THE CONCENTRATION OF INDUSTRY IN THE UNITED STATES.

TH

'HE chief mission of the student of economic conditions is to investigate social changes that are taking place, and point out their influence upon the welfare of society. Among these changes there are certain movements which it is only possible to measure by the use of statistical methods. It is well known by economists that a profound transformation in the organization of industry is now taking place in all the leading manufacturing countries. The régime of household production has given place to the factory system. The individual teamster has been supplanted by the transportation companies. This transition has now advanced to the second stage, where the smaller enterprises are being eliminated, and the prosecution of industrial work concentrated in large establishments, and relatively fewer hands. In no country is this movement more pronounced than in the United States, and in no country can its course, untrammelled as it is by old customs and prejudices, be studied with better advantage. It is our purpose, therefore, as far as statistical material will permit, to show the character of recent changes in the organization of industry in this country, the extent to which they have already progressed, and, finally, to discuss some of the more important consequences that result from them.

In order to show the extent to which industry is being concentrated in fewer but larger establishments, it is desirable to have information showing, for as long a time as possible, the number of establishments in each industry, the number of employés in each establishment, and the value and quantity of the product of each. To fully bring out the significance of the movement it is necessary to know, not only the average size of all establishments, but the number of establishments of each size. The bare statement that the number of employés per establishment is a certain number, is of value, but it is more important to know the number of establishments

employing less than 10 hands, the number employing from 10 to 19, etc. Thus, for example, if there were five establishments employing two persons each, and one establishment employing 590, the average number of employés per concern would be 100, while in reality fifty-nine sixtieths of all employés are employed in establishments with 590 employés. Unfortunately the material collected in connection with the various censuses has not been presented in such a way as to enable us to obtain this information. We are therefore forced to content ourselves with information showing only the average importance of industrial enterprises. Though the information here afforded is thus not as complete as is desired, it is yet sufficiently full to show the general features of the movement we are considering.

A manufacturing establishment, according to the definition of the census, is any place in which products are manufactured during the year to the value of $500. The census figures, therefore, can fairly claim to include all work at all deserving of the term manufacturing. Owing to the fact that the changes in the methods of manufacture have necessitated changes in the classification of industries, it is not feasible to attempt to carry our inquiry back to the ninth census, 1870. In the following brief table is shown, for all manufacturing industries combined, the number of establishments, the number of employés and the value of their product, as reported at each census, 1870, 1880 and 1890, with a calculation of the average number of employés and value of product per establishment.

From this table it will be seen that, while the number of establishments increased scarcely at all during the decade from 1870 to 1880, or but 0.54 per cent., the number of employés increased 31.49 per cent., and the value of the product 57.79 per cent., and that while the number of establishments increased from 1880 to 1890 but 27.27 per cent., the number of employés

and the value of the product increased over twice as fast, or 65.77 and 69.31 per cent. respectively.

This table, however, is of value only as showing the most general features of the problem. There are so many qualifications that should be made, as the result of changes in methods of collecting the data from which it is compiled, and the changes in the character of the industries themselves, that a general statement like this can only be used with great caution. The question is essentially one that should be considered according to particular industries. Naturally the movement has taken place unevenly in the various branches. In some it is very marked, and in others less so, though there is scarcely one of importance in which this tendency toward concentration cannot be seen to some extent. It will be desirable, therefore, to consider the movement in a number of the more important industries separately.

Manufacture of Textiles. The manufacture of cotton, woolen and other cloths is not only one of the most important industries of the country, but is, par excellence, a manufacturing or factory industry. It is fortunate, therefore, that we are able to trace, as is shown in the following table, the organization of this important group of industries during four successive decades.

a At census of 1870, the value of fabric was given instead of value added to the material by dyeing and finishing as at other censuses.

This table shows in a striking way the steady and rapid movement toward the concentration of the textile industry in fewer establishments. In the case of the manufacture of cotton goods, the number of establishments was 189 less in 1890 than in 1850, a decrease of 17 per cent., while in the meantime the number of employés had increased 151 per cent. and the value of the product 333 per cent. As a result the average number of employés per establishment has steadily increased, being 84.4 in 1850; 111.8 in 1860; 141.6 in 1870; 184.5 in 1880, and 244.8 in 1890.

Concentration in the woolen industry has progressed with equal rapidity. In this case, however, the number of establishments increased until 1870, when there were 3,456 mills in operation; after which each decade witnessed a steady diminution in number; there being but 2,689 in 1880, or 767 less than in 1870, and but 2,489 in 1890, a still further loss of 200. The number of employés, on the other hand, has steadily increased. The average number of employés per establishment has thus increased in successive decades from 27.1 in 1850 to 35.6 in 1860; 34.7 in 1870; 60.1 in 1880 and 88.0 in 1890. In some particular branches of the woolen industry this concentration has proceeded at an extremely rapid rate. Thus, for example, the number of carpet mills, which in 1870 was 215, decreased in 1880 to 195 and in 1890 to 173. In spite of this decrease in the number of mills, the number of employés increased from 12,098 in 1870 to 20,371 in 1880, and 29,121 in 1890. The average number of employés per establishment thus rose from

56.3 in 1870 to 104.5 in 1880 and 168.3 in 1890, a tripling in the average size of establishments during the period.

In the manufacture of silk, and in dyeing and finishing, though the number of establishments has in general increased, the increase has not kept pace with the increase in the number of employés. In both industries, therefore, there is shown a concentration of work in larger establishments; the average number of employés per establishment in the silk industry increasing from 26.0 in 1850 to 107.9 in 1880; and in the dyeing and finishing industry from 49.1 in 1850 to 81.7 in 1890.

Combining the four branches of the textile trade, it is seen that while the number of establishments increased during the forty years considered but 36 per cent., the number of employés increased 248 per cent. and the value of the product 465 per cent. The average number of employés per establishment has thus steadily risen from 48.5 in 1850 to 64.1 in 1860; 57.4 in 1870; 95.1 in 1880 and 124.4 in 1890. In the case of all of the industries it is important to notice that the movement toward concentration has gone on more rapidly in the later years.

The tendency toward localization, or for similar establishments to group themselves in the same places, has been scarcely less strong, and has resulted in making four cities in different States the chief localities in which each industry is carried on; Philadelphia, Pa., in wool manufacture; Fall River, Mass., in cotton manufacture; Paterson, N. J., for silk, and Cohoes, N. Y., in the hosiery and knit goods manufacture. The enormous growth in the, wool manufacturing trade during the last 20 years has been entirely confined to eight States in the East, while in the remaining States there has been an actual loss of 45 per cent. Philadelphia alone, in 1890, produced 21.82 per cent. of the entire woollens output of the country during that year.

Iron and Steel Industry. The transformation in the methods of the manufacture of iron and steel, and the great variety of the products, prevent us from tracing the evolution of this industry in as complete a way as was done for the textiles. The following table, however, taken from the general table of manufactures of the census of 1890, shows the movement in the more important branches during the decade from 1880 to 1890.