is now used as a cloak to hide rascality, a shield to protect fraud, a buckler to defend
villainy. (Cited in Lurie 1979, p. 114)In 1891, William Hatch of Missouri presented an anti-option bill to the US
House of Representatives. But after four years of political wrangling it was
finally rejected in 1895, reaffirming the ascendancy of speculation and the
unregulated market.
Thus, the judiciary and legislators provided the conditions in which entre-
preneurialism wouldflourish. They allowed for the construction of private
railway networks—the arteries of the grain trade—and gave trading companies
the confidence to invest heavily in infrastructure in the pursuit of market
dominance. Their investment was the driving force in the expansion of
wheat-growing in North America.
13.4 The Barons
The buccaneering, self-reliant industrialists, who were a feature of North
American life in the late nineteenth century, played an indispensable role in
the growth of the North American trade. They were risk-takers who balanced
debt and reinvested profits to grow their businesses rapidly and dominate the
market. The empires they created laid the foundation for the twentieth-
century corporation.
Economic historians have sometimes portrayed the so-called robber barons
as immoral and rapacious. Yet the success of the North American grain trade
forces us to reassess this one-dimensional stereotype. Their contribution as
agents of growth is rarely acknowledged; it is clear that the nineteenth-
century tycoons created far more wealth than they accumulated.
Principal-owner-controlled companies with no dread of risk provided the
motive power for the growth of the wheat industry in Canada and the USA.
Had it not been for the railway and wheat barons, large swathes of the
Northwest may never have been settled.
When the potential of rail haulage to improve the value of farmland became
apparent in thefirst half of the nineteenth century, the open question in both
America and Australia was whether the capital investment could be recovered.
Receipts from passengers and agricultural freight by themselves, even on the
most optimistic projections, were unlikely to generate sufficient profit. Private
investors would need land holdings that would offer capital gain when the
amenity lifted land values.
In North America, subsidies and land grants were offered to encourage
private entrepreneurs to push back the boundaries of the frontier by building
railways that encouraged settlement and released the economic potential of
Barons versus Bureaucrats