American business history

American business history is a history of business, entrepreneurship, and corporations, together with responses by consumers, critics, and government, in the United States from colonial times to the present. In broader context, it is a major part of the Economic history of the United States, but focuses on specific business enterprises.

Colonial era

New England

The New England region's economy grew steadily over the entire colonial era, despite the lack of a staple crop that could be exported. All the provinces and many towns as well, tried to foster economic growth by subsidizing projects that improved the infrastructure, such as roads, bridges, inns and ferries. They gave bounties and subsidies or monopolies to sawmills, grist mills, iron mills, pulling mills (which treated cloth), salt works and glassworks. Most important, colonial legislatures set up a legal system that was conducive to business enterprise by resolving disputes, enforcing contracts, and protecting property rights. Hard work and entrepreneurship characterized the region, as the Puritans and Yankees endorsed the "Protestant Ethic", which enjoined men to work hard as part of their divine calling.

Early national

Banking

Bank of the United States check signed by John Jacob Astor in 1792

Organized banking began on a small scale after the American Revolution, with a few private banks in Boston and New York, such as the Bank of North America. The major impetus came from Secretary of the Treasury Alexander Hamilton, who led Congress create a private national Bank despite furious opposition from Thomas Jefferson and his Democratic-Republican Party. The First Bank of the United States (BUS) was a privately Owned and operated institution, chartered for twenty years by Congress in 1791. The BUS Handled national finances, tax receipts and government expenditures, and funded the national debt. Increasingly became involved in lending to business, and especially assisting new local banks in unifying the national monetary and financial system.

Business centers

Baltimore

In the South, by far the major business center was Baltimore, Maryland. It had a large port to handle imports and exports, and a large hinterland that included the tobacco regions of Maryland and Virginia. It dominated the flour trade. Alexander Brown (1764–1834) arrived in 1800 and set up a linen business and his firm Alex. Brown & Sons expanded into cotton and shipping, with branches in Liverpool, England, Philadelphia, and New York. The firm Helped finance the Baltimore and Ohio Railroad to tap its own hinterland as far as Pennsylvania and Ohio. Brown was a business innovator after 1819 when cash and short credits became the norms of business relations. By concentrating his capital in small-risk ventures and acquiring ships and stock in the Second Bank of the United States he came to monopolize Baltimore's shipping trade with Liverpool by 1822. Brown next expanded into packet ships, extended his lines to Philadelphia, and began financing Baltimore importers, specializing in merchant banking from the late 1820s to his death in 1834. The emergence of a money economy and the growth of the Anglo-American cotton trade allowed him to escape Baltimore's declining position in trans-Atlantic trade. His most important innovation was the drawing up of his own bills of exchange. By 1830 his company rivaled the Bank of the United States in the American foreign exchange markets, and the transition from the 'traditional' to the 'modern' merchant was nearly complete. It became the nation's first investment banking.

Baltimore and Ohio Railroad

Baltimore faced economic stagnation unless it opened routes to the western states, as New York had done with the Erie Canal in 1820. In 1827, twenty-five merchants and bankers studied the best means of restoring "that portion of the Western trade which has recently been diverted from it by the introduction of steam navigation." Their answer was to build a railroad—one of the first commercial lines in the world. The Baltimore and Ohio Railroad (B&O) became the first important American railroad. Some 20,000 investors purchased $5 million in stock to import the rolling stock and build the line. It was a commercial and financial success, and invented many new managerial methods that became standard practice in railroading and modern business. The B&O became the first company to operate a locomotive built in America, with the Tom Thumb in 1829. It built the first passenger and freight station (Mount Clare in 1829) and was the first railroad that earned passenger revenues (December 1829), and published a timetable (May 23, 1830). On December 24, 1852, it became the first rail line to reach the Ohio River from the eastern seaboard. The B&O railroad was merged into CSX in 1987.

Marketing

The general store

General store exhibit at the Deaf Smith County Historical Museum in Hereford, Texas

General stores, and itinerant peddlers, dominated in rural America until the coming of the automobile after 1910. Farmers and ranchers depended on general stores that had a limited stock and slow turnover; they made enough profit to stay in operation by selling at high prices. Often farmers would barter butter, cheese, eggs, vegetables or other foods which the merchant would resell. Prices were not marked on each item; instead the customer negotiated a price. Men did most of the shopping, since the main criterion was credit rather than quality of goods. Indeed, most customers shopped on credit, paying off the bill when crops, hogs or cattle were later sold; the owner's ability to judge credit worthiness was vital to his success. The store was typically a gathering point for local men to chat, pass around the weekly newspaper, and talk politics.

In the South the general store was especially important after the Civil War, as the merchant was one of the few sources of seasonal credit available until the cash crops (usually cotton or tobacco) were harvested in the fall. There were very few nearby towns, so rural general stores and itinerant peddlers were the main sources of supply.

= Retail in towns and small cities

In the cities consumers had more choices, usually purchasing dry goods and supplies at locally owned department stores. Sometimes they opened stores in nearby cities. They had a much wider selection of goods than in the country general stores and price tags that gave the actual selling price. Department stores provided limited credit, and set up attractive displays and, after 1900, window displays as well. Their clerks—usually men before the 1940s—were experienced salesmen whose knowledge of the products appealed to the better educated middle-class women who did most of the shopping. The keys to success were a large variety of high-quality brand-name merchandise, high turnover, reasonable prices, and frequent special sales. The larger stores sent their buyers to Chicago or other big wholesale centers once or twice a year to evaluate the newest trends in merchandising and stock up on the latest fashions. By the 1920s and 1930s, large mail-order houses such as Sears, Roebuck & Co. and Montgomery Ward provided serious competition, so the department stores came to rely even more on salesmanship as well as close integration with the community.

Advertising

Main article: History of advertising

J. Walter Thompson Co. promotes high-powered advertisement, 1903

By 1900 the advertising agency had become the focal point of creative planning, and advertising was firmly established as a profession. At first, agencies were brokers for advertisement space in newspapers. N. W. Ayer & Son was the first full-service agency to assume responsibility for advertising content. N.W. Ayer opened in 1869, and was located in Philadelphia. In 1893, 104 companies spent over $50,000 each on national advertising. Most sold patent medicines, which faded away after the federal food and drug legislation of the early 20th century. Seven innovators had emerged in the big time: Quaker Oats, Armour meat, Cudahy meat, American Tobacco Company, P. Lorillard tobacco, Remington Typewriters, and Procter & Gamble soap. By 1914, two thirds of the top advertisers came from just five industries: 14 food producers, 13 in automobiles and tires, nine in soap and cosmetics, and four in tobacco. Agencies were forever breaking up and reforming, especially when one executive would split taking with him a major client and his team of copywriters.

Advertising increased dramatically in the United States after 1900 as industrialization expanded the supply of manufactured products to a very large market. In order to profit from this higher rate of production, industry needed to recruit workers as consumers of factory products. It did so through the invention of mass marketing designed to influence the population's economic behavior on a larger scale. Total advertising volume in the United States grew from about $200 million in 1880 to nearly $3 billion in 1920.

Historiography

Main article: Business history § United States

See also

• History of advertising
• Economic history of the United States
• History of rail transport in the United States
• Marketing
• Timeline of United States railway history

Bibliography

Surveys

• Blackford, Mansel G. A History of Small Business in America ISBN 0-8057-9824-2) (1992)
• Blackford, Mansel G., and K. Austin Kerr. Business Enterprise in American History (ISBN 0395351553) (1990)
• Blaszczyk, Regina Lee, and Philip B. Scranton, eds. Major Problems in American Business History: Documents and Essays (2006) 521 pp.
• Bryant, Keith L. A History of American Business (1983) (ISBN 0133892476)
• Chamberlain, John. Enterprising Americans: A Business History of the United States (ISBN 0060107022) (1974) by popular journalist
• Cochran, Thomas Childs. Business in American Life: A History (1976) online edition
• Dibacco, Thomas V. Made in the U.S.A.: The History of American Business (1988) (ISBN 0060914661)
• Groner, Alex. The American heritage history of American business & industry, (ISBN 0070011567) (1972), very well illustrated
• Krooss, Herman Edward. American Business History (ISBN 0130240834) (1972)
• McCraw, Thomas K. American Business, 1920-2000: How It Worked.2000. 270 pp. ISBN 0-88295-985-9.
• Porter, Glenn. The rise of big business, 1860-1910 (1973)(ISBN 0690703945)
• Schweikart, Larry. The Entrepreneurial Adventure: A History of Business in the United States (2000)

Special topics

• Chandler, Alfred D., Jr. Scale and Scope: The Dynamics of Industrial Capitalism (1990)
• Chandler, Alfred D., Jr. Shaping the Industrial Century: The Remarkable Story of the Evolution of the Modern Chemical and Pharmaceutical Industries. (2005).
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• Chandler, Jr., Alfred D. Scale and Scope: The Dynamics of Industrial Capitalism (1990).
• Chandler, Jr., Alfred D. Strategy and Structure: Chapters in the History of the Industrial Enterprise (1962) online edition
• Chandler, Jr., Alfred D. The Visible Hand: The Managerial Revolution in American Business (1977), highly influential study
• Church, Roy, and Andrew Godley. The Emergence of Modern Marketing (2003) online edition
• Cole, Arthur H. The American Wool Manufacture 2 vol (1926)
• Dicke, Thomas S. Franchising in America: The Development of a Business Method, 1840-1980 (1992) online edition
• Fraser, Steve. Every man a speculator: A history of Wall Street in American life. Harper Collins, 2005.
• Friedman, Walter A. Birth of a Salesman. The Transformation of Selling in America(2005)
• Geisst, Charles R. Wall Street: a history (2012).
• Jones, Geoffrey., and Jonathan Zeitlin (eds.) The Oxford Handbook of Business History(2008)
• Lamoreaux, Naomi R., and Daniel M. G. Raff, eds. Coordination and Information: Historical Perspectives on the Organization of Enterprise (1995)
• Myers, Margaret G. A financial history of the United States (1970).
• Previts, Gary John, and Barbara D. Merino. History of Accountancy in the United States: The Cultural Significance of Accounting (1998).
• Tedlow, Richard S., and Geoffrey G. Jones, eds. The Rise and Fall of Mass Marketing (Routledge, 2014).
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• Wilkins, Mira. The Emergence of Multinational Enterprise(1970)
• Wilkins, Mira. The Maturing of Multinational Enterprise (1974)
• Williamson, Harold F. and Arnold R. Daum. The American Petroleum Industry: The Age of Illumination, 1859-1899, (1959); online edition vol 1; vol 2, American Petroleum Industry: the Age of Energy 1899-1959, 1964. The standard history of the oil industry.

Historiography

• Decker, Stephanie, Matthias Kipping, and R. Daniel Wadhwani. "New business histories! Plurality in business history research methods." Business History (2015) 57#1 pp: 30-40.
• Friedman, Walter A., and Geoffrey Jones, eds. Business History (2014) 720pp; reprint of scholarly articles published 1934 to 2012
• Galambos, Louis. American Business History. Service Center for Teachers of History. 1967, historiographical pamphlet. online version
• Goodall, Francis, Terry Gourvish, and Steven Tolliday. International bibliography of business history (Routledge, 2013).
• Gras, N.S.B. and Henrietta M. Larson. Casebook in American Business History (1939), with short biographies, company histories and outlines of the main issues
• Gras, N. S. B. "Are You Writing a Business History?" Bulletin of the Business Historical Society 1944 18(4): 73-110. detailed guide to writing one; in JSTOR
• Hansen, Per H., “Business History: A Cultural and Narrative Approach,” Business History Review, 86 (Winter 2012), 693–717.
• John, Richard R. "Elaborations, Revisions, Dissents: Alfred D. Chander, Jr.'s, The Visible Hand after Twenty Years," Business History Review 71 (Summer 1997): 151–200.
• Kirkland, Edward C. "The Robber Barons Revisited," The American Historical Review, 66#1 (1960), pp. 68–73. in JSTOR
• Klass, Lance, and Susan Kinnell. Corporate America: A Historical Bibliography 1984
• Klein, Maury. "Coming Full Circle: the Study of Big Business since 1950." Enterprise & Society: the International Journal of Business History 2001 2(3): 425-460. Issn: 1467-2227 Fulltext: OUP
• Lamoreaux, Naomi R.; Raff, Daniel M. G.; and Temin, Peter. "Beyond Markets and Hierarchies: Toward a New Synthesis of American Business History." American Historical Review (2003) 108#2 pp: 404-433. online
• Larson, Henrietta M. "Business History: Retrospect and Prospect." Bulletin of the Business Historical Society 1947 21(6): 173-199. in Jstor
• Scranton, Philip, and Patrick Fridenson. Reimagining Business History (2013) online review
• * Staudenmaier, John, and Pamela Walker Lurito Laird. "Advertising History" Technology and Culture (1989) 30#4 pp. 1031-1036 in JSTOR
• Tucker, Kenneth Arthur. Business History: Selected Readings (1977)

Entrepreneurs, industries, and enterprises

• Bailyn, Bernard. The New England Merchants in the Seventeenth Century (1955)
• Brinkley, Douglas G. Wheels for the World: Henry Ford, His Company, and a Century of Progress (2003)
• Clark, Thomas D. Pills, Petticoats, and Plows: The Southern Country Store." (1944).
• Chernow, Ron. Titan: The Life of John D. Rockefeller, Sr (2004)\
• Chernow, Ron. The house of Morgan: an American banking dynasty and the rise of modern finance (2001).
• Cochran, Thomas C. The Pabst Brewing Company: The History of an American Business (1948) online edition
• Dethloff, Henry C., and C. Joseph Pusateri, eds. American business history: case studies (1987).
• Doerflinger, Thomas M. A Vigorous Spirit of Enterprise: Merchants and Economic Development in Revolutionary Philadelphia (1986)
• Encyclopedia of American business history and biography; 500+ Pages each with coverage of entrepreneurs, corporations, and technologies, Plus specialized bibliographies
  • Bryant, Keith L., ed. Railroads in the Age of Regulation, 1900-1980 (1988)
  • Fay, Robert L., ed. Railroads in the Nineteenth Century (1988)
  • Leary, William. ed. The Airline Industry (1992)
  • May, George S., ed. The Automobile Industry, 1896-1920 (1990)
  • May, George S., ed. The Automobile Industry 1920-1980 (1989)
  • Paskoff, Paul F., ed. Iron and Steel in the Nineteenth Century (1989)
  • Schweikart, Larry, ed. Banking and Finance, 1913-1989 (1990)
  • Schweikart, Larry, ed. Banking and Finance to 1913 (1990)
  • Seely, Bruce E. The Iron and Steel Industry in the 20th Century (1994)
• Friedman, Walter A. and Tedlow, Richard S. "Statistical Portraits of American Business Elites: a Review Essay." Business History 2003 45(4): 89-113.
• Geisst, Charles R. Monopolies in America: Empire builders and their enemies from Jay Gould to Bill Gates (2000).
• Isaacson, Walter. Steve Jobs (2011).
• Albro Martin. James J. Hill and the Opening of the Northwest (1976)
• Pak, Susie J. Gentlemen Bankers. The World of J.P. Morgan (2013)
• Scranton, Philip. Proprietary Capitalism: The Textile Manufacture at Philadelphia, 1800–1885 (1983)
• Stiles, T. J. The first tycoon: The epic life of Cornelius Vanderbilt (2009).
• Tucker, Barbara M. Samuel Slater and the Origins of the American Textile Industry, 1790–1860 (1984)
• Walker, Juliet E. K. Encyclopedia of African American Business History Greenwood Press, 1999 online edition
• Wall, Joseph F. Andrew Carnegie (1970).
• Wallace, James and Jim Erickson. Hard Drive: Bill Gates and the Making of the Microsoft Empire (1993)
• Weare, Walter B. Black Business in the New South: A Social History of the North Carolina Mutual Life Insurance Company (1993) online edition