“Industrial Concentration, Economic Growth, and Inequality ...
Industrial expansion and Concentration
-
Upload
shelly-chen -
Category
Documents
-
view
20 -
download
2
description
Transcript of 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.