Lehigh Coal & Navigation Company was a mining and transportation company headquartered in Mauch Chunk, now known as Jim Thorpe, Pennsylvania . The company operated from 1818 until its dissolution in 1964 and played an early and influential role in the American Industrial Revolution .
147-532: The company ultimately encompassed source industries, transport, and manufacturing, making it the first vertically integrated company in the United States. In 1792, a hunter named Philip Ginter discovered anthracite coal on Pisgah Mountain near present-day Summit Hill, Pennsylvania close to the border Schuylkill and Carbon counties. The following year, in 1793, the Lehigh Coal Mine Company
294-450: A "slip scraper" (similar to a bulldozer). The sides of the canal were lined with stone set in clay, and the bottom was also lined with clay. The stonework required hundreds of German masons , who later built many of New York's buildings. All labor on the canal depended upon human (and animal) power or the force of water. Engineering techniques developed during its construction included the building of aqueducts to redirect water; one aqueduct
441-585: A canal would add value to the land he was selling in the western part of the state. He later became the first canal commissioner. The first legislation supporting canals in North America was passed in 1762 in the colonial-era Province of Pennsylvania to improve navigation on the Schuylkill River through Philadelphia , the largest city in North America. It provided for the surveying of a lock canal along
588-651: A clear if not a complete view of the first era of inland water commerce in America. Next up there were numerous schemes and bills placed before the Pennsylvania assembly in the 1790-1816 time frame to improve navigation on the Susquehanna, Schuylkill and Lehigh Rivers, the first being the Schuylkill and Susquehanna Navigation Company in 1791. They consumed private capital and public monies, but were little successful. Concurrently,
735-576: A common need. It contrasts with horizontal integration , wherein a company produces several items that are related to one another. Vertical integration has also described management styles that bring large portions of the supply chain not only under a common ownership but also into one corporation (as in the 1920s when the Ford River Rouge Complex began making much of its own steel rather than buying it from suppliers). Vertical integration can be desirable because it secures supplies needed by
882-490: A factor in determining whether vertical integration is successful. There are many problems and benefits that vertical integration brings to an economic system . Problems that can stem from vertical integration can include large capital investments needed to set up and buy factories and maintain efficient profits. Rapid technology development can increase integration difficulties and further increase costs. The requirement of different business skills venturing into new portions of
1029-446: A fairly new design, invented for the purpose by White, were used so water could be retained until required for use. When the dam became full and the water ran over it long enough for the river below to regain its ordinary depth, the sluice ates were let down, while the boats, which were lying in the pool above, passed down with the artificial flood. In this manner the difficulty was overcome. Crews were sent up Mount Pisgah to improve
1176-549: A few days previously that were kept in ice remained in perfect condition. In 1924, Clarence Birdseye patented the "Birdseye Plate Froster" and established the General Seafood Corporation. In 1929, Birdseye's company and the patent were bought by Postum Cereals and Goldman Sachs Trading Corporation . It was later known as General Foods . They kept the Birdseye name, which was split into two words (Birds eye) for use as
1323-495: A great challenge. Passengers and freight had to travel overland, a journey made more difficult by the rough condition of the roads. In 1800, it typically took 2.5 weeks to travel overland from New York to Cleveland , Ohio [460 miles (740 km)]; 4 weeks to Detroit [612 miles (985 km)]. The principal exportable product of the Ohio Valley was grain, which was a high-volume, low-priced commodity, bolstered by supplies from
1470-423: A half in width, laid upon wooden ties, which were kept in place by means of stone ballast. The loaded cars or wagons, as they were then termed, each having a capacity of approximately one and a half tons, were connected in trains of from six to fourteen, being attended by men who regulated their speed. Turn-outs were provided at intervals and the empty cars were drawn back to the mines by mules. They descended with
1617-403: A large share of farm receipts, formerly assumed to go to the operator's family". Under production contracts, growers raise animals owned by integrators. Farm contracts contain detailed conditions for growers, who are paid based on how efficiently they use feed, provided by the integrator, to raise the animals. The contract dictates how to construct the facilities, how to feed, house, and medicate
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#17328513691071764-495: A loading chute at the huge slack water pool at Mauch Chunk . Riding this success, the two companies were merged into the Lehigh Coal & Navigation Company, which resolved to apply American Canal era technology, including canals, locks, and rails to bring coal to their foundries and the stoves and furnaces of Philadelphia and beyond. On March 20, 1818, the company was granted various powers they sought to secure navigation in
1911-452: A major retailer, and Essendant , a dominant wholesaler. Before a wave of deregulation at the end of 20th century, most electric utilities were vertically integrated and provided electric generation , transmission , distribution , and sales. These were not just conglomerates with a common accounting department: there was just one profit center in sales, and costs of transmission and distribution were not separated. Partial deregulation in
2058-556: A passing reference (in a report on fur trading) to improving the natural waterways of western New York. Gouverneur Morris and Elkanah Watson were early proponents of a canal along the Mohawk River . Their efforts led to the creation of the Western and Northern Inland Lock Navigation Companies in 1792 (which took the first steps to improve navigation on the Mohawk and construct a canal between
2205-473: A portion of the syndication revenues in order for a show to gain a spot on the schedule if it was produced by a studio without common ownership. In response, the studios fundamentally changed the way they made movies and did business. Lacking the financial resources and contract talent they once controlled, the studios now relied on independent producers supplying some portion of the budget in exchange for distribution rights. Certain media conglomerates may, in
2352-586: A primary energy source at the time, to the company's primary markets in the Northeastern United States . By the early 1830s, the Lehigh Canal and its bridges along the Delaware River inspired the development and connection of four other regional canals. Lehigh Coal & Navigation Company's success, along with White's reputation for advancing the state of mining and civil engineering, jump started
2499-527: A region. An equally ancient solution was implemented in many cultures — things in the water weighed far less and took less effort to move since friction became negligible. Close to the seacoast, rivers often provided adequate waterways, but the Appalachian Mountains , 400 miles (640 km) inland, running over 1,500 miles (2,400 km) long as a barrier range with just five places where mule trains or wagon roads could be routed, presented
2646-809: A similar manner, own television broadcasters (either over-the-air or on cable), production companies that produce content for their networks, and also own the services that distribute their content to viewers (such as television and internet service providers). AT&T , Bell Canada , Comcast , Sky plc , and Rogers Communications are vertically integrated in such a manner—operating media subsidiaries (such as WarnerMedia , Bell Media , NBCUniversal , and Rogers Media ), and provide " triple play " services of television, internet, and phone service in some markets (such as Bell Satellite TV / Bell Internet , Rogers Cable , Xfinity , and Sky's satellite TV and internet services). Additionally, Bell and Rogers own wireless providers, Bell Mobility and Rogers Wireless , while Comcast
2793-497: A slower information processing rate, with the side effect of making the company so slow that it could not react quickly. Birds Eye did not take advantage of the growth of supermarkets until ten years after the competition did. The already-developed infrastructure did not allow Birdseye to quickly react to market changes. In order to increase profits and gain more market share, Alibaba , a China-based company, has implemented vertical integration deepening its company holdings to more than
2940-505: A supply chain. Operational routines also become more consistent and certain as the management of these firms gradually merge. Vertically integrated firms rarely need to worry about the sufficiency in their supply of materials because they generally control the facilities that provide them. A vertically integrated company also creates high barriers of entry into their respective economy, eliminating most potential competition. Implementing vertical integration can be beneficial in that it reduces
3087-451: A system in which mass production was most efficient. The model called for the manufacture of additional devices, all of which had carefully-curated designs by Ford engineers. Instead of passing these instructions and duties off to external manufacture firms, vertical integration was exercised within the corporation. This allowed for manageable division of labor, decreased costs in delay and exchange of goods, and organized updates of each firm in
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#17328513691073234-416: A trademark. Birdseye was paid $ 20 million for the patents and $ 2 million for the assets. Birds Eye was one of the pioneers in the frozen food industry. During these times, there was not a well-developed infrastructure to produce and sell frozen foods. Hence Birds Eye developed its own system by using vertical integration. Members of the supply chain, such as farmers and small food retailers, could not afford
3381-559: A tributary of the Hudson River , rises near Lake Ontario and runs in a glacial meltwater channel just north of the Catskill range of the Appalachian Mountains , separating them from the geologically distinct Adirondacks to the north. The Mohawk and Hudson valleys form the only cut across the Appalachians north of Alabama , allowing an almost complete water route from New York City in
3528-608: A true canal, the Lehigh navigation was the type of canal built along the line of a river valley within its drainage basin and parallel to the fall of the watercourse. The Lehigh Canal for a time was two separate civil engineering projects constructed 20 years apart that stretched over two parts of the Lehigh River and totaling 72-mile (116 km) along the Lehigh River in eastern Pennsylvania . The lower canal (46.5 miles (74.8 km))
3675-415: A vertical acquisition. Vertical expansion or acquisitions can also be used to increase sales and to gain market power. The acquisition of DirecTV by News Corporation is an example of forwarding vertical expansion or acquisition. DirecTV is a satellite TV company through which News Corporation can distribute more of its media content: news, movies, and television shows. The acquisition of NBC by Comcast
3822-464: A vertically integrated strategy has helped Apple become a leading platform company; integrating their software (through APIs for third-party application developers) with their own hardware, across all the devices and services they offer. Vertical integration allows Apple to control production from beginning to end. Other companies may follow the Apple model, but may not see success for some time, both due to
3969-467: A walkway known as a towpath . Its construction, through limestone and mountains, proved a daunting task. The canal was built using some of the most advanced engineering technology from Holland. In 1823 construction reached the Niagara Escarpment , necessitating the building of five locks along a 3-mile (4.8 km) corridor to carry the canal over the escarpment. To move earth, animals pulled
4116-455: A wire mill foundry at the Schuylkill River falls near Philadelphia . White and Hazard were delighted by the quality of the fuel, and subsequently bought the LCMC's final two barges to survive the trip down the Lehigh River. In 1815, convinced they could much improve the reliability of its delivery, they began in 1815 to inquire after the rights to mine the LCMC's coal and hatched a plan to improve
4263-533: Is a form of vertical integration when purchasing departments take over the former role of wholesalers to source products. For vertical integration to succeed, managers must be able to adapt their managerial approach to compliment the changes in functional activities that their vertical shift accompanies. Managers should make sure that their firm can take advantage of existing functional knowledge through organisation, and simultaneously allow new functional knowledge to develop. However, environmental possibilities can be
4410-449: Is an example of an industry in which without vertical integration, would not be able to develop efficiently. In order to implement a telecommunications system that connected cities across a nation reliably, vertical integration was called upon. This strategic move ensured that the wiring, manufacture, and management of the system was consistent and functional across a state. Apple has used the vertical integration strategy for 35 years and
4557-763: Is an example of backward vertical integration. For example, in the United States, protecting the public from communications monopolies that can be built in this way is one of the missions of the Federal Communications Commission . Scholars' findings suggest that a reduction in inefficiencies caused by the market vertical value chains, including downstream prices or double mark-up, can be negated with vertical integration. Application in more complex environments can help firms overcome market failures (markets with high transaction costs or assets specificities) Scholars also identified potential risks and boundaries which may occur under vertical integration. This includes
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4704-587: Is one of the most successful companies in the technology industry. Apple centered its business strategy on its own development of integrated hardware, software, and latterly services. They design most of their products in-house, and do not allow their hardware and operating system to be licensed out, which allows the company to apply its company vision to its products. Large companies such as Apple are more likely than smaller companies to employ vertical integration, as they have more resources to manage each stage of production (e.g. major expansion and funding). Implementing
4851-402: Is partnered with Verizon Wireless for an Xfinity-branded MVNO . Similarly, Sony has media holdings through its Sony Pictures division, including film and television content, as well as television channels, but is also a manufacturer of consumer electronics that can be used to play content from itself and others, including televisions, phones, and PlayStation video game consoles. AT&T
4998-402: Is removed and a corporation has the power to control all firms in its supply chain. One benefit is that the implementation of vertical integration can yield increased profit margins or eliminate the leverage that other firms or buyers may have over the firm. It allows improved coordination between production and distribution firms and decreases the cost of exchange of goods between firms within
5145-481: Is the first ever vertical integration where a mobile phone company and a film studio company are under same umbrella. Vertical integration through production and marketing contracts have also become the dominant model for livestock production. Currently, 90% of poultry, 69% of hogs, and 29% of cattle are contractually produced through vertical integration. The USDA supports vertical integration because it has increased food productivity. However, "... contractors receive
5292-444: Is to pass," wrote one of the commissioners, "I need only tell you that I considered it quite an easement when the wheel of my carriage struck a stump instead of a stone." The public, meanwhile, was divided. Some held that the attempt to operate the coal mine was farcical, but that the improvement of the Lehigh River was an undertaking of great value and would prove profitable to investors. Others were just as positive that improvement's to
5439-584: The Ashley Planes and made or supported means to other novel solutions of transport problems; and created transport corridors still important today.It also pioneered the mining of anthracite coal in the United States, acquiring virtually the entire eastern lobe of the Southern Pennsylvania Coal Region , and brought in Welsh experts to bootstrap Iron production using blast furnace technology in
5586-462: The Bell System , Apple , the U.S. entertainment studios, the U.S. meat industry, Ford Motor Company , CVS , and Amazon demonstrate vertical merging. Other examples like Alibaba and EssilorLuxottica cover vertical integration in other nations. During a hunting trip American explorer and scientist Clarence Birdseye discovered the beneficial effects of " quick-freezing ". For example, fish caught
5733-637: The Canal Age in the U.S. It also spurred historically significant investments in raw materials and bulk transportation infrastructure projects. The company also supported funding efforts behind the Schuylkill Canal project, which began in 1814, and was finally funded and finished with the company's support. White and Hazard had backed the Schuylkill project since their mills were on the River, but became disgusted with
5880-752: The Canal du Midi in France (1681), Bridgewater Canal in Britain (fully completed 1769), and Eiderkanal (superseded by today's Kiel Canal) in Denmark (later Germany) (1784) spurred on what was called in Britain "canal mania" . In the Thirteen Colonies in 1762 legislation was passed supporting in the colonial-era Province of Pennsylvania to improve navigation on the Schuylkill River through Philadelphia . Canals were critical industry, as until steam locomotives, canals were by
6027-609: The Delaware River at Easton on the Pennsylvania border with New Jersey . The Lehigh Coal Mining Company was sporadically successfully in mining and transporting anthracite coal to Philadelphia , and its rights were eventually absorbed by the Lehigh Coal & Navigation Company, which leased their own operational rights from their predecessor, the Lehigh Coal Company. In 1792, the Lehigh Coal Mine Company (LCMC)
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6174-571: The Industrial Revolution in the United States . The company also established the Lehigh Canal , whose construction began in 1818. The Lehigh Canal became usable in 1820, was improved further between 1821 and 1824, and was finally transformed into a two-way canal between 1827 and 1829. The Lehigh Canal played a hugely influential role in the nation's ability to transport anthracite coal ,
6321-605: The Lehigh Valley , building the first six such furnaces and puddling furnaces to create steel, which the company then provided to its own wire rope (steel cable) manufactury, the countries first it set up in Mauch Chunk. Completing the vertical integration, the wire ropes were then marketed to other mining operations, cable railways, and other industries needing high tensile reliability in managing weighty loads. In 1822, Lehigh Coal Company bought out partner George Hauto and formed
6468-485: The Mountain West , Great Plains , and Southeast . An economic theory is a framework that defines how a particular economic system functions. Economists develop principles in which an economy adheres to, which provides insight onto the relationships between economic events, markets, companies, and the government. In economic theory, vertical integration has been studied in the literature on incomplete contracts that
6615-455: The Schuylkill Canal which was chartered in 1812 but like the earlier Lehigh River projects, languished lazily, only raising a small amount of new funds annually, and getting only a little amount of work done accordingly. Josiah White and partner Erskine Hazard needing fuel for their wire mill and nail factory at the falls of the Schuylkill fought this plodding method of incremental improvement for years. Like many North American canals of
6762-467: The "Little Three", Universal Studios , Columbia Pictures , and United Artists , produced and distributed feature films but did not own theaters. The issue of vertical integration (also known as common ownership) has been the main focus of policy makers because of the possibility of anti-competitive behaviors affiliated with market influence. For example, in United States v. Paramount Pictures, Inc. ,
6909-520: The 1820s-1840s, the canal operating companies partnered with or founded short feeder railroads to connect to their sources or markets. Two good examples of this were funded by private enterprise: Together, they and the Schuylkill Canal - Reading Railroad would supply and transport the majority of Anthracite needed by northern industries in the early North American Industrial Revolution . Unlike Europe, America did not have canals for several hundred years before industrialization. In North America, everything
7056-469: The 1931 closure of commercial operations. The lower canal connected the Southern Coal Region to the Delaware River basin, connecting present-day Jim Thorpe, Pennsylvania to Easton in the Lehigh Valley , using a specially designed canal boat capable of making the one-way trip on the River as well. It was used to carry anthracite gathered to the central Lehigh Valley to the urban markets of
7203-472: The LCMC made little profits, and only sporadic efforts over two decades. Inspired by the energy shortfall during the blockade of the War of 1812 , the LCMC sent a large expedition out in 1813, which started down the river in spring of 1814 with five arks laden with coal. Only two of them made it to Philadelphia, and both were purchased by Josiah White and partner Erskine Hazard . The LCMC board in its disgust confirmed
7350-629: The LCN & Co. from rebuilding. In 1827, the Company in one massive well organized effort, completely built the 9.2 miles (14.8 km) of America's second railroad using the road bed of the wagon road built in 1818–19 in just a few months — a gravity railroad named the Mauch Chunk and Summit Hill Railroad using wooden sleepers on a gravel substrate (as did most more modern railways) — to bring coal from mines to river more efficiently. The work went quickly since
7497-585: The Legislature put it, was granted by an act passed March 20, 1818. According to a history of the navigations, authored in 1884: The improvement of the Lehigh was begun at the mouth of the Nesquehoning Creek , during the summer of the year 1818, under the personal supervision of Josiah White. The plan adopted was to contract the channel of the river in the form of a funnel, wherever it was found necessary to raise
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#17328513691077644-552: The Lehigh Coal & Navigation Company (LC&N) by combining the Lehigh Coal Mining Company, the Lehigh Coal Company, which was leased, and the Lehigh Navigation Company. The transactions represented the first merger of interlocking companies in the nation's history. Five years later, the company built the Mauch Chunk and Summit Hill Railroad , the first coal railroad and just the second railroad company in
7791-461: The Lehigh Coal Company on April 21, 1820. Under the conditions of the lease, it was stipulated that, after a given time for preparation, they should deliver for their own benefit at least forty thousand bushels of coal annually in Philadelphia and the surrounding districts, and should pay, if demanded, one ear of corn as a yearly rental. White and Hazard found a wide divergence of opinion on whether
7938-460: The Lehigh Coal Company was launched with capital stock of $ 55,000. This formed one of the most striking illustrations in American history of the dependence of a commercial venture upon methods of inland transportation. The Lehigh Navigation Company proceeded to build its dams and walls while the Lehigh Coal Company constructed the first roadway in America built on the principle, which was later adopted by
8085-435: The Lehigh River at Mauch Chunk. Sporadically active between the years of 1792 and 1814, the Lehigh Coal Mine Company was able to sell all of the coal it could mine to fuel-hungry markets but lost many a boatload on the rough waters of the unimproved Lehigh River, contributing to lost operating profits for the company and sometimes outright losses. The owners later sold some coal to Josiah White and Erskine Hazard, who operated
8232-416: The Lehigh River could be tamed, and even fewer believed that the mining of coal from the Lehigh River's surrounding lands was feasible. On three separate occasions, funds were raised to improve the Lehigh River's functionality. By 1820, the two companies had a marginal level of navigability on the Lehigh over four years ahead of their targeted 1824 deadline. Coal was transported by mule track from Summit Hill to
8379-438: The Lehigh River towns Jim Thorpe , formerly Mauch Chunk, to the towns west, and Nesquehoning to its north. Both towns are built into the flanks, the traverses , of the mountain , with flats along the river banks. (A few decades later, railroads would follow the canals.) Within the next two years, White and Hazard constructed a descending navigation system that used their unique "bear trap" or hydrostatic locks , which allowed
8526-400: The Lehigh River, including with boats loaded with one hundred barrels, or ten tons on coal. Pennsylvania's state government kept an eye on the operation, however, and a minority felt the two men might succeed. The state reserved the right to compel the adoption of a complete system of slack-water navigation from Easton to Stoddartsville if the company did not succeed satisfactorily. Capital
8673-563: The Mohawk and Lake Ontario), but the company proved that private financing was insufficient. George Washington led a partly enduring effort to turn the Potomac River into a navigable link to the west, sinking substantial energy and capital into the Patowmack Canal from 1785 until his death fourteen years later. By 1788 Washington's Potomac Company was successful in constructing five locks which took boats 4,500 feet (1,400 m) past
8820-728: The Potomac Great Falls. The Chesapeake and Ohio Canal superseded the Potomac Canal in 1823. Christopher Colles (who was familiar with the Bridgewater Canal) surveyed the Mohawk Valley, and made a presentation to the New York state legislature in 1784 proposing a canal from Lake Ontario . The proposal drew attention and some action but was never implemented. Jesse Hawley finally got the canal built. He had envisioned encouraging
8967-568: The Schuylkill tributary Tulpehocken Creek ; this would be built between 1782 and 1828 as the Union Canal , part of the omnibus Pennsylvania legislative package, the Main Line of Public Works , and was the only water route connecting the Susquehanna and Delaware Rivers above the Chesapeake Bay . Pennsylvania had been foremost among the colonies in canal building, for it had surveyed as early as 1762
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#17328513691079114-480: The Supreme Court ordered the five vertically integrated studios to sell off their theater chains and all trade practices were prohibited ( United States v. Paramount Pictures , Inc., 1948). The prevalence of vertical integration wholly predetermined the relationships between both studios and networks and modified criteria in financing. Networks began arranging content initiated by commonly owned studios and stipulated
9261-530: The Susquehanna River valley passed by Beaver Meadows and the eventual Beaver Meadows mines, and then attempted to transport the coal down the Lehigh River to the Delaware River and on to the docks in Philadelphia . The lack of steady effort and an intimately involved company officer in the operations returned sketchy results, most often the expeditions would loose arks on the rapids of the Lehigh and so
9408-473: The U.S. The vertical merge allowed CVS-Aetna to regulate more of the healthcare and delivery chain and gave them the ability to provide higher quality care to consumers. One of the most significant advantages to this integration is the reduction in costs for healthcare. Amazon.com has been criticized for being anti-competitive as both an owner and participant of its dominant online marketplace. In office products, Sycamore Partners owns both Staples, Inc. ,
9555-490: The US in 1978 ( PURPA ) forced the utilities to buy electricity outside if the rates were competitive; this gave rise to independent power producers . The other deviation from the vertical integration model were local distribution companies in some towns and regions. In the US 250 vertically integrated companies provided 85% of electrical generation. As of 2022, this "public utility" model was still utilized in some US states, mostly in
9702-564: The United States. Using anthracite as fuel in its production, iron for the first time became plentiful and inexpensive. For a period of thirty years, three decades that shaped the future of the valley, anthracite fueled furnaces throughout the Lehigh Valley produced greater quantities of iron than any other part of the nation. The June 6, 1862 flood proved to show a fatal flaw in White's grand dream. The Upper Grand contributed to its own demise in that
9849-576: The West would enjoy economic success, and the port at the seaward end of such a route would see business increase greatly. In time, projects were devised in Virginia , Maryland , Pennsylvania , and relatively deep into the coastal states. The idea of a canal to tie the East Coast of the United States to the new western settlements was already in the air by 1724: New York provincial official Cadwallader Colden made
9996-411: The animals, and how to handle manure and dispose of carcasses. Generally, the contract also shields the integrator from liability. Jim Hightower , in his book, Eat Your Heart Out , discusses this liability role enacted by large food companies. He finds that in many cases of agricultural vertical integration, the integrator ( food company ) denies the farmer the right of entrepreneurship. This means that
10143-434: The business or help market and distribute its product. A firm may desire such expansion to secure the supplies needed by the firm to produce its product and the market needed to sell the product. Such expansion can become undesirable from a system-wide perspective when it becomes anti-competitive and impede free competition in an open marketplace. The result is a more efficient business with lower costs and more profits. On
10290-430: The canal banks, Vertical integration In microeconomics , management and international political economy , vertical integration , also referred to as vertical consolidation, is an arrangement in which the supply chain of a company is integrated and owned by that company. Usually each member of the supply chain produces a different product or (market-specific) service, and the products combine to satisfy
10437-470: The coast. Frequently it was not worth the cost of transporting it to far-away population centers. This was a factor leading to farmers in the west turning their grains into whiskey for easier transport and higher sales, and later the Whiskey Rebellion . In the 18th and early 19th centuries, it became clear to coastal residents that the city or state that succeeded in developing a cheap, reliable route to
10584-433: The company from 1822 until 1865, White and Hazard were constantly seeking innovative solutions to increase business and revenues. The vertical integration many economists credit them with inventing would appeal to them as a very natural way to control costs, hence maximize profitability. The two, and the various members of the corporate board often heard of ideas that separately( ? ) or together needed financial investment which
10731-490: The company was combined with the Lehigh Coal Company with the ouster of George Hauto, but was not rechartered officially until 1822. By late 1820, four years ahead of their prospectus 's targeted schedule, the unfinished but much improved Lehigh Valley watercourse began reliably transporting large amounts of coal to White's mills and Philadelphia. The nearly 370 tons of coal brought to market that year not only salved
10878-413: The company would often join as investors, and often end up providing a later critical boost of finishing financing, investing in such ventures directly, or buying out at a later time as subsidiaries as things developed a proof of concept, track record, better promise, or dependency on another business. From that moment on, anthracite and the canals were of pivotal importance in the industrial development of
11025-399: The cost of entering the market and taking on the currently successful incumbent, but also by innovating their products to make them more appealing in the marketplace than the current incumbent. Vertical integration requires a company to focus not only on its core business, but also on several difficult areas such as sourcing materials and manufacturing partners, distribution, and finally selling
11172-506: The country to be constructed after the Granite Railroad in Quincy, Massachusetts . The company was founded by industrialists Josiah White and Erskine Hazard , who sought to improve delivery of coal to markets. and a thickly=accented German immigrant miner named Hauto. The company is known in the Lehigh Valley as the "Old Company", as distinct from the later 1988–2010 company, which
11319-482: The dams and locks necessary to allow the coal barges to travel on the river meant that huge pools of water sat at the ready. Once the heavy June rains began, and dams began to be breached, devastating tidal waves of flood water burst dam after dam causing a great flood and loss of life. John J. Leisenring Jr., then Superintendent of the LCN & Co. estimated that 200 people lost their lives from White Haven down to Lehighton. The state legislature stepped in and prohibited
11466-410: The daytime. The best examples furnished with carpeted floors, stuffed chairs, and mahogany tables stocked with current newspapers and books served as sitting rooms during the days. At mealtimes crews transformed the cabin into dining rooms. Drawing a curtain across the width of the room divided the cabin into ladies' and gentlemen's sleeping quarters in the evening hours. Pull down tiered beds folded from
11613-495: The decisions and strategies of the Schuykill Canal's board of directors, so by the winter of 1814 were very interested in exploring the option of getting coal from Lehigh valley down to Philadelphia the more than 100 miles (160 km), one way or another., but by late 1822 just as anthracite was achieving early acceptance and the skepticism was waning the drain of building sacrificial 'Coal Arks' for every load delivered to
11760-405: The distance that separates the suppliers and customers from the resources or information, which can then boost profits and efficiency. There are internal and external society-wide gains and losses stemming from vertical integration, which vary according to the state of technology in the industries involved, roughly corresponding to the stages of the industry lifecycle. Static technology represents
11907-525: The docks of Philadelphia in 1822 as the LC&;N operations were just hitting stride was already a worry to the managing board of directors. By mid-1822, managing director Josiah White was consulting with Canvass White , a veteran designing engineer of New York 's Erie Canal locks, and by late 1822 had shifted construction efforts from bolstering and improving the one-way system begun in 1818 with ambitious two-way dams and lock construction capable of taking both
12054-457: The e-commerce platform. Alibaba has built its leadership in the market by gradually acquiring complementary companies in a variety of industries including delivery and payments. One of the earliest, largest and most famous examples of vertical integration was the Carnegie Steel company. The company controlled not only the mills where the steel was made, but also the mines where the iron ore
12201-614: The entire value chain, but do not do everything in-house (e.g. assembly of iPhones by manufacturing partner Foxconn ). From the early 1920s through the early 1950s, the American motion picture had evolved into an industry controlled by a few companies, a condition known as a "mature oligopoly ", as it was led by eight major film studios , the most powerful of which were the "Big Five" studios: MGM , Warner Brothers , 20th Century Fox , Paramount Pictures , and RKO . These studios were fully integrated, not only producing and distributing films, but also operating their own movie theaters ;
12348-556: The farmer can only sell under and to the integrator. These restrictions on specified growth, Hightower argues, strips the selling and producing power of the farmer. The producer is ultimately limited by the established standards of the integrator. Yet, at the same time, the integrator still keeps the responsibility connected to the farmer. Hightower sees this as ownership without reliability. Under marketing contracts, growers agree in advance to sell their animals to integrators under an agreed price system. Generally, these contracts shield
12495-595: The fastest way to travel long distances. Commercial canals generally had boatmen shifts that kept the barges moving behind mule teams 24 hours a day. Technology Archaeologists and Industrial Historians date the American Canal Age from 1790 to 1855 based on momentum and new construction activity, since many of the older canals, however limited later by locks that restricted boat sizes below the most economic capacities and well-behind later-developing technological capabilities, nonetheless continued on in service well into
12642-405: The final consumers; for example, a firm that sells directly to the consumers has a vertical position of 0, a firm that supplies to this firm has a vertical position of 1, and so on. Vertical integration is often closely associated with vertical expansion which, in economics , is the growth of a business enterprise through the acquisition of companies that produce the intermediate goods needed by
12789-415: The firm to produce its product and the market needed to sell the product, but it can become undesirable when a firm's actions become anti-competitive and impede free competition in an open marketplace. Vertical integration is one method of avoiding the hold-up problem . A monopoly produced through vertical integration is called a vertical monopoly : vertical in a supply chain measures a firm's distance from
12936-497: The first lock canal in America, from near Reading on the Schuylkill to Middletown on the Susquehanna. As energetic men all along the Atlantic Plain now took up the problem of improving the inland rivers, they faced a storm of criticism and ridicule that would have daunted any but such as Washington and Johnson of Virginia or White and Hazard of Pennsylvania or Morris and Watson of New York. Every imaginable objection to such projects
13083-493: The fuel to company-owned retail stations, for sale to consumers. Standard Oil is a famous example of both horizontal and vertical integration, combining extraction, transport, refinement, wholesale distribution, and retail sales at company-owned gas stations. Telephone companies in most of the 20th century, especially the largest (the Bell System ) were integrated, making their own telephones , telephone cables , telephone exchange equipment and other supplies. The Bell System
13230-734: The growing of large quantities of grain on the Western New York plains (then largely unsettled) for sale on the Eastern seaboard . However, he went bankrupt trying to ship grain to the coast. While in Canandaigua debtors' prison , Hawley began pressing for the construction of a canal along the 90-mile (140 km)-long Mohawk River valley with support from Joseph Ellicott (agent for the Holland Land Company in Batavia ). Ellicott realized that
13377-416: The heftiest cuttings and viaducts , fifty locks would be required along the 360-mile (580 km) canal. Such a canal would be expensive to build even with modern technology; in 1800, the expense was barely imaginable. President Thomas Jefferson called it "a little short of madness" and rejected it; however, Hawley interested New York Governor DeWitt Clinton in the project. There was much opposition, and
13524-411: The high cost of equipment, so Birdseye provided it to them. Until now, Birds Eye has faded slowly because they have fixed costs associated with vertical integration, such as property, plants, and equipment that cannot be reduced significantly when production needs decrease. The Birds Eye company used vertical integration to create a larger organization structure with more levels of command. This produced
13671-417: The history of the 1820-1880s Industrial Revolution , and with much the same clout as a modern conglomerate such as General Motors, or General Electric or with the same sorts of innovations as are ascribed to IBM, Microsoft or the like. Leveraging of innovation and immense self-confidence, the Company founders With the discovery of large surface deposits of anthracite coal, the Lehigh Coal Mine Company (LCMC)
13818-483: The incomplete contracting setup. In these extended models, vertical integration can sometimes be optimal even if only the seller has to make an investment decision. Canal Age The Canal Age is a term of art used by science, technology, and industry historians. Various parts of the world have had various canal ages; the main ones belong to Egypt, Ancient Babylon, and the historical empires of India, China, Southeast Asia, and mercantile Europe. The successes of
13965-401: The integrator from liability for the grower's actions and the only negotiable item is a price. In the United States new automobiles can not be sold at dealerships owned by the same company that produced them but are protected by state franchise laws. Ford Motor Company vertically integrated due to high demand for their Model T automobile. With the development of Model T, the company required
14112-693: The lack of water- and roadways made English coal shipped across the Atlantic cheaper in Philadelphia than Pennsylvania anthracite mined 100 miles away. Canals would benefit both the East and the Midwest. For more than a century, they had provided Europe with inexpensive, reliable transportation, and George Washington, Benjamin Franklin, and other founding fathers believed they were the key to the New World's future. The Mohawk River ,
14259-421: The mule trails down from the coal deposits at Summit Hill, Pennsylvania , and others to build docks, boat building facilities, and the canal systems head end pool and locks. The canal head end needed a location where barges could be built and timber and coal could be brought into slack water. The challenge was to do it above the gap made by the east end of Mount Pisgah , a hard rock knob that towers 900 feet above
14406-504: The navigation on the Lehigh as a key step. In 1818, building on two predecessor companies, founders Erskine Hazard and Josiah White entered the coal industry to serve customers seeking a steady supply of fuel for foundries and mills on the falls of the Schuylkill River . Its role in accelerating regional industrial development by taking on civil engineering challenges initially thought impossible and creating important transport and mining infrastructure, proved influential in spearheading
14553-715: The nonstop smooth method of transportation cut nearly in half the travel time between Albany and Buffalo moving day and night. Venturing West men and women boarded packets to visit relatives or solely for a relaxing excursion. Emigrants took passage on freight boats camping on deck or on top of crates. Packet boats serving passengers exclusively reached speeds of up to five miles per hour (8.0 km/h) an hour and ran at much more frequent intervals than cramped, bumpy stages. Packet boats measuring up to 78 feet (24 m) in length and 14 + 1 ⁄ 2 feet (4.4 m) across made ingenious use of space in order to accommodate up to forty passengers at night and up to three times as many in
14700-558: The northeast, especially Philadelphia , Trenton, New Jersey , and Wilmington, Delaware , but supported new growth industries in Bristol, Pennsylvania , Allentown and Bethlehem . The privately funded canal was joined as part of the Pennsylvania Canal System , a complex system of canals and tow paths—and eventually railroads. The canal was sold for recreation use in the 1960s. The Lehigh Navigation & Coal Company sits astride
14847-434: The now merged company. Within healthcare systems, horizontal integration is generally much more prominent. However, in the United States, major vertical mergers have included CVS Health 's purchase of Aetna , and Cigna 's purchase of Express Scripts . The integration of CVS Health and Aetna resulted in the combination of one of the nation's largest health insurance companies with a pharmaceutical company seen all across
14994-486: The passage of coal boats by means of artificial floods. The coal arrived at the head end from the mines at Summit Hill or down along the steep mule trail from near the headwaters of Panther Creek . It floated down the navigation; at journey's end, the barges were sold as fuel or for Delaware basin transports. The navigation company began shipping significant quantities of coal by early 1819, ahead of expectations, and attained their goal of regular shipments in 1820. In 1820,
15141-640: The politically connected Erskine Hazard and his older partner Josiah White , who together built the Lehigh Canal and the Lehigh Coal & Navigation Company , founding towns, mines, and building economically productive mining and transportation infrastructure from a wilderness in Eastern Pennsylvania south and west of the Poconos in the anthracite creating folded ridges of the Ridge and Valley Appalachians . Not
15288-626: The port of New York City to the promise of the Great Lakes , just then undergoing rapid settlement as the 1779 Sullivan Expedition had brushed aside the Iroquois and opened the Northwest Territory to settlement. Inspired in part by the news of the Erie's technological achievements, the privately funded Lehigh Canal was an achievement brought about by the energy needs of two visionary industrialists,
15435-406: The potential competitor, the enhancements to horizontal collusion, and development of barriers to entry. However, it is still debated over if vertical integration expected efficiencies can lead to competitive harm to the market. Some conclude that in many cases that the efficiencies outweigh the potential risks. Contrary to horizontal integration , which is a consolidation of many firms that handle
15582-775: The predecessor of the Erie Canal was begun in New York State and in New England, Connecticut and Massachusetts were looking at a few waterways needing better navigability. The Lehigh Canal was developed when the last of these licenses, awarded in 1816, expired in early 1818 with virtually nothing to show for the funds spent. This expiration allowed the state to give rights-of-way to the Lehigh Navigation and Coal Company in March 1818, founded by two disgruntled formerly enthusiastic backers of
15729-442: The product. Another major success of Apple's, is the forward integration with their retail stores, allowing them to sell their products directly to customers (helping customers to buy and use Apple's products and services), additionally helping them to control the prices of their products, and thus to maintain high-profit margins when they do. Apple is also known as one of the world's leading "orchestrators" as they exert control over
15876-459: The project was ridiculed as "Clinton's folly" and "Clinton's ditch." In 1817, though, Clinton received approval from the legislature for $ 7 million for construction. The original canal was 363 miles (584 km) long, from Albany on the Hudson to Buffalo on Lake Erie. The channel was cut 40 feet (12 m) wide and 4 feet (1.2 m) deep, with removed soil piled on the downhill side to form
16023-458: The railway, of dividing the total distance by the total descent in order to determine the grade. The Lehigh Navigation Company, then suffering from an unprecedented dearth of water, adopted White's invention of sluice gates connecting with pools that could be filled with reserve water to be drawn upon as needed for navigation. By 1819, the depth of water between Mauch Chunk and Easton was obtained. The two companies were immediately amalgamated under
16170-422: The right of way remained on the towpath side of the canal. The other boat steered toward the berm (or heelpath) side of the canal. The driver (or "hoggee", pronounced HO-gee ) of the privileged boat kept his towpath team by the canalside edge of the towpath, while the hoggee of the other boat moved to the outside of the towpath and stopped his team. His towline would be unravelled from the horses, go slack, fall into
16317-411: The right-of-way surveyed by White (well before 1818's charter) ran along the virtually uniform gradient created by grading the original mule trail, work overseen by Hazard in 1818. During the summer of 1827, a railroad was built from the mines at Summit Hill to Mauch Chunk. With one or two unimportant exceptions, this was the first railroad in the United States. It was nine miles in length, and occupied
16464-399: The river's navigation would follow the fate of so many similar enterprises but that a fortune was in store for those who invested in the Lehigh mines. The direct result of the examiners' report and of the public debate ultimately was the organization of the first interlocking companies in American commercial history. The Lehigh Navigation Company was formed with a capital stock of $ 150,000 and
16611-494: The route of the old wagon road most of the distance. Summit Hill, lying nearly a thousand feet higher than Mauch Chunk, the cars on the road made this descent by gravity, passing the coal, at their destination to the boats in the river by means of inclined planes and chutes. The whole of this plan was evolved by Josiah White, under whose direction it was consummated in a period of about four months. The rails were of rolled bar-iron, three-eighths of an inch in thickness and an inch and
16758-631: The same part of the production process, vertical integration is typified by one firm engaged in different parts of production (e.g., growing raw materials, manufacturing, transporting, marketing, and/or retailing ). Vertical integration is the degree to which a firm owns its upstream suppliers and its downstream buyers. The differences depend on where the firm is placed in the order of the supply chain. There are three varieties of vertical integration: backward (upstream) vertical integration, forward (downstream) vertical integration, and balanced (both upstream and downstream) vertical integration. Disintermediation
16905-534: The service given by the company did not meet "the wants of the country." In 1817, they leased the Lehigh Coal Mine's properties and took over operations, incorporating it on October 21, 1818, as the Lehigh Coal Company. They petitioned the legislature and proposed acquiring rights to make improvements to the Lehigh River for which there had been a string of supportive legislation going back decades. In 1820, White and Hazard bought out their partner Hauto and dissolved
17052-506: The simplest case, where the gains and losses have been studied extensively. A vertically integrated company usually fails when transactions within the market are too risky or the contracts to support these risks are too costly to administer, such as frequent transactions and a small number of buyers and sellers. The following are several case studies of vertical integration in play. Many examples center around American industries, where major companies like General Foods, Carnegie Steel Company ,
17199-433: The south to Lake Ontario and Lake Erie in the west. Along its course and from these lakes, other Great Lakes , and to a lesser degree, related rivers, a large part of the continent's interior and many settlements were well connected to the Eastern seaboard . The problem was that the land rises about 600 feet (180 m) from the Hudson to Lake Erie. Locks at the time could handle up to 12 feet (3.7 m), so even with
17346-455: The steel processes to the next generation. Oil companies , both multinational (such as ExxonMobil , Shell , ConocoPhillips or BP ) and national (e.g., Petronas ) often adopt a vertically integrated structure, meaning that they are active along the entire supply chain from locating deposits , drilling and extracting crude oil , transporting it around the world, refining it into petroleum products such as petrol/gasoline , to distributing
17493-434: The supply chain can be challenging for the firm. Another problem that may stem from vertical integration is the collapse of goals among the various firms in a supply chain. With each firm operating under different systems, integration may cause initial problems in management and production. Vertical integration also proves to be dangerous when monopolistic problems arise in a capitalistic economy. When this happens, competition
17640-598: The supply chain. Vertical integration enabled Ford Motor Company to be self-regulating and self-sufficient. EssilorLuxottica , the company that merged with Essilor and Luxottica , occupies up to 30% of the global market share as well as representing billions of pairs of lenses and frames sold annually. Before the merger, Luxottica also owned 80% of the market share of companies that produce corrective and protective eyewear as well as owning many retailers, optical departments at Target and Sears , and key eye insurance groups, such as EyeMed , many of which are already part of
17787-472: The timid investment and management attitudes of its board, so they explored property and feasibility examinations elsewhere in 1814–1815 and petitioned to build the canal that next year. Upon their return, the company's two founders took over Lehigh Coal Mining Company's mines and mining rights in a 20-year lease. built the Lehigh and Susquehanna Railroad and had its hands in many other northeastern Pennsylvania shortline railroads, spurs, and subsidiaries; created
17934-480: The title of the Lehigh Coal and Navigation Company. By 1823, the two companies delivered over two thousand tons of coal to market. Having displayed great technological skills by creating the world's first iron wire suspension bridge, which spanned the Schuylkill River at their wire works, White and Hazard schemed with other industrialists to secure a reliable source of anthracite. To move the coal to market, they entered political negotiations to acquire rights to tame
18081-429: The trains in specially constructed cars, affording a novel and rather ludicrous spectacle. Thirty minutes was the average time consumed in making the descent, while the weary trip back to the mines required three hours. The wagon road to become gravity railroad ran from what later became Summit Hill along the south side of Pisgah Ridge to Mount Pisgah to the canal's loading chute over 200 feet (61 m) above
18228-436: The turbulent and rapids-ridden Lehigh River for navigation. By 1817–18, they had organized the separate Lehigh Navigation Company and had written stock flyers announcing plans to deliver barge loads of coal regularly to Philadelphia by 1824. The LCMC had trouble delivering Anthracite to Philadelphia at costs cheaper than imported Bituminous Coal from Britain or Virginia. Their last expedition had been sent out in 1813 during
18375-513: The twentieth century. From the first days of the expansion of the British colonies from the coast of North America into the heartland of the continent, a recurring problem was that of transportation between the coastal ports and the interior. This was not unique to the Americas, and the problem still exists in those parts of the world where muscle power provides a primary means of transportation within
18522-491: The two parties will negotiate tomorrow about how to divide the returns of the investments. Since the owner is in a better bargaining position, he will have stronger incentives to invest. Hence, whether vertical integration is desirable or not depends on whose investments are more important. Hart's theory has been extended by several authors. For instance, DeMeza and Lockwood (1998) have studied different bargaining games, while Schmitz (2006) has introduced asymmetric information into
18669-408: The undesirable side, when vertical expansion leads toward monopolistic control of a product or service then regulative action may be required to rectify anti-competitive behavior. Related to vertical expansion is lateral expansion , which is the growth of a business enterprise through the acquisition of similar firms, in the hope of achieving economies of scale . Vertical expansion is also known as
18816-564: The unreliability of the fuel source when they let it be known they planned no further risky expeditions as too costly, giving White and Hazard the idea of purchasing the rights to operate the mining company. In the fall of 1814 they mounted an expedition to survey the Lehigh's problems and those of the coal mine and transportation needs for getting its output to the River reliably and regularly. The lower Lehigh Canal improvements were initially designed and engineered by LC&N founder Josiah White after they'd very quickly become disenchanted with
18963-405: The walls and additional cots could be hung from hooks in the ceiling. Some captains hired musicians and held dances. The canal had brought civilization into the wilderness. Two early 19th century canals had inordinately large impacts on the demographic and industrial development of the United States. The daring Erie Canal , begun in 1815 after a decade of debate and contemplation was a bid to join
19110-512: The war & blockade caused bituminous shortages, and by the time five arks were sent down river, three sank, leaving the directors of LCMC disgusted and unwilling to fund more losses. The company began to prepare plans and surveyed sites, and when the state legislature approved the river work in 1818, immediately hired teams of men and began to install locks, dams, and weirs, including water management gates of their own novel design. The desired opportunity " to ruin themselves ," as one member of
19257-415: The water and sink to the bottom while his boat decelerated on with its remaining momentum. The privileged boat's team would step over the other boat's towline with their horses pulling the boat over the sunken towline without stopping. Once clear, the other boat's team would continue on its way. Pulled by teams of horses canal boats still moved slowly but methodically shrinking time and distance. Efficiently,
19404-483: The water, throwing up the round river-stones into low walls or wing dams, thus providing a regular descending navigation. It soon became apparent that the carrying out of this plan would not insure sufficient water in seasons of drought to float a loaded ark or boat, and the success of the whole enterprise hung in the balance. White resorted to the expedient of creating artificial freshets. Dams were constructed in Mauch Chunk in present-day Jim Thorpe , and sluice gates of
19551-461: The whole range of tried and untried methods for securing "a navigation downward once in three days for boats loaded with one hundred barrels, or ten tons." The State kept its weather eye open in this matter, however, for a small minority felt that these men would not ruin themselves. Accordingly, the act of grant reserved to the commonwealth the right to compel the adoption of a complete system of slack-water navigation from Easton to Stoddartsville if
19698-616: The winter's fuel shortage but created a temporary glut. After buying out co-founder George Hauto, White and Hazard reworked their lease deal with the Lehigh Coal Mine Company, and merged it with the Lehigh Coal Company, acquiring ownership of its 10,000 acres spanning three parallel valleys in the 14 miles (23 km) from Mauch Chunk to Tamaqua . A few months later, they merged the LCC and the Lehigh Navigation Company. In late 1821, they filed papers to incorporate Lehigh Coal & Lehigh Navigation , which took effect in 1822. As operations managers of
19845-406: Was 950 feet (290 m) long to span 800 feet (240 m) of river. As the canal progressed, the crews and engineers working on the project developed expertise and became a skilled labor force. Canal boats up to 3 + 1 ⁄ 2 feet (1.1 m) in draft were pulled by horses and mules on the towpath. This canal has one towpath generally on the north side. When canal boats met, the boat with
19992-721: Was advanced—from the inefficiency of the science of engineering to the probable destruction of all the fish in the streams. In spite of these discouragements, however, various men set themselves to form in rapid succession the Potomac Company in 1785, the Society for Promoting the Improvement of Inland Navigation in 1791, the Western Inland Lock Navigation Company in 1792, and the Lehigh Coal Mine Company in 1793. A brief review of these various enterprises will give
20139-406: Was built by the Lehigh Coal & Navigation Company as a coal road to service the anthracite demand of the Eastern coast cities ahead of schedule, between 1818-1820 with down traffic only, and then gradually rebuilt with locks fully supporting two way traffic, between 1822-1824, 1827-1829 by the Lehigh Coal & Navigation Company and continued in operation as a key transportation canal until
20286-504: Was developed by Oliver Hart and his coauthors. Consider a seller of an intermediate product that is used by a buyer to produce a final product. The intermediate product can only be produced with the help of specific physical assets (e.g., machines, buildings). Should the buyer own the assets (vertical integration) or should the seller own the assets (non-integration)? Suppose that today the parties have to make relationship-specific investments. Since today complete contracts cannot be written,
20433-426: Was developed simultaneously. Early railroads in North America made many canals economically feasible, and canal's needs added to the demands by industries that pushed the early railroads into pressurized research and development and rapid steady improvements. By 1855, canals were no longer the civil engineering work of first resort, for it was nearly always better—cheaper to build a railroad above ground than it
20580-403: Was extracted, the coal mines that supplied the coal , the ships that transported the iron ore and the railroads that transported the coal to the factory, the coke ovens where the coal was coked, etc. The company focused heavily on developing talent internally from the bottom up, rather than importing it from other companies. Later, Carnegie established an institute of higher learning to teach
20727-424: Was formed in 1792 to secure the mineral rights to vast areas of wilderness west of the Lehigh River ranging beyond to the outcrops atop Sharpe Peak of Pisgah Ridge near present-day Summit Hill, Pennsylvania . The LCMC lacked a principle investor as a hands-on-manager and periodically hired teams to trek to the wilderness to build 'Arks' along the Lehigh near the turnpike operated from Lausanne above Mauch Chunk to
20874-407: Was founded, but management proved weak and tried to operate in an absentee mode. Company personnel ambitiously attempted to trek to the mine site, dig the anthracites, and then use mules to transport bags of it to the Lehigh River , which required cutting down trees and building crude arks near Lausanne Landing and then shooting the Lehigh River's rapids, hoping to reach the river's confluence with
21021-463: Was founded. It was incorporated the following year, in 1793, and the company also acquired 10,000 acres (4,000 ha) in and around Panther Creek Valley and Pisgah Mountain , and the aim of hauling anthracite coal from the large deposits on Pisgah Mountain near what is now Summit Hill, Pennsylvania , to Philadelphia via mule train to arks built near Lausanne on the Lehigh and Delaware rivers. The mining camps were over nine miles from
21168-426: Was less likely to succeed. They secured additional investors by forming two companies, the Lehigh Coal Company (LCC) and the Lehigh Navigation Company, and began seeking legislative approval for improving the Lehigh River 's navigation. The desired opportunity "to ruin themselves," as one member of the Legislature put it, was granted by an act passed March 20, 1818. The various powers applied for, and granted, embraced
21315-401: Was subscribed by a patriotic public on condition that a committee of stockholders go over the Lehigh River ground and pass judgment on the probable success of the effort. The report was favorable so far as the improvement of the Lehigh River was concerned. But the nine-mile road from the river to the mines was unanimously voted impracticable. "To give you an idea of the country over which the road
21462-432: Was to dig a watertight ditch 6–8 feet (2–3 m) deep and provide it with water and make annual repairs for ice and freshet damages—even though the cost per ton mile on a canal was often cheaper in an operational sense, canals couldn't be built along hills and dales, nor backed into odd corners, as could a railroad siding. On the settled eastern seaboard, forest decimation created an energy crisis for coastal cities, but
21609-407: Was very similarly named the Lehigh Coal and Navigation Company and was known as the "New Company" in the region. White and Hazard very shortly found themselves on the receiving end of investor criticisms that the improvements and mining operation at Summit Hill were failing and were both considered crackpot schemes. The majority opinion was that improvements were possible, but that coal mining
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