The federal government granted vast areas of western land to railroad owners so they would lay train track connecting the eastern and western states. They often used this wealth to dominate and control many aspects of American cultural and political life, and as a consequence of these practices, by the beginning of the 20th century big business became the target of government reform movements at the state and national levels. These big businesses acquired enormous financial wealth. The rapid rise of the steel and railroad industries between the end of the Civil War and the early 1900s spurred the growth of other big businesses, especially in the oil, financial, and manufacturing sectors of the economy.
These low-cost methods enabled more industries to afford the steel companies’ products. To supply their biggest customers, steel producers developed cheap, efficient methods for the mass production of steel rails. In turn, the railroads had a great impact on the steel industry. The railroads were the biggest customers for the steel industry because thousands of miles of steel track were laid. The federal government also intervened, enacting legislation, such as the Sherman Antitrust Act, to protect workers and to prohibit single companies from dominating the marketplace.The growth of American railroads helped expand the industries that supplied the railroad companies’ need for steel rails laid on wood ties, iron locomotives burning huge quantities of coal, wooden freight cars, and passenger cars with fabric-covered seats and glass windows. In addition, social reformers established groups to assist the working class in coping with the industrialists. In response to low pay and poor working conditions, workers organized national labor unions, including the Knights of Labor and the American Federation of Labor. They commonly earned less than a dollar for working twelve or more hours per day. They acquired massive amounts of wealth and commonly refused to share their profits with their workers. Generally, the owners of these firms benefited tremendously. For example, Ohio's Standard Oil Company held a virtual monopoly over oil production in the Eastern and middle sections of the United States. As these firms grew, they succeeded in driving out competition and dominating their respective economic sectors. Pools consisted of secret agreements between various businesses to eliminate competition. Companies attained a monopoly when they became the sole manufacturer or supplier of a product. Business owners formed trusts, where one person or a group of people controlled several companies, to reduce production costs and to set prices. They formed trusts, monopolies, and pools to limit competition from other companies. These firms strove to dominate the economic arena. At most, these firms might be able to dominate local markets, but they played only a minimal role in the national economy.įollowing the Civil War, Big Business emerged. The businesses that did exist usually were small operations. The vast majority of Americans earned their living in agriculture.
These companies became known as Big Businesses.īefore the American Civil War, the United States was in its infancy when it came to industrialization. During the late nineteenth century, large corporations that employed thousands of workers formed.