Tycoon. The word comes from Japan, where it means the equivalent of shogun. But long ago America confiscated the title. It was in the U.S. that tycoons became paragons of power and influence. American tycoons swung deals, not swords, and changed the
From the Print Edition:
J.P. Morgan, Mar/Apr 00
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Rockefeller soon embarked on a produce business, which boomed during the Civil War and must have further convinced him of his destiny. Young Rockefeller had strong antislavery sentiments, but believed so fervently in his fate to be wealthy that he paid a substitute to serve for him. His eye for opportunity was drawn to the nascent oil industry in the wilds of Pennsylvania.
Rockefeller and his partners built a business refining crude into kerosene. He brought to the venture a talent for watching the books and scrupulously securing every economy in a boomtown business full of imprudent wildcatters. His other genius was for spotting failings as well as abilities in his partners; when associates displayed weaknesses he eliminated them and replaced them with colleagues, such as Henry Flagler, Oliver Payne and John Archbold, who offered strengths.
The fledgling industry was rife with problems, not the least of which was the cost of transporting oil to market. Rockefeller solved that by securing clandestine contracts with the railroads that afforded huge rebates. With that edge, he was able to squeeze out the competition, which he usually then enveloped. With fewer bidders, he could pinch suppliers and regulate wildly fluctuating prices.
Industrial espionage and close association with politicos (his son married the daughter of trust-friendly Sen. Nelson Aldrich) smoothed out other snags for the tycoon. Another problem was retaining control of the empire while amassing the capital it would take to run it. With Flagler's aid Rockefeller incorporated. Later, Samuel Dodd helped him create a byzantine holding company, or trust, to circumvent laws that blocked businesses from owning property out of state.
Called Standard Oil, the company would come to control every facet of the business, from production and refining to shipping and barrel making. The trust garnered not only a worldwide monopoly, but the lasting enmity of ruined competitors and a horrified public. The lightning rod for disdain was the work of muckraking journalist Ida Tarbell. Rockefeller would argue that his business methods, common practice at the time, had slashed oil prices. Nevertheless, antitrust suits dissolved Standard Oil into dozens of smaller companies in 1911.
The ironic upshot was that his holdings gained so much on the open market that Rockefeller, already retired, became the country's first billionaire as a result.--Jack Bettridge
JAMES B. DUKE (1856-1925) THE DUKE OF TOBACCO
When Washington Duke returned from the Civil War to his farm near Durham, North Carolina, he had 50 cents, two blind mules and some cured tobacco. Seeing the success of the Bull Durham brand of chewing tobacco, Duke determined that selling rather than growing tobacco held a better future.
It was Washington's irrepressible son James Buchanan "Buck" Duke who saw that prerolled cigarettes represented a market segment not controlled by Bull Durham. When Duke was 33, he met with his four largest competitors in a lower Manhattan hotel on April 23, 1889 as the rough-hewn thorn in the side of the cigarette-making industry. He would emerge with an agreement that he would head the American Tobacco Co., the newly minted cigarette trust that would come to control the market for most tobacco products in the United States and gobble up more than 250 companies in its wake.
It was a combination of keen foresight, unmatched negotiating ability and cutthroat competitiveness that had put the young tobacco farmer in the position to rule his world. He attacked with a vengeance with marketing schemes such as brand names, in-store displays, trading cards, athletic endorsements, coupons and innovative packaging. Determining early on that sex sells, he even procured the endorsement of a comely actress. It was his introduction of the cigarette-making machine that allowed him the economies to go toe-to-toe with the serious competition in New York City.
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