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The rise of the steel industry in America before and after the Civil War revolutionized heavy industry, transportation, and business practices. The integration of Bessemer Converter and Open-Hearth Steel Production techniques brought efficiency by reducing labor needs and consolidating production stages. Steel replaced iron in railroad tracks, engines, high-rise buildings, suspension bridges, and naval ships like the Monitor and Virginia. The shift to coal as a power source further boosted industry growth. Business expansions, both vertical (Andrew Carnegie's steel empire) and horizontal (John D. Rockefeller's oil monopoly), reshaped the economy. The impact extended to transportation and communication advancements, like the Pony Express and the Transcontinental Railroad, with Western Union Telegraph running alongside. Railroads, the first big business in the U.S., evolved from individual operations to cooperative monopolies, setting rates and establishing time zones. The era saw the emergence of efficiency studies and the separation of workers from management in the railroad industry, influencing business administration practices. Stocks became popular, and Europeans invested in American railroad development, marking a transformative period in the nation's economic history.
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V. Smokestack America • Before War – little interest in heavy industry • 1. War spurred industry • 2. 1870 Bessemer Converter & Open-Hearth Steel Production • a. reduced labor needs • b. brought several stages of production under one roof • B. Steel replaces Iron • 1. Railroad rails no longer flatten & split • 2. Railroad engines held more steam & pull more weight • 3. High rise buildings • 4. Suspension bridges • 5. New steel Navy (battle of the Ironclads Virginia & Monitor) • 6. Fencing, Nails, Hinges, Needles, Etc.
2 C. Steel Changes the power source to Coal 1. Animal power, Water power, wood , & now Coal D. Capitol 1. 1/3 Railroad cost paid by Europeans 2. Stocks become popular a. John Pierpont Morgan starts selling them in his bank b. expand during 1880s & 1890s E. Transportation & Communication 1. Pony Express 4/3/1860-10/24/1861 a. 10 days from St.Joseph, MO to Sacramento, CA b. ended with first transcontinental telegraph line 2. 1st Transcontinental Railroad 1869 a. 4 more by 1890 3. Western Union Telegraph ran along side each Railroad track
3 F. Railroads 1. first big business in the U.S. a. at first one man operation b. transcontinentals too large & expensive for one man i. initial investment, upkeep too much ii. rates, competition and management too much 2. cooperative monopolies a. divided up areas among themselves b. established rates in cooperation c. competed only when trying to take over d. pressure sometimes cut wages for workers 3. First ones to instigate efficiency studies a. told when to run b. how much to carry
4 c. established first time zones 1880s e. first management studies i. 1854 Erie Railroad hired Daniel McCallum ii. separate workers from management iii. helped establish business administrators iv. others followed railroad's lead G. Business Expansions 1. Vertical a. put all phases of an operation under one roof b. companies expand in all phases of their industry c. Andrew Carnegie built up the steel industry i. backward expansion a. coal b. iron
5 ii. forward a. transportation - railroads b. shipping lines 2. Horizontal a. most railroads expand this way buy up competition b. John D. Rockefeller of Standard Oil of New Jersey i. controlled 84% of country's oil production by 1898 ii. Robber Barons or Industrial Giants
