The American History Series SERIES EDITORS John Hope Franklin, Duke University Abraham S. Eisenstadt, Brooklyn College j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j j . J Glenn Porter HAGLEY MUSEUM AND LIBRARY The Rise of Big Business 1860-1920 SECOND EDITION HARLAN DAVIDSON, INC. WHEELING, ILLINOIS 60090-6000 Copyright© 1973, 1992 Harlan Davidson, Inc. All Rights Reserved Except as permitted under United States copyright law, no part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or any retrieval system, without prior written permission. Address inquiries to Harlan Davidson, Inc., 773 Glenn Avenue, Wheeling, Illinois 60090-6000. Library of Congress Cataloging-in-Publication Data Porter, Glenn The rise of big business, 1860-1920 I Glenn Porter.-2nd ed .. p. cm.-(The American history series) Includes bibliographical references and index. ISBN 0-88295-882-8 1. Big business-United States-History. I. Title. II. Series: American his tory series (Wheeling, Ill.) HD2356.U5P67 1992 338.6' 44'0973-dc20 91-16506 CIP Cover photograph: The Larkin Company Building, courtesy of The Larkin Collection, Buffalo and Erie County Historical Society. Book design: Roger Eggers Manufactured in the United States of America 98MG6 FOREWORD Every generation writes its own history for the reason that it sees the past in the foreshortened perspective of its own ex perience. This has surely been true of the writing of American history. The practical aim of our historiography is to give us a more informed sense of where we are going by helping us understand the road we took in getting where we are. As the nature and dimensions of American life are changing, so too are the themes of our historical writing. Today's scholars are hard at work reconsidering every major aspect of the nation's past: its politics, diplomacy, economy, society, recreation, mores and values, as well as status, ethnic, race, sexual, and family relations. The lists of series titles that appear at the back of this book will show at once that our historians are ever broadening the range of their studies. The aim of this series is to offer our readers a survey of what today's historians are saying about the central themes and aspects of the American past. To do this, we have invited to write for the series scholars who have mad~ notable con tributions to the respective fields in which they are working. Drawing on primary and secondary materials, each volume presents a factual and narrative account of its particular sub ject, one that affords readers a basis for perceiving its larger dimensions and importance. Conscious that readers respond to the closeness and immediacy of a subject, each of our au- VI FoREWORD thors seeks to restore the past as an actual present, to revive it as a living reality. The individuals and groups who figure in the pages of our books appear as real people who once were looking for survival and fulfillment. Aware that historical sub jects are often matters of controversy, our authors present their own findings and conclusions. Each volume closes with an extensive critical essay on the writings of the major authorities on its particular theme. The books in this series are designed for use in both basic and advanced courses in American history, on the undergrad uate and graduate levels. Such a series has a particular value these days, when the format of American history courses is being altered to accommodate a greater diversity of reading materials. The series offers a number of distinct advantages. It extends the dimensions of regular course work. Going well beyond the confines of the textbook, it makes clear that the study of our past is, more than the student might otherwise understand, at once complex, profound, and absorbing. It presents that past as a subject of continuing interest and fresh investigation. The work of experts in their respective fields, the series, moreover, puts at the disposal of the reader the rich findings of historical inquiry. It invites the reader to join, in major fields of research, those who are pondering anew the central themes and aspects of our past. And it reminds the reader that in each successive generation of the ever-changing American adventure, men and women and children were attempting, as we are now, to live their lives and to make their way. John Hope Franklin A. S. Eisenstadt CONTENTS Foreword I v Preface to the Second Edition I ix CHAPTER ONE: What is Big Business? I 1 CHAPTER Two: The Appearance and Spread of Big Business I 29 The Advent of Industrialization 1 29 Pioneers in Big Business: The Railroads 1 32 Preconditions for Big Business I 41 Vertical Growth I 45 Horizontal Growth I 58 The Great Merger Wave I 75 CHAPTER THREE: Corporate Triumph: "Capitalistic, Centralizing, and Mechanical" I 91 Bibliographical Essay I 121 Index I 137 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 PREFACE TO THE SECOND EDITION Almost twenty years have elapsed since the first edition of this book appeared. The passage of time and the accumulation of much new scholarship have caused me to recast much of the text, particularly the third chapter and the bibliographical es say. My views about the fundamental characteristics of big business and the basic forces that called it into being, however, have remained substantially as they were. But there has been important new work on the critical decade following the Panic of 1893, and on the ties between the emerging modern cor poration and many other institutions in American life, espe cially science and technology, labor, and the university, as well as fresh studies on the creation of a white-collar workforce, on the nature of work, the role of women in the workplace, and the impact of the corporate way of life on the heartland. Fur ther, rich new investigations of the perennial topic of the reg ulation of business have appeared. These new perspectives have led me to expand the treatment of the impact of the rise of big business beyond the narrowly political sphere in which historians for so long saw the major cultural and social mean ing of the coming of the giant corporation. Since many of these broader social consequences were coming into focus in the decade before 1920, it seemed appropriate to extend the ter-