ABSTRACT
The American economy has experienced three major merger waves in the last century. Although different in character, each merger wave has had a substantial impact on the structure of American industry. The first merger wave, from approximately 1897 to 1904, was characterized by mergers designed to monopolize entire industries. Traditional giants such as United States Steel and International Harvestor achieved dominance in their primary industries in this fashion. The second major merger wave lasted from 1916 to 1929, ending with the stock market crash and the ensuing depression. Many public utility and bank holding companies were created during this period, which also saw an erosion in the market power of monopolists. Mergers among second echelon firms transformed industries such as cement, tin cans, steel and agricultural implements from near-monopolies to oligopolies [Markham (1955), Stigler (1968)].
