Corn Market Dynamics and the Joint Executive Committee (1880 - 1886)

We incorporate previously omitted controls of external conditions in transportation and commodity markets into Porter’s (1983) analysis of industry demand, conduct and stability of the JEC railroad cartel. We estimate the equilibrium price path, non-parametrically, and find that the reaction of the JEC in its rate setting to the nature of rate setting, over alternative modes of conveyance, is very much predicted by the theoretical considerations in Haltiwanger and Harrington (1991). Periods of Cartel instability are triggered by unexpected booms in corn markets in New York, amongst other factors. The latter is consistent with the Green and Porter (1984) theory.