INTEGRATION OF INDUSTRY 65 



Until 1895 or 1896 the development of the iron and steel 

 industry in the United States may be said to have followed 

 the normal course of most expanding trades. It was marked 

 by the gradual concentration of work in fewer and larger 

 establishments and a parallel geographical centralization in the 

 more favored localities. While it was evident that a domi- 

 nant position was being attained by certain establishments, 

 this dominance was due almost entirely to the natural advan- 

 tages that they enjoyed and the skill with which they were 

 managed. Their growth, in a word, was one of natural expan- 

 sion through the addition of new mills and the development 

 of established lines of work. Only to a limited extent was 

 increase in size obtained by the absorption of hitherto inde- 

 pendent plants. There was little or no idea of one or a few 

 establishments reaching such a strength as to be able to 

 exercise monopolistic powers and fix prices without regard to 

 active competition. 



This was the condition of affairs up to the closing years of 

 the last century. Suddenly a new means of building up huge 

 concerns was adopted. The possible economies resulting 

 from centralization of work in large plants and production 

 upon a large scale had nearly been reached as regards the 

 actual operations of manufacture. It was now seen that there 

 lay a great field for economies outside the work of production 

 proper, through a better control and organization of the fac- 

 tors of distribution. If a union of the forces of all or a con- 

 siderable number of manufacturers of the same product could 

 be secured, it would be possible to obtain raw materials at a 

 more advantageous rate or with greater certainty, production 

 could be made to correspond more nearly to demand, markets 

 could be reached more directly, and new ones opened up where 

 existing outlets were insufficient, transportation charges could 

 be reduced, and, finally, if a sufficient control of output could 

 be secured, a more positive influence could be exerted upon 

 the fixing of the prices at which the commodities manufac- 

 tured would be marketed. 



It was the effort to realize these considerations that led to 

 the second phase in the history of the organization of the iron 

 and steel industry in this country. This phase is the one 



Vol. 3-5 



