terprises which enjoy complete monopolies in the local markets which they serve.*

The dominant firms in these industries are indicated below:

Pairs of Firms Approaching Duopoly 5 in the American Market. In some fields two establishments together control the supply. Two companies provide all of the domestic telegraph service; two control all of the submarine cables between the United States and several foreign countries; two offer the only radio-telegraph service to many points abroad. Two companies, in each field, account for all, or nearly all, of the Nation's supply of bananas, of plate glass and safety glass, of bulbs, tubing and rod, and bases for electric lamps, of electric accounting machines, of railroad air brakes, of oxyacetylene, of sulphur, and certain chemicals. In many local markets, on a smaller scale, two petty enterprises share a trade. Under circumstances such as these, formal or informal understandings governing price and production are readily attained. Each firm of a pair controlling the whole supply is likely to act as if it were a monopolist. In their effect upon the market, duopoly and monopoly tend to be substantially the same. The dominating pairs of firms are shown below for certain industries:

Industry

Domestic telegraph service__.

6

International cable communications---

Bananas_

Electric accounting machines__-

Plate glass_.

4 A detailed statement concerning each of these illustrations is made in Temporary National Economic Committee Monograph No. 21, ch. III.

5 Cases in which two sellers, instead of one, control the entire supply of a broadly defined commodity, or enough of it to enable them to augment their profits by limiting output and raising price. Here the existence of a second seller affords every buyer an alternative source of supply. But it is unlikely to afford him any real alternative in quality, service, price, or terms of sale.

For descriptions of these cases, see Temporary National Economic Committee Monograph No. 21, ch. III.

Electric lamps, large glass bulbs, glass tub- General Electric Co.

In addition to the cases mentioned above, there are still other markets in which one or two concerns turn out all or almost all of the supply. Ninety-five percent of the heat-resisting glassware produced in the United States is manufactured and distributed by the Corning Glass Works. Natural gas is delivered to many consuming areas by a single pipe-line system. The rates and services of pipe lines in intrastate commerce have long been regulated by State utilities commissions, but those of lines in interstate commerce were not subject to effective control until they were brought within the jurisdiction of the Federal Power Commission by the Federal Natural Gas Act of 1938. About 50 percent of the American supply of borates, used in the production of borax and boric acid, has been provided since 1921 by the Pacific Coast Borax Co., an American affiliate of Borax Consolidated, Ltd., of Great Britain, another 40 percent by the American Potash & Chemical Corporation. All of the sodium nitrate sold in the United States in recent years has been supplied by the Chilean Nitrate Sales Corporation and the Barrett Co., a subsidiary of the Allied Chemical & Dye Corporation. The United States Tariff Commission, in a report covering some 2,250 synthetic organic chemicals in 1938, listed only one producer for nearly 1,200 of these items and only two for more than 350.

The total number of cases in which one or two firms control ninetenths or more of the supply of a good or service in a Nation-wide market, while undoubtedly larger than that revealed by the preceding description of specific industries and products, is unknown. The most reliable source of information on concentration of production in manufacturing industries, the biennial Census of Manufactures, gives no data on this subject. The census reports do not usually show any degree of concentration beyond the portion of an industry's output controlled by its four largest producers. In some cases even this information is withheld, since its disclosure might reveal the share controlled by specific firms. The Bureau of the Census does not publish the concentration index for an industry or a product if its largest producer controls 75 percent or more, or if its two largest producers control 90 percent or more of its output, or if the share of the output which is not controlled by the four largest producers is similarly concentrated in the hands of one or two concerns.

The electric lamp industry presents a complex picture of duopoly, monopoly, and control by a single firm. See Temporary National Economic Committee Monograph No. 21, pp. 104-106.

Among the 275 industrial categories listed in the Census of Manufactures for 1935 there were 9 for which concentration data were withheld. These were billiard and pool tables, bowling alleys, etc.; china firing and decorating not done in potteries; copper smelting and refining; essential oils; fuel briquettes; lead smelting and refining; locomotives, other than electric; tin and other foils, not including gold foil; and typewriters and parts. Likewise, in a group of 1,807 products, nearly half of those covered by the census for 1937, there were 328 for which data were withheld. In these cases, of course, production is highly concentrated and it is possible that one or two firms manufacture nine-tenths or more of the output of some of these industries or control nine-tenths or more of the supply of several of these products.

There is little or no information available on the prevalence of situations approaching complete monopoly or duopoly in regional or local markets. The figures published by the census, showing only the share of the total national output of an industry that is controlled by its four largest firms, may conceal a far higher degree of concentration within the several markets in which its products are actually sold.

MARKETS IN WHICH A FEW FIRMS CONTROL ALL OR A MAJOR PART OF THE SUPPLY

In each of the cases discussed in the preceding section one or two corporations control nine-tenths or more of the supply of an important good or service in an American market. Such cases are comparatively rare, but they are not the only ones in which large establishments may dominate a trade. In some industries a single firm, producing much less than nine-tenths of the total output, so far surpasses its rivals in resources and sales as to govern the market. In others small numbers of enterprises, roughly comparable in size, each of them overtopping their smaller competitors, together command the field.

Concentration of Production.

Among 1,807 products, representing nearly half, by number, and more than half, by value, of those included in the Census of Manufactures for 1937, there were 291, or more than one-sixth of those in the sample, in which the leading producer accounted for 50 to 75 percent of the total supply. Products of which one, two, or three companies produced a major fraction of the output between 1930 and 1940 or in some recent year appear in table 2. The percentage in each case is indicated.

TABLE 2.-Products in which 1, 2, or 3 companies produced the percentage indicated

Source: TNEC Monograph No. 21, Competition and Monopoly in American Industry, 1941, pp. 113-115.

In 1935, four companies in each field mined 42 percent of the zinc, 63 percent of the asphalt, 64 percent of the iron ore, 78 percent of the copper, 80 percent of the gypsum, and 84 percent of the marble. In the same year, four companies accounted for 66 percent of the slaughter of meat animals, killed 52 percent of the hogs, 67 percent of the cattle, 71 percent of the calves, and 85 percent of the sheep, lambs, and goats, and sold 43 percent of the pork, 52 percent of the lard, 58 percent of the beef, 59 percent of the cured pork, and 70 percent of the veal.

Among the 275 categories included in the Census of Manufactures for 1935, there were 54 in which the 4 largest firms produced more than two-thirds, by value, of the total supply. These industries are listed in table 3.

TABLE 3.-Industries in which the 4 largest firms produced more than two-thirds, by value, of the total output in 1935

TABLE 3.—Industries in which the 4 largest firms produced more than two-thirds, by value, of the total output in 1935-Continued

1 Information withheld in order to avoid the approximate disclosure of data for individual enterprises. The figure cannot be lower than 65 and is probably much higher. In the case of typewriters, for instance, it is said that the 4 largest companies produce between 95 and 98 percent of the new machines. Cf. U. S. v. Underwood Elliott Fisher Co. et al., District Court of the United States, Southern District of New York, Indictment, July 28, 1939, p. 7.

262.

Source: National Resources Committee, The Structure of the American Economy, Part I, pp. 248-258,

Among the products in the Bureau's sample there were 164, or 9 percent of the total, in which the share manufactured by the 4 largest firms was over 90 percent and 328 others, or 18 percent, in which this share was not disclosed. Thus it appears that somewhere between one-tenth and one-fourth of the products covered by the census are made in fields where 4 concerns controlled nine-tenths or more of the supply. There were 670 products, over 37 percent of those in the sample, in which the 4 leading companies were reported as producing more than 75 percent of the output or in which information was withheld because 1 firm produced more than 75 percent or 2 more than 90 percent, and there were 175 others, nearly 10 percent of those in the group, for which data were withheld in order to avoid disclosure of the share produced by the fifth and successive firms. It thus appears that two-fifths to one-half of the goods covered by the census