During the 1870's and 80's big business arrived in the United States. The growth of railroads had laid the basis for further expansion but the actual overall success of big business came during difficult economic times. Large efficient corporations began to prosper. Business leaders struggled to be competitive and even develop monopolies in certain industries.
John D. Rockefeller was one of the most famous business leaders of his time. Rockefeller had been in the oil business since the mid 1860's. He owned the Standard Oil Company which became a monopoly that was run by a trust and came to control every aspect of the oil industry. The creation of this massive company was Rockefeller's effort to impose control on a hectic business. He used tactics such as drawbacks, rebates, and price cutting to dominate his industry, and by the end of the 1870's he controlled 90% of the oil industry and had achieved a horizontal integration of the oil business.
Thomas Edison and his early phonograph. Cropped fr...
Andrew Carnegie, American businessman and philanth...
Young Thomas EdisonAnother famous example was steel tycoon, Andrew Carnegie. He was a Scottish immigrant who had come from practically nothing. However, Carnegie knew how to play his cards right and he began to focus all of his energy on steel. He believed in "putting all your good eggs in one basket and then watch that basket." Carnegie became the dominant figure in steel making. Between the years of 1873 and 1889, Carnegie was able to cut steel costs from $58 a ton to $25 a ton. Carnegie's innovations in the steelmaking industry were recognized by the economy. Carnegie sought to achieve vertical integration of his steel interests; which meant he controlled all the steps in the process of steel making. Since costs of steel were lower, the mechanization industry was able to prosper. Machines became more complex and productive which saved...