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² See, for example, Chandler, Alfred D. Jr, The Visible Hand: The Managerial Revolution in American Business (Cambridge, Mass., 1977).Google Scholar

³ See, for example, Goldsmith, Raymond W., Financial Intermediaries in the American Economy since 1900 (Princeton, N.J., 1958)Google Scholar; Taggart, Robert, “Secular Patterns in the Financing of U.S. Corporations,” in Corporate Capital Structures in the United States, ed. Friedman, Benjamin (Chicago, 1985)Google Scholar; Dobrovolsky, Sergei, “Capital Formation and Financing Trends in Manufacturing and Mining, 1900–1953,” Journal of Finance 10 (1955): 250–65.Google Scholar

⁴ Baskin, Jonathan and Miranti, Paul Jr, A History of Corporate Finance (Cambridge, U.K., 1997).CrossRefGoogle Scholar

⁵ Harrison, Paul, “Review of Jonathan Barron Baskin and Paul J. Miranti Jr., A History of Corporate Finance,” EH.Net, H-Net Reviews (1998).Google Scholar

⁶ See, for example, Dewing, Arthur, Corporate Promotions and Reorganizations (Cambridge, Mass., 1914)Google Scholar; Davis, Lance, “The New England Textile Mills and the Capital Markets: A Study of Industrial Borrowing, 1840–1860,” Journal of Economic History 20 (1960): 1–30CrossRefGoogle Scholar; Doyle, William M., “The Evolution of Financial Practices and Financial Structures among American Manufacturers, 1875–1905: Case Studies of the Sugar Refining and Meat Packing Industries,” Ph.D. diss., University of Tennessee, 1991Google Scholar; Lamoreaux, Naomi, Insider Lending: Banks, Personal Connections, and Economic Development in Industrial New England (Cambridge, U.K., 1994)CrossRefGoogle Scholar; Seltzer, Lawrence, A Financial History of the American Automobile Industry (Boston, 1928).Google Scholar

⁷ GE was incorporated on April 15,1892 under the laws of New York, and it began trading in June of the same year.

⁸ WHS was incorporated in Pennsylvania as the Westinghouse Electric Company on January 8, 1886. A few years later, in 1889, the company took over an old charter granted to Chartiers Improvement Company by the state of Pennsylvania on April 9,1872, and changed the name on the charter to its own. In 1890, a new name, the Westinghouse Electric and Manufacturing Company, was adopted.

⁹ I also consulted archival records for GE at the Schenectady Museum Archives, Schenectady, New York, and for WHS at the Library and Archives Division, Historical Society of Western Pennsylvania, Pittsburgh, Pennsylvania. Although the GE collections contain a number of sources that refer to the issues of financing, investment, and dividends covered in this article, notably the minutes of the meetings of the company's board of directors from 1892 to 1984, most of the information contained therein is brief, and even perfunctory, and could almost always be gleaned from publicly available material (see note 21 for an example). The WHS collection is rich in material on technology, research and development, and engineering, but less relevant for an analysis of the company's financial history. However, there was some useful information on the company's organizational structure that was helpful for thinking about the relation between organization and capital utilization.

¹⁰ Beginning in 1971, U.S. companies were required by the Accounting Principles Board (APB) to disclose a “statement of changes in financial position,” which reported changes in a company's working capital position, as part of their audited financial statements. In 1987, the Financial Accounting Standards Board changed these disclosure requirements when it issued SFAS 95, which mandated that companies present a “statement of cash flow” that focuses more narrowly on changes in a company's cash and cash equivalents.

¹¹ See, in particular, Dewing, Corporate Promotions; Carpenter, Niles Jr, “The Westing-house Electric & Manufacturing Company, the General Electric Company, and the Panic of 1907, Part 1,” Journal of Political Economy 24 (1916): 230–53CrossRefGoogle Scholar; and “The Westinghouse Electric & Manufacturing Company, the General Electric Company, and the Panic of 1907, Part 2,” Journal of Political Economy 24 (1916): 382–99.

¹² Throughout the paper, when I speak of working capital I use the term to refer to what might more precisely be called “operating working capital.” It excludes the predominantly financial components of working capital, notably cash and short-term debt. As a result, it slightly understates the working capital required for operations, since some cash is obviously needed for operating purposes. Nevertheless, for prosperous companies like GE that maintain large cash reserves, operating working capital gives a more accurate picture of the liquid resources they really need to run their businesses than is supplied by total working capital.

¹³ GE, Annual Report, 1987.

¹⁴ All figures are adjusted for inflation and restated in 2000 U.S. dollars based on the Consumer Price Index. These figures include all long-term issues of equity and debt whatever their purpose.

¹⁵ These totals exclude the monies that GE and WHS generated from the sale of stock to its employees under stock-option plans. These amounts reached very high levels for GE, especially during the 1990s, therefore distorting the two companies' relative dependence on, and autonomy from, the financial system. See the discussion under the heading “Patterns of External Finance, 1976 to 2000.”

¹⁶ Hammond, John W., Men and Volts: The Story of General Electric (Philadelphia, 1941), 220–22.Google Scholar

¹⁷ Wall Street Journal, 18 Jan. 1894, 4.

¹⁸ GE, Annual Report, 1903, 24.Google Scholar

¹⁹ Wall Street Journal, 15 May 1907, 1.

²⁰ Ibid. During the period from 1900 to 1911, GE also sought to stabilize its finances by issuing several tranches of stock in exchange for its outstanding debt. In a series of transactions in 1900,1901, and 1902, the company issued close to $4 million in common stock to pay down the bonds that were still outstanding from its 1892 issues, as well as its preferred stock (GE, various years). In 1911 the company issued a large tranche of stock, nearly 20 percent of its common stock at the time, in exchange for the majority of its convertible bonds, an amount of just over $12 million, which it had issued in 1907. The company also issued two large stock dividends in 1902 and 1913 to restore a capital reduction that it had undertaken in 1898 in the wake of its financial crisis.

²¹ Meeting minutes for GE Board of Directors, 192nd Board Meeting, 25 July 1912, 197, Schenectady Museum Archives. The reference in these minutes to the 1912 debenture issue is a good example of the type of information one finds on financing herein. The following statement was made under the heading “Debenture Bonds”: “The President expressed the view that if the future business of the Company shall make it necessary to procure additional capital, it should be obtained, in part at least, by the issue and sale of debenture bonds bearing in terest at a 5% or lower rate. The Board concurred in this view and upon motion, duly seconded, it was RESOLVED that an issue of 40-year debenture bonds callable at not exceeding 110 in total amount not exceeding $60,000,000, be and hereby is authorized, to be sold from time to time as required.” All of this information was also recorded in GE, Annual Report, 1913, 9.Google Scholar

²² Wall Street Journal, 21 Sept. 1912, 5.

²³ GE, Annual Report, 1918, 8.Google Scholar

²⁴ See description of these requirements by Charles A. Coffin, chairman of the board, in GE, Annual Report, 1918, 5.Google Scholar

²⁵ GE, , Annual Report, 1921, 8Google Scholar; Commercial and Financial Chronicle, 14 Feb. 1920, 663.

²⁶ The second of these issues was announced in November 1920, and most of the proceeds were actually paid in during 1921. However, part of this stock issue was reserved for GE employees, and the proceeds from this issue, $4.7 million in total, were received during 1923 and 1924.

²⁷ GE, Annual Report, 1921, 8.Google Scholar

²⁸ Dewing, , Corporate Promotions, 168–69, 173.Google Scholar

²⁹ Ibid., 171.

³⁰ Commercial and Financial Chronicle: 6 July 1895, 25; 11 Apr. 1896, 689; 13 Aug. 1898, 324; 26 Nov. 1898, 1112; 30 Sept. 1899, 705; 3 Feb. 1901, 395; Dewing, , Corporate Promotions, 176–7.Google Scholar

³¹ Wall Street Journal, 16 Feb. 1906, 5.

³² Dewing, , Corporate Promotions, 179.Google Scholar

³³ Wall Street Journal, 16 May 1907, 7.

³⁴ Dewing, , Corporate Promotions, 182.Google Scholar

³⁵ Ibid., 192.

³⁶ Ibid., 198.

³⁷ Ibid., 198–99.

³⁸ WHS, Annual Report, 1916, 7.Google Scholar

³⁹ Quoted in Wall Street Journal, 13 Dec. 1916, 7.

⁴⁰ WHS, Annual Report, 1921, 1923, 1924.Google Scholar

⁴¹ GE, Annual Report, 1946, 7.Google Scholar

⁴² New York Times, 12 Nov. 1946, 55; see also GE, Annual Report, 1946, 7.Google Scholar

⁴³ New York Times, 15 May 1956, 55; Wall Street Journal, 3 Apr. 1956, 21.

⁴⁴ WHS, Annual Report, 1941, 4.Google Scholar

⁴⁵ Ibid., 1942, 10.

⁴⁶ Ibid., 1946.

⁴⁷ Ibid., 7.

⁴⁸ Wall Street Journal, 21 Nov. 1946, 16.

⁴⁹ Ibid., 27 Sept. 1951, 5; 15 Dec. 1951, 8.

⁵⁰ WHS, Annual Report, 1951, 3–4; 1953, 3.Google Scholar

⁵¹ WHS, Annual Report, 1972.Google Scholar

⁵² GE, Annual Report, 1990, 38.Google Scholar

⁵³ WHS, Annual Report, 1991, 21.Google Scholar

⁵⁴ Ibid., 16.

⁵⁵ WHS, Annual Report, 1992, 17.Google Scholar

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⁶⁰ Field, Alexander, “Modern Business Enterprise as a Capital-Saving Innovation,” Journal of Economic History 47 (1987): 473.CrossRefGoogle Scholar

⁶¹ WHS, Applications for Relief under Section 722 of the Internal Revenue Code, Exhibit III-A-2, 11 Feb. 1952, 3–4, Library and Archives Division, Historical Society of Western Pennsylvania, Westinghouse Electric Corporation Collection, box 7, folder 2.

⁶² Chandler, Alfred D. Jr, Strategy and Structure: Chapters in the History of the Industrial Enterprise (Cambridge, Mass.), 363–70.Google Scholar

⁶³ WHS, Growth Report, 1958, 7–8Google Scholar, Library and Archives Division, Historical Society of Western Pennsylvania, Westinghouse Electric Corporation Collection, box 8, folder 2.

⁶⁴ Baskin, and M, iranti, A History, 181Google Scholar

⁶⁵ ”Increased Business Reported for the Electric Companies,” Wall Street Journal, 9 July 1912, 1.

⁶⁶ GE, Annual Reports, various years; WHS, Annua/ Reports, various years.

⁶⁷ Ibid.

⁶⁸ Ibid.

⁶⁹ Ibid.

⁷⁰ Ibid.

⁷¹ Pollard, Sidney, “Fixed Capital in the Industrial Revolution in Britain,” Journal of Economic History 24 (1964): 299–314.CrossRefGoogle Scholar

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