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Industrial expansion and Concentration

Industrial expansion and Concentration. By John Moreno and jason jones. Structural Change and industry composition. Structural Change and industry composition. New technologies. R oller Mill Refrigerated Cars Can Sealing Long distance pipe lines Steel Tank Cars

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Industrial expansion and Concentration

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  1. Industrial expansion and Concentration By John Moreno and jason jones

  2. Structural Change and industry composition

  3. Structural Change and industry composition

  4. New technologies • Roller Mill • Refrigerated Cars • Can Sealing • Long distance pipe lines • Steel Tank Cars • Advances in Bessemer and open-hearth processes • Cash Register • Typewriter

  5. STEEL INDUSTRY INNOVATIONS

  6. New forms and Sources of energy • In 1850 most of the energy came from animal and man power • During the 1870s, steam surpassed water as a source of power. • In 1890 coal was the source of 90% of the energy furnished to manufacturing • By World War I, one-third of the nation’s industrial power was provided by electricity • Coal remained the main energy source until 1920

  7. Mass Production

  8. Early business combinations • Pooling became common after 1875 • Gentlemen’s agreements were usually used for setting and maintaining prices • Gentlemen’s agreements and Pooling were not very durable

  9. Two phases of the concentration movement • Phase 1: Horizontal Mergers • the combining of firms that produce identical products. An example would be the Standard Oil Company of Ohio 

  10. Two phases of the concentration movement • Phase 2: Vertical Mergers • firms managed by different departments within one firm. Andrew Carnegie forms the US Steel Corporation in 1901 with Morgan and Moore

  11. Legislation and Legal actions • Passage of legislation to control monopoly power becomes critical in the Concentration Movement. • The Sherman Act of 1890 made it illegal for people to monopolize any part of the trade or commerce.

  12. The Federal Trade Commission • 1914 - congress passes the Clayton Act, which was intended to remove ambiguities in existing antitrust law by making certain specific practices illegal. • Price discrimination among buyers was forbidden, as well as exclusive selling and tying contracts if their effect was to lessen competition.

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