Download - Industrial expansion and Concentration
STRUCTURAL CHANGE AND INDUSTRY COMPOSITION
1869 1899Agriculture
Manufactures
53
33
33
53
Agriculture Manufactures
STRUCTURAL CHANGE AND INDUSTRY COMPOSITION
1860 Value 1910 Value
Cotton goods $55 Machinery $690
Lumber $54 Lumber $650
Boots and shoes $49 Printing $540
Flour and meal $40 Iron and steel $330
Men's clothing $37 Malt liquors $280
Iron $36 Men's clothing $270
Machinery $33 Cotton goods $260
Woolen goods $25 Tobacco manufactures $240
Carriages and wagons $24 Railroad cars $210
Leather $23 Boots and shoes $180
Combined $815 Combined $8,529
NEW TECHNOLOGIES
• Roller Mill• Refrigerated Cars• Can Sealing• Long distance pipe lines• Steel Tank Cars• Advances in Bessemer and open-hearth
processes• Cash Register• Typewriter
NEW FORMS AND SOURCES OF ENERGY
• In 1850 most of the energy came from animal and man power
• During the 1870s, steam surpassed water as a source of power.
• In 1890 coal was the source of 90% of the energy furnished to manufacturing
• By World War I, one-third of the nation’s industrial power was provided by electricity
• Coal remained the main energy source until 1920
EARLY BUSINESS COMBINATIONS
• Pooling became common after 1875
• Gentlemen’s agreements were usually used for setting and maintaining prices
• Gentlemen’s agreements and Pooling were not very durable
TWO PHASES OF THE CONCENTRATION MOVEMENT • Phase 1: Horizontal
Mergers• the combining of
firms that produce identical products.
An example would be the Standard Oil Company of Ohio
TWO PHASES OF THE CONCENTRATION MOVEMENT • Phase 2: Vertical
Mergers• firms managed by
different departments within one firm.
Andrew Carnegie forms the US Steel Corporation in 1901 with Morgan and Moore
LEGISLATION AND LEGAL ACTIONS
• Passage of legislation to control monopoly power becomes critical in the Concentration Movement.
• The Sherman Act of 1890 made it illegal for people to monopolize any part of the trade or commerce.
THE FEDERAL TRADE COMMISSION
• 1914 - congress passes the Clayton Act, which was intended to remove ambiguities in existing antitrust law by making certain specific practices illegal.
• Price discrimination among buyers was forbidden, as well as exclusive selling and tying contracts if their effect was to lessen competition.