Evening star., 1946-12-01

through partlclpatlon py Lne many III
the responsibilities and determinations
of business can Americans secure the
moral and intellectual development
which is essential to the maintenance
OF liberty"
The economic picture since the turn
of the century. with particular empha-
sis on the effects of wars, has been
projected by many authoritative groups,
notably the Temporary National Eco
monic Committee, the National Re-
sources Committee, Commerce Depart
ment, Smaller War Plants Corp, Twen-
tieth Century Fund, Inc, and congress
sional committees. A new report of the
SWPC to the Senate Committee on
Small business sheds light especially on
advantages given big business by the
war just ended.
Trend Began After Civil War.
The tendency toward the combina-
tion of industrial units under central
lied control began shortly after the
Civil War and reached peak in 1901
with the formation of the billion-dollar
United States Steel Corp. BY 1904 the
trusts had control of 40 per cent of man
ufacturing capital in the United States.
The stock market crash of 1908 and the
business crisis of 1907 placed tenn
porary brake on the combination move
ment, then under attack by the Theo-
dore Roosevelt administration.
BY 1909 it was estimated the 200 larg-
est nonfinancial (nonbank) corpora
tions owned one-third of the assets of
all nonfnancial corporations. Large
corporations had thus started to domi-
nate the American economy long before
the outbreak of World War I.
That war stimulated the growth of
big business. War contracts were is
sued predominately to the large corpo-
rations. They accumulated huge profits
for further expansion after the war. In
1909 the large manufacturing estab-
lishments employing at least 1000 per-
sons) had on their payrolls ISL per cent
of all wage earners In the manufactur-
ing industries. BY 1919 this had risen to
26 per cent.
The wave of mergers and acquisitions
extended until 1921, when it was
checked by the brief postwar depres-
sion. When better conditions returned
In 1925 the merger movement was re-
newed, reaching white heat in 1928 and
1929.
Figures Show Concentration.
While the precipitous depression of
the sos slowed mergers, the prewar con-
centration in the economy as whole
was considerable, as shown by figures
of the TNEC, the Twentieth Century
Fund and the National Resources Com
mittee:
The As largest transportation corpora
tions owned 80 per cent Of all the trans
portation facilities Of the Nation:
The 40 largest public utility corpora
tions owned more than 80 per cent OF
the public utility facilities;
The country's 20 largest banks held
27 per cent of the total loans and IN
vestments;
The IT largest life insurance COM
panies accounted for 815 per cent of all
the assets of life insurance firms;
One-tenth of per cent of all cor
porations owned 50 per cent of the total
corporate assets;
Less than 4'per cent of all manufac-
turing corporations earned "a per cent
of all the net profits of manufacturing
corporations;
One-tenth Of / per cent of all the
firms in the country in 1889 employed
500 or more workers (frms with less
than 500 are considered small businesses)
and accounted for 40 per cent of all the
nonagricultural employment in the Ma
ton.
Small Business Retarded.
The recent report of the SWPC to
the Senate showed that the war showed
small business into the background.
Enormous gains were made by big busi-
ness.
p Small firms in war industries ac-
counted for 50 per cent of total manu-
featuring employment in 1889, but by
1914 this figure had declined to 38 per
cent. Firms with 10000 or more en-
ployes accounted for 13 per cent of
total employment in 1889; after three
years of war this jumped to fully 81 per
cent. Half million small retail, serv-
ice and construction firms disappeared
entirely during the war.
Increases in concentration during the
war, the SWPC further reported, were
due largely to the distribution of war
contracts to small number of large
firms The key to the control of pro-
ductive resources was the distribution
of nearly 5000 Ooo,o 100000 in supply con-
tracts by the Government.
Statistics compiled by the War Pro-
duction Board tell this story: From
(See BIG BUSINESS, Page C-3)