According to several estimates, Jeff Bezos is the richest man on the planet today, with a net worth of more than $180 billion. In fact, he managed to add nearly $40 billion to his fortunes in the midst of the coronavirus pandemic. Most of us know how Bezos went from working on the Wall Street to creating the e-commerce giant Amazon, because he believed in the growth potential of the internet and wasn’t hesitant to make the most of it.
But what about such names as Rockefeller, Vanderbilt, Carnegie and Duke? While we might know these names, most of us don’t know how these Americans made their fortunes. Check out the following historical nuggets to find out how.
John D. Rockefeller
The Rockefeller name hasn’t always signaled wealth — in fact, John D. Rockefeller (1839-1937) was born into modest circumstances in upstate New York. However, his astute business sense led to the rise of one of the biggest companies in the world, the Standard Oil Company, in 1870. Rockefeller revolutionized the oil industry — even though lamp oil was unpredictable at the time, he figured out a way to standardize the quality of it, and by the 1880s, the company controlled almost 90 percent of the total oil produced in the U.S.
However, Rockefeller was accused of engaging in such unethical practices as predatory pricing, conspiring with railroads to eliminate his competitors and other underhanded business dealings to gain a monopoly in the industry. In 1911, the U.S. Supreme Court found the Standard Oil Company in violation of antitrust laws and ordered it to be dissolved, but not before Rockefeller became America’s first billionaire. ExxonMobil, ConocoPhillips, Chevron and a large chunk of what are now BP's American operations are some of the companies that sprung from Standard Oil Company's breakup.
Rockefeller donated much of his fortune before he died, and also gave money to establish the Rockefeller Foundation and the University of Chicago.
Shipping and railroad magnate Cornelius Vanderbilt (1794-1877) got his start sailing barges across the New York Harbor, an interest that would eventually expand into steamships and railroads. At the age of 23, he started working for a steamboat captain to learn everything he could about steamships, and was soon building ships to support his own commercial ferry service.
Vanderbilt was known to be rough around the edges, and would undercut the competition by charging such low fares that others would pay him to stay out of a given market.
Using the same tactics, he opened the fastest steamship route from New York to San Francisco during the Gold Rush, and then pivoted. He realized that trains were the next big thing in transportation, and sold his entire stake in the steamship industry, betting his fortune on railroads.
Vanderbilt always saw himself as being in the transportation business, and not just shipping — and when something better came along, he was quick to adapt. Within five years of the switch from shipping to railroads, he became the richest man in America. At the time of his death, Vanderbilt had amassed the largest fortune accumulated in the U.S. at that time.
Andrew Carnegie (1835-1919) started out as a bobbin boy in a cotton mill, and then moved on to work as a messenger for a telegraph company, where he taught himself to use the equipment. The skills he picked up there helped him land a job with the Pennsylvania Railroad, which is where he learned about the railroad industry and was able to identify smart investments, even though he didn’t have the money to make any on his own.
His boss, Thomas A. Scott, alerted him of the impending sale of 10 shares in the Adams Express Company and loaned him money to invest. Once Carnegie received a dividend check for the stock, he became dedicated to using the stock market to grow his income. Using his railroad salary and the dividend checks, Carnegie began investing in businesses he knew, including telegraph and railroad companies.
During the Civil War, Pittsburgh became the center of production for cannons, gunboats and the like. Carnegie invested in an oil well that yielded massive cash dividends. He started work on creating a steel rolling mill, and once the war was over, he focused his efforts on ironworks, including the Union Ironworks and the Keystone Bridge Works.
Carnegie opened his first steel plant in 1875, bought a rival steel company called the Homestead Steel Works in 1883 and formed the Carnegie Steel Company in 1892. Using the Bessemer process, vertical integration and other technological advances, Carnegie built the largest steel empire in U.S. history. In 1901, he sold his company to J.P. Morgan, in what was the largest deal in American history, and sparking the new firm U.S. Steel.
Carnegie spent the rest of his life in philanthropic pursuits, giving away millions to schools, colleges, libraries and other public works. In The Gospel of Wealth, Carnegie famously wrote, “The man who dies thus rich dies disgraced."
Henry Ford's (1863-1947) name is synonymous with the Ford Motor Company and the famous Model T. But before he started the automobile giant, he worked as chief engineer for the Edison Illuminating Company.
In 1891, Ford, in his spare time, started working on what he called the “Quadricycle,” a crude contraption made up of two bicycles placed side by side, powered by a gasoline engine. After working on the Quadricycle for almost a decade, Ford took Detroit lumber tycoon William H. Murphy for a ride in his creation and soon after they were in business together.
In 1899, the Detroit Automobile Company opened with Ford as superintendent in charge of production. But the venture didn’t last very long, because Ford couldn't build the vehicles fast enough to keep the company afloat. He then decided to build a racer and saw racing as a way to spread the word about his cars and his name. Ford quickly attracted the attention of the backers and started the Ford Motor Company in 1903.
While other automakers wanted to build luxury automobiles for the wealthy, Ford’s dream was to create an automobile that everyone could afford. The result was the Model T.
In order to meet the enormous demand for the revolutionary vehicle, Ford came up with novel mass-production methods such as huge production plants, the use of standardized, interchangeable parts and the world’s first moving assembly line for cars in 1913.
By integrating interchangeable parts with the assembly line, Ford paved the way for a variety of goods to be mass produced for a fraction of the cost. And by paying a generous wage, he allowed his workers to purchase the goods they produced.
James Buchanan Duke
James Buchanan Duke (1856-1925) was the man behind the development of the American tobacco industry. He entered the family business, W. Duke and Sons, with his older brother Benjamin, and was soon looking for ways to promote and grow the firm.
Duke developed several innovative marketing and production techniques that drove the family business to success. One such innovation was the 1884 acquisition of the Bonsack cigarette-rolling machine, which allowed mass production of cigarettes using automation.
Soon, Duke's aggressive marketing techniques paid off, and by 1889, the business was called W. Duke, Sons and Company, producing nearly 45 percent of all cigarettes sold in America. In an attempt to get an even greater share of the growing tobacco market, Duke joined hands with four other major tobacco manufacturers in 1890 to create the American Tobacco Company. The new entity now controlled 90 percent of all tobacco sales in the U.S.
As president of the American Tobacco Company, Duke helped organize the American Snuff Company (1900) and the American Cigar Company (1901). However, in 1911, to encourage competition, the U.S. Supreme Court ordered the tobacco giant to be split into four smaller firms, namely the American Tobacco Company, P. Lorillard, Liggett and Myers, and R.J. Reynolds.
In 1924, Duke set up the Duke Endowment, and contributed heavily to North Carolina’s Trinity College, which was later renamed Duke University.
J. Paul Getty
J. Paul Getty (1892-1976) was born to George Franklin Getty, a successful attorney who later became an Oklahoma wildcatter, a prospector investing in oil wells. The young Getty joined his father’s Minnehoma Oil Company in Tulsa, Okla., at the age of 21, and started working as a wildcatter, buying and selling oil leases.
By 1916, Getty had made his first million from a successful well, and he partnered with his father to incorporate the Getty Oil Company. He briefly retired to a life of leisure before returning to the oil business in 1919.
Throughout the 1920s, the Gettys continued to amass wealth through lease brokering and drilling. The senior George passed away in 1930, and Getty became president of his father's oil company and set out to restructure and expand the business into a self-sufficient organization — one that did everything from drilling and refining to transporting and selling oil.
Getty soon began buying other such companies as Skelly Oil, Pacific Western Oil and Tidewater Oil. After World War II, he also invested millions in the “Neutral Zone” between Saudi Arabia and Kuwait. In 1953, his gamble paid off and oil began to flow at the rate of 16 million barrels a year.