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The Beginnings of “Big Business” in American Industry*
Published online by Cambridge University Press: 13 December 2010
Abstract
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The growth of big business in America in the last two decades of the nineteenth century was primarily a response to the rise of urban markets — a result, in turn, of the spreading railroad network. Then, as a new century began to unfold, the dominant influence upon big business development came to be technological. Discernible patterns of integration, combination, diversification, and administration influenced and were influenced by the rise of huge companies and oligopolistic industries. Price competition yielded to other weapons, and the economy adjusted to make room for the young giants in its midst.
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- Copyright © The President and Fellows of Harvard College 1959
References
1 The factors stimulating the growth of the American railroad network and the impact of the earlier construction and operation of this network on the American business economy and business institutions is suggested in Chandler, , Henry Varnum Poor — Business Editor, Analyst, and Reformer (Cambridge, 1956)CrossRefGoogle Scholar, especially chaps. 4, 6–9.
2 Swift's story as outlined in Louis F. Swift in collaboration with Vlissingen, Arthur Van, The Yankee of the Yards — the Biography of Gustavus Franklin Swift (New York, 1928).Google ScholarThe United States Bureau of Corporations, Report of the Commissioner of Corporations on the Beef Industry, March 3, 1905 (Washington, 1905)Google Scholar, is excellent on the internal operations and external activities of the large meat-packing firms. There is additional information in the later three-volume Report of the Federal Trade Commission on the Meat Packing Industry (Washington, 1918–1919). Clemen, R. A., The American Livestock and Meat Industry (New York, 1923)Google Scholar has some useful background data.
3 Report of Commissioner of Corporations on the Beef Industry, p. 21.
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10 The information on National Biscuit comes largely from its annual reports.
11 Annual Report of the National Biscuit Company for the Year Ending December, 1901, January 3, 1902. References to centralizing of manufacturing facilities appear in several early annual reports. As this was written before Theodore Roosevelt had started to make the Sherman Act an effective antitrust instrument and Ida Tarbell and other journalists had begun to make “muck raking” of big business popular and profitable, the Biscuit Company's shift in policy could hardly have been the result of the pressure of public opinion or the threat of government action.
12 The background for the creation of the United States Rubber Company can be found in Norton, Nancy P., “Industrial Pioneer: the Goodyear Metallic Rubber Shoe Company” (Ph.D. thesis, Radcliffe College, 1950)Google Scholar, Green, Constance McL., History of Naugatuck, Connecticut (New Haven, 1948), pp. 126–131, 193–194Google Scholar, and Clark, , History of Manufactures, Vol. II, pp. 479–481Google Scholar, Vol. III, pp. 235–237. The company's annual reports provide most of the information on its activities.
13 The Fifth Annual Report of the United States Rubber Company, March 31, 1897, pp. 6–7.
14 This and the following quotations are from the Fourth Annual Report of the United States Rubber Company, May 25, 1896, pp. 4–5, 7–8.
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21 The experience of the other steel firms comes primarily from their annual reports and from prospectuses and other reports in the Corporation Records Division of Baker Library. A company publication, J & L — The Growth of an American Business (Pittsburgh, 1953)Google Scholar has some additional information on that company. Also, books listed in footnote 26 on the United States Steel Corporation have something on these companies. Two other steel companies listed in Table I made major changes somewhat before and after the period immediately following 1898. One, the Colorado Fuel & Iron Co., established in 1892, quickly became an integrated steel company in the Colorado area. The Bethlehem Steel Corporation was formed in 1904 when Charles F. Schwab, formerly of the Carnegie company and the United States Steel Corporation, reorganized the finances, corporate structure, and administrative organization of the bankrupt United States Shipbuilding Company.
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24 The best brief summary of these mergers and the formation of the United States Steel Corporation is in Jones, Eliot, The Trust Problem in the United Staten (New York, 1924), pp. 189–200.Google Scholar The companies' annual reports and prospectuses provide additional material.
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27 This generalization is based on the annual reports of the several companies.
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29 The development of new lines by Allis-Chalmers, International Steam Pump, and American Locomotive is mentioned in their annual reports in the first decade of the twentieth century. International Harvester's similar “full line” policies are described in McCormick, Cyrus, The Century of the Reaper (New York, 1931), chaps. 6–9Google Scholar, and United States Bureau of Corporations, The International Harvester Co., March 3, 1913 (Washington, 1913), especially pp. 156–158.Google Scholar
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32 This point has only been considered briefly here, but has been developed at some length in my “Development, Diversification and Decentralization,” to be published in a book of essays tentatively titled The Postwar American Economy under the sponsorship of the Department of Economics, Massachusetts Institute of Technology.
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