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The
Gilded Age was also the age of steel. Needed first for the vast
extension of the country's railroad network, steel was the pillar of
the U.S. industrialization during the second part of the 19th
century. Technically the steel industry was based on the
introduction of the Bessemer process. The champions of Bessemer
steel were Andrew Carnegie and his handpicked team of partners and
managers, including Henry Phipps, Alexander Holley, Captain Bill
Jones, and later Charles Schwab and William Corey. One of the main
Carnegie partners was Henry Clay Frick, who also dominated the coke
industry at Connellsville, Pennsylvania.
Steel
was one of the most capital intensive industries and only the
strongest companies could support the necessary continuous
modernization and extension of the plants. A profitable business and
essential component of the industrial revolution, steel soon became
the coveted turf of some of the major corporate consolidators. John
Warne Gates built the American Steel & Wire Company, grouping most
of the country's wire mills under one umbrella. He also participated
with Jay C. Morse in the consolidation of three major Chicago plants
into Illinois Steel. J. Pierpont Morgan hired Judge Elbert Henry
Gary to manage his Federal Steel Company and the Moore brothers from
Chicago created several steel product trusts.
Both
the Moores and J.D. Rockefeller made attempts to takeover Carnegie
Steel toward the end of the 1890's, working through Henry Clay
Frick. But is was Morgan, who finally clinched the deal with
Carnegie and managed to organize the giant United States Steel
corporation in 1901. With a capitalization of 1.4 billion dollars,
U.S. Steel was apotheosis of the trust movement. Within a few years,
the giant group took over Gates' wire trust, Rockefeller's Mesabi
iron properties and the Mellon's Union Sharon Steel company. Charles
Schwab was made the first president of U. S. Steel, but he resigned
after just three years, took over Bethlehem Steel and built it into
a major rival.
With
the growth of American cities and the relentless push of modern
civilization to the very edges of the frontier, a new sector of
services known as "public utilities" emerged. Public utilities
roughly comprised telecommunications, street railways an gas or
electricity suppliers. Telecommunications started with the telegraph
lines, whose early promoters included Ezra Cornell and Hiram Sibley.
Their Western Union Telegraph company soon had the reputation of a
stable investment held by many of the richest capitalists, including
the Astors and the
Vanderbilts. Through a series of merger
transactions, Jay Gould and
Russell Sage gained control during the
1880's.
These
robber barons, already among the leading railroad tycoons, soon also
controlled the Manhattan Elevated railways. During the 1890's, a
group of New York and Philadelphia capitalists consolidated the
street railways in both cities and reaped huge profits. They were
William Collins Whitney, Thomas Fortune Ryan, Anthony Nicholas
Brady, Peter A. B. Widener and George Lukens Elkins. With the
profits from their street railway transactions, these men took large
positions in gas and electricity companies, mining enterprises, the
nascent automobile industry and
the American Tobacco trust. There
they sided with James Buchanan Duke, who invested a sizeable part of
his tobacco millions into the Duke Power utility.
The Gilded Age
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Introduction and Index
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