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The Agrarian Image of the Large Corporation, 1879–1920: A Study in Social Accommodation

Published online by Cambridge University Press:  03 February 2011

Louis Galambos
Louis Galambos
Affiliation:
Rice University
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Extract

For many years a relatively small number dominated the private sector of the American of the American economy. Most of the nation's goods and a substantial part of its services are produced and distributed by very large corporations. Of late, most Americans seem unconcerned about this fact. They regard big business with equanimity, even approval, and as Richard Hofstadter points out, antitrust has become “one of the faded passions of American reform.”

Type
Articles
Information
The Journal of Economic History , Volume 28 , Issue 3 , September 1968 , pp. 341 - 362
Copyright
Copyright © The Economic History Association 1968

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References

1 Fisher, Burton R. and Withey, Stephen B., Big Business as the People See It (Ann Arbor: The Survey Research Center, Institute for Social Research, University of Michigan, 1951). Only 10 percent of those polled in this study felt that the bad aspects of big business outweighed the good (p. 20).Google ScholarHofstadter, Richard, “What Happened to the Antitrust Movement?,” The Paranoid Style in American Politics and Other Essays (New York: Alfred A. Knopf, 1965), p. 188Google Scholar.

2 See, for instance, Buck, Solon J., The Granger Movement (Cambridge: Harvard University Press, 1913), pp. 8–15, 18–19;Google ScholarHicks, John D., The Populist Revolt (Minneapolis: University of Minnesota Press, 1931), pp. 60–81;Google ScholarPollock, Norman, The Populist Response to Industrial America (Cambridge: Harvard University Press, 1962), pp. 15–33; andGoogle ScholarThorelli, Hans B., The Federal Antitrust Policy (Baltimore: Johns Hopkins Press, 1955), pp. 58–62Google Scholar.

3 Mowry, George E., The Era of Theodore Roosevelt, 1900–1912 (New York: Harper & Brothers, 1958), pp. 6–10, 82–83, 121–28, 131–34, 197–208, 220–22, 260–61, 286–90, 292–93Google Scholar; Link, Arthur S., Woodrow Wilson and the Progressive Era (New York: Harper & Brothers, 1954), pp. 1–2, 19–22, 54–55, 66–80Google Scholar.

4 Hawley, E. W., The New Deal and the Problem of Monopoly (Princeton: Princeton University Press, 1966); andCrossRefGoogle ScholarLeuchtenburg, William E., Franklin D. Roosevelt and the New Deal, 1932–1940 (New York: Harper & Row, 1963), pp. 183–84, 247–48, 257–60, 339–40Google Scholar.

5 , Hofstadter, “What Happened to the Antitrust Movement?” pp. 188–89, 212–14; andGoogle Scholar, Fisher and , Withey, Big Business, pp. 19–26, 139–40Google Scholar.

6 Throughout this article I refer to “the farmer” or to “farmers” as a group. This is, however, only a convenient expository device; I do not assume that this group remained homogeneous over time. The relation between changes in attitude and changes in the composition of the farm population is a subject for further analysis.

7 , Hofstadter, in “What Happened to the Antitrust Movement?” pp. 214–33, suggests the following reasons for the decline of the movement: (1) the excellent performance of the economy since 1940; (2) the “countervailing bigness” of labor unions and the government; (3) the historical experience with big business—an experience which has put to rest fears about continued concentration, the decline of technological innovations, and the end of opportunity for individual advancement; (4) the awareness that small businesses have harbored right-wingers and have nevertheless turned to the government for aid; (5) the emergence of a new generation of Americans interested in security, accustomed to bigness, and determined upon a bureaucratic career. As should be apparent, Hofstadter stresses developments since 1940 as causal factors, but so little basic research has been done on this problem that we decided it was more reasonable to begin our investigation with the period when very large corporations were first being organized in most industries. As it turned out, this was a good choiceGoogle Scholar.

8 For guidance in the techniques of content analysis we have drawn upon the following: Berelson, Bernard, Content Analysis iti Communications Research (Glen-coe, 111.: The Free Press, 1952)Google Scholar; Pool, Ithiel de Sola, ed., Trends in Content Analysis (Urbana: University of Illinois Press, 1959); the RADIR (Revolution and Development of International Relations) studies, especiallyGoogle ScholarLasswell, Harold et.al., The Comparative Study of Symbols (Stanford, Calif.: Hoover Institute Studies, Series C, Symbols, No. 1, 1952)Google Scholar; Pool, Ithiel de Sola et al, The “Prestige Tapers” (Stanford, Calif.: Hoover Institute Studies, Series C, Symbols, No. 2, 1952); andGoogle ScholarMerritt, Richard L., Symbols of American Community, 1735–1775 (New Haven: Yale University Press, 1966)Google Scholar.

9 The sample included issues appearing in the months of January and July for each year; in some cases it was necessary to substitute for issues which could not be located. Since the journals were relatively unsophisticated and the difference between a news story and an editorial barely recognized, let alone respected, all of the paper—excepting fiction and advertisements—was examined. This, unfortunately, forced us to read articles on everything from “Redwood Silos” to “Warbles in Rabbits.” It was also time-consuming, and this made a larger sample virtually impossible. In order to check the difference between a two-month and a four-month sample, we compared the total number of items in two samples, one for the months January and July, and the other for the months April and October. The samples were taken from yearly issues, picked at random, of Southern Cultivator and Wallaces' Farmer. At the 5 percent level of significance, we could not reject the hypothesis that there were no differences between the populations from which the two samples were drawn. On sampling we drew upon Mintz, Alexander, “The Feasibility of the Use of Samples in Content Analysis,” in Lasswell, Harold D. et al, The Language of Politics (Cambridge: The M.I.T. Press, 1965), pp. 127–52. For a different sampling technique seeGoogle Scholar, Merritt, Symbols of American Community, pp. 199–201Google Scholar.

10 The two areas served by the journals we used constituted an important part of the nation's agricultural sector. In 1880 64.4 percent of the nation's farms were concentrated in the North Central and South Central regions of the country; in 1900 the figure was 67.2 percent. See U.S. Census Office, Twelfth Census of the United States, 1900, Agriculture, V (Washington: U.S. Govt. Printing Office, 1902), xxxiii. We have also sampled American Agriculturist at five-year intervals but have not included the results in this articleGoogle Scholar.

11 This publication appeared under various names: Southern Cultivator; The Southern Cultivator and Dixie Farmer; and The Southern Cultivator and Industrial Journal. All of the circulation figures for this and other papers were taken from Ayer, N. W. & Son's American Newspaper Annual (1880–1920). Southern Cultivator had a circulation of 2000 in 1880, 25,000 in 1901, 50,666 in 1910, and 45,000 in 1920Google Scholar.

12 The circulation of Farmers' Review was 25,000 in 1880 and 25,265 in 1890. Judging from the letters to the editor, its readers were scattered about a large area ranging from the Old Midwest through the Dakotas, and to Texas on the South.

13 In January 1895 the name of this publication was The Farm and Dairy; this was changed to Wallaces' Farm and Dairy, and then to Wallaces ' Farmer1. In general, this paper was more state-oriented (especially in its early years) than either Farmers' Review or Southern Cultivator; see, for instance, Wallaces' Farmer, Vol. XXI, No. 1 (01. 3, 1896), p. 2. In 1901 Wallaces' Farmer had a circulation of 23,769; in 1910 the circulation was 54,006; in 1920 it was 65,200Google Scholar.

14 Obviously, one of the grounds for selecting the papers was that the issues checked included some consideration of big business.

15 In this study “big business” was construed to mean very large firms in mining, manufacturing, and transportation. Financial institutions (banks, savings and loan companies, and insurance companies) were eliminated, as were companies (such as bonanza farms) engaged essentially in agriculture. An attempt was made to limit the coverage to very large corporations; this was done, in part, on the basis of the content of the articles and, in part, on the basis of an ex post knowledge of which firms were and were not large.

16 An item was any separate article, editorial, letter, or news story which mentioned big business. AH items were counted as equal, despite their length. For a discussion of the choice of units in this kind of research, we used Berelson, Content Analysis, pp. 135–46. In order to check our reliability in deciding to score an item and in deciding whether it was on balance favorable to big business, unfavorable, ambivalent, or neutral, we re-examined four issues, picked at random, after all of the papers had been read and the results tabulated. The results of the first and second readings were compared, using a percentage agreement index:

In this formula, Pa is the number of items scored in the initial reading; Pb is the number scored in the second reading; Pab is the number scored both times. The index for the total number of items scored was 0.94; the index for the decision as to whether items scored both times were on balance favorable, unfavorable, ambivalent or neutral was 0.96. , Merritt, Symbols of American Community, pp. 200–01Google Scholar.

17 Each item was scored as either favorable to big business, unfavorable, neutral, or ambivalent (evenly divided between favorable and unfavorable remarks). Pool, In de Sola et al., “Prestige Papers” (see p. 41), only explicit judgments were counted; thus, an editorial associating communism with slave labor camps was considered neutral unless the editor said that slave labor camps were bad. By contrast, we evaluated both the explicit and implicit judgments, attempting merely to be systematic while introducing a number of subjective decisions. Certain types of action were considered to be inherently favorable (e.g., creating opportunities for farmers) and other types inherently unfavorable (e.g., depriving fanners of income). Our problems arose, of course, with the hundreds of items less obvious than the slave-labor-camp exampleGoogle Scholar.

18 The line of best fit (using the least-squares method) for this series is shown in Fig. 1; all of the linear time trends were fitted in this way.

19 The concept of affective neutrality (as opposed to affectivity) as a mode of orientation is discussed in Parsons, Talcott, The Social System (New York: The Free Press, 1964), pp. 59–61; andGoogle ScholarParsons, Talcott et al, Toward a General Theory of Action (New York: Harper & Row, 1962), p. 80Google Scholar.

20 Wallaces' Farmer, XXI (06 1896), 506Google Scholar.

21 Ibid., XLVIII (Jan. 1890), 10.

22 Other words in the pejorative category included conspiracy, kings, magnate, master, monsters, oligarchy, potentate, ring, robbers, and syndicate. Proper nouns such as the name of a company were not included in the total number of nouns used to figure the percentage.

23 One of the symbols examined in Pool, de Sola et al., “Prestige Papers,” pp. 80–81, 111–16, was “trusts.” It was a word which appeared with declining frequency and by the years 1930–1932 had virtuall y disappeared from use; our study indicates that the same change was taking place in the farm papersGoogle Scholar.

24 , Wallaces'Farmer, XLV (01. 1920), 159; XLV (July 1920), 1807. This development was far less pronounced in Southern CultivatorGoogle Scholar.

25 A response was any kind of individual or collective action which the paper said had taken place or should take place as a result of the existence or behavior of big business. For example, a response might involve better fanning, state legislation, or a federal antitrust suit; it might take place in the past, present, or future.

26 The Pearsonian coefficient of correlation (used here and in all subsequent correlations) between the percentage of the items mentioning a response and the percentage of the items presenting an unfavorable view of big business was 0.74 for the Midwest and 0.89 for the South.

27 During and after World War I the percentage of unfavorable opinions rose, but our preliminary study of the early 1920's indicated that this was a short-lived phenomenon. The peak in this case was lower than the previous high point and the percentage of unfavorable items quickly dropped to a lower level in the early 1920's; the long-run trend of unfavorable items continued downward.

28 The variance for the percentage of favorable items in Southern Cultivator was 353.3.

29 The variance for the midwestern journals was only 127.6.

30 It seemed necessary to stress this point in order to avoid being characterized as simply a new entry in the familiar “consensus” school of interpretation. If anything, our study thus far indicated that for many years conflict, not consensus, was the major theme of relations between the fanners and big business.

31 Many of these studies were written in the context of progressive history. The historians were primarily interested in why certain reform movements took place, why certain types of farm organizations were created, and why certain patterns of liberal and radical thought arose. Given these questions, it was sufficient for the historians to point out that the farmers were upset about the rise of big business; there was no need to pay much attention to conflicting or minority views. Since we used a different framework and different questions, however, this information assumed a new importance.

32 The favorable themes for the Midwest were: (1) price policies; (2) the contribution to the general wealth; (3) the manner in which big business enhanced individual opportunities; (4) the miscellaneous category of economic factors; (5) products and/or services; and (6 ) the characteristics of those who controlled or managed big business.

33 The ideas of ^achievement and ascriptive orientation are discussed in Parsons, et al., Toward a General Theory, pp. 83–84Google Scholar.

34 For variations on this theme see any of the following: Goldman, Eric F., Rendezvous with Destiny (New York: Vintage Books, 1965), pp. 55–56;Google ScholarLink, Arthur S., American Epoch (New York: Alfred A. Knopf, 1955), pp. 23–24, 68Google Scholar; Faulkner, Harold U., Politics, Reform and Expansion, 1890–1900, (New York: Harper & Row, 1963), pp. 268-69Google Scholar; and Shannon, Fred A., The Farmer's Last Frontier (New York: Rinehart & Co., 1945), p. 327Google Scholar.

35 We prepared two income series: for the Midwest we used gross income from corn and hogs; for the South we used gross income from cotton and cotton seed. All of the income data came from Strauss, Frederick and Bean, Louis H., Gross Farm Income and Indices of Farm Production and Prices (U.S. Department of Agriculture, Technical Bulletin No. 703, 1940). We adjusted these figures for changes in the general level of prices by using a consumer price index.Google ScholarSee Hoover, Ethel D., “Retail Prices after 1850,” in Trends in the American Economy in the Nineteenth Century (Princeton: Princeton University Press, 1960), p. 162. We spliced the Hoover index into the consumer price index of the Bureau of Labor Statistics.Google ScholarSee Historical Statistics of the United States (Washington: U.S. Government Printing Office, 1957), p. 126. We then converted the adjusted income figures into index numbers, using 1918 as 100 for the Midwest, and 1919 as 100 for the South. We did not put these figures on a per capita basis because that seemed to introduce more problems than it solvedGoogle Scholar.

36 We tested the significance of these values of r, usin g Fisher's Z transformation.

37 , Shannon, Farmer's Last Frontier, p. 327Google Scholar.

38 In The Age of Reform (New York: Vintage Books, 1960), pp. 109–130, Richard Hofstadter offers a subtle and compelling analysis of the manner in which prosperity and other factors influenced farm thought in the years after Bryan's defeat in 1896 Our study supports Hofstadter's conclusion that farm income was important, but that it alone can not explain the shift “From Pathos to Parity.” Curiously, Hofstadter's later article on the decline of the antitrust movement ignores his earlier work on agrarian thought and places undue emphasis upon developments since 1940. footnote 7, aboveGoogle Scholar.

39 Smelser, Neil J., in Social Change in the industrial Revolution (London: Rout-ledge & Paul, 1959), pp. 15–16, discusses the handling and channeling of dissatisfactionsGoogle Scholar.

40 There are other indicators which substantiate the conclusion that the Sherman Act was the major factor causing these changes. In the late 1880's the number of industries associated with big business increased sharply, while the (relative) amount of attention devoted to th e railroad declined. After die law was passed, the number of industries mentioned dropped off and railroads assumed their customary position as the leading subject of concern.

41 In the southern paper, 1879–1920, the railroad was the industry that was mentioned over 65 percent of die time (this wa s the mean for the yearly percentages) when any specific industry was indicated. In the Midwest the figure was over 68 percent. There was an upward bias in these figures since we assumed that all railroads were big business, whereas with other types of firms we normally included the item only when there was some reference to firm size. Even if we had treated all businesses as we did the railroads, however, the results would still have shown an overwhelming interest in the railroad.

42 , Thorelli, Federal Antitrust Policy, pp. 369–80Google Scholar.

43 Chandler, Alfred D. Jr, Strategy and Structure (Cambridge: The M.I.T. Press, 1962), pp. 31–41Google Scholar.

44 Another hypothesis which we considered was the possibility that the farmers' increasing awareness and antipathy toward labor unions tended to reduce their hostility to big business. , Hofstadter, in Age of Reform, p. 122, has suggested that in the Populist era the farmer saw himself and the laborer as members of the same, oppressed class; in the twentieth century, however, “a sharp tension emerged between labor and farmer groups.” On the basis of our data (which include labor relations only when they involved big business), however, we were unable to substantiate this intriguing idea. The journals did not devote any more attention to labor in the years after 1896 than they did in the years before; nor did the papers' basic attitudes toward labor appear to changeGoogle Scholar.