Pig Iron

Historically, pig iron had been produced on “iron plantations” with sources of iron ore, large stands of trees that could be felled and converted to charcoal, limestone (or oyster shells), and water power sources to run the blast furnaces. If a plantation were sufficiently large, and the level of production were sufficiently restrained, the harvested timber would grow back in time to be cut again, making the plantation self-sustaining in fuel. When the costs of transportation were high, the raw materials needed to run a blast furnace could not be carried any appreciable distance if the furnace were to operate profitably. By contrast pig iron had sufficient value that it could be transported considerable distances and be sold at a profit. As the transportation costs fell, the furnace did not need to be located near all the inputs. Moreover, the use of steam power meant furnaces no longer needed to be near water-power sites. In 1860 this transition was in process.

Many producers of pig iron in 1860 still had their own sources of iron ore. The census enumerated 157 establishments that mined it in nine states, but these mines accounted for only 39.3 percent of the iron ore used in producing pig iron. In 1860 pig iron was made in only eighteen states, and the days had not yet arrived when a relatively small number of large blast furnaces would be fed iron ore carried long distances by rail and barge. Deposits of coal and iron ore in the Scranton, Pennsylvania, region led to the creation of a number of businesses including the Lackawanna Iron and Coal Company and the Delaware, Lackawanna, and Western Railroad Company. The iron and coal company used local resources to make iron products. The railroad company’s principal business was hauling coal to distant industries and cities; at the start of 1860 its rolling stock included 72 locomotives, 17 passenger cars, 369 freight cars, and 3,310 coal cars. Some of the otherwise empty coal cars returning to Scranton carried iron ore to the iron and coal company. Apparently the local ore was not of the best quality: an advertisement by the iron and coal company stated that the completion of the railroad brought to Scranton “Magnetic Ores from the best mines in New Jersey which, used in combination with other ores, produces a quality of Iron of superior strength, and of great durability”. By modifying the product, the company claimed, it turned a weakness into a competitive advantage.