Between 1860 and 1900, the United States went through a massive industrial boom due to the rapid increase of laborers and demand for oil, steel, cars, and other common products. Many of the big business owners developed a monopoly in their field of business, like oil or steel using vertical and horizontal integration methods to minimize production cost with increased speed while keeping prices high. Other factors that helped the industrial boom was rapid growth of the railroad system throughout the US.
One of the biggest helps to the industrial boom in the US is the adoption of the vertical and horizontal integration systems. These systems are a type of monopoly where a business would buy all of the contributing factors in the making of their products or buy all of the retail sellers. As explained in “The Genesis of the United States Steel Corporation” by E. S. Meade, ...view middle of the document...
Meanwhile, John D. Rockefeller used the horizontal integration method for his Standard Oil Company to buy out all retail competition so he could increase his prices.
Another factor to the growth of US industry was the rapidly growing nationwide railroad system developed and owned by Cornelius Vanderbilt, who monopolized the market. Because he was the only one, he was able to charge high prices for even short distances on the railroad. This helped the other businesses because they were now able to send/receive materials from around the nation faster and in a cheaper way than previously. Also, regular customers of the railroad systems, like big businesses, got a discount because of their constant use of the railroads, further increasing the businesses profits. Also, the US government passed several tariffs on foreign goods to promote the purchase of US made goods and services.
In 1854, the English government sent a committee of businessmen to the US to study how American industry was operated. In their report they explained how they saw that everything to reduce or remove manual labor completely was adopted. Whether it was arranging lifts for materials, conveyor belts to move material or other machines, they were all used to reduce manual labor and increase efficiency. Also, in a chart showing the difference in sources of power in the American industry between 1850, right before the boom, and then in 1900, human power went from 13% to 5%, animal power from 52% to 22% and water and coal power from 35% to 73%, showing the giant boom in automated industry through machines and water and coal powered systems.
The United States greatly benefited from the industrial boom of the late 1800’s, between the standard oil trusts, railroad and shipping, and steel trusts that monopolized the markets giving some a huge economic advantage. The systems of vertical and horizontal integration greatly affected the monopolies of the 1800’s making their businesses much more efficient and generating more profit for the owners.