Improved railroad transportation allowed inexpensive coal delivery, which fueled steam-powered factories and freed factories from waterpower restrictions. As a result, factories spread throughout the Northeast. Manufacturing gained the largest benefit from technology, as business insisted on new processes, machines, products, and distribution methods. New products created new industries, as the period saw the successful installation of the gasoline internal-combustion engine (1893); automobile manufacturing (1900); aircraft production (1903); the electric light, patented by Thomas A. Edison (1890); and the telephone, radio, typewriter, phonograph, and cash register.
As productivity grew, the price of producing goods dropped, and improved mechanization increasingly accelerated the process of America’s shift to manufacturing as a source of wealth. In 1860 leading manufacturing industries were, in order of rank, flour and meal, cotton goods, lumber, boots and shoes, and iron founding and machinery. By 1919 technology’s influence had altered the top five industries to slaughtering and meatpacking, iron and steel, automobiles, foundry and machine shop products, and cotton goods. That same year the wealth derived from manufacturing was three times that of agriculture’s wealth.
As industries grew so did competition, as many companies operated with varying levels of success and product quality. This situation resulted in overproduction, which led to lower prices and profits. To better control financial outcomes, industries began to operate collectively as trusts. One of the earliest and most famous trusts was John D. Rockefeller’s Standard Oil Company (1882), which was created when Rockefeller and associates bought nearly 90 percent of the country’s kerosene industry. Similarly, James B. Duke invited competitors to join his American Tobacco Company or watch their markets be taken over by successful American Tobacco advertising campaigns.
As big business pooled the resources and interests of competing parties, by 1919 it was employing 86 percent of America’s wage earners and created 87.7 percent of the value of goods manufactured. Additionally, the annual value of manufactured goods ballooned from $5.4 billion in 1870 to $13 billion in 1899.
Trusts faced opposition by state and federal governments. In 1911, the Supreme Court used the 1890 Sherman Antitrust Act to decree Standard Oil and American Tobacco as monopolies, and further ruled the two companies be broken into smaller companies.