steel.
This was to help the project withstand the Mississippi current. Steel was very expensive at the time, and for a project of this nature, calling it audacious was an understatement. Andrew was not deterred. He charged ahead.
He was going to make his own steel. Steel is made out of iron and carbon. He teamed with English inventor, Henry Bessemer. Bessemer had invented a way that cut down steel manufacturing from 2 weeks to 15 minutes. Andrew was ready.
At 33, Andrew dared the impossible. This project was going to unite America. But the project was proving expensive and difficult. His lenders closed in on him. Pressure mounted.
Andrew needed to raise $1m to complete this project. He pitched his ideas to a new set of investors and got fresh funding. After 4 years, the bridge was completed. The result was epic. In other to rest the strength of the bridge, they made an elephant walk through it.
After this public display of strength, orders for steel came pouring. Unfortunately, Carnegie just couldn't meet demand. The rail Industry wanted steel too. He raised the equivalent of $21m in today's money and he built a new steel plant that produce thousands of tons daily.
Rail business was fast dying and Andrew turned his sight to a new industry, real estate. As migration into NYC happened, more homes will be required. Andrew's steel literally built the American society, vertically.
The world's first skyscraper was built in Chicago. And Andrew's steel wad powering this. In the next few years, over 100,000 skyscraper was built in Chicago. With this boom, Carnegie became one of the wealthiest men in America.
In all of this, something was missing, Rockefeller's wealth was 7x that of Carnegie and he wasn't happy. To fix this, he hired Henry Frick, a self made millionaire. Frick will bring the ruthless part that Andrew lacked.
This will turn out to be one of the worst decision of Carnegie's career. Frick's ruthlessness will set Carnegie's empire a thousand miles behind.
Frick was also power hungry, his drive for profit made him reduce wage, increase working hours - 12hrs daily and 6 days a week. In 2 years, profit at the mill doubled. Workers revolted and this was led to the first known case of union.
These workers closed the mill and held Frick hostage. Production stopped and revenue was lost. Frick wasn't one to take nonsense, he hired mercenaries to take on the workers, 9 people died and scores wounded.
The community wasn't going to take this lightly, a few days later, there was a failed assassination on Frick's life. Andrew called off his vacation and head home, by this time, Frisk was already the chairman of the company.
He got angry Andrew, claiming that while Andrew was on holiday, he was the one that survived a bullet and a stab. He chased Carnegie into a corner and planned a hostile takeover. Andrew had a big problem in his hand.
Frick became increasingly more powerful, this power led him into establishing a members-only club, sort of a playground for the rich and mighty. He even created an artificial lake for fishing.
As construction of this playground went ahead, the walls holding the dam close to James Town weakened. On a particular rainy day, the walls gave in and James Town was submerged. This one incident dented Carnegie's already frail image even further. He needs to fix this.
In an effort to launder his image, Carnegie started giving away his money. He donated millions to help rebuild John's Town. He also donated towards the building of the Carnegie Hall, a home for performing arts and the high and mighty.
But a challenge brewing ahead, JP Morgan, an astute banker was rising pretty fast. His expertise was in buying failing companies and turning them around. He will become Carnegie's newest threat. No thanks to Frick's carelessness.
From when he was a boy, his dad had a towering influence in his life. By age 40, he wanted to create his own identity and step away from his father's shadow. His father always taught him not to take big risk, but he was tired of doing things his father's way.
JP didn't just want to buy businesses, he wanted to create one from the ground up. He met an amazing inventor named Thomas Edison and the duo will go on to form an incredible alliance. One day, Morgan was visiting Edison and an invention caught his eyes, it was the lightbulb.
JP, with an eye for opportunities, quickly spotted the value of electricity and how it will fundamentally change the way we live. Morgan invested in Edison's company and he hired Edison to install electricity in his house in NYC.
His home quickly became a laboratory for Edison's electricity experiment. After months of perfecting the technology, Morgan was ready to show his friends the marvel of electricity for the first time.
Morgan's home became the first private residence in the world to be lit by electricity. His dad wasn't impressed. He said Morgan was fooling around and will better off doing something else.
As Morgan's influence grew due to electricity, one man, Rockefeller wasn't happy. He saw electricity as a threat to his kerosene business. Against his father's investing philosophy, Morgan doubled down on Edison. He wanted to own the future.
Morgan funded Edison with the equivalent of $83M, together, they formed The Edison Power Company. They dug ditches around NYC, laying over 100,000 copper cables and providing electricity for a lot of homes in New York.
Rockefeller wasn't happy with JP's success, he launched a targeted PR campaign, with the hope to scare the public about the dangers of electricity; electrocution, fire, etc. His hope was to maintain market share, as every home lit by Morgan's electricity was a lost customer 4 him
Tesla, a worker in Edison's lab was developing his own type of electricity; alternating current. Tesla tried to get Edison to look at his designs, but Edison wouldn't even give it a second thought. He saw himself as the father of electricity.
Frustrated, Tesla quits and sets out to start his own company. George Westinghouse became his investor. He positioned AC as the safest form of electricity. Overnight, the Thomas Edison Power Company had a new rival to contend with.
With pressure mounting on Edison, he took the dark route. He began using Tesla's AC in some terrible demonstration. A NYC prison, looking to replace hanging for its capital punishment, reached out to Edison, this led him to develop the electrocuting chair.
His singular plan was to take out Tesla by painting his AC in a bad light. The electric chair was his opportunity to prove this. If people see the dark side of AC, they will refrain from it and the Westinghouse company could potentially go out of business.
This act backfired, the public couldn't tell what time of current was used during an execution, all what they remembered was that electricity was used in killing a man and Edison was the man behind it.
Edison played himself right into Rockefeller's trap, demonstrating that electricity is dangerous and deadly. Morgan's dad was so upset, he asked him to pull away from this madness.
Meanwhile, in the midst of this, work was going on at the Niagara falls. A company was working to create the largest electricity generator that will power the entire country. JP Morgan quickly realised that this will be his opportunity for domination.
The Niagara company was undecided about who's electricity technology to use; Tesla's AC or Edison's DC. Morgan wanted it all. But he also knows that an undertaking of this magnitude will require massive investments, one that his dad will never approve.
As he ponders about his next move, tragedy struck. His dad had been involved in a carriage accident. Not long, he passed away as a result of his injuries. With Morgan now incharge, nothing was going to stop him from taking the Niagara contract. Call it a blessing in disguise.
With his father's death, Morgan's networth instantly quadruples, he was suddenly sitting on hundreds of millions of dollars. He called Edison into his office and said to him, "the best time to buy is when there is blood on the street." He said Rothschild gave his dad this advice.
He increase his stake in the Edison company by an extra $4M. He asked Edison to prepare a bid for the Niagara project and asked he told Edison, "you better win." He was going to war with Westinghouse.
With Westinghouse' rapid expansion, he found himself drowning in debt. Morgan smelled blood and he was going to take advantage of the decision. Timing, they say is everything.
Morgan launched a smear campaign against Westinghouse, when asked by reporters if another company will go burst on Wall Street, he said the companies that will go burst are those that are expanding too fast, capital intensive and low on cash. Though subtle, his remarks...
...had damaging consequences. It triggered a sell off of Westinghouse stocks and within days, Westinghouse was crawling. But something happened, Tesla, told Westinghouse that he will forgo his royalty contract with Westinghouse, he tore his contract. His invention...
..meant more to him than money. Soon, investments poured into Westinghouse, once again, he was back in business. Westinghouse went on the offensive. In 1893, Chicago held a fair, the largest yet and they organisers wanted to power it with electricity.
Westinghouse bided 1/4 of Morgan's bid and the won the contract to light the fair. With the world's eyes on the fair, this was a monumental project for the Westinghouse company. On opening night, 200k light bulbs came to light. 27M people came to the fair and they withness ..
...this magic. This moved further demonstrated that AC was safe. The folks at the Niagara station kept tabs with this happening. Two letters go out to Morgan and Westinghouse, but one man will win the contract. Who will it be? Both men opened their letters and Westinghouse...
...got the contract for the Niagara falls project. Luck was back on his side. Morgan, as expected was pissed. His fiercest rival has defeated him.
Morgan wasn't going to back down. He was going to take out his competition through intimidation. He sued Westinghouse for patent infringement of the AC design, Westinghouse realising he didn't have the resources to cover a legal tussle of this nature, gave in.
Morgan was back on top. Westinghouse was forced to sign over the patent of AC to Morgan, this move broke the company he started with Tesla. Morgan, once again applied the principles of the Morgan way towards competition.
With this new success, be wanted to take out Edison, he buys up additional shares in the company until he gathered enough controling stake. His first move was to change the company's name to General Electric. GE became the most powerful company with a valuation of $50m or $1B.
He converts the company to use AC, the standard that's still used to this day. GE, to this day is one of America's largest corporation. He pulled a master stroke. He single handedly consolidated the electric industry. He proved his father wrong.
With more power, he became hungrier for more. After a 2yr depression, the US treasury came close to bankruptcy, the govt called Morgan to help. He puts together a loan worth about $100m or $3b for the govt, saving it from a complete collapse.
His rivals now saw him as their biggest enemy. They wanted to eliminate him. Rockefeller, his fiercest competition needed to find another product to replace kerosene. He hired a team of scientists to find the use for gasoline, a substance he has been discarding for years.
The quest to create a more powerful motor lead to the development of the combustion engine, and when this motor was placed on horseless carriage, he realised how big gasoline will become. He was unto something huge.
JP Morgan, on the other hand was looking for the next big thing. He cut cost across his companies; cut labor, increased working hours and reduce wages. And profits soared.
Then a politician emerged, William Jennings Bryan, channeled the seeding frustration of the people towards his own political gains. He vowed to break down the monopolies of JP Morgan, John D. Rockefeller and Andrew Carnegie.
These 3 men weren't going to sit around and watch a charismatic politician jeopardize what they have spent their lives building. They devised a bold plan. But in other to succeed, they will need to sheath their sword and work together. All 3 men decided to buy the president.
I mean, why wouldn't they? They trio had a combined networth of the equivalent of $1tr - One Trillion Dollars. Rockefeller's worth was almost 1% of the American economy.
Bryan's campaign was equality for all. He became the spokesman for the common man. His emergence became a source of headache to the businessmen. JP Morgan suggested the trio buy their own president. The threw their support behind William McKinley, an Ohio native, who will go...
..on to become the 25th president of the United States of America.
All three men donated an equivalent of $20m to the McKinley campaign. This will go on to become one of the most expensive campaign in America's history. Bryan fought back, he went on a tour across the country and gave over 500 speeches to loud crowd. He will setup...
..the model for how presidential campaign tours are carried out, even to this day. As Bryan willed more influence, once again, the men turned to fear tactics. They told their workers not to show up the next day should Bryan win. They were in a dilemma.
After long hours of tallying, Rockefeller, Carnegie and Morgan had dodge a bullet, their candidate of choice emerged as the new president. These men bought their way into the White House. But their relationship didn't last long. They all broke ties and reignited thier rivalry.
Rockefeller learnt about an iron deposit in Minnesota, this was his chance to bit Carnegie at his own game. He quickly took hold of the mines and began to supply iron to Carnegie's competition at rock bottom prices. Carnegie's profit began to shift.
Rockefeller devised a scheme to build his own steel company, something that will rival whatever Carnegie had ever built. Carnegie offered to buy the entire output of Rockefeller's mines, in return Rockefeller will stay away from the steel business. Both men closed the deal.
After the legendary deal was closed, Morgan wanted a piece of the steel business. He wanted to consolidate the steel business. He was going to pull his most daring moved yet. Carnegie began to question his future, after years of grueling battle.
Morgan sets up a meeting with Carnegie's right hand man, Charles Schwab. Morgan was going to buy Carnegie's steel and make Charles the new president. With Charles acting as Carnegie's caddy one afternoon, he chimed the question ...
"supposedly Morgan wanted to buy your company, what will be your price?" He writes on a piece of paper, $480m or the equivalent of $400b today. This was the price he was going to sell his company for.
For context, this almost like trying to buy Facebook or Alibaba or Amazon today.
Carnegie thought Morgan wouldn't be able to raise the money. Charles returned to Morgan with the price and Morgan immediately called for a meeting. Both men shook hands, the deal was sealed. Carnegie instantly became the richest man in the world.
He has finally achieved his lifelong mission of beating Rockefeller as the richest man. JP Morgan called his new company US Steel, it instantly became the largest corporation in the world worth more than a $1B.
Almost out of no where, a new politician emerged, his name, Theodore Roosevelt. He was a man of character and wouldn't be bought. He quickly targets the two remaining men, Rockefeller & Morgan.
Roosevelt became McKinley's running mate and was later sworn in as the US vice president. With their man still in the White House, they relaxed and didn't think too much for the re-election. But their clever ploy will backfire.
On 14th September, 1901, William McKinley was assassinated. This spelt trouble for Rockefeller and Morgan as Roosevelt is sworn in as the president of the United States.
Roosevelt goes after Morgan, he was bent on breaking the monopoly of these men. He sues his company in a fed court marking the first antitrust case brought against a major corporation. Roosevelt wins and Morgan's railroad monopoly us broken up. This was a sign of things to come.
Shortly, the govt turned it's eyes on Rockefeller and Standard Oil. This will become the biggest antitrust case in America at the time.
During the trial, Rockefeller claimed not to remember any of the charge that was levied against him. While he grappled with his suit, a young entrepreneur, Henry Ford, was emerging. Ford wanted to build an affordable, mass market motor vehicle. He priced his car at $900.
But in other to sell his cars, he needed to get permission from the Association of Licensed Automobile Manufacturers, ALAM. ALAM owned the patent on automobile, giving them control over who can manufactured and sell automobiles.
After months of deliberation, his application was rejected. This was a crushing blow for the young entrepreneur. But he wasn't going to give up. With grit an determination, he challenges the owner of the biggest car company to a race.
Beating the biggest manufacturer will give him the much needed boost for his own car company. This was a break or make moment, reminiscent of the story of David and Goliath. Ford won the race and he became an overnight sensation. He raised the equivalent of $700,000.
He built a factory and soon enough was making 15 cars daily. ALAM took notice and they came after him. While Ford was battling ALAM, Rockefeller was fighting the US govt. While these men were struggling, Carnegie set out to build the Panama canal.
75,000 workers worked on this project. Carnegie raised the equivalent of $7B for the project. Built on steel, powered by electricity and driven by oil, these are the comodities that made America the most powerful country on earth.
Over the course of 40yrs, Rockefeller used innovation, ingenuity and intimidation to build one of the largest corporation on earth. Just before the court gave its judgment, Rockefeller said what the government called monopoly was merely an enterprise.
Back in Detroit, Ford awaits a judgement. ALAM sued ford for a royalty on every car he sells. If he gives in, the price of his cars will become unaffordable for the average American. He defied ALAM and continued building his cars.
He increased the wage of his workers, $5 daily, more than double the rates of most factories. He innovate a new system for making cars, he introduced the assembly line. Which is still used in manufacturing to this day.
With the assembly line, they can build more cars than their competition. A car that took 12hrs to assemble, came down to less than 2hrs. He standardized the 8hes work day, 5 days a week.
Back in New York, Rockefeller awaits judgement. One that will decide the fate of Standard Oil. Finally, judgement is passed, Standard Oil is broken into 34 companies; the age of monopoly is broken.
Finally, judgement is passed Von the suit between Ford and ALAM. The court ruled in favour of Ford, ALAM has been defeated. Ford's aim was to bring the car to everyone. His factory went on to create the Model T. It became the car for the common man.
The success of Ford became a boost for Standard Oil's gasoline stations across the nation. Cars that are built using Carnegie's steel, in factory powered by Morgan's electricity.

PS: it's amazing to watch the interdependence of these different industries.
The industrial revolution resulted in the boom of the American middle class.
Exxon, Mobil and Chevron, 3 out if the 34 companies that was broken out of standard oil are giants in their own right today. John Rockefeller is a shareholder in each of these companies.
This swelled Rockefeller's wealth even more, giving him a networth of more than $600B(in today's money), making him essentially the richest man in history. In April of 1913, JP Morgan dies in his sleep. As a sign of honour, the NYSE shuts down.
JP Morgan has helped modern finance. His influence was larger than life.
After the death of Morgan, Rockefeller and Carnegie realised time was running out. Their new competition wasn't about who was going to make the most money, but instead who was going to give the most money.
Carnegie gave away the equivalent of $67B. Most going to education and libraries. John Rockefeller outlived his rival by 13yrs, he donated millions to churches and universities. He created the Rockefeller Foundation with a personal endowment of the equivalent of $38B
He lived to the age of 97yrs. He gave out more than $500m.

The 20th century will go on to be known as the American century. With well paying jobs, wealth and prosperity reached the common man.
These visionary men sparked a revolution that changed America forever. They didn't discover the modern America, the buit it.

The Men Who Built America. The end.
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