The first iron works in America, Hammersmith, began its operation in 1647 in Saugus, Massachusetts. The operation only lasted for several years due to the low level efficiency to fuel the furnaces. But upon the discovery of charcoal as opposed to wood or coal in the early 1800s, larger operation became possible. The discovery of huge iron ore deposits in the northern Great Lakes region during the 1840s gave a further boost to production. It was also the steel industry that boosted the industrial economy in the early to late 1900s. Railroads, armaments and automobiles were largely dependent on steel. The increasing availability of steel pave the way to greater demand for various aspects of economic development—ship building, construction, agriculture and auto industry (Rogers, 2009).
The contribution of steel industry in the US can be examined in three categories—economic, historical and political. Steel's economic importance is its power to influence other parts of the economy. I.e. industries that rely heavily on manufactured steel as material on their products. Another is that steel's market structure is a typical example of the modern industrial markets. Historical importance of the steel industry provided growth and changes to the United States. From providing steel for subway development, factories, highways, bridges and construction materials to armaments, canning, steel drums, bicycles and machinery. Labor demand also increased. Basic and grand innovations that had lasting impact on history. Lastly is the political aspect. Because of the great labor demand concentrated on steel company employment, it made politicians responsive and aware to the welfare of both unions and steel companies. Government made sure that it protects its steel companies from outside competitors because of the economic benefits for both parties. Moreover, trade barriers where in effect such as quotas, trigger prices regulations, and locality preference in government procurement (Rogers, 2009).
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