Ohio History Journal

Ohio's Industrial Growth, 1900-1957,

And Some Possibilities for Study

By ROBERT E. HOLMES*

 

 

In discussing Ohio's or any other area's industrial growth, it

would be extremely difficult, and perhaps even naive or unrealistic,

to try to separate history from economics, fundamental from applied

research, commerce from romance, or chance from plan. These

elements are so intermingled in the development and expansion of

regions or countries and their industries that there is all the room

in the world for intellectual approaches by all the disciplines the

ever changing intelligence of man can devise.

At the outset, it will be helpful to point out that wherever refer-

ence is made in this paper to industry and to industrial growth, the

reference is to manufacturing and its growth. Other activities that

are frequently referred to as industries today--mining, agriculture,

insurance, banking, wholesaling, and transportation--are excluded,

although these have contributed greatly to Ohio's economic

development.

For those of us engaged in the study of industrial growth for the

purpose of applying our findings perhaps to company decisions for

future industrial expansion or diversification, or to regional prepar-

ations for maintaining or restoring industrial balance or strength, it

is highly gratifying to find statistical and historical data available

in journals of the Ohio Historical Society and elsewhere upon which

to base some phases of our analyses. If we should expand or interpret

such data in special ways that may serve to modify or clarify them

for a given situation, we hope that we do so with the full approval

 

* Robert E. Holmes is assistant chief of the industrial economics division at the

Battelle Memorial Institute, Columbus.

His article was originally in the form of a paper given at a session on "Manufactur-

ing in Ohio," during the seventy-second annual meeting of the Ohio Historical Society

at Columbus, April 27, 1957.

• 1
 

OHIO'S INDUSTRIAL GROWTH         291

 

of the authors of the original data. We are equally hopeful that by

our treatment of historical data we may stimulate the historian's

effort to create additional data that will make our further work more

meaningful.

In essence, the specialized studies of industrial and economics

history with which we are dealing here are directed toward shaping

future history. The chances of fulfillment may seem extremely slim

when we consider the vagaries of the past, but the latter appear to

grow less frequent or significant as the age of an industry or a region

works its leveling influence. Since the historian will report whatever

happens--with or without personal, embellishing interpretations--it

should be interesting to him to know how his findings might be used.

The application of historical data to intelligent appraisal of

regional and industrial growth opportunities is one of the uses. A

discussion of Ohio's industrial growth in the twentieth century will

serve to illustrate the general theme.

A popular method of measuring growth is to set up tables and

charts that numerically and graphically indicate the net changes, year

by year or decade by decade, in such economic indicators as popula-

tion, manufacturing, values, employment, personal income, electrical

power production, and so on. Also, it is common practice to compare

an individual state's portion in each of these factors with that of

the nation or of other states. By way of illustration, several charts

of this type might have been included in the text of this paper, but

perhaps it will be sufficient to quote from Research Monograph

Number 79 of Ohio State University's Bureau of Business Research,

Trends in the Ohio Economy, by Paul Craig and James Yocum:

"Population . . . has grown at almost precisely the same rates in

Ohio and the United States, in each decade, for the past five decades.

In 1910, Ohio had 5.2 per cent of U. S. population . . . [in] 1920--

5.4; 1930--5.4; and 1940--5.2." In 1950 it had 5.3. However, "from

1950 to 1953 Ohio population increased 6.7 per cent, the U. S. 3.72

per cent." Quoting further from the monograph: "Over the past 50

years, Ohio's growth in population, industry, commercial develop-

ment, transportation facilities, agricultural output--nearly any eco-

nomic measure that can be taken--has kept pace almost precisely

with the United States as a whole."

• 2
 

292    THE OHIO HISTORICAL QUARTERLY

 

"Value added by manufacture" is an economic indicator that

is used extensively in statistical studies. It is considered to be a

significant measure of industrial effort because it indicates the wealth

accruing to manufacturers and workers as a result of converting a

product from one level of value to a higher one. "Value added,"

for a state, is made up of the total values added by each of its

industries, and a state that has a high percentage of industries with

strong upgrading influences ranks higher than a state producing

low-value products. Ohio's "value added," expressed as a percentage

of the United States' "value added," has increased from 7.2 percent

in 1904 to 8.7 percent in 1954, with slightly higher values than the

1954 figure for 1919, 1923, 1925, 1929, and 1937.

Individual industries vary widely in the contributions they make

to a state's rank in "value added." Some of this variation is because

of native abilities or inclinations, and some because of established

position and financial strength. In 1939 the "value added" in nine-

teen major industries of Ohio ranged from 1.31 percent of the United

States total for textile mill products to 34.73 percent for rubber

products; in 1947, textile mill products dropped to 1.1 percent and

rubber products to 29.0 percent of the United States totals, while the

Ohio total dropped slightly, from 8.64 percent of the United States

in 1939 to 8.54 percent in 1947. On the other hand, changes in these

relative percentage figures do not necessarily mean that the pros-

perity of an individual industry has changed drastically; in all in-

stances, "value added" in total dollars for Ohio's individual indus-

tries increased from 1939 to 1947, although there were declines in

"tobacco manufactures" and in "leather and leather products" after

1947. Conversely, for a number of industries whose share of the

national "value added" decreased, sizable increases in dollars of

"value added" have been enjoyed from one census to the next.

While according to the United States Census of Manufactures

classifications, "machinery (except electrical)" and "primary metal

industries" have occupied the top two positions in Ohio manufactur

ing in 1939, 1947, and 1954, fluctuations in the next sixteen indus.

tries' positions are potentially illuminating. "Transportation equip

ment" moved from seventh place in 1939 to third position in 1954

mainly because of greatly increased activity in aircraft engine manu

• 3
 

OHIO'S INDUSTRIAL GROWTH        293

 

facture. The "fabricated metal products" classification may be ex-

pected to hover between third and fourth place as it has done in 1939,

1947, and 1954. "Electrical machinery" and "chemicals and allied

products" are showing strong signs of grasping upper levels of im-

portance in Ohio's industrial complex. There seems to be some

rustling in the "petroleum and coal products" industry that has

moved from fourteenth position in 1939 and 1947 to twelfth in

1954. It might well climb to higher levels along with chemicals

and power development.

On the other end of the ledger, it is interesting to contemplate

whether all of the declines in position should necessarily have oc-

curred or whether these declines were inevitable, so it would be

best to expend as few nostalgic tears in their memory as possible

and decent.

Still, from all the statistics comparing a state with other states

and the shifting in rank among the industries of a state, we only

can deduce that there has been relative and absolute growth or

decline. Depending on the knowledge of industries or areas we may

have picked up in the course of our business experience, we can

guess with some accuracy why these changes have taken place.

However, with help from historians we can do more than guess, and

we can estimate which changes are relatively permanent and which

ones might be redirected. Also, we can obtain satisfactory answers

to such questions as (1) why did this or that industry or company

locate where it did, (2) why are certain companies growing and

others standing still or declining within the same industry, and (3)

how much are the patterns of the past likely to influence the future

patterns.

Ohio appeared to be approaching industrial maturity by 1900,

and it was thought the pattern had been fairly thoroughly estab-

lished. "The decade of the seventies," writes Philip Jordan in

Volume V of The History of the State of Ohio, "saw the invention

of innumerable types of farm implements and agricultural ma-

chinery. The eighties witnessed improvements in factory machinery

and railroad equipment, and the gay nineties observed many

specialized tools, machinery, and labor-saving devices. By 1900,

Ohio inventors were patenting ideas, models, and designs beyond

• 4
 

294    THE OHIO HISTORICAL QUARTERLY

 

description." Even so, a more impressive maturity was developed

after 1900, especially after World Wars I and II.

An interesting aspect of the inventive efforts of Ohioans during

the latter part of the nineteenth century was that, with several

notable exceptions, the inventions were more of the improvement

type than the originating type. This was particularly evident in farm

machinery and railroad equipment. Being on the spot where new,

but perhaps crude or simple machines, were tried out, Ohio farmers

and mechanics saw the need for improvements and had the

imagination to devise them. While they were at it they also in-

vented such things as roller skates, churns, home meat-choppers,

ironing boards, lamps, wicks, kitchen stoves, curtain poles, and

carpet sweepers. So long as there was a strong market in Ohio for

agricultural equipment, industrial activity was heavy in this field;

but by 1900, when the center of vast corn and wheat production had

moved westward, Ohioans turned to heavy machinery, electrical

apparatus, and other labor-saving devices.

It would appear that specific plant location up into the twentieth

century was more associated with the residence of the inventor (and

his source of financial backing) and the opportunities he saw around

him than with the fine economic relationships of raw materials,

markets, and labor. Thus we find the rubber industry in Akron;

the earth-moving plants in Marion, Bucyrus, and Cleveland; milling

machines and printing presses in Cincinnati; office machinery in

Dayton; and many others too numerous to mention. Of course, Ohio

industry has been so favorably situated with respect to raw ma-

terials that it can hardly be said that progress would have been

quite so rapid without this factor. But like the development of

textile and leather machinery and boats in New England because the

need was there, Ohio first developed industries to serve the needs

relatively near at hand and would have brought in raw materials if

they had not been locally available.

Once having demonstrated its ability to develop and produce

heavy machinery and intricate machine tools, Ohio went on to

strengthen its position in these fields and others associated with

them. The dominance of heavy machinery has stimulated the pro-

duction of primary metal products and in turn fabricated metal

• 5
 

OHIO'S INDUSTRIAL GROWTH         295

 

products; conversely, the handling of vast quantities of ore and coal

has stimulated the demand for heavy machinery, transportation

equipment, and electrical machinery. Referring back to the eighteen

major industries previously mentioned, a type of maturity has oc-

curred that events of the past foretold to a considerable degree.

Although there are numerous examples of companies that con-

tinued to operate successfully in industries for which locations in

Ohio were declining in competitive advantage, the readiness to

adjust to and actually to create industrial change was a dominant

factor in Ohio's industrial growth. The new industries kept the

total manufacturing levels high, even though once-prominent in-

dustries decreased in importance. The movement westward of heavy

agricultural machinery production has been mentioned; carriages,

horses, and buggy whips were replaced by automobiles, gasoline, and

accelerators; leather production gave way to coated products and

plastics or composition synthetics; recently, the pottery industry has

suffered severe setbacks; and the glass industry has had its ups

and downs as glass plants moved or were abandoned because fuels

were cheaper elsewhere and major markets nearer.

We have seen evidence that Ohio grew mightier in industry be-

cause it recognized and took advantage of opportunities and did not

dwell too long on its losses. Will this philosophy continue on a

broad scale and what will historians of the twenty-first century be

likely to report when they look back at Ohio's activities from

1950 on?

Complex as industrial activity has become, it seems reasonable to

believe that Ohioans will continue to handle it intelligently. There

will be mistakes, of course, and some grief in limited areas. It is to

be hoped, for example, that Ohio may benefit from the experiences

in England and New England, where preoccupation with heavy and

other established industries may have dulled senses to the opportun-

ities for growth in newer, light industries. Latterly, New England

has awakened to the importance of its strength in technology and

research. The spark struck there might be duplicated or amplified

in Ohio.

It took fifty years of debate and final recognition of the exhaustible

character of Mesabi iron-ore deposits to bring about the building of

• 6
 

296    THE OHIO HISTORICAL QUARTERLY

 

the St. Lawrence Seaway. Although the development of taconite-

processing feasibility, had it come earlier, might have delayed action

on the seaway, Ohio's steel mills should be in a more comfortable

position because of the two sources of raw material. Even though

all the benefits of the seaway are yet to be determined, it is likely

Ohioans will be alert to capitalize on those that look promising.

The principal danger probably lies in the chance that some ex-

pectations may be too high and that some Great Lakes ports will

suffer fates similar to those of New England.

Ohio's central location in an expanding industrial nation should

permit it to avoid troubles such as have beset New England's textile

and certain other economic activities. Ohio's large and excellent-

quality coal reserves plus developments in electrical power genera-

tion will tend to favor Ohio for many years to come; they have

already brought aluminum production to the Ohio Valley and

greatly expanded ferroalloy output here; reasonably low power

and fuel costs plus water transportation, markets, and raw materials

have stimulated a movement of chemical-production facilities into

the area; and new concepts of chemical production from coal should

be favorable to Ohio and nearby areas should natural gas supplies

dwindle and costs go to prohibitive levels or should nuclear power

eventually replace coal-steam power.

Even so, other areas of the country are not likely to stand still o??

let Ohio take the lion's share of all new industrial expansion. In

fact, it is to be hoped that they do not. The wealth of Ohioans

depends on the prosperity of their customers in many other states

as well as in Canada and, to a lesser extent, in countries all over

the world. I am sure Ohio's prosperity has been exceedingly gratify.

ing to supplying industries in other states and even to competitors

in those states when there was enough business to go around

Certain Ohio industrialists will undoubtedly be instrumental ir

building branch plants in other states, or they may even move from

Ohio to other locations as the economic necessity or advantage of

doing so is recognized. If in so doing they increase the purchasing

power in those states, other companies in Ohio will find more

buyers for their products; and, assuming the production costs are

held down by such moves, Ohioans will be able to get more fo

their money.

• 7
 

OHIO'S INDUSTRIAL GROWTH           297

 

The historians of the future, as did those of the past, will tell what

has happened with the sober detachment that is so often difficult

for those in the thick of current economic change. If the current

change was rapidly upward, the historian will show that it did not

necessarily justify the wild shouts of joy and the attitudes of

invincibility that characterized the event; if the economic doldrums

were hit, the historian will show that they did not last long or that

they might have been anticipated. Not that the historian can ever

hope to prevent future trouble by citing similarities in the past, but

his presentation can help.

The military historian, for example, has yet to prevent war, but

the more he understands the details of making war, the more ac-

curately he guides the world in its future attitudes toward war.

When earlier historians spoke of the glory of war, the more they

may have inspired some of the wars that followed.

The more economic relationships historians can discern and de-

scribe in their studies and writings, the more helpful their work

should be to industrialists, economists, sociologists, and civic

leaders. Needless to say, it would be dangerous and highly un-

desirable to attach an exclusively economic significance to historical

events; other possible influences such as political, sociological, and

even spiritual or emotional should be recognized, if possible, when

considering economic impacts of historical events. A classic example

of the interrelationship between economics, politics, sociology,

emotions, and spirits was created by the passage of the Volstead

act. In the period between then and repeal, certain enterprises were

replaced by others and numerous bizarre activities arose; one of the

latter illustrates the opportunist at his most opportunistic: a builder

of fast boats made a "good thing" of building both rum-running

boats and the revenue cutters to catch them.

For a fuller appreciation of an area's development as one re-

views it in the light of history, it is desirable to have as full knowl-

edge as possible of the basic characteristics of the area's industries.

Also, the degree of maturity the area has attained relative to other

areas must be understood. Too often, it seems, a chain of events

that may have occurred in one area is supposed to be logical or

reasonable for another area. A proper presentation of the historical

• 8
 

298    THE OHIO HISTORICAL QUARTERLY

 

facts could show that the second area is not ready for the same

chain reaction because one or more links are missing.

Also, changes in the major economic and technological factors of

an industry must be taken into consideration when making com-

parisons of one period in history with another. For example, the

disappearance of the manufactured-gas industry resulted from

natural-gas pipeline developments, and it is possible that gas

manufactured at the coal mines may one day replace natural gas but

be transported through the established pipelines.

Although pulp and paper mills have been traditionally located

near the forests, there are some indications that for many types of

paper it may be preferable to ship dried pulp to paper mills at

locations as near as possible to the markets. On the other hand, in

other segments of the paper industry such as the corrugated box

industry, boxes may be made near the market or at the paper and

board mill, depending on the size of major customers or the service

they require.

The meat-packing industry has undergone evolutions that saw

Cincinnati the center, and later Chicago. Since livestock supply,

shipping facilities, and other factors influence the location of meat-

packing plants, and those factors are subject to change, the meat-

packing industry is likely to change its locational pattern again in

future years. The leather industry has often been influenced by

changes in the packing industry.

Developments in the power industry that have permitted im-

provements in the economics of transmitting power as well as in

producing it from coal are significantly affecting the location of old

industries and the development of new ones. These developments

have been particularly instrumental in opening up new opportunities

for Ohio's greater participation in a wider variety of industries. It

can be expected, however, that other states may become more com-

petitive with Ohio in some industries in which Ohio has had some

advantages in the past.

The iron and steel industry is one that may become more at-

tractive for other areas as new transportation facilities, lower

electric-power costs, and special processing methods reduce the

competitive advantage of Ohio. But it is unlikely that any influence

• 9
 

OHIO'S INDUSTRIAL GROWTH           299

 

that stimulates additional use of steel will be anything but a helpful

one to Ohio's own iron and steel industry.

The chemical and plastics industries seem destined for consider-

able growth in Ohio because they both thrive on strong industrial

activity, raw material availability, low-cost transportation systems,

nearness to large population centers, and ample supplies of power,

fuel, and water, all of which are characteristic of many areas in or

near Ohio.

The machine-tool industry and the transportation-equipment in-

dustry have been discussed in earlier paragraphs but deserve mention

again, because they are particularly suited to grow with many of

Ohio's other industries that both need their products and find in

them substantial markets for products.

The suggestion implied in this brief outline of industry character-

istics is that interested historians should find highly interesting op-

portunities for special studies of Ohio by delving into the detailed

development of individual industries. By studying each industry on

a nationwide basis and then more intensively in relation to Ohio,

considerable enlightenment as to the success or failure of certain

industries that have started in Ohio and as to why some have not,

so far, come to the state should result.

For example, a study of some aspects of the pottery industry

could be interesting in showing just what has happened to cause its

recent decline whether it has been (1) unfair competition from

foreign countries, as a number of representatives of the industry

believe, or (2) failure on the part of some companies to accept the

possibility that their products may have become outmoded, their

processes obsolete, or their location unsuited to future success. Or,

a study of the whole paper industry or important segments thereof

might determine changing aspects in production or marketing

economics that will influence growth favorably or unfavorably.

Finally, in view of the relatively low position of the "apparel and

related products" industry in Ohio, a review of this industry might

reveal significant trends that would suggest opportunities to expand

this activity in Ohio, or reasons to forget it, as the case might be.

Many other examples might be given that could result in studies

of considerable significance to Ohio's future growth.

• 10