The Steel Business
By: Grace Mitchell
How and why the steel business grew?
The steel business before the 1860s was not widely used because it was expensive to manufacture. The development of new manufacturing techniques helped to overcome the problem of not being used very much. Two new methods of making steel were made, The Bessemer process, developed by Henry Bessemer of England, and the open-hearth process. If you ask why the steel industry grew it's because with the new methods, mills could produce steel at affordable prices and in large quantities.
Andrew Carnegie was the leading figure in the early years of the American steel industry. He was the son of a Scottish immigrant. He started as a telegraph operator, Carnegie later became a manager of the Pennsylvania Railroad. In 1865 he left that job to invest in the growing iron industry. He soon realized that steel would have an enormous market. After learning about the Bessemer process, he built a steel plant named J Edgar Thompson steel works that used the new process. By 1890 he dominated the steel industry. His company became powerful through Vertical integration. Carnegie bought iron and coal mines, warehouses, ore ships, and railroads to gain control of all parts of the business of making and selling steel. in 1900 he was producing one-third of the nations steel. In 1901 Andrew Carnegie sold his steel company to banker J. Pierpont Morgan. Carnegie donated $350 million to various organization.
how and why did government began to restrict the steel business?
The way the government began to restrict the steel business is during the 1880s, several states passed laws restricting business combinations. Corporations, however, avoided those laws. Public pressure for a federal law to prohibit trusts and monopolies led congress to pass the Sherman Antitrust Act in 1890. The law sought "to protect trade and commerce against unlawful restraint and monopoly." The act did not clearly define either "trusts" or "monopolies." If you wondering why the government restricted the steel business its because state government responded to the growing opposition to trusts and monopolies. Trusts meaning a combination of firms or corporations formed by a legal agreement, especially to reduce competition and monopoly meaning total control of a type of industry by one person or one company.