Weakening Giants

If the wealth of the large corporations and that of all corporations should continue to increase for the next twenty years at its average annual . . . 1909 to 1929 rate, 79% of all corporate activity would be carried on by 200 corporations by 1950.

Thus in 1936, wrote Adolf A. Berle Jr. and Gardiner C. Means in their classic study, The Modern Corporation and Private Property. Many an economist has suspected since that World War II has increased the weight of the 200 biggest manufacturing corporations on the U.S. economy. Last week, in an article in the November issue of the Survey of Current Business, the U.S. Department of Commerce set their fears at rest, at least for the present. The war, the department found, had checked the trend toward monopoly.

Its finding that the U.S. was not now shadowed by Brandeis' "curse of bigness" was based on a survey of 1,000 manufacturing corporations--the 200 biggest and 800 others, a cross section of their runners-up. Between them the 1,000 control over half of the nation's manufacturing wealth. From 1939 to 1945 their assets had grown by 50% but the rate of growth of the runners-up had far outstripped the growth of the giants (see chart).

The big 200 had entered the war controlling some $30 billion or half of all U.S. manufacturing assets. They had come out of the war with $42 billion, but their new holdings made up only 45% of the total. Their share of total corporate manunfacturing activity, as measured in sales, had shrunk from 39% to 36%.

The 800 had incresed their assets from $6 billion to $11 billion, a jump that raised their share of the total from 9% to 12%. Their volume of sales had increased 148%, almost one and a half times that of the giants. Result: 26 of 1939's giants had lost their places in the top group.

Whether the trend toward monopoly had been checked for long was open to question. The department merely noted that smaller companies usually grow faster during booms--and would shrink faster if a recession or depression comes along.

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