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| Stovemaking Cities and Towns, 1874, grouped in descending order of annual output: RED = leading centres with top 25 percent of production (Troy, Philadelphia, Albany); YELLOW = second quartile; GREEN third; BLUE fourth. For the original zoomable map of which this is a snapshot, click here. |
The Stove Industry in 1874:
A Statistical Portrait
In 1874 Wiley’s American Iron Trade, John Dunlap, ed., was published. Among
other things, it contained a detailed report on the American stove industry,
reporting for every firm its name, location(s), annual average capacity expressed
in tons and/or units of production (stoves – approximately ten per ton), andfor some companies the value of their product and the size of their labor force too.
How did the compilers succeed in persuading hundreds of proprietary, competitive
enterprises to share this information? Answers must be largely speculative – no
explanation about data sources was provided – but it seems likely that the report
was a by-product of the stove industry’s attempts to form a national organization
for the purpose of controlling competition. The leaders of this organizing process,
notably John Perry of Albany and Giles Filley of St. Louis, believed firmly in the
value of statistical information as a basis for intelligent common action. Filley, the
largest stove foundryman in the country, with wide connections and a formidable
reputation among his peers, employed a statistician, at his own expense, to gather
data. He or more likely Perry probably passed this information on -- the report contains a long and laudatory report on Perry and his firm, while all of his competitors are dealt with in a standard brief reporting format. It is reasonable to assume that this ‘puff’ was Perry’s reward for his generosity with Filley’s data.
A reason why companies may not have been reluctant to share this information is that it was not commercially sensitive, and it wasn’t very private either. Firms reported their annual average capacity, not their actual production or sales, which would have been much more problematical; and, given that stove founders all relied on the same labor-intensive production process, it was easy for companies or their rivals to produce good estimates for capacity simply by counting the number of ‘floors’ – individual molders’ workspaces – in a plant. This was public knowledge.
The result of this process of data-collection and publication is that we have an
unusually revealing snapshot of the industry at the end of the post-Civil War boom,
and at almost its peak of development. Alternative fuels which would soon cut into
its market – gas, manufactured and natural, and petroleum (kerosene) – were only
beginning to make their impact. And the movement of markets, followed by
production, into the midwest and then the South, had not yet eliminated the
dominant position of the east-coast manufacturing centers where the industry had
emerged between the 1830s and 1850s. In the early 1870s, pioneering inventors
and business-founding entrepreneurs were still alive to tell the tale; the industry
was still that close to its origins.
* * *
What was the size-distribution of firms and output within the industry?
As we can see, the industry was not simply characterized by many firms, it was also one where the larger players – rarely other than single-plant manufacturing operations themselves, though the larger ones also maintained ‘branch houses’ (showrooms and warehouses) in major urban market and distribution centers, particularly New York and Chicago – did not possess a dominant market share. This was an industry with low barriers to entry and, if we can extrapolate early 1920s data backwards, no clear or strong economies of scale. Companies producing less than a thousand tons of stoves a year could compete in national markets alongside those several times larger than themselves; companies producing less than 500 tons could compete in local markets, or via specialization.
The competitive structure of the industry depended, not just on low barriers to entry, weak and uncertain returns to scale, and many players, with none dominant. It was reinforced by the regional dispersion of the industry. By 1874, all of the northern and border states, as far west as Wisconsin, Iowa, Missouri, and Kansas, and two southern states, Virginia and Georgia, had stove foundries within them. (There were probably many other local general foundries that turned out some stoves for nearby customers; these data are for companies specializing in stove manufacture.) There was a considerable amount of geographical concentration – New York, Pennsylvania, and Ohio, the states where the industry had emerged in the 1830s, had almost two-thirds of production capacity – but this early-1870s snapshot disguises the fact that the industry, like its markets, was moving west, and that midwestern river and lake cities (particularly Detroit and St. Louis) were home to well-established, comparatively large firms, which were already major regional and even national players.
There was thus no simple or static picture of geographical concentration of production, or relatively stable, isolated markets. Stove producers sold very vigorously into national markets from at least the 1850s, and invaded one another’s home territories with impunity. The weight of their products does not seem to have stood in the way of long-distance selling, given the efficiency of the American transportation system. Well into the post-Civil War period, stove manufacturers depended on cheap water transportation for their non-perishable goods rather than the railroads, if possible; hence the locational advantage of Albany and Troy, at the head of tidal navigation on the Hudson, and the start of the Erie and Champlain canals, with the Delaware & Hudson to bring pig iron and coal from Pennsylvania’s mines and furnaces; hence, too, the prominence of river and lake ports among the rising Midwestern manufacturing centers.
Where within these states were the major stove production centers?
Looking a little more closely, we can see that stove production was still
concentrated, within these states, in a few major and some minor (Troy, Albany)
cities.
Troy and Albany, together with other smaller (Buffalo, Utica, Peekskill) cities
along the Hudson-Mohawk corridor, remained the industry’s largest production
center. This strong position, which had been established as the industry came
into being in the 1830s-1850s, was about to collapse, as their first-mover and
locational advantages were eroded by changes in transportation (from waterborne
to railroad), movement west in the center of gravity of the rural population,
the establishment of new, larger Midwestern competitors, and, crucially, the
crippling burden of high labor costs imposed by their strongly-unionized iron
molders.
In the original Google Document version, from which the above text and tables have been copied, the reports on all individual companies were included at this point. But that would have made this post far too long for a blog post, and threatened to foul up the formatting. So it probably makes most sense to include a link to the Google Sheet containing all of the original data instead.
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