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Technological Change in American Manufacturing During the 1920's

Published online by Cambridge University Press:  03 February 2011

John H. Lorant
John H. Lorant
Affiliation:
Douglass College, Rutgers University
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Extract

It is well known that the average productivity of capital in American manufacturing increased at a comparatively high rate during the 1919–1929 decade. During the same period the accelerated application of scientific information stimulated important changes in manufacturing plant and equipment. This Note investigates the relationship between these two processes. The inquiry is of historical interest for two reasons: First, the study should help to support statistical observations of the increased efficiency of production facilities during the 1920's, thereby connecting observed productivity change as measured by economists with substantive technological improvements as described by economic historians. And second, it may be possible to characterize the 1920's as a period of unique technological growth in the history of American manufacturing.

Type
Notes
Information
The Journal of Economic History , Volume 27 , Issue 2 , June 1967 , pp. 243 - 246
Copyright
Copyright © The Economic History Association 1967

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References

1 Kendrick, John W., Productivity Trends in the United States (Princeton: Princeton University Press [for the National Bureau of Economic Research], 1961), Table 45, p. 166.Google Scholar

2 Giedion, S., Mechanization Takes Command (New York: Oxford University Press, 1948), p. 41.Google Scholar

3 Increased competition is reflected in the some 500 mergers which occurred during the 1920's. See Haynes, Williams, American Chemical Industry, Vol. IV: The Merger Era (New York: Van Nostrand, 1948), p. 46.Google Scholar

4 John H. Lorant, “The Role of Capital-Improving Innovations, in American Manufacturing During the 1920's” (unpublished doctoral dissertation, sponsored by Professor Donald Dewey, Columbia University, 1966). Trade journal literature, e.g., Oil & Gas Journal, Paper Trade Journal, and Chemical and Metallurgical Engineering, published during the 1920's, serve as a major source of evidence for these conclusions.

5 Calculated from: American Petroleum Institute, Petroleum Facts and Figures (Centennial Edition; New York: American Petroleum Institute, 1959), pp. 97, 101.Google Scholar

6 Enos, John L., Petroleum Progress and Profits: A History of Process Innovation (Cambridge: M.I.T. Press, 1962), Appendix Tables lb and lc, p. 286.Google Scholar

7 The Cross and Tube & Tank processes, accounting for nearly 51 per cent of total cracked gasoline output in 1929 (see , Enos, Petroleum Progress and Profits, p. 285Google Scholar), represented output-capital advances connected with gasoline production of between 200 per cent (calculated from:Williamson, Harold F. et al. , The American Petroleum Industry, Vol. II: The Age of Energy, 1899–1959 [Evanston, III.: Northwestern University Press, 1963], p. 383Google Scholar) and 30 per cent (calculated from: , Enos, Petroleum Progress and Profits, p. 113Google Scholar). Enos notes that “the capital cost of a [Burton-Clark] unit was 50 per cent of the Tube and Tank and its capacity only 39 per cent.”) compared with batch-type Burton bulk pressure distillate systems or the semicontinuous Burton-Clark units. These data lead to the interpolation of 100 per cent as a conservative estimate of the average increase in the productivity of capital that can be attributed to continuous thermal cracking.

8 100% × 47% × 90% = 42%.

9 Calculated from: Kendrick, Productivity Trends, Table D-1V, p. 484.

10 The 3.6 per cent average annual rate of increase in the productivity of petroleumrefining capital attributable to continuous thermal cracking as a proportion of the approximately 9.1 per cent over-all rate of increase in the productivity of industry capital due to all causes.

11 Admittedly, these estimates are only “first approximations.”

12 See Davis, Pearce, The Development of the American Glass Industry (Cambridge: Harvard University Press, 1949).CrossRefGoogle Scholar

13 Jerome, Harry, Mechanization in Industry (New York: National Bureau of Economic Research, 1934), pp. 62–63,112,118.Google Scholar

14 , Giedion, Mechanization, p. 192.Google Scholar