Between 1895 and 1904 a great wave of mergers swept through the manufacturing sector of the U.S. economy. More than 1,800 firms disappeared into horizontal combinations, at least a third of which controlled more than 70 percent of the markets in which they operated. In The Great Merger Movement in American Business, Naomi Lamoreaux explores the causes of the mergers, concluding that there was nothing natural or inevitable about turn-of-the-century combinations. With the aid of a formal model, Lamoureaux demonstrates that the merger wave was the product of a particular historical combination of circumstances: the development if capital-intensive production techniques; a spurt of rapid growth in a number of heavy industries in the late 1880s and early 1890s; and the panic and depression of 1883. Together, this sequence of events produced an episode of abnormally severe price competition that manufacturers finally turned to consolidation to alleviate. Despite her conclusion that the mergers were not inevitable, Lamoreaux does not accept the opposing view that they were necessarily a threat to competition.
'During the decade from 1895 to 1904, more than 1800 manufacturing firms merged into 157 consolidated corporations, many of which in turn dominated their industries and became some of the best-known companies in the United States. In the three generations since, capable scholars in many disciplines have offered a variety of explanations. Now, in a clearly written, sophisticated, and remarkably concise book, Naomi R. Lamoreaux presents a synthesis and bold critique of that scholarship, together with strikingly original insights of her own.' Journal of American History 'Professor Lamoreaux has explored the great merger wave of turn-of-the-century America as an event produced by special circumstances that had serious implications for the health of the American business system nearly a century later. We can hope that she will continue to apply her enormous talent to a further explication of these implications.' Reviews in American History 'In this book Naomi Lamoreaux directs our focus from the role of vertical integration and the managerial 'resolution' in the emergence of the large, modern corporation emphasized by Alfred Chandler back to where it had been initially, on the never-equalled wave of horizontal consolidations in manufacturing between 1895 and 1904. The causes and effects of this merger wave, which permanently altered the structure of the American economy, are important and difficult questions, usually sidestepped by new economic historians. Lamoreaux skillfully analyzes them with an imaginative blend of business history and cliometrics ... I found the book extremely interesting and suggestive and profited greatly from it. It is well written, clearly argued, and accessible to general historians as well as economists. It should have great impact in focusing attention on this important period of consolidating.' Journal of Economic History 'This book is a model of good economic history and of good scholarship. Professor Lamoreaux has beautifully balanced a thorough reading of the history of the period with a plausible economic theory of the events and presented them in a readable and persuasive manner. I am certain that this will become the standard work on the great merger wave of the late nineteenth century.' Journal of Economic Literature