Two Centuries of American Leadership

Two Centuries of American Leadership

The article Four Centuries of Global Leadership tracked the largest company in the world from 1602 to 2018. This article focuses on the United States, detailing how leadership, in terms of the company with the largest market cap, has changed over the past two centuries.

The table which accompanies this article provides a unique history of the United States stock market. We have calculated the number companies in the market at five-year intervals, the value of the capitalization of the United States stock market and what was the largest company in the U.S. stock market. We have data for every year from 1782 to 2018, but we thought five-year intervals would be sufficient to show the general trends.

The data covers every stock exchange and over-the-counter stock for which GFD was able to collect data. GFD is still adding data to the United States stock database so the totals a year from now will be even larger than they are today. Using this table, you can break the history of the U.S. stock market down into several eras.

The Era of the First and Second Bank of the United States

The Bank of North America was established in the United States in 1781 by Robert Morris with $1 million in capital. The first Bank of the United States (see the blog, “Alexander Hamilton and the First Bank of the United States”) was established in 1791 by Alexander Hamilton with a capital of $10 million, $2 million of which was subscribed to by the United States government. The bank failed to gain enough votes for its renewal in 1811 and was finally liquidated in 1815. A second Bank of the United States was established in 1816 with $35 million in capital. Andrew Jackson fought the renewal of the second Bank’s charter in 1836 and the bank died, leaving the United States with no central bank until 1913 when the Federal Reserve was established.

As you can see by the numbers, when the first Bank was established in 1791, the Bank was the stock market, representing 86% of the capitalization of the four firms that existed. Over the next 20 years, the number of companies listed in the U.S. grew from 4 to 79 and the first Bank’s share of total market cap fell from 86% to 13%. The bank’s charter ended in 1811, but it took four years to liquidate the bank.

The second Bank of the United States (see the blog, “The Bank War”) was established in 1816 with $35 million in capital, and in 1820 it represented 39% of the total capitalization of the United States stock market, but over time, its share declined as well, to 15% the year before its charter expired in 1836 when Congress failed to override President Jackson’s veto. During its existence, however, the number of listed companies in the U.S. grew from 95 in 1820 to 299 in 1835 and the capitalization of the U.S. stock market grew to over one-quarter of a billion dollars.

The Era of IBM

In 1967, IBM became the largest company in the world, replacing AT&T. It held the top spot until 1989 when it was replaced by ExxonMobil (formerly Standard Oil of New Jersey). During that period of time AT&T was broken up into Ma Bell and the Baby Bells and IBM was under constant threat of being broken up by the United States government. But it wasn’t the government that was ultimately the downfall of IBM, it was the personal computer that replaced the mainframes and their huge computing power that created a new market IBM could not dominate.

Nevertheless, IBM defined the go-go era of the 1960s and 1970s and gave notice that tech stocks were the dominant industry in the United States. Large companies could not operate without the use of computers, in fact, the stock market itself could not operate without computers. IBM computerized the stock market, made the daily calculation of the S&P 500 possible, enabled electronic orders to replace paper orders and brought the time of trades from minutes to nanoseconds.

The Big Four

Although General Electric was the largest company in 1995, 2000 and 2005, there were actually three companies that traded the title between them between 1991 and 2011, General Electric, ExxonMobil and Microsoft. Each of them was the largest in their sector and according to the economic conditions of the year, one of those three was on top with the other two close behind.

General Electric wasn’t just an electricity and manufacturing company anymore, but was a finance company that provided funding to corporations and consumers. As the finance sector began to take over the stock market in the 2000s, this helped General Electric to stay on top. Microsoft was the reason for IBM’s downfall since it played a central role in the replacement of the mainframe with the personal computer, but just like IBM, Microsoft felt the ire of the government when the company was sued under the antitrust laws and also came close to being broken up.

ExxonMobil, the descendent of Standard Oil benefitted from the price of oil surpassing $100 a barrel to become the biggest company in the world between 2006 and 2011. But when the price of oil went down, so did ExxonMobil and with iTunes and the iPhone beginning to take over the world, Apple moved up to the top spot.

Growth in the American Stock Market

In addition to keeping track of the largest company in the United States, the table also provides information on the size of the U.S. stock market, both in terms of the number of companies listed on U.S. exchanges and their total capitalization. All data are based upon companies included in the US Stocks Database and are available to subscribers.

The number of companies grew from 1 in 1782 to 100 in 1823, to 500 in 1871, to 1000 in 1888 and 2,000 in 1895. The number of companies peaked at 9,850 in 1999 and has declined since then to around 5,400 in 2017. At this rate, one wonders whether there will even be 3,000 companies to put into the Russell 3000 in the near future.

The total capitalization of the U.S. market has also grown dramatically, starting off at $1 million in 1782, reaching $100 million in 1823, and $1 billion in 1869. In 1898, the United States surpassed Great Britain as the country with the largest market cap in the world at over $6 billion. The total market cap reached $10 billion in 1901, $100 billion in 1950 and $1 trillion in 1971. Today the market cap exceeds $30 trillion.


Who will be the biggest company five or ten years from now? A tech company like Apple, Alphabet, Facebook, Microsoft or Amazon? A former leader like ExxonMobil, a bank like JPMorgan Chase or a conglomerate like Berkshire Hathaway? Or some company we haven’t even heard about? Or will America cede the top spot to a Chinese company like Tencent or Alibaba? Only time will tell.

Two Centuries of American Leadership


Year Firm Top Firm Market Cap Companies Listed Total US Market Cap Average Firm Size Top Firm Share Total Market Cap
1782Bank of North America1111100
1791Bank of the United States (First)14.80417.184.3086.15
1795Bank of the United States (First)13.00926.932.9948.28
1800Bank of the United States (First)13.751328.312.1848.57
1805Bank of the United States (First)13.004344.701.0429.08
1810Bank of the United States (First)10.906861.510.9017.72
1815Bank of the United States (First)9.007968.640.8713.11
1820Bank of the United States (Second)36.589594.631.0038.65
1825Bank of the United States (Second)42.35161136.130.8531.11
1830Bank of the United States (Second)45.50174136.130.8630.29
1835Bank of the United States (Second)39.59299262.420.8815.09
1840Bank of the United States (Second)22.88337254.250.759.00
1845Vermont Central Railroad Co.4.60310234.480.761.96
1850Champlain National Corp. (Delaware & Hudson Canal)7.92365346.480.952.29
1855Chicago Rock Island & Pacific Railway Co. (1847)26.70422464.451.105.75
1860New York Central Railroad (1853)18.06405463.201.143.90
1865Illinois Central Railroad Co.28.15420796.161.903.54
1870New York Central Railroad (1869)78.694441.105.712.497.12
1875New York Central Railroad (1869)93.566121,528.322.506.12
1880New York Central Railroad (1869)138.098862,590.692.925.33
1885Chicago Burlington and Quincy Railroad Co.105.129462,904.073.073.62
1890Standard Oil of New Jersey (ExxonMobil)149.781,0163,477.833.424.31
1895Standard Oil of New Jersey (ExxonMobil)191.102,5604,760.852.324.01
1900Standard Oil of New Jersey (ExxonMobil)803.002,1998,899.224.059.02
1905Standard Oil of New Jersey (ExxonMobil)687.882,47013,929.245.644.94
1910Standard Oil of New Jersey (ExxonMobil)608.712,59416,
1915Penn Central Corp. ($50 Par)591.632,56020,459.198.012.89
1920Standard Oil of New Jersey (ExxonMobil)613.632,64921,873.228.262.81
1925American Telephone & Telegraph Co.1,319.003,31747,567.6414.342.77
1930American Telephone & Telegraph Co.3,152.553,04163,251.4920.804.98
1935American Telephone & Telegraph Co.2,802.112,22951,644.9223.175.43
1940American Telephone & Telegraph Co.3,143.242,27944,966.6319.736.97
1945American Telephone & Telegraph Co.3,851.712,18975,945.2834.695.07
1950American Telephone & Telegraph Co.4,320.872,315111,597.3048.213.87
1955General Motors Corp. (Old)12,768.782,205251,419.80114.025.08
1960American Telephone & Telegraph Co.23,944.372,281380,328.20166.746.30
1965American Telephone & Telegraph Co.32,072.602,932607,877.10207.335.28
1970International Business Machines Corp.36,218.424,031694,247.80172.235.22
1975International Business Machines Corp.33,378.945,270736,652.30139.784.53
1980International Business Machines Corp.39,606.905,1911,337,999.00257.752.96
1985International Business Machines Corp.95,299.746,3792,222,049.00348.344.29
1990International Business Machines Corp.64,528.996,6802,911,041.00435.782.22
1995General Electric Co.120,259.808,0306,546,687.00815.281.84
2000General Electric Co.475,003.247,94615,181,594.001,910.603.13
2005General Electric Co.367,473.666,82016,393,740.002,403.772.24
2010ExxonMobil Corp. (Standard Oil of New Jersey)368,711.997,83518,368,258.002,344.392.01
2015Apple Inc.586,859.246,26926,524,419.004,231.042.21
2017Apple Inc.874,111.875,22433,541,682.006,420.692.61

The Era of Chicago Railroads

The Bank of the United States collapsed soon after 1840, ultimately going bankrupt, and in 1845, the transportation era began. Railroads were built in every state, and in 1845, three railroads were neck and neck for the top position, the Vermont Central, the South Carolina Railroad Co. and the Western Railroad Co. of Massachusetts, each with around $4.5 million in market cap. In 1850, the Delaware and Hudson Canal, which stretched from the upper portion of the Hudson River in New York to the coal valleys of Pennsylvania was the largest company in the United States. The canal transported anthracite coal from northeastern Pennsylvania through 108 locks to the Hudson whence the coal could be brought to New York City and the rest of the country.

Over the next three decades, the largest company in the United States was a railroad that connected Chicago to the rest of the country. Leadership passed between several different railroads, including the New York Central which went from New York City to Chicago, and three Chicago-based railroads, the “Rock Island” which served the areas to the west of the Mississippi, the Illinois Central, which served the Mississippi Valley from Chicago to New Orleans and the Chicago, Burlington and Quincy, which connected Chicago to the grain growing states of the Midwest.

There is no reason why the second-half of the nineteenth century shouldn’t be called the Era of Chicago Railroads. The windy city was at the heart of the nation and connected all points to the west and south of Chicago to the east where the nation’s goods were sold. In fact, the Northern Pacific stock corner (see the article “Northern Pacific – The Greatest Stock Squeeze in History”) occurred because two railroads which were not connected to Chicago battled over controlling a railroad which went into Chicago. However, by the time the Columbian Exposition took place in Chicago in 1893, the railroads had lost their crown to a new sector of the economy: oil.

The Era of Standard Oil

Standard Oil became not only the largest company in the United States, but the largest company in the world by 1900. Before 1900, the London & Northwestern Railway of the UK was the largest railroad and the largest company in the world, having succeeded the Bank of England in the 1860s. The London & Northwestern Railway employed over 100,000 people connecting London with Birmingham and the surrounding cities. The interesting fact about Standard Oil, however, was that even though it was the largest company in the world, it wasn’t listed on any exchange in the United States and was only traded over-the-counter!

Until Standard Oil was broken up by the U.S. government in 1913, it remained the largest company in the United States between 1888 and 1913. From 1890 until today, with the exception of the Japanese stock market bubble in 1989, the largest company in the world has always been an American company.

After Standard Oil was divided into 32 companies, it lost the blue ribbon for largest company to Penn Central, which connected New York City to Chicago. Standard Oil regained the crown in 1920 as the Standard Oil Co. of New Jersey and for several years in the 21st century, Standard Oil regained the title as ExxonMobil.

It should be noted here that the largest company inevitably comes under the scrutiny of the government. Both the Bank of England and the London and Northwestern Railway were nationalized by the British government after World War II. Standard Oil was broken up in 1913 as was AT&T in 1983. IBM and Microsoft were both threatened to be broken up by the application of American Antitrust laws and the tech giants of 2018 are currently under the scrutiny of politicians in Washington.

The Era of AT&T

Before the American government intervened, Ma Bell was the largest company in the world, keeping the title consistently from 1923 until 1965 except for 1927, 1928 and 1954 to 1956 when General Motors took the title away from AT&T. AT&T had a 40-year stretch in which it ruled the United States stock market as the largest and one of the safest stocks to invest in.

One of the odd stories about AT&T is that in 1938, Dow Jones reorganized its indices, reducing the Utilities index from 20 stocks to 15 and restricting the index to electric utilities. Until then, the Dow Jones Utilities Index had included AT&T and Wells Fargo since telecommunications companies were considered utilities. AT&T was moved to the Dow Jones Industrials and IBM was removed from the index until 1979. If IBM had stayed in the index between 1938 and 1979 and AT&T had been left in the Utilities, the Dow Jones Industrials would be 22,000 points higher than it is today (see the blog “Dow Jones Industrial Average’s 22,000 Point Mistake”).