The World's Largest Industrial Companies of 1912

Business History

Volumn 37, Issue 4, 1995, Pages 85-96

  Schmitz, Christopher ^a  

^a UNIVERSITY OF ST ANDREWS   (United Kingdom)

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EID: 0005774362     PISSN: 00076791     EISSN: 17437938     Source Type: Journal    
DOI: 10.1080/00076799500000129     Document Type: Article

References (36)

1. M. Chick, ‘British Business History: A Review of the Periodical Literature for 1991’, Business History, Vol.35 (1993), p.2.
2. L. Hannah, ‘Scale and Scope: Towards a European Visible Hand?’, Business History, Vol.33 (1991), p.298
3. commenting upon Chandler's recent major study, Scale and Scope: The Dynamics of Industrial Capitalism (Cambridge, MA, 1991), and specifically the listings provided there of the 200 largest industrial firms in the United States, Britain and Germany at various dates between 1913 and 1953.
4. C.J. Schmitz, The Growth of Big Business in the United States and Western Europe, 1850–1939 (Basingstoke, 1993), p.30.
5. Ibid., pp.32-3 provides a table of the world's leading industrial companies of 1937, compiled on the same basis as the listing in this paper, while Fortune magazine's well-known rankings by gross sales are available annually from 1956 onwards.
6. P.L. Payne, ‘The Emergence of the Large Scale Company in Great Britain, 1870-1914’, Economic History Review, 2nd series, Vol.20 (1967), pp.539-41.
7. Chandler, Scale and Scope, pp.638-721.
8. P. Wardley, ‘The Anatomy of Big Business: Aspects of Corporate Development in the Twentieth Century’, Business History, Vol.33 (1991), pp.278, 288.
9. To aid comparison, all valuations have been converted to US dollars at contemporary exchange rates. It could be argued, however, that American and German tariff protection around 1912–13 resulted in generally higher price levels than in Britain. Consequently, a comparison based on an exchange rate basis, rather than a common purchasing power parity basis, might tend to under-rate the scale of British firms. However, it was felt this was only a potential problem when comparing balance sheet asset values. As regards comparative equity valuations, it was assumed that the existence of a healthy transatlantic market in stocks, particularly American ones in London, ensured the setting of standardised prices which transcended any differences in real exchange rates - unless significant potential for arbitrage were admitted, and this does not seem to have been the case at this time; see R.C. Michie, The London and New York Stock Exchanges, 1850–1914 (London, 1987), pp.68-9.
10. American data on stock issues and 1912 high-low price ranges were obtained from Moody's Manual of Industrial Securities (New York, 1914) and the New York Times, 6 June 1913.
11. British and South African company data were taken from T. Skinner, Stock Exchange Year Book for 1913 (1913) and the Economist magazine's weekly listings of share prices during 1912.
12. The French firm Saint-Gobain's 1912 market valuation is given by M. Lévy-Leboyer, in N. Horn and J. Kocka (eds.), Recht und Entwicklung der Grossunternehmen in 19. und frühen 20. Jahrhunderl (Law and the Formation of the Big Enterprises in the 19th and Early 20th Centuries) (Göttingen, 1979), p.452. Of the hundred firms listed, 63 per cent are represented by market capitalisation and 37 per cent by gross assets.
13. A theme discussed, in part, by R. Michie, ‘Different in Name Only?: The London Stock Exchange and Foreign Bourses, c.1850-1914’, Business History, Vol.30 (1988), pp.46-68.
14. As listed in W. Feldenkirchen, ‘Concentration in German Industry 1870-1939’
15. in H. Pohl (ed.), The Concentration Process in the Entrepreneurial Economy since the Late 19th Century (Wiesbaden: Zeitschrift für Unternehmensgeschichte no.55, 1988), p.144. It may well be the case that extensive research in German business archives and pre-1914 commercial publications would yield a number of comparable estimates for market capitalisation. However, the likelihood that such an exercise would be enormously timeconsuming, if possible at all, is underlined by the fact that leading German business historians like Pohl have apparently not ventured beyond producing rankings based upon asset values.
16. One American firm which slips through the net completely is the leading vehicle manufacturer of the immediate pre-1914 era, Ford. So closely was this controlled by its founder-owner, Henry Ford, that no asset figure is apparently available before 1917, when this stood at %165.9 million; A.D. Chandler, The Visible Hand: The Managerial Revolution in American Business (Cambridge, MA, 1977), p.510. On the basis that the less productive General Motors Corporation had a market valuation of %17.5 million in 1912, it could be suggested that if Ford had been a quoted company at that time, it would perhaps have had a market valuation somewhere in the range %25 million to %50 million, and so might have entered the lower half of this list.
17. Gross asset figures for American firms are taken from Moody's Manual of Industrial Securities (New York, 1914).
18. The asset figure for the French firm Thomson-Houston is taken from J. Houssiaux, Le Pouvoir de Monopole (Paris, 1958), p.270.
19. This applies in particular to the British lists compiled by Chandler and Payne, referred to above, as well as those for 1919 and 1930 in L. Hannah, The Rise of the Corporate Economy (2nd ed. 1983), pp.102–3, 189–90.
20. At the same time, it avoids a measure of confusion that sometimes appears in discussion of the relative sizes of firms, because non-comparable measures are employed. Wardley, to take a recent example, ranks his British firms on the basis of equity and debentures, but contrasts them with an equity-only valuation for United States Steel in 1904; ‘Anatomy of Big Business’, pp.278, 288.
21. Chandler, Visible Hand, pp.503-12;
22. idem. Scale and Scope, pp.638-721. A partial exception to this rule is the British-registered company, Shell Transport & Trading, which was solely an oil shipping and marketing enterprise in the years before its amalgamation with the oil-producer, Royal Dutch, at the end of 1906 (on the basis of 60 per cent Netherlands and 40 per cent British ownership, and with top management recruited largely from the former country). Thereafter, Shell was in no sense an autonomous company, despite its separate British legal identity. Royal Dutch, in its own terms, was clearly a very large firm in 1912/13, but assessing its market capitalisation is difficult. The nominal value of its issued capital at this time was 56 million guilders, equivalent to about %22.7 million.
23. However, it was distributing annual dividends equal to around %16.5 million and if a relatively conservative price-yield relationship of 5:1 or 6:1 were assumed, this would imply a full market valuation would have been somewhere between about %80 million and %100 million; Royal Dutch, Royal Dutch, 1890–1950 (The Hague, 1950), pp. 10,19. This, in turn, would suggest that the total valuation of the Royal Dutch-Shell combine should have been in the region of %180 million, confirming its contemporary position as a closer rival to Standard Oil of New Jersey than the separate figure for Shell would otherwise indicate.
24. Another large American retailer excluded from the list is F.W. Woolworth, with a 1912 median market valuation of %69.8 million.
25. As argued recently, for example, by P. Wardley, ‘Anatomy of Big Business’, pp.269, 271–4.
26. Railway companies would have dominated such a list, as indeed they would have done at any time since at least about the 1860s; Chandler, Visible Hand, pp.169, 513;
27. Schmitz, Growth of Big Business, pp. 19–20.
28. In 1912, the leading American railroad, the Pennsylvania, had issued equity stock with a market valuation of %2,812 million, dwarfing US Steel, whilst numerous other American railroads had capitalisations in excess of a billion dollars. In Britain, the Midland Railway was the largest company, with an equity capitalisation equivalent to %489 million. In the financial sector, Britain's leading banking firm (other than the Bank of England), Lloyds, had a market capitalisation equal to %69 million in 1912, while the largest German firm, the Deutsche Bank, was valued at %120 million. Public utilities would also have figured prominently in a broad-based ranking: American Telephone and Telegraph (A.T. & T.) having an equity capitalisation of %480 million, while the Gas Light & Coke Company, in Britain, was valued at the equivalent of %112 million. For a comprehensive listing of Britain's 50 largest industrial and service sector firms in 1904/5, ranked by market value, see Wardley, ‘Anatomy of Big Business’, p.278.
29. J. Roberts, Mitsui: Three Centuries of Japanese Business (New York, 1973), pp.140, 172.
30. This figure for nominal capitalisation should be contrasted with the 1912 turnover of the most prominent part of the Mitsui zaibatsu, Mitsui Bussan (effectively the trading arm), which amounted to 359 million Yen (about %180 million); K. Yoshihara, Sogo Shosha: The Vanguard of the Japanese Economy (Oxford, 1982), pp.315, 317. The implication is that Mitsui Bussan had the potential for a market capitalisation considerably in excess of %25 million in 1912, although it would fail to qualify for inclusion in the present listing since it was not primarily engaged in manufacturing.
31. It might be argued that the most valid point of comparison with the zaibatsu would be the type of informal investment networks identified, amongst others, by Stanley Chapman; S.D. Chapman, ‘British-Based Investment Groups before 1914’, Economic History Review, 2nd series, Vol.XXXVIII (1985), pp.230-51.
32. K. Nakagawa, ‘Business Strategy and Industrial Structure in Pre-World War II Japan’, in K. Nakagawa (ed.), Strategy and Structure of Big Business (Tokyo, 1977), p.17.
33. This asset valuation followed a hectic phase of expansion during the First World War and it is certain the 1912 figure would have been considerably less. In 1896, the largest Japanese industrial firm, the Kanegafuchi Cotton Spinning Company, could only muster assets of 3.28 million Yen (about (%1.65 million); Nakagawa, ‘Business Strategy’,p.13.
34. The impressive mean figure for the four South African-registered mining firms included in Table 1, of %79.6 million, raises some interesting questions about the nature of this highly developed island of capitalist development in the southern hemisphere of the early 20th century. For some of the answers, see P. Richardson and J.-J. Van Helten, ‘The Development of the South African Gold-Mining Industry, 1895-1918’, Economic History Review, 2nd series, Vol.37 (1984), pp.319-40.
35. Wardley, ‘Anatomy of Big Business’, pp.287-8.
36. For an elaboration of this point, see Schmitz, Growth of Big Business, pp.31,34.