The Birth of Big Business in the United States, 1860-1914: Commercial, Extractive and Industrial Enterprise

Published by EH.NET (July 2006)

David O. Whitten and Bessie E. Whitten, The Birth of Big Business in the United States, 1860-1914: Commercial, Extractive and Industrial Enterprise. Westport, CT: Praeger Publishing, 2005. xvi + 205 pp. $90 (cloth), ISBN: 0-313-32395-X.

Reviewed for EH.NET by David L. Mason, Department of Social Sciences, Georgia Perimeter College.

The roughly fifty-year period between the end of the Civil War and the start of World War I was one of the most dynamic periods in American economic history, in no small part because of the rise of big business. The Birth of Big Business in the United States, an introductory work intended for students and the general reader, chronicles the developments and processes that led to the rise of large-scale firms in both well-known industries like oil and steel, as well as in the extractive industries like mining and forestry. Throughout the concisely written narrative, the authors highlight the role of government in both encouraging and restraining the expansion of big business. This work succeeds in placing industrialization in the broader context of American history, an important consideration for first-time students of business history.

The book is organized into four major sections, the first of which sets the stage for the birth of big business. In the first chapter, the authors outline the effects of the Civil War on business development. The scale and scope of this conflict forced the government to assume an unprecedented role in the economy, and this need to satisfy the demand for goods and services had far reaching effects on business. Legislation and government incentives spurred innovations in finance, led to more efficient production methods, and promoted the increase in farming output. The war also caused existing industries (like railroads) to grow exponentially, while helping to establish new industries like oil. As the authors note, the experience of the Civil War not only helped business “overcome the hurdles between small-scale and national operations” (p. 17), but was instrumental in solidifying a relationship between government and business that would be critical in the growth of big business in the postwar era.

The first section concludes with a broad and comprehensive discussion of the changes in communications and transportation before and during industrialization. The authors cover all the major improvements (canals, cars, roads, airplanes, postal service, the telegraph and telephone), and they place a special emphasis on the role of government in fostering the success of these commercial enterprises. The chapter also provides sufficient factual details to give the reader a true understanding of how important these innovations were to the growth of big business.

The remaining three parts of the book (11 chapters) focus on specific industries and firms. Of these, the four chapters on retailing and the extractive industries are the most interesting and set this book apart, since these industries are often not included in comparable introductions to business history. The authors place these industries in a historical perspective and achieve a good balance of broad overviews with specific factual information. The chapter “The Commercial Response to a Mass Market” focuses on how urbanization sparked a revolution in the scale and scope of consumer retailing. The “Giant Farms” chapter gives an overview of the rice, sugar, corn and cattle industries, with an emphasis on how government land policy encouraged the development of the large farming enterprise. The chapter on forest products details how changes in technology and transportation after the Civil War transformed an industry dominated by small family-owned firms into one characterized by vertically-integrated businesses engaging in professional land management activities. The section on mining focuses primarily on how the struggles between coal producers and the railroads “swept independent mine operators into several large combinations that were themselves eventually forced to combine” (p. 112). Like the chapter on farming, the authors emphasize the role of the government in fostering business growth. Finally, all these chapters include brief discussions of the major firms in the respective industries and contain tables and factual details to illustrate the authors’ broader points.

The seven chapters that focus on specific big business firms tend to be more uneven than the industry overviews. These profiles include the United Fruit Company, Singer Sewing Machine, American Sugar Refining Company, American Tobacco Company, Standard Oil, U.S. Steel and the Meat Packers (Swift, Armour, Morris, and Cudahy), and they range in length from three to sixteen pages. While each is adequate for the target audience, more advanced students of business history would likely only have their appetites whetted.

The goal of The Birth of Big Business in the United States, 1860-1914 is to provide the student and general reader a concise yet comprehensive history of one of the most important periods in American economic history, and in large measure it succeeds. It offers a good foundation for understanding why big businesses appeared after the Civil War, and the role of the government in this process. As such it serves as a springboard for undergraduates and general readers who wish to delve deeper into the field of business history.

David Mason is an instructor at Georgia Perimeter College. His most recent book is From Buildings and Loans to Bailouts: A History of the American Savings and Loan Industry, 1831-1995 (Cambridge University Press, 2004).