\ THE MODERN CORPORATION AND PRIVATE PROPERTY Adolf A. Berle and Gardiner C. Means With a New Introduction by Murray L. Weidenbaum and Mark Jensen ‘Transaction Publishers [New Brunswick (U.S-A.) and London (U.K)cenronaons nave css toe mae gl devices trough whch tie rate busines tanmctons of nents ay bo cited on ‘hough sll moch wed for this pepe the corporate foe has oqed » lngersgtcanc. ‘ho crporson ha fu, bce fan meld of trgerty tur snd aren orgsiing 060 ‘omic if, Ge fo tremor proportions, fee may bef Rie cvlvel s-corportesptan—ashre was ano fos atom hich heel oc seman af tutes sd powers, nd sated degre af prominence evting it be det with tj scl nt. Woke enn the tation probly before tha tine its nth, Spectacles bas et, ety non seers tbo htt ytom wl mone forward t propionic wuld agp Intintion dy, ows the crprta ste of toy wat eyed the fnaitn of at Sates ed barns ten 3 opening oF the greet erty Only hy remembering tht men Hing an teal tine when the preset station wes hardy dreamed of an ‘we exlore Go conde tat thw oar ey san betas “ply deninet dng the Mine of ow circ, For tat ‘ean if ferret dest examin le stn ean Ind thet tpl o the ef te cont aed a vey di stl certain to be pet; may eve determine fare pet of he Shave fo mn vg ir Onan of property his Diyed ott part in he Inlance ot powers whi po mek i thn of aye We ned ot rset coutovery a fo whether propery teeta ie Strablycotting Te gal ew ef ery histor nt hat ‘oper intros ave tl ines, or vis, bee dint. .Following this grim analysis, one commentator onthe ste of orpora- tone abmerved that they had become the "master Instrment of v= ‘aton”" Another expresod his depression ot tho fact thet the system had at length reached a pont definitely commiting cviiation to the rule of a plutcracy Sl others have seen in the system a transition ‘hase towards ulinate sociale or commmuninn. Accoptance of any of The belies may be delayed, bt the underlying thought expresed in ther all that the corporate sytem at become the prinipal felor in scone orgenaaton trough is mebiization of property hfs new aspect the corporation isa means whereby the wealth ot nnmerable inva as been concentrated nto huge aggregates te whereby control aver tht welt hes heen surrendered to #wifed ‘rection. The power atendant apa such concentration as Drought fons princes of industry, whiove poston inthe comunity is yet > be defined. The surrender of contel over the welth by investor has sffectively broken the old property relationships and hay raised the problem of defining there elationshipe anew. The diction of i flry by persone other than thas who have ventred thee wealth ihr rized the quertion of the motive force ack of sich direction tua the elective cstibtion of the returns fom buses entrpese ‘These corporations have arse In Beld after eld av the myriad Independent and competing waite of pete business have given Way {o the few large froupings of the modern quas-pubie corporation ‘he typical busine unit ofthe IBth century war ened by indole te el groupe wt managed by Hem ar thle appointees ad was, {he iain Kmited fn sae bythe pereonal wealth of the inoeal bn tontrol ‘ewe anit have been rupplanted fs sver greater measure by aren aggregations in which tons and even hundreds of thousands of workers and propeity worth hundreds of millions f dollars, be longing to tens of even hundeeds of thousseds of indicus, are com bined through the soeporte mechanisn into single producing organ zation andor unifed control and management. Such + ualt the [American Telephone and Telegraph Company, perhaps the most ad ‘anced developnent of the corporate sytem. With arity of almost {ve billions of dolls, with 494,000 employees, and Mockholdors Waar Ran "ve Nene Wir” Bel 1918 ‘ Agoal Repro the Ameen Tle od Telgath Canpsny, New Yok, 4850"ey 8 ol 2a of ene tr In On Beco 1905 esate ene oe 54008 pany sem me to the numberof $07,004 thi company ay indoed be called an eo omic empite-an empire hounded by ao geographieal Hints, bu held together by ceattlized contol. One hundred eampanis of tis sto would control the whole of American wealth; would emplay all f the {ninfuly employed, and Hf there ere no depiction of stockholders tvould be owned by practically every family inthe county, Such an organiation of economic activity rests upon two der sclopmens, eal of hich has made pomsble an extent f the area dor nied control. The betory ayer, the bass ofthe industrial Tevolition, bromgt an ineeasngly large numberof worker deel Iinder'a single management. Then, the modern corporation, equally evolutionary int fet, placed the wealth of imumerable duals Under the same genta conto By each of these changes the power [of those in control wae immensely enlarged and the stats af thas ti Coed, worker or property owner. war radially changed. The in Uependent worker who enlored the factory became n wage laborer Sorreudering the direction of his aor to bls Yodusrial master. The property owner who fnvers ina toderm corporation so fr surenders Fis wealth to those i control ofthe corporation that ho has exchanged the poston of independent cwner fr one in which he may boone merely recipient ofthe wager of eat “i and of itself the corporate device docs ot necesary bring boat this change, thas ong been pombe for an individ to Corporate is business even though Ws represents his own invest Tocnt, hit own activities and his wa busines transactions; be has in fact metely created legal alter eg0 by setting up a corporation asthe rrominal vile, If the corporate form had done nothing more thin {ths we should have only an lutererting cxtom according to which Ipasines would be cari on by individuals adopting fr that purpose cartain legal clothing. Te would involve no radical shift im property tenure of in the ganization of economic actly; i would ingugurate ‘0 “yt” compari to the Inttutins of feadalisn ‘The corprste sytem appears only when this type of peat oF “clone” corporation hat given way to an easatallydifoent form the quis puble corporation: a expiration in which a lage measure“? ‘of separation of ownership and control has taken place though the © ‘liplication of ops ‘uch seperation may exist in varying degrees. Where the men ‘ukimately responsible for running x corporation own « majority of the voting stock while the remainder widely dfsed, contol andprt ownership are in theic hands. Only forthe remaining owners i, there separation from contol. Frequently, however, ownership is 50 ‘widely seatered that working contel can be mantaind with but @ minor doterent, The Rockelller fay, for example x reported to Ihave retained deect or indirect minor interests i many of te Standard Oil Companies; and inthe case ofthe Standaed Oil Company of Idina, this interest, amounting to only 14.5 per cent” combined ‘withthe satgie poston of te hader, has proved sulicent for the Catal ofthe corortion. In such a cae the restr bulk of owner Ship is vtwally without contol. Separiton uf ownership and contol becomes almost complete when not even a substantial minority ater fst exis, a fa the American Telephone aud Telegraph Company ‘whose lager bolder ie reported to ow les than one per cent a the Company’ stock. Under ch conditions contol may Be bel by the dlecetors or titular managers who can employ vhe prory machiery to become aselperptiatng body. even though a «group they own Tout ssl faction ofthe lock outstanding. In each of these pes, majority coatrol, minority contra, and management control the Separation of ownorship from control has beaone effective a tego ody of security holders hae been created who exercise virtually no ‘etal over the wealth which they or thelr predecessor in Interest ave contrtbted to the enterprise nthe case of management control, the ownership interest held by the eontlling group amounts t bot 1 very sll fraction ofthe total ovrerthi. Canportions where this Separation har become an important factor may be clased 8 qua [lic in character in contraistneton tothe private, or closely hel ‘orportion in which no important seperation of ownership and con trol has taken pce, Growing out of this separation aro two characterises, almost at typleal of the quasi-public corporation athe separation Iself= mere stzeand the pablie market fr its secre, 1 preci this sears tion of contd front ownership which makes posible ements ag trottone of property. The Fords and the Mellons, whose, personal vial i salient to Boance great enterprises, ae so few, tat th tanly emplasize the dependence ofthe lage enterprise on the wealth of more than the Individual or group of individuals who tmy be i ‘control. The quastpubliecosporation commands ts supply of capital from a group of investors eequently desebed ax the “inverting ble” I daw these savings to self ether dively, as individuals Drehase stoks oF bonds, or indirectly, at insurance companies, #500 Table X19 Iunks, and investment tuts recive these savings and faves the in fcmporate securities, To soute these funds it must commonly sail Tel of an open market in its scutes hy listing shares on stock exchange, om; lees important, by matting private “un Fea” market So essen, In fac ithe open market to the qua buble corporation hit Htmsy Be consideved almost as characterise Uibat type of corporation asthe separation of ownership fom contd td the reat aggregation of wealth "These characteristics ate not invariable, The private corporation nay be, and fa few astance i, excodingy Tage: witness the Ford Motor Compaiy, sil owned and arected by Mr Ford and hi im. mediate asoclates, Private of “lor” corporations may and oceasan. tly do eval thmecive of a public market for their shares the ‘Aluminum Company of America, though most of ts stock i closely bald, hat le sharor listed om the New York Curb Exchange, and & Shall fraction of fr stock i add im there, But these iatances are 30 ‘rcepional asta prove the rue. In the ovrwholming bulk of cases, Corporations fll ato the quaat-puble ease when the represent large Sgreyations of wealth and thee securities are avaible in the opan Imatlaty for in each corporations part or most of the owners have los invariably surendered contol “Thoth the American Inw maker no dstinaion between the pr vate corporation and the quastpebli, the economies of the two ae ‘sentially diferent, The separation of owmership om conta peo ‘vos «condition where the Interests of owner and of ultimate man ‘ger tay, an ote do, diverge, and where many of the chcks which formerly operated to limit the vse of power disappear. Size alone tends to give theve nt comportions a sca significance wot atachod to the sales units of private enterprke. By the use of the open Inarket for secures, each of these corporations assumes abligtons Towards the investing publ which transform i from 4 Tegal method clothing the role of few individuals sto an tnstittion at least ‘nominally serving investors who have embarked their fonds its ‘aterprse. New responses towards the owners, the workers, the usumers, and the Sato thus rest upon the shoulders of thse in ‘otal Io eveatng these new relationship, the quastpublic corpo tion may fais be sid to work a revolution. It has destroyed the tty that we commonly cll property -har divided ownership into ‘ominal ownership and the power formerly Joined to It Thereby the ‘Soporation hat changed the nature of proft-eeking enterprise. This ‘evolution forms the sbjet ofthe present studyai [Examination of the changes produced cin properly commence with the new relationships between the owners on tho ope hand and com tual on the other, and I + these relatonshipe with wich thls ook. ‘will dea. This invlves the are roughly termed “corporation ance” the rations between the corporation as managed by the froup in eon trol snd Uae who hold participations ln ites stockbolders, bond Folders, and, to some extent, its oer creditors. Tho change in internal ‘rpsniation the relation of the corporation to is workers, it pnt ‘organisation and ite techincal problem of production we cannot con ‘erat thi tne, Nor can we here dea witht extersal relationships, fon the one hand with its customers~tho tors on which i frzishes {to them ts products or fr servicer—and on the other bund, withthe polities! statethe goverament by which st may bo fn some dogree ‘controled, or over which It may have a measure of dominance. Here ‘we are emcemed enly with a fundamental change in the form of ‘ropery, and in the economic relationships which rest upon i ‘utwardly the change i simple enough, Men are lots Ukely to own the phyla instruments of production, They are more likely to ‘own pisces of paper, lowly known as stocks, bonds, and othorsecai- ‘ies, which have bocome mobile through the machinery of the public ‘markets. Beneath this, however, les a more fundamental shift. Pye Contol over the intruments oF production has hoon surrendered. in rer growing deqroe to centralized groups who manage propesty in Tull, mppomdly, but by no means neosaelly, for the benefit of the seourty holder Power over induseal property has been cut of fom the beneficial owmership of this property—or, In less technical law rage, fom the legal right to enjoy ts fruits. Control of lyse as 541 has pase from the individual ownor to those who diet the ‘toric tatations, while the owner retains an Gtereat In thelr Product and Ineeate. We se, in fic, the rurender and regrouping Of the incldence of ownership, which formerly bracketed full power ‘F manal dispsiton with complete righ to enoy the we, the ful, fod the prods of phytases. There har resulted the dilation {GF the old som of ownership into te component parts, contol and enc omertip This dination of the tom of property destroy the very Found tion on which the economic order of th pat thee centoics hs ete. Private enterprise, which has molded economic ife since the close of the middle ages, bas been rooted in tho inetittion of private propety. ‘Wades the feudal system, ts predecessor, economio organization grew out of motaal obligations and privileges derived by various indiduals ore 9 simon 9 from their relation to property which no one of them owned. Private fmterpise, onthe wher hand, has sesomed an owner of Ue instrument of production with complete property right: over thas Instruments Wherens the organisation of feudal ecavomlc life rested vpon 20 hiborate system of binding customs, the organization under the sh {eam of private enterprise has ested pon the santerest of the prop- fsty owner=s slFintrest held in check only by competition and the ‘Sonditons of supply and demand, Sich glnteret hat long been re faded as tho best guaran of economie efficiency Tt has been as famed that, the individual protected ln the eight both tose his town propety as he eee Bt and to receive the Fal frais of we, his Seare for personal gain, for pros, can be relied upon as an eee: > tie incentive to He efcert sve of any Indust property he may PT the quasi public comoration, such an amimpton no. longer hola, Ar wo have sen, ko longer the lnvivalhtnaelf who wes His wealth Those in control ofthat weal and therefore «poston to secure inde lllenoy and produce pet, are no longer, a+ fumes, etd to the bulk of such prot, Those who conta the Alenia the type rodern corporation own x0 txignisot = Traction of the companys stock thi the elurs from running the erporaton profil acre thon ely a very minor dgves The Sfoctoldes, onthe oer and, to whom the prot of the corporation fn cannot betta hy thous rote to a more cient we ofthe fropety, nce they have sorvendered ll dsposiion of to those In ntl tthe enterere. The explosion ofthe tom ef property de Stroy the base of the old animpton tat the quest for pros wil Spur the owner af inbwirapropenty tts fetve ae" cee Chui shllenges the fundamental inane pindpl of india itikatve in industrial enterprise. It rises for reexamination the ves thn of the moive fre back of adr, andthe ed fr which the tonern corporation en be o fl be “The corporate system frther command attectionbeenuse ts de. selopment ff progesive, as ir fentres become mare marked and {snow areas come oe by ono under Ie sey. Bconomlo pow, in terms of control over phyla ats, i spre responding t0 2 ‘entree fre, tending more and more to concentrate in the hands ‘fs few corporate managements At the same tine, benccial owner ‘hip teeta, tending to divide and subdlvde to spl fo ever males units and to pass feel from haod to hand. ta other words Swmership continvally becomes more dispersed: the power formerlyfone ot becomes neresingy conceited ad th corpo 3 ‘tem is thereby more securely estublished. me “Thr rstem bd ib allerbracig x wasteful tem ints tine T deme tht we examine bth codons ad {etre fran understanding ofthe suctore pon whih wil et thoccono oer afte ature ‘of THE CORPORATE SYSTEM. ‘comonsra mvrenmist is no new intittion. From the days of the ein stock trading companies which built up the merchant empires of England and Helland in the Seventeenth Contry, the qua! public ‘orporstion hasbeen wall own, ts entrance Int the Beld of industry, Ihowove, dats from the exly Nisteanth Centory. In 180 the corpo rate form war used in America malaly for undertakings involving 2 ‘ect publ interest the consroction of tures, begs and canal, the operas of banks and fsrence companies, and tho eration of ‘ie brigades, Up to that year only 335 prot acaing corporations ap ‘pear to have been formed inthe United States, nary all incorporated Tithe last decade af the Rightoonth Century. OF thes, 319 were tan pike, bridge and inal companies, and another 36 furnished water and fre protection or dock facies, Banks and insurance companies had just bogun 1 seeune corporate form and numbered 67 at the opening (ofthe century, Manulactring industry lay almost wholly outside the ‘corporate Bel, bing represented by only corporations." "Though some of these erly uty corporations were quasi-public In character, thei stock bang held by what was forthe time, arse number of ocbalers, the fst important manufactariog enterprise to be so cegonzed dats from 1813. The Boston Manufataring Com: pny, fist of the lage Now England textile Srns, was establisod at ‘Walter, Masrchuset, daring that year and was in many ways the prototype of the corporations of later date. Though insigfiennty ‘Sal In comparison with the corporat giants of today this company ‘had all hoi ewental characteris. Within ten years ofthe date of ‘ovgh 8. ane, "aay tthe Rar Hy of Arn Corton” teat Oval Be12 moneary om rene Incorporation, its stock, originally eld by eleven stockholders, had ‘became Ina Sense dispersed. By 2890 the stockholders numbered 70, ‘no individual owned more than 86 percent of tho stock, it took 12 to establish majority control, andthe management lay with « board of icctors whose combined holdings smouted to only 22 per cont Twenty yey lter there were 189 rocHhollers, the largest of whan stl owned 8 yer eat. Fifty-one pe cnt ofthe tock was dstted mong I? individuals wile the management held only 11 per cont? Smal though these gure see in comparison with the hondredt of thowsnds of stockholders of the American Telephone Company today, they are none the less significant. The number of shareholders tepretented a vary considerable dlperion forthe pur valve of exch share was $1000 and the total numb of avalable shares was small ‘The paidin capital of $00,00, increased in 20 years to 81,000000.~ svar a very large sum for induralenterprte in thore days, The sian ‘of the indotal plant was correspondingly large i relation t those of ‘competing conctns, and for the fist tne, all the textile procenes, feom breaking open the bate of cotton to shipping the finished cloth, were brought under a single diction. Here, to, the “promote,” Smportant a figure inthe compote system ody, clearly appered By “relling out tothe publi” to usn the modem phrase, the orignal organizers fred dhemfclvor and a large past of thotr capital from the fortune of thos Ent investment and were enabled to go on tor: {inks further siularcororato units. Tis Whey dd, forming sces- on of lange textile concerns, all corporate fa form, all capalized at 51,000 000 or more within afew years of erganization, al equipped for large scala, mass production Including every process, and all publicly eld In every company, ownership rested withthe public and direc. tion with a management which owned a relatively sxall proportion of the stock In 19, the stock of one company, the Merrimack, waz Tl by 380 people including: * 0 siete tutes 68 ferme "Der fom Sc ad Deed Hts oft Bon Manning Ci rt Lael Canenin'y SSB; Mido: 80 cet se ea ae es 19, te Bt and Maouchont Cae, 16 a 1D, a [E's sole iy sf Lowell The sume poor mace urea ‘et Ne alto ded 84th te eter of en. Serr en ay Nov Roh Cron anacs Boon 18, Rope: tid 150 5 retired bias men 45 momufctrrs and mechan 40 ch sade, and wnspeted 21 ber 15 pystlns 15 Famers, Biy vrto of their size and widespread ownership, these companies ‘were alvaye ditinguished in New England as "The Corporations” in Contra to Uwe sll private concerns, though tho Tater were often sncomporated “Tn corporate development of this branch of the textile industry stood alone inthe industal eld before 180. tx growth, moreove, tras arene in Ue years after the Civil War when the corporat ss tem war eliowhere growing apace, 20 that today, paradoncaly, the teste lndutry is one of the fow majo Industries which is not domi pated by great quan publ corporations ‘More geneal in te mte-bellem period, and more slgnifeant for the future development, watt introduction of the corporate system {nto the ralroad Sel, Rallroad consrecton, solving = heavy intl tay of capt, almost necessitated recourse to the corporate form, ‘noe theft short liner hal been constructed, thi form made posible the next slep, consoldation into larger systems. The fst of Wo malor tvonpingy, the ereation ofthe New York Central Raoad 1853, wat chioved through the devices which the corporation offered. The property of 10 small companies between Albaay and Buillo was Fonsferted to «new corporation by exchange of stock an the 34 mi Hon dolae of securities, ied agaist the combined propertics, were ispened umong 2465 invertors Albany and other cts of Now York Sate. No individual or grovp held a controling nancial terest {nthe new corportion® Already the stock of ralboad companies was {amuliar on the pub exchanges and by the ‘Sts fight for contol of their propertin ad boceme eter enarket Shs or more sinister legal bates Since the Civil War, the quistpublic corporation has come to ominate the raoad Reldslmost completly. Advantger of eon foliation and the diustrou elects of competition drove companies into larger aod larger unite until, in 1900, great systems operated 8, Wi, Stwony, “Tha Bopangs afte New Yok Catal Ralend”N. Ts 1p. 35 i HCO Adam, “Chale of Bs” Boston, 114 moveary oe eee ‘0 percent ofthe fst class mileage and LT per cent of allroad road mileage nthe county” ollowing the lad ofthe rllroods, én the last part of the Nine= teonth Gentry and the eaty years ofthe Twentieth, one aspect of ‘canomle Ife after another has came under corporate evay. Hanking Sod invurance companies casied the system over from the enler Yours of the contry. So also di the public utilities, among which it Tas became practical niversal® Mining and quarrying followed close tn the het of the wiley, bing 883 per cent corporate ht 1902 ad {88 per contin 1010! To the Inter year, 99 por cont of the wage tamer in the copper industry were employed by corporations, 98 per fet in iron ore 07 per contin lead and lnc, and 89 per cant in pstoloum and natural gas I should be noted, ofcourse, that the ex ent to which @ eld is Incorporated i aot an exact measure of the fresno of the questpublic corporation and the corporate sytem, "Shoe private conportions are ineluded in tho totals The later, how ‘ver, represent inmost eases a telatively small proportion ofthe wealth tnd sctvty Involved and therefore do not seriously invalidate such Figures ata index ofthe extension ofthe quas-pubic corporation. "Except forthe tet corporations mantoned above, the corporate system mace slower headway inthe manufacturing Beld. Is growth ‘war silat inthe peviod immediately folowing the Givit War by tho enlargement of industeal units ad the spread of mas prodbtion. Inthe closing decades ofthe Nineteenth Centary le ecsived a further stmolas fem the trast mavement of those year. By 1590 the census Feported 07 per cent of all manufactored prodacte as made by erporatlons and corporate focease In the Twentieth Centry bas boon most rape 87 por cant of goods were so prodced by 1919" fd it sf o assume that over Of per cont of rhanufecturing is ca. "Decne fom the, eet of tn Hote Commitee om Intertoto a orton ‘buns in “Repan ofS Owner i ai 1s Cove fan ed Seen Hone Haprt Ne 180, Pb, WL po. Ll LV. niet, eof stn rnd wy eo tly ‘Setpuncs wars corp ty 1912. Cont of Blond Telopch 1917p ‘AT Jano oc lente compen IU wer ote: Ca ‘el ese St a0 of he a {eat} Ce fe ny Get Eke PR ISH, 2, In the Cease ha Masahiro 8 rsanaly iced ‘w Abntsact of Lith Cons of the Unted Stat, 1020, p. 1278 Fath Come of Wate Sta, 130, eb V9. 18 ‘ath Conan United Sty, 108, Vo. Vl p14, 208 ried on by corporations at the present time." Wage eamess tn the Cavploy of manufacturing corporations have Increased correspondingly From 65 per cent of those engaged in manufactures in 189 to 82 per fet (estiated) In 1089! Though In manufactring, peivato corpo: felons playa tre important role than in he mining snd tity eld, the growth in total corporate manufacturing reflects a large measire of growth of quas-pabie corporations. In «few manuftcturing indies the transfor to the corporate form hat eon delayed, but ever hore the shift swoticsble i 108, the ments clothing industry, with a value pradet of over billon Aolars wa only 84.8 per cent corporate, tho bread and baking industry nly S17 per cent, millinery sod lace foods 489 percent, attomobile ‘epsiring 001 percent, women's clothing 82.9 per cent, fue goods 30.1 percent, cheese-making 207 per cant These ae the mot tnportant manufacturing industries n which the corporate form bas not become ‘overwhelmingly predominant" but in each ete te 1020 Sgure showed 1 larger proportion of eorprate production thn the figure of the pre ‘tous ces The l god reason, moreover, o below thatthe rent Census wl show very much grenter ropostion of corporate ality lin mor of there indus. In the mercantile Bold the corporation is only ust bogionig to come into ts own. Exact Bguzes a not hete avalable, but zough ‘eimates place the per cent of wholesale sales made by corporations in 1900 a approximately 80 per cent and at 40 percent i 105. Inthe same steon year period zeta sales by eoepratons grew from 18 10 {90 percent fall tal sale." The later growth loca some ad ‘etal extension of wholesale corporate tae since fn many cases the retail corporstion alr performed the wholesale function. Though there [goes a het only approximate, may be shown tobe in enor when the coneas of 1950 reports a thorough canvass of the mercantile Bald for the fst time, the rapid growth of the corporation tn this area cannot be questioned, ‘This expansion ie abnost synonymous with the development of the chain store. From 1919 to 1927 sales by chain groceries increased 287 Raat clined By pjting tnd based onto ar fo pe cnt ‘itil edt at ue by corpo sing 6a toa EoFioe odd ia ect of 14h Con af the Uolted Se, 88, p. 6D fr 169 ont imate (inte 13 or eto) for 18 ‘Shee of 1h Cee he Usted Stns, 1820, yp. 1022-100, A nate woah Cony a ng» re pode fone 410: ‘cain, et tan 5 per eat of whch wer peace by cogent ‘sed an Bee sap by Ue Nana! Bur of Beonamle Resaor cent wale sales of Sand 10 cent store chains grew 100 per cont ‘The rato of grow of there cn store sto far in exces of the growth of total real sales as to represent a notoworthy encrouchment of ‘corporate upon private enterprise fn dsttin, For the felis of contraction and what the consis calle “on losied industes"-Le, peroaal serees, amusements, rental of business bulldlngs, profesional aetvter of physicians, neers, te ‘socorat figures are not svalable, Between forty wud siaty per cent Al consteuetion appears to be carrad on by corporations,” and per= haps somo 15 to 95 per ent of tho unclassified industries I is impos sible to discover the degre of growth in these Rok. Certsnly there has been 2 marked Increase in the number of moving pieure houses ‘owned by exrporation, particularly by tho big cisins, barber and bbauty parlors te chatned and Incorporated toa growing but stil small extent, restaurant chains have grown in the lst twenty yeas, and ‘mpoations forthe owning of busines property have extended their ‘operations. 11s not posible, however, 10 measare whether thaso de- ‘lopment ave been more tepid then the total growth of business fx thoes fel ‘One of the last ara of non corporate activity, the Bed of real estate, shows signs of coming within th eoxpoate spore. Much real state held by priate corporations. Realestate corporations such as the Equitable Ofce Builng, Inc, with seve secrites onthe ex changes, have already made thelr appearance and a Real Extato Ex: ‘change hae recently been formed i New York to deal solely in ‘Secunties of corporations argantnd to tke over real ett Tn agriculture the corporation has made least headway. Jn 1920, (6.1 percent of all fans, measured by thelr value, were operated by the owner, whe 949 per cont were operated by tenants Only 40 per cont wore operated by managers" Presumably corporate faring Was ‘entry restricted othe ater elas, though lands held y 2 corporation fad operated not by the corporation but by tenants would be fnladed {nthe second growp- "Tho operations of the government remain as the only Bald of ccanomie activity not yet considered. Her, of cour, the corporate ‘stom with He widely dispersed owner fe not in evidenos. It should be noted, however, that even the goverment is ogioning to {Nao ray of si, ch, “at Hamonle Chats the "end on fue sapped by th Neon Banas of enum Rach ough eats holon ttn To dat, 1th Caaf Und Sato 160, Val 130, ceply te corporate device-wines, for expla the Pot of New Se uth ven beth conprnon say beesme te tab Jon climate omertip aody to the ett Gat the dence ‘shiny eect linet omc esting with the ooo, “Tin Gd after els the corporation a entered, rn and tncome whol partly dorian The date oft appesencs sd the degre of ts dominance have fn general varied wi two for, {BS pac chrcte af the cy ngueston andthe smn oe ‘Spl ecenry to canyon tates Tce fw tthe ee of ileal, common cavor tanks snd isuranee compere Teich even a te ISAs wee conceded to peor pobe fan Ae) andthe reas of pers erica gsr, tr th gh fed eapital este ralray nd mie; ato meres Us puss where cpl coms to uch rg extent of sock on Id On th ese fr devetopment ah pat ne nay ford tora tine when pentyl cmos wl be cared on “iver he conorte frm, And wherever the corporation hes Bone ‘Emma fat been te qu pb, nt Br eat, Te dor Srp ev eo loing to the private entepinof dne Thad new quality toeterpie-the quay fuga. Acting to Nathan Applies, lending New Baglin tore mutate,se contonara sytem he done more than evolve 2 org Dy which bones is carried on. Within i there exists a centripetal attrition which draws wealth together ato aggregations of eanstantly neroasing Sle, atthe sae te throwing contra ito the hands of Fewer and fewer men The trend i apparent and no Kini isa yet insight. Were {pone to sy tht reumstaneer hid established the concentration, bat that there was no Batis to form an opinion as to whather the process would continu, the whole problem might be simpliled. But {his isnt the eas. So far as canbe son, every elenvent whic favored ‘concentration sl exists, and tho only apparent actor which may end Uh tendency i the lint the ability of fow haan beings effectively tolhandle the aggregstes of property brow under thee contol “The sze of the moder lant corporation i dificult to grasp. Many ‘people would consider Inge a corporation having assets of ¢wllon ‘ollars or a ince of $30,000, Measured hy the average corporation this iden would be usted, In 1987 two-thinde of all corporations ve porting net inomes earned les thin $9,000 exch Tho average nom Banking corporation In that yeut had an income of only 23,000" and ‘ros atts of but §5TOD00 Tn comparison with the average corport- tion the milion dallar company would be large. But in comparison to the geet moder corporation bath sro pigmies.On the basis of ase, the American Telephone and Telegraph Company would be utvalent to ever 8,000 average sted corporations, and both the United Sates Steel Corporation and the Pennsjvania Halleoed Company to ovet “Ii 38 and 1 Nwning ac we hie ecco 4000. A hundred millon dolar company would be equivalent in asa to nearly 200 average corporations Clearly such great organisms are not to be thought om ee tame terms asthe average company. Aeady the Telophone Company cantrals more welth than contlned within the borders of twenty-one of tho states inthe county. "The great extent to which economic ately Is today cated on by such lange enterprises fe clearly Indicated by the accompanying Ist of the two hundred largest * non-banking corporations, compaled sof January 1, 190. Nea all of these comanias had assets of over fone hundred illon dollars, and Aten had assets of over billion Alar, Their combined assets amounted to eihty-on billons of olla, as e shall re, nearly hal of ll corporate wealth ts the United States. ‘These great companies form the very framework of American Industry. The Indivdoal most come in contact with them almost ‘msnoly. Hle may own ah oteest in one or toro of thes, ho may {be employed by ane of ther, but sbove all he i continually accepting their service It he travels any distance be i almost corti tide 00 foe of the grat raion systems. The engine which draw han has probably Been constructed by the Amerlean Locomotive Company or the Baldwin Locomotive Works; the ext fn which a rides Ikly to Ihave boen made by the Arserian Car and Foundry Company or one ofits vbsidinrs, unless bo Ie enjoying the servos of the Pullman Company, The rile have almost certainly beon supplied by one of the elven steel companies en the lian coal may well have come from one ofthe four cosl companies, s not fom amine owned by the railroad ill. Parhape the individual travels by automebile—in tear ‘manufactured by the Ford, General Moters, Studebaker, or Chyler Companies, on ces supplied by Firetone, Coodech, Goodyear or the United titer Rubber Company. He may choore tong the brands ‘of gas frasbed by one of the twenty peteoourn companies all actively Sling his trade. Should he page to send telegram ort telephone, ‘ve ofthe listed companies would be sure to Sl his need, Lar scxrtog to ae sets es depen ot reported in Monts Rl SOI*RAAS‘Uuljoa India ta: tn th wace whe t combate [Gite set wn ot en no nett wat bade Poo on the ses Ett ed hero the shat sorta mb ave sch cp Tce tmnt, ey tame eal ny {Rennes batt vety vow etinate af the wey cot ws mae, bed on Be iit cal IS SPR Pan ary and teen cota ae ‘Blur tay ele late my of ovo tg ok Sowa b owned by moet sores‘rant 1: The 200 Largest Non-banking Corporations in the United States (Gio st nw “Grow ant ono Soot fn 090 sou om 1 990 x inition of dlrs Nome into of dats ‘awcemenes ‘omen cates, soar, ere (Gowined) ann Kodak Co seo Konner Co. 500 Genel Ther Boupment In. (Fox Thats) 900 Prower& Game Co. joa onus tne 042 ‘non Carbide & Carbon Cop. 008 Peru Publis Corp. an oO Radio Cop of America 2800 (et) Contain Cont Co. oo Werner Bo, Pures, Ie er Glen Alden Cot Co. 000 (ee) Phat © Renting Cel & ron Corp 1290 ee Plubgh Coa Co ms ‘Alani Refine ora ool Product, Dru, Tobacco, te Continent Of Ca 1580 ae roo Gulf OF Corp. 49) ‘Borden Co 140 Ohi OF Co. nos ‘ational Daly Product Co 25 Pha Petroleum Co. 153, sur Prae Ol & Gan Co 208 ‘ated Fra Co. a0 rae Pipe Lie Go. 105 ees Pern Ga - 2iKe “amour Co, asus icfeld Ot Cao Clforata isto See Co asia ‘Shall Unin OF Cor, aaa Wir & Co 60 Sinclair Conndated 0 Carp. ams oun ‘Shar Grade Of Purchasing Co, mo “onercon Sur Refing Co asta ‘Strand Coo Clore on Caton Coe Prod. Co ios ‘Standard Ot Ca of diane 5500 (ot) ‘oucso Standen O Co of Ne omy wer, “Ameren Tebczo Co 2054 ‘Sundar Ot Ce of New York 084 gat & Myers Tobacco Co. 103 Tews Con. oma Leilard (Co. 100 Tide Wace Avoca O11 Co. a4 Rey Tobe Co a Union i Anoiaten 2400 (et) ones Veown Of Co. 267 ‘atonal Bic Co. sa, ‘onwa cmescats oar, 86 ao ‘Aled Chimica Dye Cos. ana aereen reer ciaroa a orn Pract Rafing Co 1207 Da Port de Nenour & Co ana Leather International Motch Corp. a8 Interationl Shoe Co ms‘rante 1; The 200 Largest Non-banking Corporations in the United States (Continued) ‘Gran ect on or show fon 1, 1990 “Gro at ono aout fn, 1090 Name sells re Nome iA of dates Tater Metals ‘gl Camber Com not moe ‘minum oo mre 2008 Meenile seoren isan ont, ne. (United Dr 60) 180 “icra Sing Refit Co mo Coa Aone © Poca Cs Ms ‘tmconde Copper Mins Co fos ‘one Co ims ‘meet Cope Cor ‘ora Noy 11) & Co "7.0 (en) areal ad Cu rosa Ma i co. wa Pn Dede Cor. at ontemery Word Ca ies econ Ser oriuct& , a8 “Anon Ring a Co so1s ated Ser Cor. (Unt Cie So) mas pemacrantoses ea Woo co Iss Cifecory 200 Gi el oof deren 3 Metal Fredwcts Inland Steel Co. 103.2, aroun Tones & Laughlin Steet Corp. 292.0 ‘her or war atin! rel Cr. inns Pod Mtr. ‘a1 option Se Co sat ier tor Cop ian (oe) eee era ees Studebaker Cor. rue ‘Wheeling Stee Corp. 1283 ee Yeonpen Shot Tate Co sr Gano en Co rd ‘Weatphne Batis Moatring Ca 00 opr /MACHENEHY incwine ‘Grown Zellerbach Corp. ut 6 Irn opr Powe Co. eo Deon a cman Oats op ma ere Public Utilities (Crouped according to associated companies) “inwcn Felon & Teeraph Ce we wig ‘Ate epon Us. ono ‘aero Cor Fy Co os intoatn! Teoh &Teloaph Co. sae ‘nero Laon ton Warton Vin apo Co mae ‘Amr Rar Sido Sentry Cor fone acme nec atu Locate Wore 68 “ncrton Comma Power Cor. 1s Cone Co uss ‘anccn Wer Works © Bl Co m524 monenre we rioe ‘rants t: The 200 Largest Non-banking Corporations in the ‘United States (Continued) ‘rx concremunon ov scone rowan 25 tout on 180. Nene ono. Name iscrmcrry Axp cas (Contined) smupormmcerr Ann at (Continued) oe om “htma Conontsnw noe (Continued) ‘New England Gos and Electric Attain 1087 aes ee eco Troe Rainy ond Bue Acar pues ‘abe See Corp ef New Toney ao, Gliwtante Co S08 nae Gs Improvement Co ee Grid Gu oof Ne Yok ums ned Lp owe ae (Conia Gar HeLa Power Caf Pakimare 1959 ated Sue Ete Poorr Cop. oe ea Utes Power & Lie Corp. svat Date Power Ca ant etvoads (Groped acon oat companies) Po Elec Co of Baton 1603 “Aehany Corp 1600.0 (est) tte Bond & Share Co 1500 “eo. 5009) “Aercan Car Het Co 430 ens Cy Sethe Ry ox ‘American Power ight Co. “sk ‘Nea York, Chego © St. Lut R. Ca 500 (et) lc Power & Light Com 0,0 (st) Whang & Lake Eee Ry. Co 041 Natal ower © Ligh Co 000 (et) Atchison Topeka 6 Sota Fe By. Co. rissa sts enor ‘aloe Co Line RC. 10.0 (et) ommomseath Eaton Co 4409 (ox) ‘atinore Oho Ra. Co. 140s Mate West Ueies Co. almno (et) Cheng Allon Rd Co. 1618 Mind United Co 581 eng Co 565.0 (et) North Aner Lig & Power Co. ‘ot Wose Moland ty. Co asa People Gs, ight & Coke Co wet cng arora lint By Co ma Publi Sere Co of Norther ints 1600 ‘Chcage Creat Wester RCo 102 sonra co. ono Chis, Milano, Pau & Pe Rd Co mo rootyn Union et Co. od {hiege & Noth Western By. Co. exo aster Can & Pl Anolten 1587 ies, Rock nend& Poe Ry. Co. a ene Star Gat Co. 100 {hiago Union Staton Co 68 North American Co ios, Delaware & Hudson Ca aio Pri Got © Bs, Co ana Dalnear, Lacan & Western RCo, 1908 ace Lighting Co. oe Dancer Rio Grnde Weve Rd Co. asd Sa Celfomia Elton Co Lad aos Florida Yast Coast. Co 1230 ‘Stone Webster, ne 490.0 (et) (Crest Northern Ryo, ae aiid Con eo (othe oa my. Co. si09 ‘nen connate noc ‘Chea, Bringon& Quincy RCo ois ‘Clunbis Gar Beet Cor. sos ‘Spolane, Ron Seat fy. Co. Moa,