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When starting the lecture “Robber Barons” given by Dr. Burt Folsom I was not really sure what to expect. I was unsure of where he would be taking us with this. This is a subject that I was unfamiliar with as it is not taught in a history class anymore. However, throughout the lecture I was able to learn and develop some of my own opinions that I feel most would greatly agree with.
How it began
Dr. Folsom started out the lecture by saying that the theory that our founders has was: IF we give a lot of freedom in the constitution and allow lots of individual freedom. With limited government we would give freedom and prosper. I personally would agree with to a point. If people are given freedoms without being micromanaged by laws, they will tend to do better and flourish on their own which we learned from Dr. Folsom.
Catching UP
In the 1800’s England was beating America in all aspects basically. They were leading in textiles, railroads, and industrials. They were even evolving how they were building ships. They built the first steamboat which saved time and money. This boat could travel a voyage in about 2 weeks. When people started traveling by boats it could months at a time. For example, when Christopher Columbus set sail to America, it took him 2-3 months. Steamships changed how people traveled. They would be costly but would get someone across the ocean quickly.
The beginning of steamboats in America
The revolution was being seen by many around the world. They were also seeing that the United States was again lagging. This was especially seen by a man named Edward Collins. Edward went to the constitution and petitioned then what he said would benefit America, that congress needed to fund an entrepreneur build boats to catch up to England with their steam ship revolution. He helped persuade them by using his line “bring the funds in and contribute to economic development” according to Dr. Folsom. Collins volunteered to design and develop the ships that would catch up to the British. The catch was that the start-up costs would be $385,000 and $3,000,000 to build the ships. Congress listened and the ships were built.
Launching the ships
Once the ships were finished, they were launched and a plan that I considered to be brilliant. Of the four ships built two were station in New York City and two in England. Of all the things that Collins did I felt as if this was best thing he could have done as there were constantly ships moving and generating income. I feel as if everything was great for the first year until Collins asked for money and was granted it by congress. This continued until a congress member Cornelius Vanderbilt thought something was fishy and petitioned that he would do for half the cost. This was denied by congress. I feel as if this is case largely due to congress not wanting to take a loss on all of the money they have already spent. They also wanted to save face.
The battle
Soon after Vanderbilt was denied the opportunity to build and run the ships at half cost on his own, he built and started his own steamboat company. Vanderbilt raced Collins to England and won, but realized the fuel costs were astronomical. He slowed his ship down and still making it with plenty of turnaround time to start the next voyage. Where Vanderbilt beats Collins is that he was always fully loaded with passenger carrying 600 people every trip while Collins was only carrying 200 people. Vanderbilt continued to develop new ways to make money. Within his ship he was selling food to his passengers, and by the end of the first year without any subsidies he made a profit. After the year was up Collins continued to go to congress asking for money which he received until he started doing things poorly and losing ships and money. After his ship sank and congress denied him $990,000 within six months, he went bankrupt. I feel as if Vanderbilt was able to grow and thrive in this market was largely due to the fact that he was using his own money. He ran his company like a business and took care of it because he was the one who would lose the money.
Should government give subsidies to help businesses?
A tricky question that I am struggling with is should the government help with subsidies? I feel as if there becomes a point when they should not. Collins wasted $11,000,000 in subsidies which was 1/3 of the national Debt. I think that a logical answer is it should be given in moderation. Collins didn’t care if he lost the money as it was not his to begin with while Vanderbilt grew and thrived because he took care of his business as he was the one who funded it. I personally feel as if Government subsidies become wasted. While Collins wasted American money he did help start the Rise of America.