"...look into all things with a searching eye” - Baha'u'llah (Prophet Founder of the Baha'i Faith)


Jul 17, 2017

Incorporation of America – the Great Merger Movement

Having survived the many hardships of the 19th century - including a wrenching Civil War at mid-century and, in the last decade, economic depression and labor unrest in both city and countryside - Americans breathed a sigh of relief in the new century. For the most part, the first 10 years of the 20th century were a time of prosperity. The Cake Walk was the fashionable dance, prepared foods such as dressed beef and tinned ham were making their appearance in markets, and, three years into the new century, Henry Ford founded the Ford Motor Company. As the decade progressed, the automobile began to reach a mass audience, as did electricity, radio, and the telephone - all of them inventions and discoveries that would simultaneously shrink distance and transform society. Yet even as the American people gazed in wonder at the various technological achievements they associated with the rise of Big Business, they found themselves uneasy at what scholar Alan Trachtenberg has characterized as the rapid "Incorporation of America." Indeed, the ascendancy of large corporations to economic, political, and even cultural dominance would be one of the defining themes of the century itself. Corporations were vigorously swallowing up not only their smaller competitors but each other as well. Between 1897 and 1904, the so-called Great Merger Movement created companies of almost undreamed of size and scale. In the early 1890s, for example, it was rare for a corporation to be worth more than ten million dollars. A decade later, almost 200 corporations were capitalized at that value. The top one percent of companies employed more than a quarter of all workers in the country. If Americans hadn't known it before, they knew it now: This was the age of Big Business.

Perhaps not surprisingly, the symbol of power for the age was not an industrialist, but the financier J. P. Morgan. Huge financial resources were needed to fund huge companies, and often those in charge of the banks became rulers over the new empires. Morgan had twice been instrumental in national efforts to recover from or avert financial panics, first in 1893 and again in 1907. Moreover, "the House of Morgan," as the banking firm of J. P. Morgan and Company was known, played a crucial role in the reorganization of the nation's railroads. Morgan himself became the effective head of the most gargantuan of the new "trusts" - U.S. Steel Corporation, which controlled more than 60 percent of all American production of that critical metal.

Faced with this concentration of power, Americans grew increasingly ambivalent about the cost of the prosperity and efficiency that big corporations promised. 
(National Geographic: ‘The 20th Century’)