The technological breakthrough that has launched the rise of heavy industry is the discovery of a new way of making large quantities of steel. In the 1850s, both Henry Bessemer in England and William Kelly in the United States discovered that blasting air through molten iron produced high-quality steel. The Great Lakes region, with its abundant coal reserves and access to the iron ore of Minnesota’s Mesabi Range, soon emerged as the leading steel producer. Andrew Carnegie has worked his way up from being a poor Scottish immigrant to becoming the superintendent of a Pennsylvania railroad. In the 1870s, he began manufacturing steel in Pittsburgh and soon left his competitors in the dust by a combination of salesmanship and the use of the latest technology. Carnegie put into work a business strategy that says everyone has a duty to become rich. Andrew Carnegie’s article “Wealth” argues that the wealthy have a God-given responsibility to carry out projects of civic philanthropy for the benefit of society. Practicing what he preaches, Carnegie distributes over $350 million of his fortune to support the building of libraries, universities, and various public institutions. Deciding to retire from business to devote himself to philanthropy, Carnegie sold his company for over $400 million to a new steel combination headed by J. P. Morgan. The new corporation, United States Steel, is the first billion-dollar company and also the largest enterprise in the world, employing 168,000 people and controlling over three-fifths of the nation’s steel business.
The first U.S. oil well was drilled by Edwin Drake in Pennsylvania. Four years later, in 1863, a youthful businessman, John D. Rockefeller, founded a company that would come to control most of the nation’s oil refineries by eliminating its competition. Rockefeller took charge of the chaotic oil refinery business by applying the latest technologies and efficient practices. This company became well-known as Standard Oil. As his company grew, he was able to extort rebates from railroad companies and temporarily cut prices for Standard Oil kerosene to force rival companies to sell out. By 1881, his company controls 90 percent of the oil refinery business. The trust that Rockefeller put together consists of various companies that he has acquired. The combination represents an integration of an industry, in which former competitors were brought under one corporate umbrella. By controlling the supply and prices of oil products, Standard Oil’s profits soared and so did Rockefeller’s fortune. By eliminating waste in the production of kerosene, the Standard Oil monopoly is able to keep prices low for consumers.