shtabula and Conneaut. The purchase
of the Bessemer and Lake Erie Railroad, which extended from Conneaut
to Pittsburgh, made this great transportation route complete. Besides
freeing their business from uncertainty, this elimination of middlemen
naturally produced great economies.

Probably Andrew Carnegie's shrewdness in naming his first plant the
J. Edgar Thompson Steel Works, after the powerful President of the
Pennsylvania Railroad, and in making Thompson and his associate Scott
partners, had much to do with his early success. These two gentlemen
conferred two priceless favors upon the struggling enterprise. They
became large purchasers of steel rails and their influence in this
direction extended far beyond the Pennsylvania Railroad. What was
perhaps even more important, they gave the Carnegie concerns railroad
rebates. The use of rebates, as a method of stifling competition and
building up a great industrial prosperity, is an offense which the
popular mind associates almost exclusively with the Standard Oil
Company, yet the Carnegie fortune, as well as that of John D.
Rockefeller, received an artificial stimulation of this kind.

Though incomparably the greatest of the American steel companies, the
Carnegie Steel Company by no means monopolized the field. In forty
years, indeed, an enormous steel area had grown up, including western
Pennsylvania, Ohio, Indiana, and Illinois, practically all of it drawing
its raw materials from those same teeming ore lands in the Lake Superior
region. Johnstown, Youngstown, Cleveland, Lorain, Chicago, and
Joliet, became headquarters of steel production almost as important as
Pittsburgh itself. Two entirely new steel kingdoms, each with its own
natural reservoirs of ore, grew up in Colorado and Alabama. The Colorado
Fuel and Iron Company, which possessed apparently inexhaustible mineral
lands in Colorado, Wyoming, Utah, New Mexico, and California, itself
produces not far from three million tons a year, almost half the present
production of Great Britain. The Alabama steel country has developed in
even more spectacular fashion. Birmingham, a hive of southern industry
placed almost as if by magic in the leisurely cotton lands of the South,
had no existence in 1870, when the Pittsburgh prosperity began. In the
Civil War, the present site of a city with a population of 140,000 was
merely a blacksmith shop in the fork of the roads. Yet this district has
advantages for the manufacture of