The acoustic steel string flat top guitar descended from a style of guitar initially strung with gut strings brought over to America from Germany by a luthier who learned from the Viennese luthier J. G. Stauffer. C.F. Martin started his company in New York in the 1830s, and soon after moved to Pennsylvania. The main feature of these guitars that separated them from the ones in Europe was the use of a cross-braced flat top, instead of the more delicate fan-braced guitars developed in Spain.
Martin's x-bracing proved to be very successful for the structure needs and the sound of a guitar that uses steel strings, which have more tension than gut strings and their nylon successor. The C.F. Martin Company along with other makers such as the Larson Brothers, and Washburn, started making flat top guitars with steel strings in the 1920s at the demand for a louder and punchier sound used in North American folk, western and blues music.
Another European immigrant, Orville Gibson, broke new ground with his redesign of the mandolin, and created a whole new line of instruments, including a guitar, with his new principle of carving the top, such as it is done on the violin family of instruments. Thus the archtop guitar came to be. Later on, this company also developed some flat top guitar designs, too.
These were not the first instruments to use metal wire for strings. The same was being done for the cittern instruments of Northern European countries since the 15th century, but not for lutes or guitars. The mandolin started to be strung with metal in Naples, Italy, in the mid 18th century. An instrument native to the Appalachian mountains, the banjo, was also created with metal strings.
It could be that gut strings were too expensive for the general public in North America at the end of the 19th and beginning of the 20th century, and that is why many musicians who played popular music in streets and bars began to string up with cheaper and longer lasting metal strings. Most likely, the Irish, English and Germanic population brought with them their countries metal strung instruments, and the African slaves also used metal strings on instruments in their homeland. Whichever the case, it became the sound sought after by the next generation of players.
The American steel string is generally larger than the Spanish guitar, allows for a wider variety of shapes and sizes, is sometimes heavily inlaid with pearl, and unlike classical guitars, was made by large manufacturing operations where a craftsman would concentrate on one or two aspects of constructing the guitar. The process was largely mechanized, and the use of jigs, molds and fixtures was not uncommon. Some of the original makers turned into big manufacturers, adapted to the times and popular music, and continue to grow. Some, such as Gibson, nurtured the advent of amplified music with the invention of the electric guitar.
Before that came to be, a pair of creative luthiers called the Dopera Brothers, designed an acoustic steel string guitar that used a spun metallic cone driven by the energy of the strings for amplification. These guitars, called resonator or resophonic guitars, were soon relieved of their purpose by electromagnetic pick-ups and speakers, but their sound continued to be unique enough to be sought after by many musicians.
Today there are many types of flat top steel string guitar music and many of them call for their own specialized sound and aesthetic from a guitar. There are ones for playing finger-style and some more suited for strumming. Many makers show off their artistic inlaying and others prefer a more austere looking instrument. Many luthiers now work independently, the way the traditional Spanish makers do, making the entire instrument from start to finish. Most use the Martin and Gibson shapes as a basic design and modify them, and many keep creating new features and designs.