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Changing Patterns of Concentration in American Meat Packing, 1880–1963

Published online by Cambridge University Press:  11 June 2012

Richard J. Arnould
Richard J. Arnould
Affiliation:
Assistant Professor of Economics, University of Illinois, Urbana
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Abstract

Professor Arnould analyzes the reasons for concentration in the American meat packing industry from 1880 through 1920, then describes and evaluates the varied forces which have led to declining concentration since the end of World War I.

Type
Research Article
Information
Business History Review , Volume 45 , Issue 1 , Spring 1971 , pp. 18 - 34
Copyright
Copyright © The President and Fellows of Harvard College 1971

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References

1 Bain, J. S., Industrial Organization (New York, 1968), 41.Google Scholar

2 Arnould, R. J., “Changing Patterns of Concentration in the Meat Packing Industry” (unpublished Master's thesis, Iowa State University, 1965)Google Scholar; and Weiss, Leonard W., “Average Concentration Ratios and Industrial Performance,” Journal of Industrial Economics, XI (July, 1963), 237–254.CrossRefGoogle Scholar

3 It must be recognized that many other factors play a role in this problem, such as the controversy surrounding the underlying theory of the entire Bain hypothesis.

4 Bain, Industrial Organization, 41–42.

5 The intended implication, at this point, is neither that it was nor was not used to its fullest extent.

6 The “Big Five” were forerunners of Swift, Armour, Morris, Wilson, and Cudahy.

7 The branch house system developed as the primary means of distribution in this period.

8 Federal Trade Commission, Report of the Federal Trade Commission on the Meat Packing Industry (3 parts, Washington, 1919), part I, 141–43.Google Scholar

9 Ibid., part I, 106.

10 Ibid., part I, 107.

11 Ibid., part I.

12 Ibid., part I.

13 The proposed merger that would have accomplished near monopoly control will be discussed later.

14 Federal Trade Commission, Meat Packing Industry, part III.

15 Ibid., part III.

16 Ibid., part III.

17 Ibid., part III, 69.

18 Ibid., part II, 13.

19 Ibid., part II, 13–15.

20 Ibid., part II, 15.

21 Ibid., part II.

22 Ibid., part II.

23 In 1923 Morris and Company was acquired by the North American Provision Company, a subsidiary of Armour and Company.

24 Moody, John, Moody's Industrial Manual (New York, 1963).Google Scholar

25 The separate sources of the data overlap the period from 1947–1956. This overlap is maintained because linear extrapolation did not seem warranted. Additional data provide an additional overlap, and in some cases a breakdown by species and regions but present the trends in the same direction and essentially the same magnitude. See American Meat Institute, Financial Facts About the Meat Packing Industry (Chicago, 1962Google Scholar); Anthony, Willis, “Patterns of Concentration in the Slaughter Industry, 1952–1962” (unpublished manuscript, St. Paul, 1964Google Scholar); and Federal Trade Commission, Meat Packing Industry, parts I, II, and III.

26 U.S. v. Swift and Company, Armour and Company, Wilson and Company, Inc., and the Cudahy Packing Company, et al., Ill., Civil No. 58C613 (1958).

27 American Meat Institute, Financial Facts, 15.

28 Wallace, Thomas Dudley, “An Analysis of Recent Shifts in the Location of Hog Slaughtering: Special Emphasis on the Corn Belt” (Ph.D. dissertation, University of Chicago, 1952), 24–60.Google Scholar

29 National Commission on Food Marketing, Organization and Competition in the Livestock and Meat Industry, Technical Study No. 1 (Washington, 1966), 17.Google Scholar

30 Anthony, Willis, “Patterns of Concentration in the Slaughter Industry, 1952–1962,” unpublished manuscript, University of Minnesota, 1964.Google Scholar

31 This study was based on the modern “on-the-rail” system. See National Commission on Food Marketing, Organization and Competition, 18.

32 Ibid., 19.

33 See Butz, Dale E. and Baker, George L. Jr., The Changing Structure of the Meat Economy (Boston, 1960Google Scholar); Logan, Samuel H. and King, Gordon A., Economies of Scale in Beef Slaughter Plants, Research Report No. 260 (Davis, Cal., 1962Google Scholar); and National Commission on Food Marketing, Organization and Competition.

34 National Commission on Food Marketing, Organization and Competition, 17.

35 U.S. Department of Labor, Industry Wage Survey, Meat Products, Bulletin No. 1416 (Washington, 1963), 7.Google Scholar

36 U.S. v. Swift and Company.

37 U.S. Department of Agriculture, The Economic Effects of U.S. Grades for Beef, Research Report No. 298 (Washington, 1959), vii–viii.Google Scholar

38 This decline is due in part to the competition but also to various management and organizational problems.

39 American Meat Institute, Financial Facts, II.

40 Moody, Industrial Manual.

41 These figures do not include non-manufacturing activities in which many of the Big Four operated.