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　　 to part of a lecture in an American History class.FEMALE PROFESSOR:We have been talking about the transformation...the industrialization of United States economy in 19th century.As the country shifted from an agricultural to an industrial base, political power shifted, too.Businesses became... a lot of power went...went...went...went from the government into the hands of business leaders.So, why did this happen?How did an elite group, a few business giants, how did they end up dominating, controlling a number of important national industries in the last quarter of the 19th century?How did they get to be so dominant?How did they figure out?How did they take advantage of the new industrialization of American society?Well, [slight pause] consider the example of Andrew Carnegie and the steel industry.We have already discussed the development of a national network...a national system of railroads.Well, this growth created a tremendous demand for steel; a national railroad system needs a lot of railroad tracks,
　　right?And Carnegie seized the opportunity. He built the world's most modern steel mill.And he came up with a system of business organization calLED vertical integration.Vertical integration just means that...all...every single activity of a particular industry's processing is performed by a single company.In the case of the steel industry, this means [listing] the mining of iron ore, the transportation used to get ore from the mine to the mill, turning the ore into the steel, the manufacturing process, and sales.Carnegie controlled all of these, he practiced Vertical Integration on such a large scale that he practically owned the whole steel industry.
　　This of course gave him a lot of political clout.Just a quick sketch, but you get the idea, right?Here is another example—John D. Rockefeller. Rockefeller owned an oil refinery, but he wanted to expand his business.Since there was lots of comPETition in the industry, he thought the smart way to go about it would be to buy his compes' businesses.But, at the time, it was illegal for one corporation to control another.So, what he did was, he created an organizational structure called a trust.A trust is... well I don't have to go into that now, what matters is that a trust created a single, central management team, and that team directed the activities of what otherwise still appeared to be independent companies.This new...uh...legal entity worked so well that at one point Rockefeller controlled 90% of the country's oil refineries, which again gave him lots of political power.o