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NARRATOR: Many of today's corporate giants were born in the 1870s and '80s. The nation's economy at the time, that had been built from local family-owned businesses, became dominated by large nationwide companies.

JOHN STEELE GORDON: There was no single industrial corporation listed on the New York Stock Exchange at the end of the Civil War, not one. By 1900, there were dozens of them, and they employed 30,000, 40,000, 50,000 people. They were enormously important in all kinds of industries.

NARRATOR: These big businesses used two methods, called vertical and horizontal integration, to grow and command new markets. Vertical integration is when companies become powerful enough to dominate every step of the production process from beginning to end.

JOHN STEELE GORDON: What it basically is, is a chain, from the raw material, the iron ore sitting in Minnesota; to the ships that carry the ore in the Great Lakes to Pittsburgh; to the foundry that turns the ore into steel; into the factory that turns the raw steel into finished I-beams and railroad ties and what have you. If that all comes under one corporate ownership that's called vertical integration. We still have a lot of vertical integration, although less than we used to.

NARRATOR: Vertical integration allowed companies to produce goods more cheaply and more quickly than their competitors could. Other companies relied on horizontal integration to grow profits.

JOHN STEELE GORDON: Horizontal integration is when this steel manufacturer hooks up with this steel manufacturer and this steel and this steel and this steel. And so what you end up with is a monopoly, or a trust, as they were called in those days. The first real trust was Standard Oil.

NARRATOR: John D. Rockefeller bought up stock from oil production companies across the nation and used this stock to establish the Standard Oil Trust. By 1882, the trust controlled more than 90% of the nation's oil refining industry. By the turn of the century, these kinds of corporate strongholds controlled American markets and politics. Admirers called the men who owned them captains of industry. Critics called them robber barons. Later, the federal government would begin to regulate industry more closely to prevent monopolies.