T

CHAPTER I

THE EVOLUTION OF BUSINESS

HIS is a factory-made age. Its leading tendency is toward concentration and the power-driven machinery of the factory best accounts for this

tendency.

That concentration is characteristic of modern life is in evidence:

1. In the widening of national sovereignties. Since 1750 three great world empires have been built and the land area of the whole world has been gravitating toward control by a few nations. The present war seems likely to strengthen this movement while changing its method.

2. In the growth of national wealth. By official estimate the wealth of the United States, exclusive of Alaska and the island possessions, grew from seven billion dollars in 1850 to one hundred and eighty-seven billion dollars in 1912.

3. In the growth of national populations. The new world populations have grown almost magically. The population of the United States multiplied by twenty-three between 1790 and 1910, and that of Canada has increased twenty-nine times since 1800. Even among the nations of Europe population increase has been notable since the factory came. The populations of England and of Russia have multiplied by four in the past hundred years. The population of the coun

try included in the German Empire at the beginning of the war had increased nearly five-fold in less than a century.

4. In the growth of cities. Some of the western nations have become practically urban and all of them tend that way. The United States, young among the nations and of large area, had only about three per cent. of its population urban in 1800, whereas the census for 1909 records more than forty-six per cent. of the population as urban and five of the states as being more than seventy-five per cent. urban.

5. Among wage earners. In 1800 they were competing individuals. To-day, though still competing, they are massed in effectively organized armies, millions under each of several banners.

6. In the world of capital control. In the middle of the eighteenth century capital was scattered in hand tools and in village shops. To-day mechanized industries have combined and integrated until the concentrated capital of single business enterprises surpasses the whole wealth of most kingdoms prior to 1750.

All these phases of the modern world's concentration have come from the great industrial inventions of the eighteenth century.

Inventors and discoverers have always played leading rôles in the drama of human evolution. Eric and his hardy crew futilely attempted to establish colonies on this Western continent some six centuries before any permanent colony was established. Those six centuries gave Europeans movable type, the compass, and gunpowder. Many seventeenth century colonists were induced to undertake their journey and were sustained during pioneering hardships by the prospect

of worshipping according to their interpretation of the Book. Their voyage was lined by the compass and by means of it supplies and recruiting bands could reach them. Once landed, their deadlier weapons prevailed over the hostile natives. Thus permanent colonization of the new world, impossible in the days of bold Eric the Red, was actually accomplished after three great inventions had equipped man with needful means of communication, of better sea travel and of conquest over even valiant savages.

Just as these three inventions were fundamentally important in evolving modern from medieval life, so the series of eighteenth century inventions which gave us power-driven machinery made their fundamental contributions. The factories they made possible largely increased production and therefore rapidly increased the wealth of nations. These factories compelled many workers to live near them and industrial cities grew. These industrial cities produced factory-made goods in high surplus above their own needs for such goods. To provide raw materials for these factories and food for the workers, and to dispose of the surplus factory products, nations developed transportation by land and by sea, searched for foreign markets and established new colonies. The widening of national sovereignties resulted. Both the rapid increase of national wealth and the establishment of new colonies stimulated the increase of population. The wage earners in the growing industrial cities were called to their work and were freed from it at common times. Associating in large numbers all day at their work, coming and going in groups, they talked of the growing

difficulties which prevented wage earners from rising, of their low wages, and of the hard conditions under which they worked. They sensed the power lodged in their numbers and the necessity of organization before they could use such power to their advantage. A century of organizing efforts, at first haphazard, weak, and commonly condemned by the general public, have culminated in such permanent, effective and generally approved national organizations as the American Federation of Labor, with its 2,000,000 members. So the factory, the concrete embodiment of new industrial inventions, stimulated rapid growth and steady centralization throughout the industrial, the political and the social life of the whole western world.

To complete the background for a study of Trusts it is needful that the rapid growth and the steady centralization, since 1800, of productive power in representative manufacturing plants be set forth in some detail. Facts of official public record in the United States prove such growth and such centralization during the past century beyond any reasonable doubt.

Concentration has occurred in leading lines of United States manufactures steadily since 1800. The census data on manufactures prior to 1850 are unsatisfactory. That there was industrial concentration within the United States from 1800 to 1850 is, however, a fair inference from the facts that there were practically no factories at all in 1800 and very few in 1810 and in 1820, whereas the census figures for 1850 show sizable average plants in a number of important manufacturing lines. Industrial concentration in the United States since 1850 is clearly demonstrated by the census

returns. The notable and steady growth of the average plant, in leading lines of manufacture, is shown by listing its amount of capital, its number of employees, and its value of output, decade by decade.

It seems unnecessary to give tables for all of the thirteen industries for which data are given from 1850.* Tables covering three of them, as compiled from the Twelfth and Thirteenth Censuses, are given as fair illustrations of the steady concentration shown in all the thirteen leading industrial lines:

INCREASING SIZE OF U. S. MANUFACTURING PLANTS 1850 TO 1910

*See Twelfth Census, Vol. VII, p. lxxii, and Thirteenth Census, Vols. VIII and X, see Indexes. The thirteen industries are Agricultural Implements, Carpets and Rugs, Cotton Goods, Glass, Hosiery and Knit Goods, Iron and Steel, Leather, Malt Liquors, Paper and Wood Pulp, Shipbuilding, Silk and Silk Goods, Slaughtering and Meat Packing, and Woolen Goods.