Final answer:
The correct answer is option 3. J. P. Morgan bought Carnegie Steel and created U.S. Steel in 1901, forming the first billion-dollar company in the U.S. The sale was part of the industrial growth and consolidation characterizing the era, with steel production at the core of the nation's development.
Step-by-step explanation:
J. P. Morgan purchased Carnegie Steel from Andrew Carnegie and created the U.S. Steel Corporation. This monumental transaction took place in 1901 when Andrew Carnegie was persuaded to sell his company for the sum of $500 million. After acquiring Carnegie Steel, Morgan merged it with several other smaller steel companies to form the U.S. Steel Corporation, which was then capitalized at an incredible $1.4 billion, making it the first billion-dollar company in the United States.
Steel production and development were essential to the nation's growth, with high demand due to expansions in the navy and railroad industry. Andrew Carnegie, a Scottish immigrant, made his way up from a modest beginning to dominate the steel market by implementing vertical integration and maximizing efficiency through direct ownership of all aspects of production, from mines to railroads. U.S. Steel subsequently became a pivotal force in industrial America.