Chapter 3: The High Priests of Prosperity
For many years it has been the custom of the city’s more optimistic citizens, when expounding its virtues in foreign parts, to refer to it as “the city of a thousand factories.” The authority for this figure is rather obscure since even the published literature of the Chamber of Commerce claims only some five hundred manufacturing establishments, including down to one-horse concerns operating in the dim altitudes of loft buildings. But the phrase has a fine sound as it rolls off the tongue, and consequently still enjoys considerable popularity with the more active boosters.
More recently, business other than manufacturing are awakening to a consciousness of their own importance and of the exalted nature of the services which they render to the public. Therefore it is customary now in spreading the story of the city’s greatness, to claim for it a pre-eminence based upon a nicely balanced list of commercial as well as industrial activities, including a very considerable number of those engaged so far by mankind. In addition to the several hundred factories, there are five or six banks, eighteen or twenty savings associations, two or three department stores – one of which to the Chamber of Commerce, is “rated as the finest of its kind between New York and Kansas City” – and about two hundred other retail shops in the downtown section. There are also two or three thousand insurance salesmen, automobile dealers, realtors, advertising agents, architects, contractors, brokers, tailors, interior decorators and morticians.
These, together with the manufacturers, form the group which keeps the wheels of business turning, provides jobs for the taxpayers and ample opportunity to spend all of the money they make at their jobs, and so promotes the endless cycle of community happiness and prosperity.
Of recent years it has been the practice of these men of business to refer repeatedly to their strong sense of duty to the public and to the intensity of their passion for the rendering of service without thought of self. They display a keen interest in the personal welfare of each of the citizens who serve either as their customers or their employees. It is probably in reward for this ceaseless devotion that they enjoy the best fruits of the prosperity which they so vehemently proclaim.
There was a time, a generation or so ago, when the leading industrialists concerned themselves very little with the fortunes of the city as a whole or with those of the individual citizens who acted as their employees. There were out to make money, and they didn’t care a hang who knew it.
No one had suggested that goods might be sold instead of bought; and as those early worthies had amply receptive markets for the things produced by their rather leisurely manufacturing methods, they saw no reason to get excited about either the physical or financial fortunes of their less important fellow citizens. Therefore they told labor exactly where it could get off, serene in the knowledge that the unorganized workers could be forced to accept whatever combination of working conditions and wage scales employers wished to provide. And the general public, so far as they were concerned, could be thoroughly and eternally damned.
When they wanted special concessions for their industries, as they not infrequently did, they went to the city fathers and bought them as man to man. A happy entente between themselves and the county authorities served to keep their corporation taxes at figures low enough to add appreciably to the net profits for each year’s operations. Where competition among themselves was involved, they indulged freely and frankly in piratical practices which doubtlessly would shock their more polished and discreet industrial descendants.
Their independence, and some measure of their financial success, depended largely upon the fact that they were the sole owners of their businesses, singly or at least in small groups. But they were also possessed of a sternly magnificent self-confidence. It is highly unlikely that any of them ever dreamed of such a thing as the modern “conference,” in which the present-day executive seeks the counsel and guidance of his associates and subordinates.
Even without the assistance of pie-charts, sales conventions, efficiency engineers and personnel directors, many of these early industrialists amassed large fortunes and displayed in their accomplishment considerable commercial ability. Occasionally they are compared, to their distinct advantage, with representatives of the industrial generations which have succeeded them. Only recently a department head in one of the corporations was asked for his opinion of the business ability of the present head of the concern, a gentleman who had succeeded one of the early business barons. His pithy and pointed reply was: “He is worth just what he can lift; not what he can think.”
It was about twenty years ago that the “welfare idea” took hold of the industrial giants. Not until then did they begin to realize the cosmic importance of catering to the physical and spiritual well-being of their employees. Since then they have been very greatly concerned with the daily affairs and happiness of those who garnish their payrolls. They have equipped their factories with shower baths and cafeterias, instituted morning song services, organized employees’ clubs, promoted suggestion contests, and held annual picnics at which their workers are permitted to disport themselves in games and over-eating throughout the day at corporate expense.
As one of the early leaders of the welfare movement was fond of saying: “It pays.” And indeed it does pay. The director of welfare activities in one concern is said to have stated that the work he supervised had to show a return of at least six per cent in lowered operating costs or increased dividends.
Principally, these activities tend to heighten the esprit de corps of the employees, resulting in less dissatisfaction over low wages and in commendable and unselfish efforts to increase organization efficiency. This last effect, of course, manifests itself chiefly in suggestion contests in which the employees are permitted to present the firm with valuable ideas for increasing efficiency and profits. Occasionally an employee has been known to make a labor-saving suggestion of such value that he has eliminated his own job, as result of which he has been rewarded with a modest cash prize and simultaneously removed from the payroll.
Movements for tax-supported parks and playgrounds, or for any other community welfare undertakings, are invariably endorsed and even financially supported by the business leaders of the community. The happy result is that the taxpayers, having supplied themselves with ample opportunity for recreation and pleasure, become increasingly devoted to the right-thinking ideals of citizenship and to a gratifying contentment with their jobs.
Usually it is only when these contemporary captains of industry engage themselves with the investing public that they display those more robust attributes which characterized the operations of their predecessors. Then, however, they unlimber many of the same methods which, in earlier days, served to build up some of the most notable fortunes. A single example will suffice.
A manufacturing company of some size was about to sell out to outside capital – at a very generous profit. The stock of this concern was owned largely by local citizens who had been urged earlier to display their civic pride by investing in it. Of those who controlled the destinies of the company, only two or three were privy to the impending change in ownership. These gentlemen, as a result of “bear” stories which circulated mysteriously among the stockholders, were happily able to buy – from their friends, and from widows, orphans and others of the general public – a great part of the company’s outstanding stock, at a gratifying low price. Holding this stock until the deal was eventually consummated, they were able to sell it to the new owners at an advanced price which paid them a splendid profit. One of them was said to have made a million dollars through this fortunate combination of circumstances.
As a general rule, these masters of commerce have stayed within the law, or at least close enough to its borders to avoid any serious embarrassment. Occasionally, they have become involved in operations which have aroused the concern of the public prosecutors. In many of these cases they have been able to allay whatever suspicions these officials may have entertained. At other times, when they have actually been forced to appear for trial, the juries generally have been brought to see and appreciate the sound probity which has characterized their actions regardless of the appearance of much of the evidence presented against them. On those rare occasions when a trial has resulted in a conviction, it has usually happened that a superior court, after reviewing the case, has exonerated them in decisions which are frequently quite incomprehensible to the lay mind, though none the less welcome to the defendants.
Once in a long while, such affairs result in the supreme indignity of incarceration. This happened in the case of two business men in control of a corporation which had reached a most parlous financial state. They were charged with attempting to distribute the impending loss by selling additional stock to local investors. Unfortunately, in telling their prospective purchasers about the splendid condition of the company – when indeed it was on the point of collapse – they made use of the United States mails. A federal court subsequently decided that the community might well be spared the benefits of their financial genius for a time, and accordingly put them away with as little compunction as it would have used in dealing with ordinary housebreakers.
There is an engaging imperialism in the city’s attitude toward the matter of retail trade. Customers are drawn from what the Chamber of Commerce describes as the “nearer zone of influence.” This is a territory established by dividing with the nearest larger cities, on a fifty-fifty basis, the intervening counties, cities and towns. Included in this zone is one city of more than fifty thousand population. The extent of the commercial domain is approximately eight thousand square miles, and is said to contain, under the city’s trade sovereignty, some nine hundred thousand customer-subjects.
The fealty of some of these vassals is open to a measure of doubt, as not a few individual in outlying hamlets and towns have had the temerity to set up stores of their own, thus harvesting trade dollars which would otherwise pour into the city’s tills. But it is certain that considerable numbers of the subjects do more or less of their shopping in the city, enticed thither by the advertising which the merchants distribute both by mail and in the newspapers of the surrounding smaller towns. In some cases the small-town merchants persuade their newspapers not to accept such advertisements; but generally they are published. As one retailer put it, in speaking of his small-town competitors: “We don’t bother much about what those little fellows think; they’re not strong enough to protect themselves,” – a fortunate weakness which permitted him to do extensive advertising in the one-horse newspapers in the “zone of influence.”
A strong defense is maintained against merchants from the larger cities who attempt to woo the trade of Gem City customers. The newspapers are sternly forbidden to accept any advertising from such pirates, and even traveling representatives of foreign firms are strictly dealt with. Thus the manager of a hotel was told if he continued to rent his sample rooms to the representative of a New York retailer, no one of a considerable list of the local retailers would buy anything from any salesman who stopped at his hotel. The manager saw the light, and the New York salesman was banished to less advantageous accommodations. Commercial justification for this move was expressed by a leading tradesman, who said: “Why, of course we don’t want our people to buy things from out of town; what we want them to do is buy the things we have for sale.”
Occasionally, too, the larger merchants find it necessary to quell the overweening trade ambitions of the smaller ones. In one such instance there was a small but quite successful retailer operating next-door to a department store and competing with one of its departments. The owners of the larger store purchased the building in which the retailer’s shop was located; and when his lease expired it was not renewed. Consequently he moved out and was somewhat dismayed to find that he was replaced, within twenty-four hours, by the department store’s stock of the same kind of merchandise he had for sale. It was a matter of some months before many of his old customers realized that there had been a change in proprietorship; and possibly some of them never discovered it at all. At any rate, the department store occupies his old location to this day, and there offers him enterprising competition.
Of course; there is a Retail Merchant’s Association, which is composed of some two hundred of the downtown retailers. This body serves the double purpose of promoting the interests of all its members and preserving some measure of peace among them in their competitive activities. To advance the former end, a close eye is kept on the city hall to see that ordinances favorable to trade receive the proper consideration. And a lobbyist is maintained at the state capital to assist the solons in properly interpreting all proposed commercial legislation which might exercise an undesirable influence on the city’s retail trade.
Discord among the merchants themselves arises principally from the popular practice of holding frequent sales, designed to attract crowds and profits to the stores which indulge in them. Often the advertised bargains offered at these sales are worth no more than the special prices, if indeed that much. There is consequently uproarious protest from other tradesmen who are themselves prepared to handle the crowds and the profits. The Association, therefore, employs spotters who visit all sales and report the number of bargains which are one high in price and low in quality. By means of this secret service work, protests, warnings, reports to committees, and the like, a fair relationship between price and value is maintained in the majority of cases. Thus the merchants are usually assured of an equal division of the spoils of trade; and even the customers enjoy some measure of protection.
By far the greatest blessing ever visited on the city’s industrialists and merchants was the World War. And, to a man, they welcomed it with open arms.
It was a bonanza. The manufacturers discovered that they could equip their factories to make shells, and that the Allies would pay cash, and plenty of it, for those same shells on the docks in New York. Hundreds of factories hummed twenty-four hours a day with vastly profitable munitions contracts.
As the factories demanded thousands of additional workers, wages soared to heights never reached before or since. Girls who had clerked behind counters for six dollars a week made seventy in the factories. Skilled mechanics made from one to two hundred dollars. Naturally, these wage-earners, their pockets bulging with money, assaulted merchants, buying everything they laid their eyes on. And the merchants joyfully boosted the prices of their merchandise to the highest altitudes in the town’s history.
When the smoke of battle finally cleared away, late in 1918, untold millions had poured into the city. The lion’s share of this vast sum was in the coffers of the manufacturers. The bulk of the rest of it was in those of the merchants. The wage-earners, who alone had been able to spend it as fast as they made it, were not quite so well off.
With their war-won wealth, wisely administered, many business men have greatly increased the fortunes they accumulated in those happy days. This increase has been reflected both in the lavishness of their private lives and in new splendor in their business establishments.
Their new and larger homes are furnished with what they assume to be the last word in refined elegance. Their motor cars are larger and shinier than ever. Their clothes are expensively tailored, richly sleek. Assembled at their weekly luncheon clubs, they present a gratifying picture of substance and success.
Many of their retail shops and department stores have taken a new magnificence in the way of fixtures, decorations and the display of merchandise. Their business offices have become places with softly lighted reception rooms, elegantly furnished. The private offices of some of the leading executives in both the industrial and commercial concerns are vast chambers of breathless splendor. Architects and decorators have been allowed to run hog-wild in the matter of rare wood paneling, walls and ceilings of molded and tinted plaster, deeply silent rugs, and a wealth of the most lavish furniture obtainable, including not merely desks and chairs of heavy and ornate design, but enormous overstuffed davenports which invite the most luxurious repose Some of these inner shrines suggest nothing so much as the grand salons of the larger ocean liners.
This expansion in wealth and splendor has come about through the constant participation of the business virtuosi in the crusade for ever-increasing prosperity. “Spend more money – spending’s what makes prosperity” has been their slogan and the essence of their appeal to the buying public. And no one can say that that public has failed to respond to their appeal in a handsomely unselfish manner.
Another potent factor in promoting the boom has been the constant preaching of the great Gospel of Time-Payment. Ceaselessly the commercial interests have pointed out the utter folly of waiting until one has the money to buy an automobile, a radio, an electric refrigerator, or almost any other luxury or necessity the human heart could desire. They say of whatever article they offer: “Begin now to enjoy its luxury, comfort, convenience and economy. Pay just a little down, and the balance on the easiest of terms.”
The soundness and logic of this economic theory has had a tremendous appeal for buyers of all sorts of goods. As a result the homes of thousands of them are filled to overflowing with an incredible variety of articles, some of which are useful, a few of which are ornamental, and practically none of which are yet paid for. Frequently the customer has taken to the time-payment plan with such abandon that he has found almost of all of his monthly income pledged in advance on the things he has purchased. Quite generally those addicted to time-purchasing, having little cash on hand or in prospect, have found sudden financial emergencies quite embarrassing, or even disastrous. Thus, for the loan sharks as well as the merchants, the time payment crusade has been a glorious success.
Just as things were at their best in all these respects, along came November 1929. For the succeeding few weeks the majority of the city’s business leaders were principally engaged in three activities: figuring out the amounts of their own market losses, the discharging as many of their own employees as possible, and making statements through the newspapers as to the fundamental soundness of local business and the very slight damage done to it through the alleged depression. This last practice had to be discontinued, however, as some of their more glowing statements got onto the Associated Press wires, and, being published in other communities brought to the city hordes of job-seekers who thought they were coming to a land of milk and honey.
During the months that followed, all hands were urged to “think” themselves into prosperity; and in fact many, having lost their jobs, had ample time for that process. The “spend money” campaign was also continued with little if any abatement. But in spite of this sound advice there were persistent rumors of unemployment and a steady increase in the number of those applying to the Community Chest for relief. In some quarters the unemployment rumors were stoutly denied. In others it was conceded that their might be a few individuals out of work; but that, of course, there were fewer by far than in other less progressive cities. However, by the midsummer of 1930 industrial authorities admitted that there were probably from ten to fifteen thousand idle; and some of the social workers, who were in daily contact with the needy, set the figure as high as twenty thousand. The official figures of the Industrial Association reveal the fact that the number of employees in the city’s factories decreased steadily from early spring until late autumn at the rate of approximately two thousand per month.
Even at the beginning of the lull there were a few industrial and business concerns in the city who apparently entertained the old-fashioned idea that employment was a matter of personal relationship as well as economic consideration. Accordingly they held as many of their employees as they could, reduced hours of operation rather than working forces, and even put some jobs on a half-time basis so that two employees, alternating by days or weeks, could continue to make at least a bare living.
As the winter of 1930-31 closed in, this practice became increasingly popular until about twenty per cent of the employees were working on “staggered” schedules, and the majority of the factories were operating on shorter hours in order to provide as much employment as possible. By that time, too the city government was employing a greatly increased amount of common labor on public works.
When cold weather arrived, one citizen opened a soup-kitchen where any and all of the obviously needy might get a free meal daily without question or red tape. This move was strongly disapproved by the local Republican politicians, who, in view of the approaching election, desired the introduction of no evidence to the effect that the city was not enjoying its usual prosperity. There were objections also from some of the proponents of systematized charity, and from various boosters who dreaded having the word go abroad that the city was reduced to that low estate. However, the soup-kitchen was heartily endorsed and handsomely patronized by thousands of citizens who had not taken a full meal for some months and who saw no prospect of doing so in the immediate future.
As this is written the high priests of prosperity are treading cautiously through what they recognize to be a clearly defined valley. Yet beyond them lie the hills, and toward these they lift their eyes. Once again upon the high and sun-kissed plains of prosperity they may be expected to cultivate and reap new business harvests. It is even probable that their employees and customers, having gotten their jobs back, will be as ready as ever to supply the golden grain of profit.
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