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Rockefeller sought control of the expanding industry through horizontal integration control of one stage of production (transportation and then refineries) Rockefeller established the Standard Oil Trust (1882) to control companies that had previously participated in price fixing arrangements (controlled 90% of the industry through horizontal and vertical integration) – emulated by other industries Morgan and other investors in 1900 for $500 million and became a major philanthropist, advocated the “Gospel of Wealth”īig Oil John D. $11.50/ton in 1900) Carnegie sold Carnegie Steel to J.P. vertical integration  control of every stage of steel production from mining iron ore and coal to selling the finished product  reduced costs and allowed Carnegie to under-price the competition through economy of scale monopoly control of the industry Overall result: More steel produced and at lower cost ($65/ton in 1875 vs. cost-analysis  cut back costs, higher profits 3. the Bessemer steel process  high-quality steel 2.

Congress created the Interstate Commerce Commission in 1887 in an attempt to regulate railroad business practices that hurt small farmers and business owners in remote areasīig Steel Andrew Carnegie led the industry in the late 1800s thanks to the introduction of: 1.

Railroads often went deeply into debt, relied on government subsidies (often in the form of real estate) and used questionable business practices to compete for business and profits owners (such as Jay Gould of the Union Pacific) were depicted as “robber barons” who violated the public trust.

Railroad companies were the first “modern” corporations – sought capital through stock issuances, separated ownership from management, created national distribution and marketing systems, established complex accounting methods, and formed new organizational structures.

Expansion from 10,000 miles of track in 1850 to nearly 200,000 miles by 1900 – opened up a huge internal market that promoted farming, commerce, and closure of the frontier.

Failure of the money supply to keep pace with expansion Rapid decline of prices (both agricultural and industrial) 6. Intense competition that led to the rise of monopolies 5.

Huge demand for labor (both skilled and unskilled) 4. Technological innovations (transportation, communication) 3. Exploitation of vast coal reserves (especially in Appalachia) 2. Whereas America’s First Industrial Revolution of the early 1800s had been characterized by steam powered textile factories in New England, the Second Industrial Revolution spread nationwide and was characterized by: 1.The Civil War and the growth of railroads in the 1860s contributed to the start of America’s Second Industrial Revolution (c.