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FEDERAL
WORK
WORKS
PROJECTS
AGENCY
ADMINISTRATION
F. C. HARRINGTON
CORRINGTON GILL
Commissioner
AssistantCommissioner
NATIONAL
RESEARCH
PROJECT
on
Reemployment
Opportunities
andRecent
Changes
in Industrial Techniques
DAVID
WEINTRAUB
Director
Studies
of theEffects
of Industrial
Change
on LaborMarkets
LABOR
AND THE SHUT-DOWN
TEXTILE
OF THE AMOSKEAG
MILLS
by
Daniel Creamer
and
Charles W. Coulter
THE LIBRARYOF THE
JAN 25 1010
UNIVERSITY
CF ILLINOIS
WORKPROJECTS
ADMINISTRATION,
NATIONAL
RESEARCH
PROJECT
Report No. L-5
Philadelphia,
Pennsylvania
November 1939
331.8
FEDERAL
N215s
WORK
WORKS
PROJECTS
1734 NEW
No.5-9
AGENCY
ADMINISTRATION
YORK
AVENUE
WASHINGTON,
NW.
D.C.
F. C. HARRINGTON
COMMISSIONER
OF WORK
REMOTE
PROJECTS
STORAGE
November
Colonel
7, 1939
F. C. Harrington
Commissioner of Work Projects
Sir:
The report transmitted herewith is concerned with
the economic effects of the shut-down of the Amoskeag
textile
mills
on
the workers
and the community
of
Manchester, New Hampshire. For over a hundred years
the Amoskeag Manufacturing Company had been located
in Manchester, at one time employing more than 16,000
Before their closing in 1935 these mills,
workers .
producingboth cotton and worsted fabrics, were by
far the most importantsingle source of employment
in the city.
The manufacturing
activity
of Amoskeag
began,
after 1921, to show losses more often than profits.
In April 1935 the decision was made to shut down the
i
t
n
9
o
3
c
mills; raw-material inventories were processed and in
September the mills closed.. In July 1936 the liqui
dation of the company was recommended by a special
master of the bankruptcy court. During the next 2
months the entire property was sold.
Amoskeag employed more than 17,000 different
personsduring 1935, as many as 11,000 in the week of
Peak employment . In a city whose gainfully occupied
personsnumbered 35,000 out of a total population of
75,000 in 1930, a shut-down of these proportions
was
I calamitous.
little to which the displaced workers
In a field survey conducted late in 1936,
almost one-quarter of the workers could not be 10
could
There
turn.
was
cated.
Most of these had apparently left Manchester
and some of the migrants had probably obtained jobs.
Of those interviewed,only two-fifthsof the men and
one-fifthof the women had had any work since their
State Employment Service was flooded with applicants
for work .
The scarcity of jobs is indicated by the
fact
that
the office made a total of only 544 place
ments in private employment between April 1935 and
October
1936.
The peak in Federal assistance was in 1936, when
the Government contribution amounted to 70 percent
of the expenditures for general assistance and WPA
wages .
It is estimated that Federal grants were the
source of payment for at least
of Manchester's
food stores
The continued
a
fifth
of
the
sales
in this year.
insufficiency
of employment
op
portunity in Manchester necessitated continuation
of relief measures at high levels. In 1937 about
one-quarter of the Manchester families were receiving
general assistance or WPA work; in 1938 the average
rose
once again to the 1936 level of almost 29 per
During 1937 and 1938 a higher proportion of
families received general relief in Manchester
than
in any other of the 23 New England cities for which
cent .
information
is available.
a prosperous manufacturing
city, was left stranded when itslargest company closed
its mills after a long period of gradual liquidation.
The loss of employment opportunity in 1935 for more
Thus Manchester,
once
than 11,000 workers raised social and economic prob
lems for the entire population which are still unre
solved and which only local and Federal
relief
nd
th
Works Program have been able to mitigate.
Respectfullyyours,
Comington
bil
Sier
z
Corrington Gill
Assistant
Commissioner
C
S
Page
Chapter
xix
PREFACE .
1.
INTRODUCTION
.
1
.
Plan of study and character of data.
II. COMPETITIVE
PROBLEMS AT AMOSKEAG AND IN THE
TEXTILE
General
INDUSTRY.
8
trends
8
Excess capacity.
8
Competition
of substitute
textiles
13
13
Faulty accountingprocedures
The relation of foreign trade.
14
Amoskeag'scompetitiveposition.
.
Obsolescence of equipment.
Cost of new machinery and repairs.
.
Managementpractice.•
The effect of "giantism"
The experiment in rayon production
Local
taxation
Summary.
AMOSKEAG'S
11
12
The style factor
Speculation in raw materials
III.
5
18
16
24
25
28
31
33
38
PROFIT
RECORD
AND
CORPORATE
38
REORGANIZATIONS
The pre-war period, 1906-14.
The financial reorganization of 1911
The war years, 1915-18
38
The post-war years, 1919-25.
Accumulation of cash reserve
Decline in activities. .
47
The financialreorganization
of 1925
The financialreorganization
of 1927
Amoskeagin the depressionafter 1929.
51
Amoskeag under the NRA textile codes
81
.
43
45
48
49
IV. EFFECTS OF THE SHUT-DOWN
55
59
8
8
Decline in Manchester's employment opportunities
prior to the shut-down.
88
.
Attitude of Amoskeag workers after
the
74
shut-down
Characteristics of Amoskeag workers displaced
76
by the shut-down.
Privateemploymentafter the shut-down.
Interval
between the shut-down
first job ..
Employment status in October 1938.
ix
79
and the
80
81
xi
CONTENTS
Appendix
Page
C. EMPLOYMENT CONDITIONS, 1923-32 ..
.
204
207
Inception of the Plan of Representation.'
.
Structuralorganizationof the Plan of
Representation. .
.
The plan in operation.
Wage negotiations,
210
215
215
1923-24
Wage negotiations,
1925-27
220
Relation of special difficulties to
profitable operations
221
Furthercost reductionthroughspeed-up
222
225
and wage cuts . . .
The bond issue and another wage cut.
229
Wage negotiations, 1928-32 .
D. EMPLOYMENT CONDITIONS,
Before
the
248
1933-35
248
NRA
248
Trend toward union organization.
The NRA at Amoskeag.
250
.
E. EFFECT OF AMOSKEAG'S DECLINE
ON EMPLOYMENT,
265
EARNINGS, AND MIGRATION .
285
289
Employment and unemployment.
Rates
of
labor
turn-over
.
Total weeks of no employment
Part-time employment, 1934
Incidence of unemployment.
The labor reserve.
Size of the labor
273
278
278
282
282
284
reserve.
Composition of the labor reserve
Annual earnings at Amoskeag, 1923-34
295
.
298
Migration, 1920-34
Extent of migration.
Character
of migration
Amoskeag emigrants
298
303
.
308
.
Summary:
311
F. SUPPLEMENTARY
G. THE COMPANY
TABLES
312
PERSONNEL
AND INCOME - TAX RECORDS
The personnel record
The
income-tax
card.
.
321
321
322
.
Sampling procedure and representativeness
of the sample
323
Periods into which data have been grouped
330
for analysis.
The skill classification
of occupations.
331
Personnel-record
334
Income-tax-record
schedule.
schedule
.
335
xii
CONTENTS
Appendix
Page
H. OCCUPATIONAL -HISTORY SCHEDULE
IMPORTANT TERMS .
AND DEFINITIONS
OF
338
Occupational-history
schedule.
336
Definitions of important terms
337
.
I. SOME EVIDENCE ON THE RELIABILITY OF AN EMPLOYMENT
HISTORY BASED ON THE WORKER'S MEMORY.
CHARTS
AND
339
ILLUSTRATIONS
Figure
Section of the Amoskeag textile mills as
from the Stark
1.
seen
Mill. .
Prontispiece
Populationof the UnitedStatesand numberof
active spindles in the cotton-textile industry,
1840-1935.
2.
.
10
Annual production
1907-35. .
of cotton and worsted cloth,
42
3.
Monthly cotton production, 1912-35
4.
Relativechange in net sales and productioncosts,
for the cotton section, 1906-34.
5.
47
1906-34
Annualprofitsand lossesbeforeand after the
paymentof bond interest,for the cottonand
80
worsted sections, 1928-34.
7.
Removing a full lap from a picker.
8.
Repairing
9.
Worker "piecing up" on
10.
45
Net sales and production costs, for the cotton
section,
8.
42
break in sliver on a drawing frame
a slubber
.
73
78
83
Percentage distribution of total man-months elapsed
between last Amoskeag job and October 15, 1938,
by employment
status, sex, and marital status.
11.
Tending a fly frame (doffing).
12.
13.
Ring spinner .
High-speed beam warper
14.
Slashersperformthe last step in the preparation
89
94
98
103
of a warp.
108
15.
Drawer-in entering a
18.
Worker operating a machine which automatically
new
warp.
112
ties the ends of one warp to those of another
that is to replace it.
17.
Cotton
18.
Wool comber.
C-1.
119
120
napper.
.
132
Centered 12-month moving averages of man-hours
workedand numbersof personsemployed,by
section, 1925-34 .
205
xiii
CONTENTS
CHARTS AND ILLUSTRATIONS-Continued
Figure
E-1.
Page
Number of persons on pay roll and estimated number
of full-time employees required each week,
285
1927-35, for the cotton and worsted sections
TEXT
TABLES
Table
1.
Numberof activespindlesin the UnitedStates,
New England, and southern States, 1870-1935.
2.
3.
.
Quantityof cottoncloth exported,imported,and
producedin the UnitedStates,1910–33..
17
Distributionof spinning-frame
spindlesand looms
in the cotton-goods
industry in 1935, by date of
installation
5.
Percentage increase in output per man-hour of
processing departments of the cotton-textile
industry made possible by mechanical changes,
6.
Averageage of spinning-frame
spindlesin the
cottonsection,1921–34.
1910-36.
7.
8.
9.
10.
14.
Distribution of machinery in place in departments
of the cotton section, August 1934, by date of
manufacture.
4.
9
18
20
21
Distribution of spinning-frame spindles and looms
scrappedin the cottonsection,1921-34,by year
of scrapping
Distributionof spinning-frame
spindlesand looms
23
scrapped in the cotton section, 1921-34, by age
at time of scrapping .
23
Number of spindles in the spinning departments of
the various mills in the cotton section,
July 31, 1934.
29
Percentage taxes are of gross income for Amoskeag
Manufacturing Company and for cotton-textile
corporations
in NewEnglandand theSouth,
1926–33. .
11.
Manufacturing
Company,taxes paid by Amoskeag,
and the tax rate, 1910-38. .
12.
13.
Annual record of operating profit or loss, divi
dends, and surplus or deficit for the cotton and
worsted sections of the Amoskeag Manufacturing
Company, 1906-34
3
5
39
Annual production of cotton and worsted cloth,
1907-35.
14.
34
Assessed valuation of Manchester and Amoskeag
Distributionof Manchester'sgainfullyoccupied
population,by industrialgroup,1930.
41
89
CONTENTS
xiv
TEXT
TABLES-Continued
Table
15 .
Page
umber of wage earners ir manufacturing establish
ments in New England,Manchester,and Amoskeag,
1899-1935.
16.
70
Numbergainfullyoccupiedin Manchester,by
selected occupational group and sex,
1920
and
1930.
71
17.
Indexes of monthly employment in the manufacture
of cotton and woolen and worsted textiles in the
18.
Percentage distribution of those who were
reemployed, by interval between last Amoskeag
United States,
1935 and 1936 .
job and next job and by sex.
19.
72
80
Percentagedistributionof workers,by age, sex,
and marital and employment status as of
October 15, 1938 .
20.
82
Percentage distribution of workers, by degree of
skill of longest Amoskeag job, 1930-34, sex,
and maritaland employmentstatusas of
October 15, 1936...
21.
Percentage distribution of workers, by industrial
section, sex, and marital and employment status
as of October 15, 1936
22.
84
.
Percentage distribution of workers, by marital
status and duration of employment status as of
October 15, 1936, and sex.
23.
85
87
Percentage distribution oftotal man-months elapsed
betweenlast Amoskeagjob and October15, 1936,
by employment
24 .
status, sex, and marital status.
Industrial distribution of employment after the
shut-down.
25.
27.
90
Percentage distribution of a special sample of
workers, by employment status as of October 15,
1936, employment stratum at Amoskeag, sex, and
marital
28.
89
status
92
Active file of Manchester workers at New Hampshire
State Employment Service, 1935-38.
99
Numberof personsin cases receivinggeneralrelief
and amount of relief extended in Manchester,
April 1933-September 1938.
28.
Percentage distribution of population in
Manchester, urban New England, and urban
29.
Monthly report of the number of new companies
United States,
by age, 1920 and 1930
107
110
located in the Amoskeag mills and their volume
of employment,January1937-September
1938 .
130
CONTENTS
APPENDIX
XV
TABLES
Table
A-1.
Page
Distribution of foreign-born population in eight
New Englandcities havinga populationof 50,000
to 125,000
B-1.
161
in 1930, 1890-1930.
Annual cost of pensions as a percentage of annual
manufacturing
costs,1916-35.
B-2.
C-1.
178
Indexes of cost of living in Boston and wage rates
at Amoskeag, 1914-22
Number of docketed complaints, by decision and
nature of complaint.
.
C-2.
Indexes of cost of living in Boston and annual
D-1.
earnings at Amoskeag, 1923-34. .
Comparison of average hourly wage rates for speci
189
214
230
fied occupationsin cotton-textile
manufacturing
in Amoskeag, New England, and southern mills,
1924-33. .
D-2.
252
Relative
averagehourlywageratesfor specified
occupations in cotton-textile manufacturing in
Amoskeag, New England, and southern mills, 1924,
July 1933, and August 1933
E-1.
254
Percentagedistributionof periodsof employment,
by length of period and sex of workers, in the
cotton and worsted sections,
E-2.
1923-34 .
Percentage distribution of periods of no employ
ment, by length of period and sex of workers,
the cotton and worsted sections,
E-3.
267
in
1923-34
288
Labor turn-overrates for Amoskeagand cotton
textile industry,
1914-34.
270
E-4.
Percentage
distribution
of finalseparations
for
E-5.
Number of weeks of no employment as a percentage
specificreasons,by periodand sex, 1911-33.
of total number
of man-weeks
available
.
272
for
employment in the cotton and worsted sections,
1923-34.
E-6.
E-7.
274
Percentage distribution of workers, by total weeks
of no employment and section, 1923–34.
Percentage distribution of weeks of employment in
the cotton and worsted sections
in 1934, by
number of hours of employment.
E-8.
E-9.
Percentage distribution of cotton workers, by
total weeks of no employment and degree of skill
at longest occupation, 1923-34
Percentage
distribution
277
279
of women in the cotton and
worsted sections, by total weeks of no employ
ment and marital status, 1923-34
E-10.
275
280
Percentage distribution of men in the cotton and
worsted sections, by total weeks of no employ
ment and marital status,
1923-34
281
CONTENTS
xvi
APPENDIX
TABLES-Continued
Table
E-11.
Page
Average number of Amoskeag workers actually em
ployed as a percentage of the average number
on the payroll,
E-12.
283
1925-34
Actual average weekly number of Amoskeag workers
as
a percentageof the total numberemployed
during the year in the cotton and worsted
sections,
E-13.
284
1928-34.
Percentagedistributionby age of a specialsample
of workers, by employment stratum and sex.
E-14.
Percentagedistributionby employmentstratumof
a special sample of workers, by age and sex.
E-15.
287
.
288
Percentage distribution by length of Amoskeag
attachmentof a specialsampleof workers,by
sex and employment
E-16.
E-17.
289
stratum
Percentage distribution of married women, by
number of dependents and employment stratum.
291
Distributionof gainfullyoccupiedpersons10
years of age or over in New England cities with
populations of 50,000 to 125,000, bysex, 1930. .
E-18.
E-19.
Percentage distribution of final separations, by
length of Amoskeag attachment, period, and sex.
.
295
Medianannualearningsof workers,by degreeof
296
skill, section, and sex, 1923-34
E-21.
Median annual earnings of regular and intermittent
E-22.
Number of Manchester emigrants over 21 years of
age, by industry attachment and sex, 1920-34
workers,
E-23.
298
1923-34 ..
.
F-1.
305
Percentagedistributionof a sample of Manchester
emigrants,by place of immigration,
1920-29and
1930-34. .
E-25.
301
Percentage distribution of Manchester's gainfully
occupied population 21 years of age or over,
1930, and of Manchester's emigrants, 1920-34,
by sex and age •
E-24.
294
Distribution of workers by annual earnings and
sex, 1923-34 .
E-20.
293
Percentage distribution of Amoskeag emigrants,
1920-34, and final separations, 1933–35, by sex
and degree of skill of last Amoskeag job
307
309
Net sales and productioncosts in the cotton and
worsted sections of the Amoskeag Manufacturing
Company,
F-2.
1908 to May 31, 1925.
312
Consolidated profit and loss statement of the
AmoskeagManufacturing
Company,June 1, 1925
December24,1935...
F-3.
313
WPA employmentand pay-rollcosts for Manchester,
September 1935-October 1938.
314
xvii
CONTENTS
APPENDIX
TABLES
-Continued
Table
F-4.
Page
Comparativecase load for generalrelief in 24
New England cities, 1934-38.
F-5.
Number of men per 100 women at Amoskeag, by
nationality,
F-8.
315
319
1917 and 1929
Percentageof men 45 years of age or over at first
accessionand percentageof men at same age
319
entering
skilledoccupations,
by period.
•
F-7.
F-8.
G-1.
Percentagedistributionof final separations,by
age at final separation,period,and sex
Percentage distribution of workers by years at
longest occupation, by degree of skill and sex.
320
.
320
Total hirings of all workers and of sample and
percentageof total differentpersonsin sample,
325
by period, 1927-35 .
G-2.
Distribution of all workers and those in sample,
by section, 1935 .
G-3.
Distributionof all workersand those in sample,
for the cotton and worstedsections,by depart
328
327
ment, 1935
G-4.
Distribution
of first accessions
of all workers
328
and of those in sample,1924-27.
G-5.
Totalseparations
of all workersand of sampleand
percentage
of totalseparations
included
in
329
sample, by period, 1927-35
G-6.
Percentage
sample
distribution
of all workers and of
by importantnationalities
and period,
330
1919-29.
I-1.
Number of cases in which total duration of employ
ment as reportedagreedwith, was less than, or
exceeded actual total duration, by reported
tenure group
I-2.
Comparisonof numberof actual monthsof employ
ment with the numberreported,by reported
tenure
I-3.
340
341
group
Comparisonof numberof jobs reportedwith the
number actually held, byreported tenure group.
.
342
PREFACE
America is dotted with cities and towns that can point to
better
dayswhentheywereflourishing
commercial
or industrial
Many a canal and river town lost its locationalad
vantage
whenthe railroads
drewoff its commerce.Many a rural
centers
.
shopping
and marketing
centerlostmostof its tradeas automo
biles,trucks,and improved
roadsmadelargercitiesmore eas
ily accessible. Deserted towns abound in areas where bonanzas
have been exhausted; on the other hand, new discoveries of
mineraldepositsand new processes
that made the exploitation
of knownlow-gradedepositsfeasiblehave broughtnew mining
townsintobeing. Landreclamation
and irrigation
havebrought
millionsof new fertileacresunderthe plow,givingrise to
newagricultural
communities
and tradingcenters. The devel
opmentand applicationof steam power and electricityhave
freedmanufacture
fromdependence
on waterpowerandpermitted
itsspreadand concentration
in localities
thatofferedother
advantages.
The declineof the New Englandregionas a centerof textile
production
is a classic
example
of a locational
changeof in
dustry in this country. In 1880 the manufacture of cotton
goodswas concentrated
in New Englandto the extentof about
80 percentof the spindlesin the industry. In 1935 its share
The old "waterpower"manufacturing
citiesof Lowell,Lawrence,
New Bedford,Fall River,Holyoke,
was less than 30 percent.
Nashua,
and Manchester
declined
in employment
opportunity
and
population
as Gastonia,
Greensboro,
andothersouthern
cities
and rural areas developed. Silk manufacturingmigratedfrom
New Englandto New York in the 1860'sand from there to New
Jersey about 1870. Two decades later the industry began an
othershift,this time to the steeland coal towns of Penn
sylvania.Onlyin the manufacture
of woolensand worstedshas
NewEngland
retained
itspreeminence,
although
evenhere
its relativeimportancehas declinedin favor of New York,
NewJersey,Pennsylvania,
and,to a smallextent,theSouth.
Theseshiftshavesometimesinvolvedtransfersof capital
and labor;they have also meant that productionfacilities
havebeenpermitted
to deteriorate
in onelocality
whilenew
facilities
werebeingerected
in others,
andthatexperienced
xix
PREFACE
xxi
southern manufacturersor their unwillingnessto continue to
risktheirinvestments
in a marketthatpromised
to be less
productive
of profitsthanformerly.
The situation described in this study is in most respects
typicalof the shut-downs
whichoccurredin New Englandduring
The reportrepresents
a case studyof
the last two decades.
the effects of the shut-downof a single enterprise,the Amos
keagManufacturing
Company,whichhad beenthe economicback
boneof a majorNewEngland
city- Manchester,
NewHampshire.
It shows what the owners' decision to withdraw from manufac
turethecapital
theyhadaccumulated
by producing
cottonand
woolengoodsin Manchester
has meantin termsof unemployment,
lossof income,
migration,
andgeneral
disorganization
of the
Manchester labor market.
It alsoraisesquestions
concerning
thesocial
responsibility
of business.
Whatis an appropriate
basisfor a decisionto liquidate
an enterprise
whoseemploy
mentor unemployment
largelycontrols
the prosperity
of a city?
Overthe courseof morethana centurythe peopleof Manchester
had invested in homes and built a community with schools and
churchesand streetsand othercommunityenterprises
that go
with an American city, yet they had no say in a matter that
affected
themso vitally.In thecaseof railroad
operation,
for example,public-utility
commissions
have gone beyondthe
question
of profitability
to theownersandhavegivenweight
in their decisions on abandonments to the interests of commu
nities,to otherbusiness
interests
served,and to theequities
Theircriterion
is the publicwelfare.
of labor.
TheNational
Research
Project
is indebted
to manyindividuals
andagencies
forassistance
in thepreparation
of thisreport.
The willingness
of the trustees
of the AmoskeagManufacturing
Companyto releasethe companyrecordsto the HamiltonSmith
Memorial
Library
of theUniversity
of NewHampshire
madepos
sible this study with its wealth of intimate detail.
The
li
brarygraciously
made the materialavailableto the Project.
Theofficeof Manchester's
mayor,through
itssecretary
Yvan
Caron,
kindly
arranged
foroffice
spaceforthefieldstaffin
Manchester's
CityHallandin manyotherwayswasmosthelpful.
The Divisionof Unemployment
Compensation,
the MinimumWage
Division,
theDepartment
of PublicAssistance,
andthecentral
officeas wellas theManchester
officeof theNewHampshire
CHAPTER
I
INTRODUCTION
In the latterpartof August1839,8 yearsafterthe organi
zation of the Amoskeagmillsat Manchester,New Hampshire,
Thoreau,
theessayist,
spenta week on theConcordand Merrimack
Rivers. Hispassagethroughthe Amoskeag
canalsalongthe Mer
rimackwas swiftin orderto get "out of hearingof the hammer
111
whichwas layingthe foundation
of anotherLowell
Had thisboattripbeenrepeated
97 yearslater,one doubtless
.
would have discovered that the Manchester scene still bore
a close resemblanceto that of Lowell,but this time the sound
of the hammerwould be that of the auctioneerliquidating
mill property. For the Amoskeag
Manufacturing
Company,which
claimedto be the world'slargesttextilecompany,
ceasedmanu
facturingoperations
in September1935,and in Augustof the
followingyear the masterin bankruptcycourt orderedits
liquidation.
To relatein detailthe 105 yearsof the corporatelife of
thiscompanywouldbe, it is safe to say, an enlightening
case
studyin an important
phaseof American
economic
history.Such
a task,however,
is notwithinthe province
of thisreport.
This study is concernedwith Amoskeag's
morerecenthistory,
the periodof Amoskeag's
declineand dramatic
closingand their
effecton the textileworkersof Manchester,
who constituted
a largefractionof the 75,000inhabitants
of New Hampshire's
Queen City.
A detailedrecitalof this industrialcase historywas under
takenin the beliefthatthedeclineand collapse
ofthe Amoskeag
Manufacturing
Companyand the concomitant
socialconsequences
The authors wish to acknowledge their indebtedness to the many members
of the National Research project staff who have aided in this study. Deserving
Note.-
of specialthanksare ArthurJ. Kennedy,MichaelE. Ahern,AnthonyW. Debski,and
NormaMac Rury,who as long-timeAmoskeagemployeesor long-timeManchester
resi
dents, or both, had acquireda fund of knowledgeon the local situationwhich
they were ever willing to place at our disposal. Only in this manner were we
able to minimize instances of m1sinformation on local matters. We are grateful
to MarvelKellerfor help in preparinginstructions
for the transcription,
edit
ing, and coding of the Amoskeag employmentrecords; to Charles M. Booth and
HaroldW. Northropfor supervisionof editingand coding of these records;to
MurrayP. Pfeffermanfor supervision
of the mechanical
tabulations;
and to Margaret
Snowden,HenryW. Schultz,and HaroldBaron for draftingthe charts. TO Morris J.
slonimand, more particularly,to William F. Barnum, who performeda host of
statistical and other research tasks, special thanks are due.
1Henry
D. Thoreau,
A Weekon theConcord
andMerrimack
Rivers
(Boston,
Mass.:
Houghton Mifflin Co., 1893), p. 323.
1
SHUT-DOWN
2
OF AMOSKEAG
may be utilized
for the studyof urbantextileNew Englandin
decline.
It is expectedthat a detailedanalysis of Amoskeag
willshedlightonthemoreimportant
considerations
thattrans
formedoneof thecountry's
firstindustrialized
regions
into
one of its first"depressed
areas"of an industrial
character.
Whatweretheforcesat workto make" a manufacturing
townthat
shallbe the Manchester
of America"keeppace,witha certain
lag both in the rise and decline,with the Manchester
of the
Old World?2
What types of adjustmentdo workers make who are
economically
strandedin a depressed
area,and whatadjustments
may they hope to make? What factors does a community.have
to take into consideration
in attemptingto attractnew and
expandingindustriesintoan old,specializedmanufacturing
center?
These are the basic questionsto which this inquiry
is addressed.
The same groupof Bostonfinanciers
who hadestablished
tex
tilemillsat Waltham,
Lowell,and Nashuaorganized
theAmoskeag
ManufacturingCompany in 1831. Accordingly,
its development
throughout
mostof itscorporate
existence
displayed
no unique
ness since it was of a piece with the other mill towns in the
Merrimack
Valleyand adjacent
areasof northern
New England.3
In its manufacturing
aspect,the patternconsistedof the
construction
of largeintegrated
mills,combining
spinningand
weaving,
withsaleseffected
througha singlecommission
house.
Thecompany
initiated
a paternalistic
laborpolicy,
especially
with respectto housing,in order to attractthe daughters
of native farmers to the mill.
Its control of water power
and its largelandholdings
transformed
the enterprise
into
something more than a textile plant. In a very real sense,
New Englandtextilemillswere muchconcerned
withreal-estate
development
and promotion,
and in this respectthe Amoskeag
Manufacturing
Companywas no exception.
To this end, the company obtained exclusivecontrol of the
Merrimack water power in this locality and ownership of the
2onJune13,1810,thelegislature
oftheStateofNewHampshire
authorized
the
change of name from Derryfieldto Manchester. Popular tradition gives Judge
Blodget credit for this name. He is reported to have said, " IAs the country
increases in population we must have manufactures, and here, at my canal, will be
a manufacturing town that shall be the Manchester of America. '" George Waldo
Browne,
The Amoskeag
Manufacturing
Company
(Manchester,
N. H.:
Amoskeag
Manu
facturing Co., 1915), p. 25.
3Fortheextent
ofinterlocking
directoratesamong
theearly
NewEngland
textile
corporations,see Vera Shlakman,EconomicHistory of a Factory Town: A Study
of Chicopee,Massachusetts,
"SmithCollegeStudies in History,Vol. XX, Nos. 1-4,
oct. 1934-July 1935" (Northampton, Mass.:
Studies), pp. 39-42.
Smith College Council of Industrial
INTRODUCTION
3
farm land on whichthe growingtown of Manchester
was to be
The company's
interest
in manufacturing
was notsolely
in the possibilities
of profitabletextileoperations.Of
built.
equalimportance
wasthefactthattheexpansion
of manufac
turingactivities
createdan opportunity
for sellingmachinery
madein Amoskeag's
shopsand the leasingof waterpower,while
the additionsof new workersto Manchester's
populationre
sultedin appreciation
of the valueof Amoskeag's
landholdings.
Through its control of these essentialsthe company deter
minedthecommunity's
industrial
development;4
because
of its
volumeof business,reputation,
and stability,both alleged
and real, its voice weighed heavily in city government
,
cham
bersof commerce,
city planning,
and,on occasion,
evenin the
legislatureof the State. Accordingly,
the rise and fall of
Amoskeag'sfortunesare reflectedin the fortunesof the city.
Norwas the company's
corporate
structure
exceptional.
From
the start, along with the other mills that served as its proto
type,thecompany
possessed
all the attributes
of"bigbusiness",
usually
associated
witha morerecentperiodin corporation
history At no time,for example,
did Manchester
residents
own any considerable
portionof Amoskeag
stock:from its early
years,the organization
was characterizedby
absentee
ownership.
"Control"was exercisedby a board of directorsor trustees
who not infrequently
had but small investments
in Amoskeag
securities. Withfew exceptions,
the trusteeswere prominent
financiers and merchants of the Boston area who had no detailed
familiarity
withmanufacturing
processes
and for whom Amoskeag
represented
onlyone of a numberof business
interests.As
a consequence,
the treasurer
was thedominant
personality
in
the company'saffairs. The fact that even this post was not
regardedas a full-timejob probablyexplainswhy his office
waslocated
in Bostonduringtheentirelifeof thecorpora
tion.
The actualsupervision
of mill operation
was entrusted
to an agent,a salariedofficial
who represented
the board
of directors and resided in Manchester.
Thus to the problems
ofabsentee
ownership
wereaddedthoseof"remote
control."
In all this,it must be emphasized
again,Amoskeag
and Man
chester
weretypicalof mostof the otherinlandmillsand
mill towns,especiallythosenorth of Boston.
The
rise
of
4Formanyyears,
andtosomeextent
until1935,plants
des1ring
tolocate
in
Manchesterwere directly or indirectlydependent on Amoskeag'sapproval.
SHUT-DOWN
4
OF AMOSKEAG
Manchesterfrom a mere villageat the foot of the Amoskeag
Fallsto a city of 70,000to 80,000persons,in broadoutline
at least, did not differ from the often-toldstory of the de
velopment(say) of Lowell.5
It does not followthatthe specificreasonsfor Amoskeag's
decline,which beganabout1911, and its adjustments
to its
difficulties are identical with those of the other mills for
whichit is a typecase;the historyof Amoskeagdoespossess
some exceptional features. The most obvious and important
of these is size
established
it claimedto be the largesttextilemill
at one location.
Itssizeand absenteeownership
andcontrol
werenotconducive
to timeliness
of adjustments
in decisionsto reequip,to al
ter the characterof production,
or to reorganizemarketing
methods. Moreover,
when thesedecisionswere made(usually
aftermuchdelay)
, a centralized
management
militated
against
anything but a clumsy prosecutionof the decisionssince the
entireset-upwas lackingin flexibility.The natureof the
separation
of the"control"
fromthe management
alsoencouraged
fluctuationsin financialpolicy.
The protectionof the interestsof investorsat the expense,
sometimes,
of operating
efficiency
wasencouraged
by the pres
ence of a largecashsurplus,whichmay be attributed
rather
directlyto its scaleof operations.A very substantialpor
tionof thissurplus
wasaccumulated
during
thewaryears.If
Amoskeag
had not had its tremendous
capacity,
it wouldnot have
been able to make such effective use of the short-lived boom.
With a smallersurplus,
a policyof gradualliquidation
might
have appeared less tempting. In this respect,too, Amoskeag
may be regardedas atypicalbecauseof its size.
The same may be said to apply to the social consequencesof
the decline and failure of the company.
The decline and clos
ing of the millsaffectedmorepersonsthanhad beenaffected
by theshut-down
of any giventextilecorporation
in the neigh
boring textilecities.
It is important
to notice,however,
thatall thesedeviations
of Amoskeag
fromwhatis alleged
to be representative
behavior
are deviationsof degree and not of kind. If this be so, it
5For
For thisreasonthe rise of AmoskeagandManchester
will notbe recounted.Those
interested in the development of Amoskeag and Manchester will find a chronicle of
theirgrowthin Browne,op. cit.
INTRODUCTION
5
wouldnot be merelymakinga virtueout of necessity
to claim
that for these very reasons this particular case possesses
methodological
advantages. It may be properly
contended
that
a studyof extrememanifestations
is frequently
an effective
methodof making"characteristic"
behavior
understandable.
Although
theinitial
reason
for undertaking
thisinquiry
is
the bearingof the materialon the development
of a depressed
industrial
area,the resultsof the surveyindicatethat the
material
shedslighton stillbroaderproblems.It is charac
teristic
of modern
businessenterprise
to withdraw
factors
of
production
from a declining
industry
and transferthemto ex
pandingindustries.Cottonmanufacturing
in New Englandafter
1900wassuchan industry,
andthe Amoskeag
trustees
attempted
If one assumescompletedivisi
bilityand mobility
of all the factorsof production,
a strong
to effect such a transfer.
case may be made that such a transfer would increase the na
tional dividend. In the absence of complete mobilityof pro
ductionfactors,however,importanteconomicmaladjustments
are created.
A considerableportionof 'the Amoskeagcapital,
for example,was divisible
sinceit was heldas quickassets.
Manchester
labor,on the otherhand,lackedthisdivisibility
since it was relativelyimmobile,in terms both of occupation
In thesecircumstances,
the transfer
of capital
was tantamountto the creationof an economically
stranded
and location.
population.
PLAN
OF STUDY
AND
CHARACTER
OF DATA
To set forth the variousfactorsthat made for Amoskeag's
decline within the framework of the considerationsoutlined
above,it is necessaryto reviewthe more importantinflu
encesthathaveconditioned
the industry's
recentdevelopment,
including
theshiftof the cottonindustry
to the southern
sea
board. The next chapterdiscussesthe more recentdifficulties
that have beset the textile industryand analyzes Amoskeag's
handicaps
in the competitive
struggle.
ChapterIII shows how thesedifficulties,
generaland spe
cific,
affected
Amoskeag's
performance.
Performance
fromthe
point of view of the stockholders is measured in terms of
profitsand dividends.By meansof the company'sledgersand
certified
statements
prepared
forthebondholders'
committee,
this recordis reconstructed
beginningwith the year 1906.
INTRODUCTION
7
unemployment,
annualearnings,
and the extentand character
of
emigrationfrom Manchester.
Concluding
appendixes
(F-I)of a technical
naturepresent
supplementary
tables
anddescribe
thetranscribed
pay-roll
and
income-tax
records
of thecompany
andthesampling
methods
used.
Definitions
of termsusedin a fieldsurveyand the reliability
of employmentinformation,
as securedfrom both interviewswith
workersand pay-rollinformation
for the same persons,are
also discussed.
CHAPTER
COMPETITIVE
II
PROBLEMS
AND IN THE TEXTILE
GENERAL
AT AMOSKEAG
INDUSTRY
TRENDS
The locational shift of the cotton-textile industry to the
southernStateswas due in largepart to the availability
of
a cheaperlaborsupplythancouldbe attractedto New England
and it coincidedwith the introductionof automaticloomsinthe
industry.
Theshiftcreated
serious
industrial
maladjustments,
the
most
importantof which was the developmentof excess
capacity
a problem that has bedeviled the industry for
a long time.
Excess Capacity
This was broughtaboutlargelybecausethe locational
shift
of the industrysouthwarddid not involvemigrationof the
industry
in theliteral
meaning
of theword. The NewEngland
millownerdidnotdismantle
hisplantandshiphisequipment
to a southernlocation,as has so often been the procedure
in thehosiery
industry,
forinstance,
in recent
years;
nordid
he usuallyestablisha southernmill with modernequipment
and closedownthe New Englandplant. In either case, excess
capacity
wouldnot havebecomesuch a seriousproblem.
That it did reachseriousproportions
was due to the fact
that the originalshift occurredthroughsouthernentrepreneurs
organizing
textilecompaniesin theirown localities.To be
sure,theywere assistedby northerncapital,but it was not
the capitalof the New Englandtextile-mill
owners. Rather,
the capitalwas suppliedby the manufacturersof textile
machinery
and by thecommission
housesand converters.1
In
this mannerthe expansionof the industryin the South ini
tiallywas a net additionto the industry's
capacityrather
than the replacementof capacityabandonedor transferred
from elsewhere.
1stephen
J.Kennedy,
profits
andLosses
inTextiles
(NewYork:Harper &
1838),pp. 8-8.
8
Brothers,
COMPETITIVE
PROBLEMS
9
The rapiddevelopment
of the industryin the Southmay be
seen in table 1. In 1870 the activespindleage
in the South
amounted to only 5.9 percent of the active spindleage in New
England;the percentage
was 6.5 in 1880. By 1890, however,
this percentagehad increasedto 14.4, and 10 years later to
33.2.
The shiftcontinuedat a rapidrate untilin 1905 the
southernStateshad about half(53.7 percent)as many active
'
spindles
as NewEngland;
afterthesucceeding
5 yearstheyhad
two-thirds
Table
as many.
1.-
NUMBER
It is patent that even prior to the
OF ACTIVE
NEW ENGLAND,
SPINDLES
IN THE
UNITED
STATES,
AND SOUTHERN STATES, 1870-19888
(Thousandu )
South
United
Year
1870
New
States England
7,132
10,653
South
5,498
327
8, 632
1883 12,680
1884 | 13,300
1885 13,375
0.8
.
561
n.
n. &.
n. &.
1886 13,400
n.
n.a.
1887 13,500
1888 13,500
1889 14,080
1890 14,384
n.a.
n.
& .
n.
n.
&.
1891 14,640
1892 | 15,200
1893 15,550
1894
15,700
1895
16, 100
8.
8.
n. 8.
South
32,808
33,889
34,543
n.a.
n . a.
n.a.
n.a.
n . a .
n. 8 .
1923 36, 260
1924 | 35, 489
1925 35,032
1926 34, 750
18, 054 16,310
17,066 16,944
15, 975 1.7,292
15,526 17,574
1927 34, 410
192833,570
192932,417
14,995
13,815
12,537
11, 351
33.2
-
a .
n. a.
n. a.
n. &.
n.
n. a.
22,000
na
22,850
n. 8.
n. a.
23,687 14,202 7, 631
25,250 | 14,408 8,995
14, 913
a
9, 528
-
1930
31,245
67.6
70.6
73.0
75.8
80.814.4
529
1921 36,047
1922 35,708
n. &.
67.1
17, 985 14,
n.
34, 931
| 35, 481
66.5
66.9
06.71880
76.6
79.7
n. a.
1919
a.
New
17, 101 12,956
17,474 13,382
17,761 14,156
18,066 14,486
18, 287 15,531
18,388 15, 709
17,939 15, 906
13, 171 4,368
of
1908 | 27,505 15,329 | 10, 201
1909 | 28,018 15,592 10, 429
1910| 28, 267 15,735 10,494
1918
a.
17, 894
18,282
18,541
18,586
80.2
84.9
85.4
88.7
90.3
99.3
108.2
113.2
119.3
132.3
147.9
163.7
185.9
9, 655 17, 953
8,566 17,529
8,206 17,829
204.6
62.4
1931 | 28, 980
1932 27,272
1933 26,895
1934 27, 742
8, 458
217.6
63.9
1935
7,763
53.7
as
percent
England
1920
n. a .
1907 26,375
England
1915 31,964
n . &.
n.a.
1903
1904
1905
1908
States
n.a.
a.
n.
1902 21,400
New
n. a.
n.
n. &.
18,100
Year
1916
1917
10,935 1,570
n . &.
1900
19,472
1901 20,200
South
United
1911 29,523 16,511 11,085
1912 30,579 17, 140 11,583
191331,520
17, 311 12,227
191432, 108 17,408 | 12,711
n. &.
1898
1899
8.5
8.
1896 16,650
1897 17,150
17,450
5.9
n . 8.
n. &
as
percent
of New
England
26,701
18,408
18,096
AdaptedfromstephenJ. Kennedy,
Profitsand lossesin Textiles
(New York:
217. 3
233.1
Harper &
Brothers,1936),DD. 235-6. All data are from U. S. Department of Commerce, Bureau of the
Censusbulletinson Cotton Productionand Distribution. Data represent spindles active
at any time during year ending July 31 for years prior to 1915 and August 31 for years
since
1916.
n.a. Data not available.
COMPETITIVE
PROBLEMS
11
on the averagewas 12.2 kilogramsper personcomparedwith 13.8
in 1927 and 12.8 in 1929. Comparablefigures for all textile
fibers
except
jutewere13.5,15.4,and14.5.2
This excesscapacitycreateda type of intensecompetition
thatleadsto instability,
and thischaracterized
the industry
evenin the decadepreceding
the war.
Earlyin the centuryAmoskeag
officials
expressed
theirfears
of thiscompetition.
Theearnings
record
of Amoskeag
forthese
yearsas analyzedin the next chapter indicatesthat it was not
immuneto the industry-wide
trendsand justifiedthe fears
of its officials.
The war prosperityand the intensityof the 1919-20boom
concealed
thepresence
of themaladjustment
of capacity
in the
industry.
It reappeared,however,with intensifiedforce
in the earlier years of the post-war adjustment,for a part
of the high profitsof the war yearswas reinvested. As
a
consequence, the largest number of active spindles in the
entireindustry
was reported
in 1923,althoughthe New England
branchof the industryreachedits peakspindleage
two years
earlier,
Insubsequent
yearstheliquidation
in NewEngland
was of sufficient volume to more than offset the expansion
of the industryin the South,which continuedto 1930, but
it wasnotofsufficient
magnitude
to materially
reduce
excess
capacity in the industry as a whole.
To the reappearance
of this basic difficultyin the post-war years must be added
a number of new problems, all of which combined to make the
roadof successful
competition
in cottontextiles
a hardone.
Competition
of Substitute
Textiles
One difficultproblemwas the competition
of othertextile
fibers,particularly
rayon,whichhad accounted
for only
0.1 percentof the mill consumptionof importanttextile
fibersin the UnitedStatesin the period1911-14,but which
represented5.5 percent in 1934.3 This developmentwas not
achieved
by diminishing
theshareof thetextile
market
served
by the cotton industry.
Rather it served only to impede the
2Computations
presented
inTheWorld
Textile
Industry:
Economic and Social
Problems, Studies and Reports: SeriesB (Socialand EconomicConditions)
No. 27"
(Geneva,Switzerland:International
LabourOffice,1937),vol.I, p. 165. (Report
to the Tripartite Technical Conference held in Washington, D. C., April 1937.)
30.S.Congress,
Senate,
Cotton
Textile
Industry,
s. Doc.No.128,74thcong.,
1st sess. , 1935, p. 83.
COMPETITIVE
PROBLEMS
13
to manufacture
for inventory;
to manufacture
for ordermakes
Evenwhen a new designor
for wide fluctuations in activity.
pattern
hasbeenintroduced,
it is difficult
to estimate
the
seasonal requirements from its initial reception. And in
a situation
of rapidstylechanges
a miscalculation
involving
a
carry-over
of stockis mostserioussinceit can be liquidated
onlyat a considerable
losswhich,if it doesnot endanger
the mill'ssolvency,makesfor a generalpriceweaknessthat
affectsmany mills and converters.
Speculation in Raw Materials
Another
sourceof instability
in theindustry
wasthespec
ulativesituation
in the raw-material
market,particularly
in
the first half of the twenties.
The small cotton crops of 1921, 1922, and 1923 had
gradually forced the price of cotton up from the
depression low of 11.8 cents in March, 1921, to 35.8
cents in December,1923. This price rise had been
practically continuous over these three years, SO
that the mills had been able to profit enormously
fromappreciation
in valueof inventories.
The
fact
that mill profits during these years were largely
speculativeand were due to exceptionalconditions
in the cotton -growing area which were bound to be
eventually overcome, does not seem to have made
much impressionupon cotton mill management.•
In other words, the entire period subsequentto the
of excep
close of the War, up to 1924, was
tional conditions, beginning with the post-war boom
and then continuing after a brief collapse in the
winter of 1920-21, from which it was rescued by this
progressive
price rise of cotton.
It was thereforenot until 1925 that the industry
returned to what might be considered a normal op
erating basis. It would be expected that under such
conditions
there
would
in mill earnings which
be a renewal
of the decline
was characteristic
of the years immediately preceding the war.
This
is
precisely
whathappened.
Poulty
Accounting
Procedures
A factorcontributing
to the industry's
difficulties
in these
yearswas the faultyaccounting
procedures
whichhad been
practicedin previousyears. Of specialimportance
in this
BKennedy,
op.cit.,p.128.
COMPETITIVE
PROBLEMS
15
traderestrictionsresultingfrom the desire for national
self-sufficiency,
and currencydepreciation
servedthe same
end,particularly
in the depression
years.
Importsintothe UnitedStates,however,havenot onlybeen
negligible
duringtheseyearsbut haverepresented
a declining
fractionof domesticproduction,
the highestpercentage
being
2.8 in 1923•
If regard were had for certain types of cloth,
the fractionimporteddoubtlesswould be a little higher.
The case given the widest publicityhas been the imports
of Japanese print cloth. In 1935 such imports amounted to
only3 percentof America's
domesticproduction
of printcloth,
according
to an estimate
in theCabinet
Committee's
report.8
Its effect,however,very probablyhas been greaterthan is
indicatedby the smallness of the percentagesince, in some
instances,
domesticproducerswere obligedto lower prices
in orderto meetthiscompetition.
These,in brief,were the majorfactorsthat conditioned
thecotton-textile
industry
in general
in the yearsfollowing
" It was the operationof the basic
factor of overexpansion,coupledwith style developments
the
war .
In summary:
during the twenties, which heightened the competition for
theexisting
marketand forceddown millmargins.To thiswas
addedthe artificial
overcapacity
createdby the extension
of
double-shift
operationin the South. .
where profitshave
been consistentlymade during this time,(they) have been
largely
products
eitherof specialized
machinery
or patented
processes,or the productsof exceptionally
well managed,
efficient mills." 9
In this competitivestrugglethe New Englandmills were
at a specialdisadvantage.
They not onlyoperated
with higher
wage rates than did the mills in the South, but they also had
theadditional
handicap
of theaccumulated
obsolescence
bothof
equipmentand managementpractice. Some of these special
handicaps,
whichrepresent
evidences
of failure
to solvethe
basicproblems,
can be illustrated
by Amoskeag's
experience.10
8cotton
Textile
Industry,
D. 104.
9,
Kennedy,
op.cit.,pp.128-9.
10111sworth
noting
thattherateofAmcskeag's
declinewas
lessrapid
thanthat
of cotton textiles in New England as a whole. Thus, while in 1925 Amoskeag's
cotton section accounted for 3.7 percent of all employment in the cotton-goods
establishments
of New England,the percentagesteadilyincreaseduntil it stood
at 5.1 in 1933. The same relationshid could be inferred, of course, from the fact
that Amoskeagcontinuedoperationsthroughoutall the years during which many
mills in theregion were going out of businessand were not being replacedby
new mills.
N
S
O
I
T
Y
T
N
R
E
U
E
B
M
N
I
T
O
N
R
E
S
O
I
o
H
A
C
T
U
l
4
P
S
T
G
A
C
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PROBLEMS
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17
COMPETITIVE
PROBLEMS
19
made the older-typeloom obsolescent.Anotherconsideration
at
Amoskeag
was the construction
of two new mills,the Coolidge
Mill and the New Bag Mill, between 1911 and 1920.
To the
extent that these mills representedadditions to productive
capacity,
onewouldexpectthe installation
of new machinery.
Afterthe strikeof 1922, negligible
amountsof machinery
werepurchased,
withthe exception
of looms. About 15 percent
of the looms in place in 1934 were manufacturedin 1926;
thatis, afterthe financial
reorganization
of 1927(see
chapterIII),
the onlyimportant
additionto equipment
was the
964 model X Draper looms purchased new in 1934, which rep
13
'resented
about9 percentof all loomsin placein thatyear.
Whatthisobsolescence
meantin termsof operating
efficiency
is suggestedby a recentstudy of mechanical
changesin the
cotton-textile
industry
between
1910and1936.14An important
assumption
in thisstudyis "thateach millwas equippedwith
the best machineryavailableat that time(1910 and 1936]
.
This machineryis assumedto have operatedat the machine
speedsprevailingin the respectiveperiods: Only such ma
chinesand equipmentas havebeen provedpracticaland econ
omicalare included."15Ideal conditions in other respects are
also posited, and all differences in productivity due to
factorsotherthanchangesin machines
havebeenexcluded
from the survey.
From the descriptionof the technological
changes,it appears
thattherewere no radicalinventions
in this27-yearperiod
butrathera seriesof improvements
moreor lessevenlyspaced
overthe period. Accordingly,
the technological
level that
obtained in 1934 was probably close to the level of 1936.
The percentageincreasein man-houroutput in processing
departmentsbetween1910 and 1936 for the productsmanufactured
by Amoskeagis given in table 5.
From this survey, the smallest potential but nonetheless
substantial
increases
in man-hour
output,
ranging
from32 to
13For
For the
period January 1 to November 9, 1934, 91.2 percent of all cotton spindles
in place were active compared with 74.0 percent of all cotton looms, according to a
company
record.
14Boris
Stern,
Mechanical
Changes
intheCotton-Textile
Industry,1910
to1936
(WPA National Research
oject in cooperation with U. S. Bureau
Labor St
S
tics, Department of Labor, Report No. B-2, Oct. 1937).
p. 2.
16Ibid.,
SHUT-DOWN
20
Table 8.- PERCENTAGE
OF PROCESSING
OF
AMOSKEAG
INCREASE IN OUTPUT PER MAN -HOUR
DEPARTMENTS
OF THE
COTTON-TEXTILE
INDUSTRY MADE POSSIBLE BY MECHANICAL
1910-888
CHANGES,
Percentageincreasein mill producing
Department
Carding
Spinning
Spooling and
warping
Slashing
Sheeting
Sateen
Flannel
Print
112.49
38.89
81.39
95.92
93.05
32.75
32.54
37.35
169.18
120.00
142.31
159.74
and
drawing
Weaving
80.00
42.86
57.13
86.87
37.78
47.30
50.56
41.24
aDatafromBorisstern,
Mechanical
Changes
intheCotton-Textile
Industry,
1010 to 1936(WPA NationalResearchprojectin cooperationwith U. S. Bureau of
Laborstatistics,
Department
of Labor,ReportNo. B-2, Oct.1937),p. 5.
50 percent,occurredin the spinningand weavingdepartments.
The largestrelativeincreases
tookplacein the spoolingand
warpingdepartment,
with the increases
in the cardingand the
slashing
and drawingdepartments
nextin order.
This comparison,
to repeat,restson the performance
of the
Even
if
Amoskeag
bestavailable
machinery
in each base year.
had the best availablemachineryin 1910, its backwardnesswas
extremein keepingabreastof changesin machinery
subsequent
to thatdate,ascan be seenfromtable3. Each of the depart
mentsrepresented
in the table had less than one-quarter
of
its machinerymanufactured
after1910,with the exceptionof
theweaving
department,
wheremorethan80 percent
of theloom
pickage
hadbeenmanufactured
afterthisdate. In other words,
the weaving department was the only one of the four that
couldmake any claimto beinggenerallyequippedwith modern
machines
in 1934,and in thisinstance
lessthan10 percent
of the loomswereof mostrecentmanufacture,
while18 percent
even antedated 1910.
In one respectthisunderstates
the extentof Amoskeag's
obsolescence
because
it assumes
thatAmoskeag
hadup-to-date
equipmentin 1910.18 As previously
mentioned,
anywherefrom
22 to 72 percent
of themachinery
in thesedepartments,
weaving
16this
assuines
thatthedateofmanufacture
anddateofinstallation
areidentical;
1. e., that Amoskeag purchased only new machinery. According to a letter to the
authors from Mr. Duniaine'soffice, the assumption is generally correct.
COMPETITIVE
21
PROBLEMS
againexcepted,had beenmanufactured
before1901. Moreover,
to computeage of machineryas of 1934, despitethe small
volume of additionsto equipmentafter 1920, tends to minimize
somewhat
the degreeof obsolescence
becauseof the advanced
age
ofthemachinery
thatwasbeing
scrapped
between
1921and1934.
Thuson the inventory
datethe averageage of spinning-frame
spindles
was 27.1 years,whereasa yearearlier(July1, 1933)
the averageage had been 29.3 (table 6).
Table
6.-
AVERAGE
AGE
OF SPINNING
IN THE COTTON SECTION,
Year
Average age
in
Year
years
1921
19.8
1922
1924
20.8
21.4
22.1
1925
1926
1927
1923
-FRAME
SPINDLES
1921-348
Average age
in years
1928
1929
1930
1931
24.9
25.9
26.7
24.1
1932
1933
28.7
29.3
25.1
1934
27.1
23.1
27.7
Based on an NRP tabulationof companyrecords. The average is computed from
ungroupeddata as of July 1 of each year on the assumption that the date of
manufacture is as of July 1. The date of scrapping is known.
In anotherrespect,however,this procedureoverstates
the
extent of obsolescence in that by addition or interchange
of parts a machinemay sometimesbe so remodeledthat its
efficiencyis much greaterthan on the date of manufacture.
But it is not clear how far this processcan be carried. The
major improvements
have been such as to increasethe speed
of operation
and to enablethe machinery
to carrya larger,
heavier load. These have required,in the main,changesin
the designand construction
of the machinesratherthan the
additionsof gadgets. Long-draft
spinning,for example,is
an improvementover tape-drivenspinningframeswhich had
previously replaced band-driven frames. Now " tape-driven
framescan be, and are being,adaptedto long-draft
spinning.
Someband-driven
frameshavebeenchangedoverto longdraft,
but the amountof suchconversion
is believed
to be relatively
small and most of it is not believed worth the new investment.
Therefore,spinningequipmentthat is 25 to 30 years old
22
SHUT-DOWN
OF
AMOSKEAG
appearsto be definitely
obsoletefor the productionof the
1117
cotton yarns most commonlyproduced.
Be this as it may, to judge by expenditureson repairs and
employmentin the mechanicalsectionat Amoskeag,it would seem
that modernization
throughrepairswas not exploitedto the
full after 1926.
Sincecomparable
datafor individual
millsare lacking,
it is
impossible
to knowin anyexactmanner
theextent
of Amoskeag's
handicap,
if any,in competition
withothermills.Onecanbe
certainthat its competitors
also were not equippedentirely
with the best machines in 1910 or in 1936. However, most of
Amoskeag's
competitors
were locatedin the South,and since
these are mills of more recent construction,it is a safe
inference that their machines were of more recent manufacture
than Amoskeag's
equipment.
Some ideaof the extentof physical
liquidation
in the post
war yearscan be gleanedfrom the statistics
on spinning
framesand loomsscrapped
and replaced.From 1921 through
1934 the companyscrapped230,536spinning-frame
spindles
Itable 7 ). These represented
45.5 percentof all spindles
in place on the inventorydate (August15, 1934).18 It is
significant
thatthescrapping
of 82 percent
of allspindles
scrapped
occurred
after1927,whenthefinancial
reorganiza
tionshad beencompleted,
and that halfof this took placein
the NRA period. During the same 14 years (1921 through1934)
only23,328spindles,
or 10 percentof thespindleage
scrapped,
were acquired,and theseadditionswere made by 1923. The
medianage of scrapped
spindleage
on thedateof scrapping
was 40.6 years,with nearlyone-fifthof the spindles50 to
55 years old (table8).
There are similardata availableon looms. Between 1922 and
1934 the companydiscarded15,832looms,or 114.6percentof
thenumber
in placeat theendof theperiod.Onlyone-quarter
of the totalscrappedloomswere dismantled
between1922 and
1927;two-thirds
werescrapped
in thesucceeding
3 yearsand
7 percentduringthe NRAperiod.Replacement
of loomswas also
17A.F. Hinrichs,
Wages
incotton-Goods
Manufacturing
(U.S. Dept.
Labor,
Bur.
Labor Statistics, Bull. No. 863, Nov. 1938), pp. 51-2.
18Total
spindles
inplace
include
those
whose
year
ofmanufacture
isunknown.
COMPETITIVE
Table
7.-
DISTRIBUTION
SCRAPPED
23
PROBLEMS
OF SPINNING
- FRAME
SPINDLES
IN THE COTTON
SECTION,
BY YEAR OF SCRAPPING
AND
LOOMS
1921- 34,
a
Spinning-frame spindles
Looms
Year
Total
1921
1922
1923
1924
Number
Percent
Number
Percent
230,536
100.0
15,832
100.0
25, 760
11.2
n. a .
451
O
14,616
344
1925
2.8
6.3
448
2.8
0.2
173
1.1
993
6.3
387
2.3
O
1928
1927
1,575
87,032
1928
1929
29.1
1930
1,024
9,888
1931
1932
1933
28,672
65, 904
1934
9.9
38.1
11.3
20.317,296
5,700
1, 785
7.5
3,212
0.4
4.3
12.4
804
3.8
28.6
524
3.3
O
aBasedon an NRP tabulation
of companyrecords.
n.a. Data not available.
Table
8.-
DISTRIBUTION
SCRAPPED
OF SPINNING
- FRAME
IN THE COTTON SECTION,
SPINDLES
AND
LOOMS
1921-34,
BY AGE AT TIME OF SCRAPPINGA
Spinning-frame
spindles
Looms
Age in years
Number
Totalb
229,544
10-14.9
15-19.9
Percent
Number
Percent
100.0
6,586
100.0
O
20-24.9
5,712
2.5
25-29.9
30-34.9
8,864
3.0
6.9
15,840
34.2
30.3
78,608
69,578
8, 064
44,880
40-44.9
45-49.9
50-54.9
Median age
45
0.7
2,688
802
40.8
1,687
12.2
25.6
1,154
17.5
3.235-39.9
210
3.5
19.6
40.6
23.5
a
Based on an NRP tabulation of company records.
b
Excludes
992scrapped
spindles
and9,246scrapped
loomsforwhichdateof
manufacture
18 unknown .
SHUT-DOWN
24
OF AMOSKEAG
on a largerscalethanthat
of spindles.Thus3,552
looms,equal
to 22.4 percentof the loomsscrapped,
were purchased
in this
13-yearperiod,73 percentpriorto 1927,and the remainder
in
the year 1934. Unfortunately
the date of manufactureis known
for only some 40 percent of the discarded looms. For this
numberthe medianage on the date of scrapping
was 23.5years.
Thereis presumption
in favorof believing
that the machinery
of undatedmanufacture
was considerably
older. If this is
true, an annualdepreciation
rate of 5 percent,which was
appliedin preparingcertainstatements,is too high in the
caseof spinning
framesandloomsin termsof theactual
life
of these
machines.
It may not be too high,however,if the
mill were to continueas an effectivecompetitor.
Cost of New Macbinery
and Ropairs
From a statementpreparedfor the bondholders'
protective
committeeby certifiedpublicaccountants
it is possibleto
show the sums expendedfor new machinesand repairsafter
1926.
In that year$408,273werespentfor machinesand
equipment
exclusiveof thosefor the rayonplant. From that
date on, exceptfor 1930when $346,623were spent,therewas
a continuousdeclinein the expenditures
for new machinery
until 1932 when only $15,974were so expended. With the
purchase
of 964automatic
loomsin 1934,appreciable
sumswere
againspent- some$887,000.
The trend in the cost of repairs (materials and labor, is
morestrikingevidenceof plantdeterioration.With the age
of machineryincreasingbecauseof the curtailedpurchases
of new equipment,
one wouldexpectmoreto be spenton repairs
if efficiency
were not to be reduced.Thecontrary,
however,
occurred
at Amoskeag.In 1926 repairscosting$1,290,000were
Gradual curtailment from that date reduced the cost
by nearlythree-quarters
to $372,000
in 1932.19To put the
made.
equipment
in a condition
to handlethe increased
volumeof
production
in 1933and 1934,annualrepairsexceeding
$900,000
were necessary.
The obverse side of this record is the effect on employment
in the mechanicaland maintenancesections. Man-hourfigures
19part
ofthedifference
would
beduetothereduced
costofmaterials
andlabor.
COMPETITIVE
PROBLEMS
25
for the generalsection,whichalso includesclericalemploy
ment in the central office,begin with 1927, and in 1932
totaled 2,184 thousand man-hours. The volume of employment
remainedabout the same in 1928 as in 1927, but in 1929,a peak
production
year,employment
was reducedby some22 percent
from
the 1927 level. At the troughof the depression
in 1932 the
curtailmentamountedto a 57-percentreductionfrom the aggre
gate of man-hoursin 1927. Therewas a partialexpansion
of
employment
in thissectionin the following
two yearswiththe
increase
in volumeof production
and repairsexpenditure.
Muchthe same situationis disclosedby the averagenumber
of workersemployedin this section,data for which are avail
ablebeginning
in 1925. In that year a weeklyaverageof 1,022
personswas employed. Therewas an uninterrupted
declineuntil
the average of 386 per week was reached in 1932. By 1934 as
manyas 728 personswereemployed
in the averageweek.
Management
Practice
Thecompany
couldhaveutilized
theprinciples
of"scientific
management"
withoutinvestment
in new machinery,
for in tex
tiles"the 'stretch
out'whichis moreaccurately
designated
as the 'extendedlabor' or 'multipleloom' system
as
originally
devisedand introducedin 1923 was a process of
applying
scientific
management
to automatic
weavingwhichwas
quitedivorced
fromthe introduction
of laborsavingmachinery,
sinceautomaticloomshad long beforebeenwidelyinstalled
throughout
thecottonmanufacturing
industry,"20
In such circumstances,
a stretch-out
to be introduced
scien
tificallymust involve"the scientificintegrationof all
the functions of the mill to meet the needs of the looms and
This involveda laborious,systematic,and
thoroughgoing
studyand punctilious
adjustment
of materials,
methods,and operatingconditionsin all departments
- not
the weavers .
merelytheweavingdepartments
- at the individual
mill;
andan equallyimportant
exercise
of skilland carein the
maintenance of these conditions,"21
20.
Richmond
C.University
Nyman,Onion-Management
Cooperation
in the "StretchOut"(New Haven,
Yale
Press,1934),pp.
21-2.
Ibid.,D. 22.
Conn.:
21
SHUT-DOWN
26
OF AMOSKEAG
Evidence
in appendixes
B, C, and D showsthatfromabout1920
on Amoskeag
continually
increased
theworkload,thatis,made
use
of the stretch-out.
There is considerable indication,
however,that littleor no attentionwas paid to improving
materials,
methods,
andoperating
conditions.
As a result
the
company failed to realize the full economies of the stretch
out,andtheoperatives
failedto achieve
theexpected
volume
of production,
which,of course,
affected
theirearnings
and
working morale. This is indicated
by a numberof complaints
thatfoundtheirway intothe company-union
minutes.
As earlyas 1924,for example,
the box-loom
fixerspetitioned
that their sections should be reduced to 40 looms because it
was impossible
for a loomfixerto keepup his work on account
of poorcastings,
poorwarps,and poorequipment.22
In the
following year, at the first annual dinner conferencebetween
managementand employeerepresentatives,
an operativereminded
the managementthat it "had promisedsome six months ago
improved
material
or improved
product
to be passedalongfrom
one operation
to the nextwhichwouldeasethe workof the
variousoperatives.
So far as he had beenableto observe,
the
workof the manydepartments
hadbeenincreased
but the product
or materialpassingthroughthe variousoperations
is now as
defective as ever.1123
Again,in 1927,the weavers
in the StarkMill"complained
that 32 looms were too much for one weaver to run, with the
qualityof warpsand fillingas theyare at present."In this
instancethe weaverscarriedtheirpoint,for it was decided
" that the loom sets (should]be changedfrom 32 to 28 looms at
present and left to the discretion of the overseer if the
1124
weaverscan run moreloomswhenthe conditions
are better.
Similarconditions
obtainedin the Bag Millweavingdepart
In this instancethe weaverscomplained
about the poor conditionsof their warps, their low wages, and
the number of looms they tended. The committee made a first
hand investigation
and noted that the warps were "crossed,soft
sized and soft yarn; tiebacks and lint accumulatingin deep
ment as late as 1930.
22Minutes
es of the JointDepartmental
committee,
DocketC4001,1924.
23minutes
of theFirstAnnual
Convention,
April18,1925.
24minutes
oftheJointDepartmental
committee
forcotton
Weaving,
July18and
27, 1927.
COMPETITIVE
wires."
PROBLEMS
27
It was voted that " in view of the conditions as shown
thiscommittee,
the overseer
shouldin hisdiscretion
returnas
many of the improperlysized, crossed and soft twisted warps
[as well as) ... thosecontaining
toomany tiebacks
to the
dress room for correction. To turn down warps attemptingto
get beyond soft places and tiebacks; and, if necessary, to
employroom girls,backtendersor spareweaversto coverthe
backalleyshelping
out the weavers,
by findingbrokenendsand
piecingup,straightening
ends,etc.,of thosewarpswhichmay
not be bad enoughto returnto the dressrooms,untilsuchtime
as the above conditionsshall improve."25
This condition,moreover,was not restrictedto the weaving
departments.
Thusthereis a recordof the complaint
filedby
" the,worsteddoublerson 60 spindle work that the job as laid
out is too big to handleas the yarnis runningpoorly. In
vestigation
supported
theircontention,
and "it was votedthat
the operatives
(should]run 40 spindlesinsteadof 60 until
11
yarn conditions(should] return to normal."28 Likewise,when
the beamers at Number 7 Mill complainedthat they were unable
to earna satisfactory
week'spay,thecommittee
recommended
"thata carefulinvestigation
be carriedout to insurethe yarn
reachingthe beamersin bettercondition
and preventbreaking
and tearing
whichnowslowsup the beaming."27
A lackof integration
amongoperations
wasalsoin evidence
in thereports
of othergrievances
presented
by company-union
delegates.28Nor was there much systematicattempt,to judge
by the workers'complaints,
to improvethe morepersonaltype
of workingconditions,
such as lighting,
drinkingfacilities,
dustremoval,
or the moreserious
consideration
of seniority
rights.Theapplication
of thestretch-out
underthesecir
cumstancescould have only the resultwhich the operatives
themselvespointed out. At the depth of the great depression
the representatives
to the Employees'Council "discussed
circumstances
which causedhigh cost throughinferiorpro
ductiondue to employeesbeing given too much work. This
causesseconds,remnantsand rags.1129
2510id.,
January
27and28,1930.
26minutes
oftheJoint
Departmental
Committee,
Docket
W2007,
1928.
2710id.,
Docket
C3009,1930.
2810id.,
Docket
C4005,
1925;
Docket
C4030,
1929;
Docket
C4034,
1930.
29minutes
of theEmployees'
Counc11,
January
20,1932.
SHUT-DOWN OF AMOSKEAG
28
The Effect of "Giantiem."
To judgefromthecharacter
of Amoskeag's
growth,
the pre
sumptionis that its very size was a handicap. Its rise to
a position
as the world'slargesttextileplantin one location
was largely by accretionsthrough the purchaseof financially
weakmillsratherthanby the construction
of new plantsbased
on surveysby textileengineers
witha view to buildingup to
optimumcapacity.
Thepresumption,
however,
cannot
be tested
empirically.
This
would require detailed cost analysis by size of firm, data
Nor are inferencespermittedfrom a
comparison
of Amoskeag
costsin 1933and 1934withthe results
of the FederalTradeCommission
investigation
intocostsand
which
do
not
exist .
profits of cotton-textilecompaniesin these two years, since
none of the companiesincludedin the commission'ssurvey
carriedon the varietyof processing
operations
thatwas
carried on by Amoskeag.
Certainconsiderations,
however,may be noted. One
writer
with textile-mill
experiencereports:
The general concensus
in the trade is that a print
clothmillof aboutsixtythousandspindlesattains
the principal economies of size, and that with
furtherincrease
thereare no proportionate
economies
of large-scale
coarser
yarn
management.
fabrics
such
For
a mill producing
as sheetings, maximum
efficiency could be attained in a mill of not much
over thirty thousandspindles. These economies
are
largely economies of management and plant layout
rather than strictly due to technical efficiency.
Smaller mills could for practical purposes be con
sidered as equally efficienton technicaloperation
solely.30
If millopinion
is correctly
represented
in thisquotation,
it is applicable
to Amoskeag,
for with the declinein gingham
productiona large percentageof Amoskeag'sproductionwas
composed of print cloth and the coarser yarn fabrics.
It is of
interest,
therefore,
not onlyto havesome ideaof Amoskeag's
size but also an idea of the size of some of the individual
mills in the cotton section. The number of spindles in the
spinningdepartments
is knownas of the summerof 1934. The
CoolidgeMill with 104,896spindleswas the largest. Three
30Kennedy,
op.cit.,
p.188,itn.5.
COMPETITIVE
PROBLEMS
29
mills had a spindleagevaryingfrom 70,000to 90,000; in three
othermills the numberof spindleswas between39,000 and
58,000,and in onlyone millwas the numberless than 30,000
Itable 9).
Table 9.- NUMBER OF SPINDLES IN THE SPINNING DEPARTMENTS
OF THE VARIOUS MILLS IN THE COTTON SECTION,
a
JULY 31, 1984
Mill designation
Number of spindles
Total
513,376
Coolidge
104,896
No. 4 Central
Amory
Stark
Jefferson
No. 1 Central
No. 1 South
No.
9 Central
89,312
77,904
70,504
57,600
49,348
39,488
24,324
Basedon an NRPtabulation
of company
records.
Since,it is claimed,thechiefeconomies
derivedfroma mill
withmorethan30,000spindles
are economies
of management,
thereis pointin considering
all the Amoskeag
millsas one,
for many of the managerial functions were performed by the
centralofficeratherthanby the officeof a givenmill. On
this basis Amoskeaghad 513,376spindles. To this number
should be added the net loss of 207,208 spindles between 1921
and 1934. Thus even on the 1934 basis the cotton section of
Amoskeag
as a singleunitwasmorethaneighttimesthesize
at which economiesare thoughtto cease. No mention, however,
is made at what point diseconomies
set in.
That diseconomiesvery probably do set in is suggested by
the necessity for considerabletrucking of cloth in process
both within mills and from onemill to another. Not only is
the additionaltruckingitself a cost which would not be
incurredby a smallermill, but becausetruckinginvolves
additionalhandlingthereis added opportunity
for soilage,
waste, and seconds.
It mightbe argued,perhaps,thatsuch disadvantages
were
more thancompensated
for by the fact that its largecapacity
COMPETITIVE
PROBLEMS
31
In this connection,the limitedextentto which Amoskeag
manufactured styled fabrics should be noted. It produced
both cotton and worsted goods, the former being the much
more important branch of the business. Worsted goods were
producedfor men'sand women'swear for both the springand
Amongthe cottongoods,ginghams
were the most
important
singleproductfor the greaterpart of the period,
fall seasons.
withflannels
nextin importance
andevensuperseding
ginghams
in the last10 years. Sheetings,
towelings,
and tickingshave
comprised
fromabout10 to 15 percentof the totalcotton-cloth
production.
For a briefperiod,1926-33,
thecompanyalso
manufactured
rayontextiles.Although
the volumeof production
fromthissectionwas relatively
negligible,34
a discussion
of
the section'sdevelopmentis meritedsince it was the one
outstandingattempt on the part of the company to adapt its
productionin accordancewith current trends before the trus
tees decidedon furtherliquidationthroughthe financial
changesof 1927.
The Experiment
in Rayon Production
Beforethe rayonunitbeganproduction
in 1926,preliminary
experimentation
hadbeencarried
outovera period
of2 years,
35
accordingto an announcement
in a local newspaper.
From
testimony before the Sabath Committee there is some basis
forbelieving
thatduringthese2 yearsthe"mensat around
todo, receiving
salaries,
fora yearor so,without
anything
bitterly
thatthe companyshouldmanufacture
rayon;
complaining
thattherewasa market
forit,andnothing
wasdone",
although
"136
of opinionaboutit.
"therewassomedifference
After the first few months of operation,the agent was able
to reportto the JointConvention
of EmployeeRepresentatives
that the "rayondepartmentis doing remarkablywell and is
producing
a muchhighergradeof rayonthanwe expected
for the
34statistics
onthephysical
volume
ofrayon
cloth
produced
arenotavailable,
but
figureson annualnetsales do exist. Annual net sales of rayon as a percentage
of Amoskeag's annual total net sales of all cloth in each year from 1926 through
follows:
0.1, 1.0, 1.1, 1.3, 0.8,1.7, 3.3, and 0.5. Accordingly,
rayonproduction
may be omittedin the discussion
of production
trends.
35
Manchester Leader, March 27, 1926,cited by Alan R. Sweezy, "The Amoskeag
1933 are as
Manufacturing
Company,*
Quarterly
Journal
ofEconomics,
Vol.LII,
No. 3 (May1938),
D. 502.
3bv.
s.congress,
House
ofRepresentatives,
Investigation
ofReal
Estate
Bond
holders'
Reorganizations,
PublicHearings
Beforea Subcommittee
of theSelect
Committee(Hon. Adolph J. Sabath, chmn.), 74th Cong., 2d sess., Sept. 30 and
Oct. 1 and 2, 1936, Part 18, D. 113. Also quoted by Sweezy, loc. cit.
SHUT-DOWN
32
OF
AMOSKEAG
time it has been in operation." But even at the outset,
operationswere hamperedby inadequateinvestments.Asked
whether the rayon department"will continue to run night and
day indefinitely",
the agent responded," I cannot say. We are
theselines."37
to produce
machinery
by limited
restricted
Presumablyit was the realizationthat the initialinvestment
of $121,000
was insufficient
thatpromptedthe additional
in
vestmentof almost$164,000
duringthe courseof 1926. Never
theless,
a smalllossafterdepreciation
continued
until1927
when the firstprofitswere realized,
amountingto $129,000.
It was probablythis showingthat encouragedthe managementto
make a furtherinvestmentof $184,000in 1928, a step that was
justifiedby the profitswhichwere earnedeach yearthrough
1931 . In the following
yearand in 1933,when liquidation
of
the department
occurred,
smalllossesweresustained.However,
duringthe 8 yearsof the experiment,
grossprofiton sales
was $278,165afterdepreciating
all but $23,000of the entire
investmentof $619,000,or an averagedepreciation
rate of
about 12 percent per annum. The annual rate of return on the
total investment over these 8 years was 5.6 percent.
Nonetheless,
the trusteesdecidedto liquidatethe rayon
department. The treasurer related to the Sabath Committee the
considerations
thatinfluenced
thisdecision.
We had got to a place where we were producing about
20,000 pounds of rayon yarn a week, or approximately
1,000,000 pounds a year. The plant had been started
in a vacant building,not well adaptedfor the busi
ness, and the time had come when we had to consider
the question of investinga lot more money for new
machinery and possibly moving the whole outfit into
We found
or, rather, I
another building.
shouldsay, they(the contractors)
found
that
it
would cost as much, or perhaps more, to adapt this
big building to the productionof rayon yarn as it
would to start afresh and build a new institution.
The question then came as to the advisability of
spending a large sum of money
and by that I mean
$1,000,000 or $2,000,000 or $3,000,000, perhaps
to
establish the production of rayon yarn in Manchester.
Having
in mind that
we must compete
with such
con
Du Pont, Celanese and Industrial Rayons,
ascerns
Our operation(sic) had
not to do it.
begun to be not as efficientas they should be, and,
we decided
37Minutes
oftheJoint
Convention
ofEmployee
Representatives,
March
15,1928.
COMPETITIVE
PROBLEMS
3
3
therefore, it was the best judgment on the part of
the management that it was not good wisdom to invest
38
a large sum of money in that property.
Possibly
if the$26,000,000
which,as the material
in the
next chapterindicates,was drainedoff by the AmoskeagCompany
duringthe years1925-27had remained
with the AmoskeagManu
facturing
Company,
thetrustees
wouldnothaveregarded
it as
a very risky venture to invest the additionalfunds needed in
rayonproduction.
Local Taxation
The competitivedifficultiesthus far enumeratedare mainly
the results of inertiaor inabilityto introduceinnovations.
Therewas,however,
a handicap
of lesser
importance
thatcould
not be so classified
that of local taxation. The fiscal laws
of NewHampshire
permitted
Manchester
to levya property
tax
not only on mills and machinery but also on stock in trade,
thatis, on inventories
of all kinds. The latter tax is un
usualin a Statein whichmanufacturing
is important.To that
extentNewHampshire's
industry
operated
underan additional
competitive
handicap.
The extent of the tax handicap for Amoskeag compared with
other textile mills in the North and South can be seen from
table 10. Localtaxesare expressed
as a percentage
of gross
incomefor each year from 1926 to 1933· The data for the four
New EnglandStates(Connecticut,
Maine,Massachusetts,
and
Rhode Island),aswell as for the four SouthernStates(Alabama,
Georgia,
NorthCarolina,
and SouthCarolina),
wereadapted
from Federal income-taxreturnssuppliedby the Treasury
Departmentto the TariffCommission. From this comparison
it is clearthatuntil1933localtaxestooka largerper
centage
of Amoskeag's
grossincome
thanof thegrossincome
of
cotton-textile
corporationsgenerallyin New Englandor in
the South.
In 1933 Amoskeag had the smallest ratio and the
southernmills had the highestratio,possiblybecausesome
processingtaxes were included,althoughmost corporations
39
reported
processing
taxesundercostof goodssold.3
The
differences
betweenthe Amoskeagand New Englandratiosare
probably
duechiefly
to thestock-in-trade
taxinNewHampshire.
381
Investigation
of RealEstateBondholders'
Reorganizations,
D. 189;Sweezy,
op. cit.,D. 503.
39cotton
Textile
Industry,
table
59,itn.3, D.149.
COMPETITIVE
Table 11.- ASSESSED
PROBLEMS
VALUATION
35
OF MANCHESTER
AND AMOSKEAG
MANUFACTURING COMPANY, TAXES PAID BY AMOSKEAG,
AND THE TAX RATE,1910-868
Assessed
valuation
( thousands
of dollars )
Amoskeag's
as percent
Year
of
Manchester
Local
valuation
Amoskeag Manchester's
Tax
rate
per $1,000
( dollars)
taxes
paid by
Amoskeagt
(thousands
of dollars)
valuation
1910
39,881.9
9,850.0
24.7
20.10
1911
41,451.8
9,850.0
23.8
20. 40
1912
17,000.0
17,000.0
17,000.0
25.4
24.6
15.20
15.20
15.20
255.0
288.4
1914
67,012.5
69,208.3
68,798.1
1915
71,875.1
17,020.0
23.7
15.20
1916
74,557.3
17,538.5
1917
79,463.3
268.9
273.6
319.5
1918
1919
83,151.2
18, 482.2
21,337.0
24,213.4
23.5
23.3
1913
1920
92,977.2
24.7
25.7
15.60
16.40
16.20
26.0
20.60
30,541.2
27.9
27.7
28.9
31.0
31.5
18.20
24.50
198.0
200.9
266.9
360.6
498.8
1922
109,454.6
110,326.8
111,632.3
1923
114,597.9
30,544.4
32,308.9
35,497.5
1924
113,703.3
35,490.6
118,869.8
32,732.3
33,399.0
26,000.0
23.0
26,000.0
22.9
26,000.0
22,705.2
18, 343.6
27.00
6 62.0
588.6
1932
96,109,1
13,000.0
22.8
20.5
17.3
13.5
25.50
1931
113,819.2
110,880.8
106, 151.9
28.00
28.75
373.8
1933
93,277.7
95,868.8
92,757.5
13,000.0
13.9
28.00
364.0
1934
1935
16,000.0
16.7
85,038.1
13,000.0
6,750.0
14.0
1936
28.50
32.00
41.00
432.7
299.4
265.7
1921
1925
1926
1927
1928
1929
1930
121,275.8
113,214.6
113, 440.3
555.8
26.00
748.3
840.0
23.50
24.00
834.2
851.7
27.5
28.50
784.4
27.5
26.00
27.80
868.5
694.0
27.50
685.2
7.9
493.4
a
acompiled
fromAnnual
Reports
of thecityof Manchester,
1910-36,
andfromrecords
on file with the Board of Assessors, Manchester, N. H.
Draxassessments
minusabatements.
and in Amoskeag's
valuationwere aboutequal. From 1918 to
1924 Amoskeag's rate of increase was more rapid than the
remainder
of Manchester's
property
which,however,
did not
reach its peak valuationuntil1926 and thereafterdeclined
at a slowerratethandid Amoskeag's
assessedvaluation.Thus
SHUT-DOWN
36
OF AMOSKE AG
duringthe greatdepression
Amoskeag's
property
accounted
for
onlyabout14 percentof Manchester's
assessed
valuation,
which
from the peakof $121,000,000
had been reducedto $96,000,000
in 1932• Sincethe city'stax revenues
werealmostexclusively
derived from the property tax, Amoskeag contributed to tax
revenuesin about the same proportionas it figuredin the
totalassessed
valuation
of the city.
SinceManchester's
budgetwas subjectto littleflexibility,
as the assessedvalue of city propertydeclinedthe tax author
ities were obligedto raise the tax rate per $1,000 of property
to insure adequate revenue. The pre-war rate was between
$15.00and $20.00;at the time of the highestvaluationin
1926 the rate was $26.00.
Increases
weregradual
fromthat
pointon, reaching
a rateof $32.00in 1935and $41.00in 1936.
For thisreasonthe declinein Amoskeag's
tax paymentsin most
years was not quite so rapid as the decline of its assessed
valuation.Nevertheless,
Amoskeag's
tax paymentsin 1932 and
1933 were less than 45 percentof the largesttax payments
made by Amoskeagin 1926.
From these data it appears that as the burden was lifted
from Amoskeag,
at leastin absoluteterms,to approximately
the
sameextentan additional
burdenwas placeduponotherproperty
in Manchester.
If this shift
had been made earlier or in
largeramounts,
it veryprobably
wouldhaveworkedout its
effectsin termsof higherrents;and thiswouldperhapshave
madeit moredifficult
for Amoskeag
to havepaidwagerates
overall theseyearsthatwere lessthanthosepaidgenerally
by othertextilemillsin New England.That is, the wage and
tax differentials
probably
tendedto havecompensating
effects.
SUMMARY
These,then,are the more importantgeneralproblemsand
specialdifficulties
whichin the courseof the post-warad
justments
transformed
an important
cotton-textile
centerinto
a depressedarea. Enoughof the industry's
background
has been
presented
to showthatthe basicmaladjustment
of excesscapac
itywas clearlyin evidence
beforethe WorldWar and would
haveforcedseriousreadjustments
even if there had been no
The war had the dual effect of postponingthe day of
war.
reckoningand of accentuating
the severityof readjustments.
COMPETITIVE
PROBLEMS
37
In addition
to somedisadvantage
in taxation,
the Amoskeag
Company'spositionin competitionwith southernmills was
adversely
affectedby obsolescence
of equipment,
of management
practice,and of marketingorganization.Similar handicaps
affectedthe competitive
positionof most New Englandtextile
mills.
To what extent these were self-imposedit is difficult
to judge.Professor
W. E. Freeland,
industrial
counsellor
of
theMassachusetts
Institute
of Technology,
in an address
to the
LowellChamber of Commerce in 1927, attacked" absenteeowner
ship and trustee control" and laid the blame for chaotic
textileconditionsin Lowell at the doors of the millmenwho,
he said,"lackedgoodjudgment,
are poormanagers
of theirown
plantsand failedto keepabreast[of]changing
conditions."40
Amoskeag
was amongthe last of the textilemillsof the area
to succumb
to the
trends.
To buck the tide would certainly
havemeantroughsailing,but to do so wouldno more havemade
failureinevitablethan it would have made successassured.
On the otherhand,to driftwith the tidecouldonlymeanbeing
engulfedby it. Nevertheless,
thisseemedto be the policyof
the Amoskeag
trustees,
as suggestedby the company's
financial
history
relatedin thefollowing
chapter.
40mgives
Strong
Advice
toLowe11
Business
Men,"
Textile
World,
Vol.
LXXII,
NO.25
(Dec.17, 1927),D. 38.
CHAPTER
AMOSKEAG'S
PROFIT
III
RECORD
AND CORPORATE
REORGANIZATIONS
An account of the financial history of the company must
be related
to itsearnings
recordif it is to be meaningful.
Thisrecordwillserveas morethanbackground
out of whichthe
financial
reorganizations
of 1911,1925,and1927weredevised.
It willshowalsohowthe generalproblems
of the industry
and the specificdifficulties
of Amoskeagwere reflectedin
its activities.
THE PRE- WAR PERIOD, 1906-14
This accountingbeginswith 1906. In the preceding year
Amoskeag
had acquiredits worstedsectionby absorption
of the
Manchester
Millsand had enlargedits cotton-cloth
production
at the same time by the acquisition
of the AmoryMills. The
onlyotheradditions
to productive
capacity,
asidefromthe
purchase
of theStarkMillin thecourseof the1922strike,
were the construction
of the CoolidgeMill in 1910 and the
NewBagMillin 1914. Accordingly,
Amoskeag
maybe regarded
as
having
comeof agein 1905,andan examination
of itsearnings
recordwouldproperly
beginwith thefollowing
year(table12).
Thenetoperating
profit
earned
separately
by thecottonand
worstedsections,
as wellas the dividends
paidon outstanding
commonand preferred
sharesof stock,is available
fromcompany
records.
Sinceoverhead
expenses
wereallocated
by Amoskeag
to
the cottonandworstedsectionsin the proportion
of two-thirds
to the formersectionand one-thirdto the lattersection,this
maybe takento represent
therelative
valueof investments
in
the two sections. For this reason dividend disbursements were
apportioned
in thesamemanner.From these data it is possible
to determine
yearby yeartheamountby whichtheearnings
of
each section either exceededor fell short of the amount
of dividend
payments
attributable
to the respective
sections.
Thisbasisof comparison
seemsmoreilluminating
thanearn
ingsper share. Withthe mergersin 1905the capitalstructure
38
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.S
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.i
l
I
o
d
40
SHUT-DOWN
OF AMOSKEAG
consistedof only 57,600sharesof commonstock with a par
valueof $100,allof whichwereoutstanding.
Thatthecompany
was grosslyundercapitalized
fromthat dateto the subsequent
reorganization
in 1911 was indicatedby the fact that the
marketpriceof Amoskeag
stockin thoseyearscenteredaround
Hence
its
dividend
ratein thatperiodwas 12 percenton
$325.
the par valuebut only3.65percentwhenfiguredon the market
price.1 For this reasona comparisonbasedon earningsper
sharewouldgivea misleading
impression
of the relative
prosperity
of the companyin thoseyears. On the other hand,
since the latter rate representsbut a very modest return on
an investmentand since the dividendrate, thoughsomewhat
enhanced,remaineda modestone 15.54percent)for a number
of yearsafterthereorganization
of 1911whicheliminated
the
discrepancy
betweencapitalized
and marketvalue,a comparison
based on the excess or deficitin earningsafter dividend
payments
appearsmoremeaningful.2
The earnings(or losses)in questionare those derivedsolely
from manufacturing
activity;that is, profitsor lossesfrom
investmentsare excluded.3 In the cotton section, by far the
largercomponentof Amoskeag'sbusiness,therewere sizable
surpluses
afterdividends
in the firsttwo yearsof the period.
Thesesurpluses
wereappreciably
reduced
in eachof thefollow
ing years, 1908 and 1909; in 1910 the cotton section failed
to earn its dividendpaymentsby $80,000. In each of the same
fiveyears(1906-10)
the worstedsectionearneda surplusafter
dividends, varying from $227,000 in 1908 to $38,000 in the
preceding
year. Andin 1910therewas a surplusof $180,000
fromworstedoperations
to morethanoffsetthe deficitin
the
cotton
section .
In 1911, however,after the initial
payment of dividends on the preferred shares and an extra
dividendon the common,the worstedsectionfor the firsttime
sincethe reorganization
of 1905did notearnits dividend
paymentsby as much as $233,000. Despitethe surplusafter
dividends of $ 160,000 in the cotton section, the combined
1Manchester
Union,
August
28,1911.
2.
"After 1911 the dividend on the old basis was $18 Instead of $12.
of 5.51 percent on the market price of $325.
3
This is a return
Amoskeagaccountingpracticeshave been followedthroughout. This
involves
an
important departure from accounting orthodoxy in that Amoskeag made no provision
por depreciation but charged additions to plant and equipment as an operating
expense.
For the period under consideration the net effect has been to exaggerate
earned surpluses and to minimize deficits.
PROFITS
AND REORGANIZATIONS
41
manufacturingoperations of Amoskeag had to draw upon their
accumulatedreservein order to meet dividendobligations
in 1911,although
theaddeddividends
didnotmeanan unduly
high rate of return.
Table 18.- ANNUAL PRODUCTION OF COTTON AND WORSTED
1907-838
CLOTI,
(square yardo)
Cotton
Year
Total (millions )
cloth
(millions )
Worstedcloth
(tens
1907
1908
187.2
171.9
172.3
159.6
148.7
123.0
1909
1910
171.3
191.7
161.7
1911
185.2
207.9
219.3
205.1
141.9
1912
236.2
1913
231.6
223.7
217.5
140.9
1914
1915
234.9
213.9
221.2
200.3
1916
200.5
188.2
137.1
135.8
122.6
1917
202.8
188.7
141.0
1918
1919
171.4
143.2
117.0
1920
159.9
159.7
136.0
150.0
1921
147.5
143.6
1922
1923
132.6
116.4
125.4
1924
1925
1926
138.2
89.6
128.4
130.4
84.5
121.7
66.8
1927
1928
124.6
118.3
120.2
63.4
52.2
109.4
105.6
54.3
84.8
35.5
1929
1930
1931
1932
1933
1934
1935
125.4
114.8
108.3
88.3
110.2
139.0
125.2
71.7
99.3
39.5
71.5
61.9
77.7
51.4
27.5
86.8
84.0
28.5
88.2
114.7
84.2
112.3
40.5
n.a.
of
thousands)
110.4
24.5
n.a.
aBasedon fiscalyearending
May31. Data from companyrecordsdepositedwith the
HamiltonSmithLibrary,University
of New Hampshire,
Durham,N. H.
bFor1929andensuing
years
figures
arebased
oncalendar
instead
offiscal
years.
n.a. Data not available.
42
SHUT-DOWN
OF AMOSKEAG
The deficitafterdividends
continued
in 1912in the worsted
section,while the surplusin the cottonsectionwas reducedby
almost one-half . The effects of the pre-war depressionwere
reflected
in thesmallsurpluses
in eachsection
in 1913and
a deficitof $26,000in the cottonsectionin 1914,whichwas
not offsetby the still smallersurplusof the worstedsection.
Perhapsof greatersignificance
in indicatingAmoskeag's
position
at that timewas the declinein physicaloutputthat
had set in (table 13). Thus the peak of worsted production
occurredin 1910; thatofcottonproduction,in 1912 (figure2).
figure
2.-
ANNUAL
PRODUCTION
OF COTTON
AND
WORSTED
CLOTA,
1907-88
SQUARE YARDS OF COTTON CLOTH
SQUARE YARDS OF WORSTED CLOTN
( IN TENS OF THOUSANOS
(IN MILLIONS)
225
223
200
200
175
175
COTTON
150
150
125
125
100
100
WORSTED
75
75
50
50
25
25
1907
1909
Based
1911
on table
1913
1915
1917
1919
19
2
1921
1
1923
1925
1927
1929
1931
1933
1935
o
WPA -National Research project
13
L-42
Figure 8.- MONTHLY COTTON PRODUCTION,
1912-36
OF POUNDSMILLIONS
50
45
=
COTTON
PRODUCTION
CENTERED
12-MONTH
MOVING
AVERAGE
40
35
30
25
20
15
10
5
methi
0
1912
Based
1019
14
on an
1915
1017
1010
NRP tabulation
company production records
1920
of
1921
1022
1023
1024
1925
1920
1927
1920
1920
IYO
1931
1933
1934 1935
WPA -National Research project
1-43
PROFITS AND REORGANIZATIONS
43
Fromthesedata it wouldappearthatthe fearsexpressedby
the Amoskeagofficialsin the first decade of the century had
some foundationin theirown businessexperience.It
shows
alsothatAmoskeag,
liketheindustry
in general,
wasaffected
by the declinein profitmarginsthatbeganabout1907and
continued
up to America's
entrance
intothe war.
The Financial
Reorganisation
of 1911
Althoughthe motivesthat promptedthe financialreorgani
zation in the latter part of 1911 doubtless were mixed, in
the light of the above informationand in view of some of the
termsof the reorganization
it wouldseem that it was partly
motivatedby the incipientdecline. The formal change in
volved the transformationof a New Hampshirecorporationinto
a New Hampshiretrust. Accordingto a financialanalyst,
this was undertakenfor the purpose of avoidingtaxes on
thepartof theshareholders,4
and thishe considered
to be
"the compelling
reason." The occasionwas used,however,to
alterthe capitalstructure.
The exchangeof one shareof commonstockin the corporation
for two sharesof cumulative
no-parpreferredwith an annual
dividend
rateof $4.50andthreesharesof no-par
common
stock
in the New Hampshire
trustwas regarded
as merelyinflating
the capitalstructureto fit the capitalworthof the company
as measuredby the value of its securities.
This is at leastsuperficially
correct. It should be re
membered,however,as the observerquotedabovepointedout
at this time, that
"some might infer that it comes
unusual prosperity of late.
But
as
a
result
examination
of
of
the report just issued clearly disproves this,
showing that the Amoskeag Company has suffered
from the prevailing textile depression. In point
of fact, it is solely the achievement of years of
operation
4peanulterior
motive
115
appears in the taxation advantages to be gained in
Indeed,thisalonemay be regardedas the compelling
reason for the recommended change. The shares of the Amoskeag Manufacturing
Company,the New Hampshirecorporation,are largelyheld in Massachusetts,
and
30 pronouncedis the trendat presentin favor of nontaxablesin this state that
some such step was almost unavoidable. Certificates
of the voluntaryassociation
will benontaxable,both in Massachusetts
andin otherstates.'" J. I. Eldredge in
the Bank Journal,quotedby the ManchesterUnion,October11, 1911.
the new form of organization .
51bid.
SHUT-DOWN
44
OF AMOSKEAG
This statementis amply corroboratedby the profit record just
reviewed. Moreover,there is reasonfor believingthat a large
partof the Amoskeag
stockbeforereorganization
wasownedby
a small group: Thusa Manchester
newspaper
reporting
the rati
fication
of thereorganization
plansby a stockholders'
meeting
remarkedthat" abouttwentystockholders
were presentat the
meeting
(They)represented
over53,000sharesof
.
stock"out of a totalnumberof 57,600.8
With these acts
to go on and the assumption that these
20 stockholders believed that the failure to earn all the divi
dendsin 1911 was not due entirelyto the "prevailing
textile
depression"but also to the beginningof a seculardecline,one
would expect veteranBoston financiersto safeguardtheir
interests.
Thiswasaccomplished
by creating
twoclasses
of
stock, preferredand commonshares. By selling the latter
theycouldrecapture
theiroriginalinvestment,
more or less,
dependingon when the originalinvestmentwas made;7and by
retaining
the preferred
stocktheywouldhavefirstclaim
to any profitsthat mightbe earned,or to considerable
sums
in the event the declinebecamevery severeand resultedin
liquidation,
sincethe plantin all probability
had not been
overvaluedeven after the write-up.
Theseinferences
appear
justified
alsoby thereasons
forthe
recommended
changesin capitalstructure
as thesereasonswere
set forth in the Circularto the Stockholdersof the Amoskeag
ManufacturingCompany under date of August28, 1911.
The
reasons which led to these recommendations are as follows:
1. The preferredshares,considering
the amountof
property and the assured earning capacity of the
concern,
are likely to be highly regarded as
an
investment, the amount of dividends to be paid on
the common shares being more dependent on future
growth and general business
conditions.
2. The lower pricesat which the new shares will sell
in the market will be an inducement to others to
associate themselves with us in the ownership of
the property among whom it is hoped will be many
of our officialsand operatives,who are deterred
from becoming
stockholders
in the corporations
by
8
the present high price of this stock.
6Manchester
Union,
October
14,1911.
?Eachcommon
sharewasto receive
an annualdividend
of$3.00.This
amount
capitalized at 6 percent yields a capital value of $50.00.
8Circular
totheStockholders
oftheAmoskeag
Manufacturing
Company,
quoted
in the
Manchester Union, August 28, 1911.
PROFITS
AND REORGANIZATIONS
45
The unforeseenprofitsof the war years renderedsuperfluous
thiseffortat self-protection,
andthestockholders
werenot
againfacedwiththesituation
of getting
outfromunderuntil
As will be shown later, the differingcircumstancesof
1925.
thatyearnecessitated
a morecomplicated
technique.
THE WAR YEARS, 1916-18
Thehighprofits
of thewaryearsconstituted
an appreciable
portionof the cash surpluswhichin the post-wardepression
became the cynosure of the stockholders.
For this reason
it
is important
to tracethe sourceof theseprofitsand the
accumulation
of the surplus.
In 1915and 1916 thecottonsectionagainfailedto earn its
dividenddisbursements,
the deficitamountingto $196,000in
the latter year. These deficits,however,were more than off
set by thesubstantial
surpluses
earnedby the worstedsection.
The poor showing of the former is explainedby referenceto
figure 4. Here on a semilogarithmic
scale are plottedthe
dollarvalue of net sales, the cost of cottonand coloring
material,and the directlaborcosts of cottonmanufactures
as enteredin the Amoskeagaccountingledgersfor the years
Fromtheinitial
yearthrough
1914allthreecurves
areclosely
parallel,
indicating
thatrelative
changes
in each
1906-34.
were about equal. But in 1915 and 1916 the rate of increase
Figure 4.- RELATIVE CHANGE IN NET SALES AND PRODUCTION
FOR THE COTTON SECTION, 1908-84
COSTS,
(Ratio scale)
SALES
IN
MILLIONS
OF
DOLLARS
COSTS
INNETMILLIONS
401
JO
OF DOLLARS
20
=
1
NET
SALES
OF
COTTON
COST OF COTTON
DIRECT
LABOR
GOODS
AND COLORING MATERIAL
COSTS
1
20
10
1
/
10
5
HT
9
4
TH
7
177
6
3
5
2
1900
1900
1910
1012
1914
1916
on tables F-l, F-2, and
semiannual
accounts
Amoskeag Mfg. co.
of the
1910
1920
1922
1924
1926
1920
WPABasedNational
1930
1932
Research Project
1-44
46
SHUT-DOWN
OF AMOSKEAG
in the cost of cottonand coloringmaterial,particularly
the
latter,exceededthe rate of increasein net sales,that is,
therateof increase
in thepriceof cotton
goods.9It is this
disproportionate
increase
in material
coststhatcurtailed
earningsbelowthe dividend
requirements.
Thereafter,
of controlling
importance
were the majordiver
genciesin the rates of changeof materialcosts and value
of net sales compared with labor costs.
The latter,
even
beginning
with 1916,increased
at a muchslowerratethanthe
othertwo and continued
to lag through1918. In the following
year the value of materialsand of net sales decreased some
what, while labor costs continued to increase. Between 1920
and 1921 all threedeclined,
with laborcostslaggingalsoon
thedownswing.The ratesof declinebecameequalin 1922owing
chiefly to the 9-month strike.
From this one would expect that in 1917 the lean years were
left behind.
Thusthecottonsectionin thisyearreturned
a surplus after dividendsfor the first time in 4 years.
It amountedto $731,704,whilethe surplusfrom the worsted
section was $487,000. In 1918 the war boom reached its peak,
with the surplusfrom the cottondivisionaloneamountingto
$4,790,483,
morethansix and one-half
timesthe surplusof the
previousyear. The worstedsectiononly tripledits surplus
of 1917 by showinga surplusafterdividendsof $1,460,603.
Thus from manufacturing
operations
solely,Amoskeagreported
for 1918 a surplusafterdividendsof more than$6,000,000
and this after the dividend rate had been increased.
In viewof the relationships
justoutlined,
the conclusion
is
inescapable
thattheseprofitsresultedfrom the skyrocketing
of pricesof cloth,while paymentsto laborwere increased
onlygradually.
Itwas a clearcaseofprofiting
fromwar prices
and Government orders. The gross-profit
marginthat these
differential
ratesof increasemade possibleis shownin
figure 5 by the area between the curve of net sales and the
curverepresenting
the totalproduction
costsincluding
changes
in inventory.Althoughfiguresin sufficient
detailare not
available for the worsted section, there is no reason to
believethatthe relationships
weredifferent
fromthosein the
cotton section.
The increase
in thedollarvalueof netsalesmay be takenas a conservative
indicatorof the increasein the priceof cottongoodssince physicalproduction
was decreasing
duringthe same years(table13).
PROFITS
47
AND REORGANIZATIONS
Figure 6.- NET SALES AND PRODUCTION COSTS,
FOR THE COTTON SECTION, 1906-84
MILLIONS OF DOLLARS
NET SALES OF COTTON
GOODS
COST OF PRODUCTION
COST OF COTTON
AND COLORING
DIRECT LABOR
COSTS
JS
MATERIAL
30
25
20
IS
10
$
0
1900
Based
1900
on
semiannual
1910
1912
1914
1916
1910
1920
1922
tables F-l, F-2 , and
accounts
1924
1926
1920
1930
1932
1934
WPA - National Research project
of the
L-45
Amoskeag Mfg. co.
THE
POST -WAR
YEARS,
1919-28
The generalpost-armistice
depression
affectedAmoskeag's
cottonsectionin 1919by reducingits surplusafterdividends
to $2,084,963,a reductionof more than one-halfover the
recordsurplusof the preceding
year. In the worsted section
the curtailmentwas still more severe,and it exceededits
dividendpaymentsby only $28,256. In the following year,
1920,the prosperity
induced
by the transition
fromclothing
soldiers
to clothing
ex-soldiers
stillprevailed
in thecotton
section,withearnings
aboutequalto thosein 1919.
But
with
the stock split up 2 to i, dividend payments were propor
tionatelyincreasedso that there was only $1,106,000as a
surplus.10 Adverse conditions,on the other hand, continued
in theworsted
section
as evidenced
by an operating
profitof
$45,433,
whichmeantthattherewas a deficitof $706,366
after
dividends.
Depressed
conditions,
however,
caughtup with the
cottonsectionin 1921 when earningswere onlyslightlymore
thanhalfof thedividend
requirements;
about
five-eighths
of
W.
10in
this
respect
Amoskeag
followed
awidespread
practice.
the cotton
textileIndustryfollowedother Americanindustriesin interpretingthe United
StatesSupremeCourt decision,Eisner versus Macomber,by whichstock dividends
were held not to be taxable as income, as an occasion for freely capitalizing
A cursory check of cotton
surplusthroughthe issuingof stock dividends.
millswhich
issued
stockdividends
during
these
years
(1920to1923)
gives
alist
of 156firms, representing 11,451,000 spindles, or approximately 30 per cent of
the industry.
The capital stock of these mills was increased from $215,107,000
to $ 383,503,000,an average increase of 80 per cent.
"The Justirication
of such actionwas presumablythe reinvestmentof earningsin
the business,especiallyduringthe War, when the ExcessProfitsTax and the pear
or other taxes and further demands from labor made it desirable to keep dividends
Stephen
J. Kennedy,
profits
andlossesin Textiles
(NewYork: Harper &
down.
Brothers,
1936),D. 131.
PROFITS
AND REORGANIZATIONS
49
was entered income from investments. From December 1, 1912, to
May31,1925,income
fromthissource
amounted
to $6,912,007.11
Anotheraccountis that headed"guarantee",
whichwas created
by settingaside 3 percentof the valueof net sales. From
December1, 1911, to May 31, 1925, there had accumulatedinthis
account$1,903,483. Profit and loss was another account. On
thisterminaldate therewouldhavebeena lossof $5,020,794
if some $6,300,000 had not been transferredto this account
from the interestaccount. The highestamountin thisaccount
a profitof $8,341,000
in May 1920. It was converted to
a loss of the above magnitudeby the paymentof incomeand
was
excess-profitstaxes, the shrinkagein the value of its secu
rity investments, the purchase of the Stark Mills, and the
paymentof dividendsin the immediatepost-waryearsin the
face of low earningsor outrightmanufacturing
losses. There
was also $3,000,000 in a suspense account created ad hoc
on
November30, 1918,apparently
as an offsetagainstthe value
placedon its land,waterpower,mills,and machineryin the
trial balanceof November29, 1911.
The surplusin May 1925 would be the algebraicsum of the
amounts in these four accounts plus the reserve for share
The surpluson thisaccounting
wouldbe $24,539,513.
It is interesting
to note that on the same date its invest
holders.
mentsin securities,
almost
exclusively
UnitedStates
Fourth
LibertyLoan Bondsvaluedat $85, were carriedon the books
at $25,500,000.
Decline
in Activities
Despitethe factthatthesewere yearsof risingraw-material
prices,Amoskeag
sustained
the heavylossesalreadynoted. It
wasclearly
a period
of declining
activity.
Production
in the
cotton section,for example,declinedfrom 188.7 million
square yards in 1917 to 125.4 and 110.2 in 1923 and 1924,
respectively.The declinein the worstedsectionfrom the
wartime level was even more severe:
from 14.1 millionsquare
yardsin 1917to 6.2 and 7.8 in1923and 1924,respectively.
It
is but natural that the decrease in the weekly average number
11theaccountingin this instancebeginswith December1, 1912, ratherthan with
December
1,1911,becauseinthe
fiscalyear1911-12
the balancein theinterest
accountwas transferred
to the profit-and-loss
account.
PROFITS
AND REORGANIZATIONS
51
convention
in accordance
withthePlanof Representation
(see
Accordingto the minutesof this meeting,he
appendix C).
commented
that"staple
gingham,
as far as we areconcerned,
Diversification is what Mr. Straw is
is hopeless.
interested in, manufacturing fancy goods such as striped
.
flannels and rayon.1112
To makesuch a shiftwouldinvolve"revolutionary
changes",
as the Boston News Bureau remarked at this time.13
But
it
was the financiers
of Boston,notthe manufacturers
of New
Hampshire,who controlledthe destiniesof Amoskeagat this
time,as theyhadthroughout
itshistory.14
Theyknewth the
Amoskeag
millshadbeenoperating
at a considerable
lossand
that the prospectsfor profitableoperationswith the same
set-up were poor indeed. They knew also that Amoskeagpos
sesseda cashsurplusin the neighborhood
of $25,000,000.
More
than half of this had been accumulated in the war years from
profitsobtainedchieflythroughincreased
raw-material
prices
and from Government orders.
The existence of such a large
surpluswould havemade it possibleto improveefficiency
by
modernization
of plantand equipment
and to seek new marketsby
experimentation
in new designs,constructions,
and processes.
At best,however,thiswouldhaveconvertedlossesintomod
erate profits. With much less risk, the financiers knew
how to earn moderate profits for the stockholders from a
surplusof this size by othermethods. Plans to accomplish
thispurpose
weredevised
andputintooperation
in thesummer
of 1925.
THE
FINANCIAL
REORGANIZATION
OF
1928
The underlyingprinciplewas that of buddingfission: to
havetwo companies
wherebeforetherehad beenone. The assets
were to be so segregatedthat one company would own the mill
propertyand some of the cashsurplus,whilethe othercompany
would own $18,000,000 of the cash surplus and operate as an
investment trust. Controlof both companies,of course,was to
rest with the same group of financiers. The mechanics of the
transaction are not without interest.
12minutes
oftheJoint
Convention
ofEmployee
Representatives,
September
19,1925.
13quoted
intheManchester
Union,
July3,
1925.
For
14
full quotation see D. 30.
AlanR. Sweezy,"The Amoskeas
Manufacturing
Company,"
Quarterly
Journalof
Economics, Vol. LII, No. 3 (May 1938).
PROFITS
5
3
AND REORGANIZATIONS
Parkhill mill was, whether it was making money
or
losing, and what, if any, interest trustees of the
old Trust had in the Parkhill property.
This
motion
was promptlyvoted down and the plan approved as it
had been developed weeks before. If there was
any advantage to be gained from the ownership of
Parkhill
nobody ever tried to prove it.
This plant was immediately closed down after a net loss of
$3,200,000
fromtheoperation
and liquidation
of theParkhill
plantandtheDeltaLandCompany.A suspicion
thatthemerger
was
one of personalaccommodationratherthan of economic
advantage
to Amoskeag
is created
by thefactthattheParkhill
specialtywas the manufacture
of fine ginghams.That is , at
theverytimethat Amoskeag
was painfully
awarethattherewas
a sharply
reduced
demandfor ginghams,17
it addedto its
capacityto produceginghams.
Thismerger
wasmade,however,
onlyaftertheParkhill
assets
had also been veryconsiderably
markedup. The extent of the
mark-upis not known,but the valuation
of the assetstrans
ferredto the new companywas placedat almost$5,000,000
after
allowance
for depreciation.
The new company,the AmoskeagManufacturing
Company,took
possessionof these assetsrevaluedat about $45,000,000,
including$6,000,000in cash, by issuing285,000shares of
preferred
and 365,000sharesof commonstock,eachwithoutpar
value. Of this number,
20,280sharesof preferred
and 35,000
shares of common stock were received by the former owners of
theParkhill
properties.
Theremainder
of thestock,
slightly
morethan90 percent,
wasreceived
by theoldtrust,
nowcalled
the Amoskeag
Company,
whichhad retained
$18,000,000
in Liberty
Loan bonds.
The mark-upsin assetsminimized
the seriousness
of the withdrawalof $18,000,000
in workingcapital,eight
ninths
of whichcouldberegarded
as a reserve
fordepreciation
18
of plantand equipment.
170.
S. Congress, HouseofRepresentatives,
Investigation
of RealEstateBond
holders'Reorganizations,
PublicHearings Before a subcommitteeof the select
Committee(Hon.AdolphJ. Sabath,chmn.),74th Cong.,2d sess.,Sept.30 and Oct. 1
and 2, 1936, Part 18, p. 172.
18.
From this analysis,it appearsthat.Judge
Black is in error when he statesthat
"in the first report to shareholders of the old trust there was given an 1 opening
trial balance' of the Operating Trust in which the plant was marked down to
$16,500,000"from $36,500,000($33,000,000for Amoskeag and $3,500,000 for
Parkhill).Actuallythisdoes not representa mark-down.The higher figure is the
value of the plant on a reproductioncost new basis; the differencerepresents
depreciation.since neither Amoskeag nor Parkhill had depreciation reserves, the
value of the plant turnedover to the new companywas only$ 16,500,000.Thus, in
a balancesheet of June 1, 1925,preparedby certifiedpublicaccountantsfor the
bondholders' committee, the value of the Manchester plant less depreciation was
enteredas $14,480,319and the value of the Parkhillplant after depreciation
as
$1,971,617,
whichequalsJudgeBlack'stotalof $ 16,500,000.
PROFITS
55
AND REORGANIZATIONS
uponindustrial
plants."120
Two monthslaterthe New Hampshire
Legislatureconsideredlegislationthat would exempt raw
material
fromtaxation
and permitthe citiesand townsto
abate all or portions of manufacturingstock in trade from
municipaltaxes.21 In the followingmonth,May, the Manchester
Boardof Assessors,
realizing
thatthe"depression
in the
industry
couldnot be overlooked
any longer",
reducedthe valuationof the Amoskeagmillsand machineryby
$5,300,357
and stockin tradeby $2,037,267.22
textile .
A final effort was also made to revive the gingham market.
To thisend, Amoskeag
contributed
$10,038in 1927to a gingham
advertising
campaign,
but apparently
withoutany beneficial
results to itself.23
THE
FINANCIAL
REORGANIZATION
OF
1927
Despitethe readjustment
downward
of specific
wagerates,the
lightening
of the tax payments,
and the improvement
in textile
business
evidentin 1927,the trusteesapparently
did not feel
justified
in revisingtheirestimateof Amoskeag's
abilityto
survive.
A proposalof liquidationwas made by certain New York
interests in the summer of 1927.
It calledfor a 60-day option
to purchase
thestockof the Amoskeag
Company
at $100a share
for its preferredstockand $90 a sharefor its commonstock
(whichwas sellingat around$60) plus whateveradditional
amountmightbe realized
for the commonstockafterthe liqui
dationof thequickassetsandthepayment
of expenses
andof
a banker'scommission. This would have entailed liquidation
of the mill properties
of the Amoskeag
Manufacturing
Company
through
theliquidation
of theAmoskeag
Company,
whichat this
timewas the holding
companyof theformer.
Thoughthe offerwas rejected
by the trustees
of the Amoskeag
Company,nevertheless
it servedto makea tellingpoint.
Thestockholders
of themanufacturing
company
weresustaining
a continuous
shrinkagein assets,and, accordingto the pre
dictionsof the treasurer,
wouldcontinueto do so. Why not
then liquidate and enable the stockholders to invest their
20
BostonNewsBureau,
February
17,1927,D. 1.
211bid.,
April
5, 1927,
D.2.
22Ibid.,
May26,1927,
p.4.
23
Reportto the Bondholders!
Committee,
ScheduleB-3(reportprepared
for the
companyby Stewart,Watts,and Bollong,publicauditorsin Boston).
PROFITS
57
AND REORGANIZATIONS
recommended that the Operating Trust buy in its whole
issue of 285,000 shares of preferred stock for
$8,135,078 in cash, plus $14,665,000 in twenty-year
8% bonds and 13,191 additional common shares.
The trustees,subjectto the approvalof the share
holders,unanimouslyadoptedresolutionsto amend the
Declaration of Trust, buy in the preferred stock,
issue the bonds and additional
common stock,
and list
the shares of the Trust on the Boston Stock Exchange.
At the second meeting a certified copy of all these
resolutions, with full detail, was presented to the
shareholdersof the Operating Trust at Manchester,
at twelve
o'clock
noon.
By affirmative vote of every
shareof both preferred
and commonstocktheseres
were " in all respects approved, ratified
olutions
and confirmed."
Two hours later,at Boston,the trusteesof the old
Trust held the third meeting ofthe day. Mr. Dumaine,
now acting as treasurer and trustee of the Old Trust,
reported what had transpired at the two previous
meetings.
was
The news
not entirely unexpected,
becausethe trusteeshad already prepareda plan for
the voluntary liquidation of the common stock of the
old Trust.
This plan was described in a printed
circular to their shareholders, bearing the same
This circular stated the terms
date.
on
which
the
Operating Trust had voted to buy up its preferred
stock and explained an option by which holders of
common stock in the Old Trust might liquidate their
holdings of such stock by accepting for each share
$52 in cash, $40 in the newly issued bonds of the
OperatingTrust,and one share of commonstock in the
Operating Trust.
Nothing in the foregoing recital is intended to
indicate
any impropriety
or irregularity.
The meet
ingsappearto have been duly calledand carefully
conducted.
The recordsare complete.
Old
Trust
in Control
It is intended, however, to show that this entire
plan was conceivedby the trustees of the old Trust
and carried through by them to its final consum
mation.
.
The circular
goes on to say:
had two objects in mind:
1.
" Your
To
trustees
distribute
have
to
such
common shareholders as wished their proportion of the
Coupony's
assets,therebypreventing
anyoneelse
acquiring the
below their true value.
2.
To
secure
the continued operation of the works to Manchester
and New Hampshire,withoutdanger of wastefulwreck
ing." "The plan places the plant where it should be,
upon
its own responsibility.
to succeed or fail. "
PROFITS
AND REORGANIZATIONS
59
capitalor proprietory
interest
for promissory
notes
and then to withdraw,underthe guiseof interest
payments,nearlyfifty per cent of the capitalso
represented.26
The purchaseof the commonsharesof the old trustwas not
without its benefits in more ways than one.
The trustees
were
notonlyassured
ofcontinued
control,
butalsounder
anoption
which they offered to themselves they stood to make a good
profit.27
Although
the TextileWorldcouldsay editorially
("Signifi
canceof Amoskeag
Recapitalization")
thatthe"recapitalization
plan"(sic)involved
onlythe "distribution
of the quickassets
that are not essential to the successful operation of the
11 28
manufacturing
company",
there can be no doubt that the com
petitivepositionof the manufacturing
companywas seriously
impaired
by thesefinancial
transactions.
As the special
masterpointedout, it lost $8,000,000in operatingcapital
On
without
receiving
anyquidproquowhatever.
the contrary,
its costswere increased,
becausewhereformerlyit was only
morallyobligated
to pay dividends
on the preferred
stock,now
it was legallyobligatedto pay some $680,000as intereston
the bonds,whichthe holdingcompanydecidedshouldbe issued
by the manufacturing
company.Its ultimateliquidationwas now
a certainty.
AMOSKEAG
IN THE DEPRESSION
AFTER 1929
The trusteeswere probablynot surprisedthat the company
In 1928 boththe cottonand the
worstedsections
reported
operating
lossesafterbondinterest.
continued to sustain losses.
Theaggregate
of thelosseswas morethana million
dollars,
of whichupwards
of 85 percent
was dueto interest
payments.
Even in 1929 the cottonsectionfailedto earn its share of the
interest payments. The worstedsection,however,clearedmore
than a million dollarsafter interestdisbursements. Upon the
basisof thisprofitthecompany
paiddividends
amounting
to
$366,000for the firsttimesinceits reorganization
in 1925,
26Black,
loc.cit.
27
Some idea ofhow profitablethesetransactions
were to certaintrusteesacting
in their own behalf may be obtainedbyreference to the following: Black, op. cit.;
MarquisW. Child,"Great AmoskeagTextileCorporationQuits Businesswith Tragic
Results,"
St. LouisPost-Dispatch,
August2,1936, part8, D. 3J;Investigation
of Real EstateBondholders'
Reorganizations,
p. 82.
28,
'Vol.LXXII,No. 22 (Nov.26, 1927),p. 39.
PROFITS
AND REORGANIZATIONS
61
words,
thevolume
of employment
hadbeenreduced
by 28 percent
between1929 and 1930 and by 22 percent between 1929 and
1931.
Theshrinkage
in theaverage
number
of persons
employed
was only slightlyless.
The depthof the depression
in termsof employment
was not
reached, however, until June 1932, when in one week only
4,019personswere employed. Althoughby the latterpart of
this year a decidedimprovementhad occurred,nevertheless
each sectionsustainedlosseswhich totaledmore than a million
dollarsfor the year;three-quarters
of thisrepresented
bond
interest. The sources of payment appear to have been cash,
investments, and accounts receivable which were reduced by
$1,177,000
duringthiscalendar
year.
With wages downtowhat appearedto be an irreducibleminimum,
the onlyhopeof reliefwas in the reduction
or elimination
of
the fixed burden of the bonded indebtedness.
Since the current
marketprice of the AmoskeagManufacturing
Company'sbonds
at thistimewas between
38 and4130andsincethe Amokeag
Companyretainedonly $3,600,000
worthof the originalissue
of $14,000,000,
it involvedlittlesacrifice
for the trustees
to offer the bondholdersa plan for the conversion of bonds
into cash for 35 percent of their value and into preferred
stock for the balance.31
The bondholders, however, were not
responsiveto this idea, and no other similarproposalwas
proffered
until3 yearslater.
AMOSKEAG
UNDER
THE
NRA
TEXTILE
CODES
At about the same time the pre-NRAboom, which Amoskeag
sharedwiththe industry
in general,
was gainingmomentum.
The averageweeklynumberon the pay roll in January1933was
6,988,and a gradual
expansion
tookplaceuntilin Juneof
the same year the weeklyaveragewas 8,259,an increaseof
18 percent.Thisoccurred
chieflyin the cottonsection.Even
this understatesthe extent of the upturn,for the percentage
increasein the weeklyaverageof man-hoursworkedover the
same periodwas 28.
Whetherit was in spite of or becauseof the NRA textile
codes,whichbecameoperative
in July,the volumeof production
30The
Annalist,
January
13and
20,1933.
31.CottonM111
News,"
Textile
World,
Vol.
83,No.1(Jan.
1933),
D.95.
PROFITS AND REORGANIZATIONS
63
competitivedisadvantageof the former. For this reason, new
ordersdid not bringAmoskeag
out of the red.
It has alreadybeenmentioned
thatin the calendaryearsof
1931and 1932,in the absenceof a cashsurplusand in the
presence
of largeoperating
losses,the bondinterest
was paid
by liquidating
inventories
and accountsreceivable.In 1933
the operating
profitfromthe worstedsectionwas almost
sufficient
to meet the interest payments.
Nevertheless,
becauseof the risein the volumeof production
and business,
it was necessaryfor Amoskeagto borrow$1,500,000from the
bankon unsecured
notesto restoreits depleted
inventories
and
accountsreceivableto an adequatelevel.
In the following
yearan operating
lossof aboutthree
quartersof a milliondollarswas incurredbeforeinterest
payments of the same amount.
Accordingly, an additional
$4,000,000was borrowed in 1934, still on an unsecurednote,
from the First NationalBank of Boston, of which Mr. Dumaine.
was
It was used not only to buy Supplies and
a director.
raw materialsand to give creditsbut also to pay the bond
interest.32
On April2, 1935,the initialbankloan of $1,500,000
owed
to the NationalShawmutBank was paid off in cash, and the
$4,000,000owed to the First NationalBank was reducedby
$1,000,000on the same date and a renewalwas askedfor the
Mr. Dumaine stated: " They said that in view of
the fact that the assets had fallen below the face value
balance.
of the bondsthey(the bank]wouldhaveto havecollateral."33
Amoskeag
agreedto pledgeits accounts
receivable,
and the
note was renewed.
In December 1935 when Amoskeag sought
refugeundersection77B of the FederalBankruptcyAct,all
but $30,000had been repaidto the bank. Accordingto Mr.
Dumaine's
testimony
beforetheSabathCommittee,
thedecision
to begin liquidationswas made at the time of the renewal of
the notes.34 In other words, after withdrawinga cash surplus
of$26,000,000,
thestructure
wasbrought
to theground
by the
gradual
withdrawal
of circulating
capital.
Thus the concessionsby the workers in the form of wage cuts
and the stretch-out
overa periodof yearsiseeappendixes
B-D)
32
Investigation
ofRealEstate
Bondholders'
Reorganizations,
d.93.
33Ibid.,
p.95.
34Ibid.,
D.98.
PROFITS
65
AND REORGANIZATIONS
wasestablished,
andthecompany
petitioned
forreliefunder
section77B of the FederalBankruptcyAct.
This
is intended
tofacilitate
reorganization
in lieuof liquidation.
The trusteesof the companyin a statement
to its bond-and
shareholders
underdateof December
24,1935,explained
that
reorganization
was necessary
because
of the greatburdenof
bondedindebtedness.
Quotingfromthe petition
whichhad been
filed by the company,they stated: " The existence of the
outstanding
bonds($11,000,000]
has required
the continued
payment
of interestout of capital,has impairedthe creditof
theCompany,and has resulted,
together
withotherconditions,
in makingtheCompany,
in theopinion
of theTrustees,
insol
1137
The letterfurtherdeclaredthat"reorganization
at
the presenttimewillleavethe Companywithsufficient
assets
and ample creditfor possiblefutureprofitableoperations"
whichwill be carriedon "only in that portionof the plant
vent.
which can be economicallyoperated,and ·
.
the balance of
the plantor machinerynot so neededwill be disposedof as
purchasers can be secured. Such anticipatedrevisionof
facilities
will notseriously
impairthe maximumproduction
of
whichthe plantis now capable."
Not untilMarch9, 1936,did the companysubmita planfor
reorganization
to the court. The planhadthe approval
of both
thebondholders'
committee
andthecommittee
representing
the
stockholders. It was proposedunderthis plan that general
creditorsotherthan bondholders
shouldbe paid in cash the
full amountof theirclaims,a sum of $67,319. The present
commonstockholders
were to retaintheir stock. The bond
holderswere given a choicebetweentwo plans: Plan A, by
whichtheywouldreceive,
inexchange
foreach$100of principal
amountof bondssurrendered,
one shareof 5-percent
noncumula
tivefirst-preferred
stockretirable
at callor in liquidation
at 105 and 15 sharesof new commonstock;or Plan B, by which
they would receive on the same terms $50 in cash and one-half
of a shareof 4-percentnoncumulative
second-preferred
stock
retirable
at callor in liquidation
at 100.38
37Letteron
fllein
theAmoskeag
Room,
Hamilton
Smith
Library,
University
of
New Hampshire,
Durham,New Hampshire.
38
°Proceedingsforthe
Reorganization
of a Corporation
No.58,598,
Inre: The
AmoskeagManufacturing
Company,
Debtor,
District
courtofthe
UnitedStates,
Districtof
Massachusetts,
MarchO, 1936.
PROFITS
AND REORGANIZATIONS
67
canals,
and waterwheelsof Amoskeag
for $2,250,000,
and an
equal amountwas loanedby the local banks to completethe
purchasepriceof $5,000,000.42The purchaseincludedthe
millunits,tenements,
goodwill,
Merrimack
Riverwaterrights,
and otherholdings
in Manchester.43
By September
15, 1936,Amoskeag
Industries,
Incorporated,
was preparedto announcethat it would offermill spacefor
leaseor sale to any incoming
industry
thatwouldguarantee
to
employ Manchester labor. There is irony in the fact that
after105 yearsof operationAmoskeagended as it began,a
real-estate-development
corporation.Now, however,it had a
different purpose. Over 100 yearsago its energieshad been
directedtowardtransforming
a hamletinto a city;nowit was
most earnestlyconcernedwith preservingthe economicbasis
of that city.
427
'It is interesting to note that by virtue of this sale, the Amoskeag Manufacturing
Company had a balance of $13,700,000, sufficient to pay all claims including
$ 11,379,000 in bonds with accrued interest as well as liquidationcosts.
43-Utility
Alds
cityinAmoskeag
Deal,"TheNew
York
Times,
September3,
1936,
p.29.
44thedegree
ofsuccess
that
hasattended
itsfirst
efforts
willbedescribed
in chapter V.
EFFECTS
OF SHUT-DOWN
69
attachment
to be in the manufacturing
and mechanicalindus
The next largestconcentration,
12 percent,was in
tries.
trade, and the remainderwas about equally distributedamong
transportation
and communication;
clericaloccupations;
and
professional,
domestic,
andpersonal
services.
Clearly,
then,
Table 14.- DISTRIBUTIONOF MANCHESTER'S
GAINFOLLYOCCUPIED
POPULATION,
BY INDUSTRIAL
GROUP,1980a
Total
Industrial
group
Total
Num
ber
Per
Men
34,446 100.0
22,270 12,178
285
0.8
284
Forestry and fishing
70
70
Extraction
Agriculture
13
0.2
0.1
20, 312
communication 1,704
59.0
4.9
4,153
12.1
3,487
718
2.1
709
838
of minerals
Manufacturing and mechanical
Transportation
and
Trade
Public
service
Professional
service
2,078
Domestic and personal service
2,686
6. O
7.8
Clerical
2,427
7.0
1930,
apifteenth
Census
of theUnitedStates:
Women
cent
13
13,340
1,553
1,074
922
1
O
6,972
151
688
9
1,240
1,612
1,505
"Population" (U. S. Dept. com.,
Bur.Census,1933),vol.IV, D. 984.
thefluctuations
of employment
in manufactures
willexplainin
a largemeasurethe fluctuations
of employment
opportunities
in Manchester. These fluctuationsare shown in table 15 where
the averagenumberof wageearnersemployed
in manufactures,
as
reportedto the Census of Manufactures
for specifiedyears
between1899and 1935,are recordedfor Manchester,
Amoskeag,
andNewEngland.2
Just before the turn of the present century the number of
wageearners
in Manchester's
manufacturing
establishments
was
a littlelessthan18,000and reachedits peak(to the extent
that this can be revealed by a discontinuoustime series) in
1914when,on the average,
almost26,000personswereemployed.
In the first post-waryear,1919, therewas a decline of a
littlemore than i percentfrom the peakemployment
in 1914.
2
FiguresforAmoskeag
wageearners
havebeenadapted
fromcompany
records
and
computed by the census methode
EFFECTS
OF SHUT-DOWN
71
level of employment that had obtained in 1929 and this at
the very time that half of the employment opportunities in
Manchester's
factoriesdisappeared
with the closingof the
Amoskeagmills. Much the same situation characterized the
New Englandregion;that is, an expansionof employmentin
manufactures
of 14 percentoccurred
between1933and 1935,but
thisrepresented
a decline
of17 percent
fromthe1929figure.
The full seriousnessof the situation at the outset of the
depression
canbe appreciated
onlywhenit is realized
thatin
theservicesand in tradetherewas no employment
gain suffi
ciently
largeto offsetthislossas in otherurbancommunities
during this decade. There was a decrease in manufacturing
wagejobs of 6,000in roundnumbersbetween1919 and 1929and
an increaseof only 2,000 (between 1920 and 1930) in the num
otherthan manufactures
ber gainfullyemployedin industries
(table 16).
Table 16.- NUMBER GAINFULLY OCCUPIED IN MANCHESTER,
BY
SELECTED
OCCUPATIONAL
GROUP
AND SEX. 1920 AND 19308
1920
Occupational group
Total
Total
Men
1930
Total
Women
Men
Women
10,028 5,780 4,248 12,062 7, 010 5,052
Trade
3,277 2,672
Public
service
Professional
service
605
633
1, 573
632
1
662
911
2,107
830 1,277
2,438
984 1,454
4,153 3,467
718
2,078
686
709
838 1,240
Domestic and personal
service
Clerical
2,686 1,074 1,612
922 1,505
2,427
aData por: 1920 fromFourteenthCensusof the UnitedStates: 1920,"Population"
(U. S. Dept. Com., Bur. Census,1923),vol.IV, p. 292; and 1930 from Fifteenth
Censusof the UnitedStates: 1930, "Population"
(U. S. Dept. Com., Bur.Census,
1933),vol.IV, p. 985.
Fromthesefew salientfactsthe conclusion
seemsinescapable
that Manchester'sdepression antedated 1929. The same facts
servealso to give the settingfor the outwardmigrationof
morethan10,000
persons
during
thedecade
of the"prosperous"
The depressioncould have the effectonly of ac
celeratingthe rate of Manchester'sdeclinein employment
opportunities
both in manufactures
and in the servicesand
The revivalin business,aside from the closingof
trade.
twenties.
EFFECTS
OF SHUT-DOWN
73
The manufacture
of bootsandshoesrankedsecondinimportance
as an employerof Manchester's
factorypopulation.The expan
in
thatoccurred
in and aroundManchester
sionin thisindustry
factor.3
industrial
servedas the onlyothermitigating
1935-36
The Census of Manufactures reportedthe monthlyaverageem
ploymentin the boot and shoe industryof New Hampshireas
14,544 in 1929, 11,300in 1933, and 15,035 in 1935, an all-time
peak for the State. In the latter year, 4,817 of these shoe
jobs, almost one-third,were in Manchester.4
Themanufacture
of cigarsin Manchester
hadat onetimeem
ployedover 1,200 persons,but at the time of the Amoskeag
shut-downless than half this number was so employed,largely
as the result of the mechanization of the process in 1931 when
morethan 600 men handworkerswere replacedby some 200 girl
W PA- Nationa! Research Project(fine)
FIGURE 7.- REMOVING A FULL LAP FROM A PICKER
Thismachinecontinues,
thecleaning
andfluffing
oftherawcotton,
begun
on other machines. Equipped with an evener", it forms a lap (a layer of
cotton fiber) of uniformweight. Anothermachinesplitsthe lap intothick
strands or "slivers. "
3muchthelargest
partof NewHampshire's
shoeindustry
islocated
inthetier
of lower
counties
Hillsborough
(which containsManchester),Rockingham,and
strarford.
4Thefigure
forManchester
istaken
froma letter
totheNational
Research
Project
from the U. S. Bureau of the Census, June 18, 1937.
EFFECTS
OF SAUT-DOWN
75
by the Citizens'Committee of the city of Manchesterand the
Manchester
TextileCouncilon thefollowing
question:"Areyou
willingto work underadjusted
wagesand conditions
whichwill
permitpermanent
and peaceful
operations
on a competitive
cost
basisas determined
by themanagement
andrepresentatives
of
the workers and approvedfor submissionto the workers by the
chairman
of the New Hampshire
TextileCommission
and the chair
manoftheCitizens'
Committee?"8
Ofthe6,802
valid
ballots,
54 percent were cast in the affirmative.
Thisdisplay
of willingness
to makeconcessions,
however,
was
not met by an equalwillingness
on the partof the bondholders.
Accordingly,
the court was constrained
to orderliquidation
of the company's property. The court'sorder,it shouldbe
remembered,
was not made untilJuly1936;that is, for almost
a yearafterthe shut-down
the workershadsome basisfor hop
ing that Amoskeag
wouldreopenthe mills. There can be little
doubtthat this attitudeaffectedthe type of job hunt they
made during the interval.
Thatsuchwas the attitude,
at leastin the firstfew months
afterthe shut-down,
is clearlyevidentfromthe reportof
a survey of familiesliving in companytenements. This canvass
was undertakenby a representative
of the company'spersonnel
office in November and December of 1935. In that year the
company tenements housed 931 of its employees, with all the
milldepartments
and nationalities
represented.Accordingly,
theymaybe considered
forthispurpose
a representative
sample
of Amoskeag workers. In an interimreportunderthe date of
December9, 1935, the investigator
recordedthat "the occupants
of the tenements
madetheusualinquiries
as to whenthemills
will reopen; will they be closed all winter? Are the unions
to blame for conditions? When they start, will it be longer
hours, etc.?" In the final reportof January31, 1936, he
estimated
that"approximately
80% of thoseinterviewed
inquired
as to when the mills would reopen."
Whilewaitingfor the millsto resumeoperations,
many used
theirenforced
leisureto makeimprovements
in theirtenements.
Thus "it was noticed that a majority of the houses had been
newly paperedand painted. This has been done by the male
Bfrom
copyofballot
inthecompany's
files.
EFFECTS
OF SHUT-DOWN
77
concentrated in semiskilled occupations to an even greater
degree,85 percentbeing so classified;11 percentwere skilled
operatives.9
How much occupational
mobilitythe workerspossessedwould
dependin parton the extentof theiroccupational
habituation.
Someideaof this may be had from data on the numberof years
at the longestoccupation.For more than one-quarter
of the
operatives
thelongest
occupational
assignment
did notexceed
2 years,and for an additional31 percentthis had lasted from
2 to 7 years. For about one-thirdthe longestoccupation
extended over a minimum of 10 years.
The degree of occupa
tionalhabituation
is ratherdirectly
related
to age. Thus,
to thedisadvantages
of age itselfin the caseof an older
personseekingreemployment
must be addedthe disabilities
of
an advanced
degreeof occupational
habituation.10
The amount of formal schoolingdid not particularlyenhance
the occupational
mobilityof the Amoskeagworkers, Upwards
of 7 percentof both the men and the women had no schoolingat
all,and aboutone-quarter
hadcompleted
fromonetosix grades.
Onlyone-third
hadcompleted
the eightgradesof grammarschool.
Although
one-quarter
of the men had some high-school
training,
not quite9 percenthad graduatedfrom highschool. For the
womentherespective
percentages
were14 and4.5.11
Geographical
mobility,
on the otherhand,wouldbe affected
by otherconsiderations,
suchas yearsin the community,
family
responsibilities,
and homeownership.
The measurement
of the
firstfactorwouldprovidesomeideaof the extentof the loca
tional inertia to be overcome.
Almost half of the operatives
reportedthat they had residedin Manchesterfor more than
20 years,and an additional
one-thirdreportedthat they had
lived in this communitysince birth.
Of the men and womenreporting
maritalstatus,70 percentof
the former and 72 percentofthe latterwere marriedat the time
of the shut-down.
Some26 percentof the marriedmen reporting
on dependency indicatedthat they had no dependents,whereas
9Figures
inthisandthepreceding
paragraph
arebasedon interviews
ofworkers
separated from Amoskeag in 1935.
The survey is described on page 79, and the
findingsare subsequentlyreferredto as "NRP field-survey
data."
usedwas NRP Form 20 (see append1xH).
Data are for Amoskeag workers separated in
10Data
The schedule
1935, and are based on an NRP tabula
see appendix G).
tionof a sampleof companypersonnel
records(Form1030
IlExcept
where
otherwise
specified,
data
inthis
andthefollowing
twoparagraphs
are based on NRP field survey data.
EFFECTS
OF SHUT-DOWN
79
in inducingnew employersto locate in Manchesterwill be
discussed in the next chapter. Under the former head,
the
unassisted
effortsof the workersin findingprivateemployment
eitherin Manchesteror elsewherewill be discussedin the
presentchapter. In lieuof findingemployment,
manyworkers
found it necessary to secure public relief. This and other
effects of the shut-down are also discussed in subsequent
sectionsof this chapter.
PRIVATE
EMPLOYMENT
AFTER
THE
SHUT-DOWN
For this part of the study a sample of Amoskeagworkers who
had becomeunemployed
throughthe shut-downwere interviewed
from 13 to 22 months after the loss of their Amoskeagemploy
ment.14
The names selected for interviewwere based on that
partof the 10-percent
sampleof the personnel
files15in which
the final separationoccurredin 1935. This procedure re
sults in a close approximationto a 10-percentsample of those
employedat Amoskeagin 1935, and in most respectsit is a
representative
crosssectionof Amoskeag
operatives
in the
year of the closingof the mills.
This surveyyielded1,534names,of whom 1,114were inter
All but 46 of the scheduleswere usable,makinga
totalsampleof 1,068. This may be regardedas a 7-percent
sampleof Amoskeagworkersin the last yearof the company's
operation. With respectto distribution
by sex and marital
viewed.
status,by age,and by degreeof skill,the composition
of
the 7-percentsampledoes not differsignificantly
from the
composition
of the 10-percent
sample.
Of the 420 employeeswho were not interviewed,
51, or 3.3
percent of the 10-percent sample, were accounted for either
by death or by removal to a community too far away to make
interviews
feasible,
or because
theiremployment
at Amoskeag
had been of less than a month'sduration. Thus369,or almost
one-quarterof the originalsample,could not be located.
Sincea diligentsearchwas made for them withinManchester,
it is probablethat most of these had left the city. It is
safe to conclude,therefore,that employmentother than in
Manchester
afterthe shut-downis grosslyunderstated
by the
14.11
those
separated
from
theAmoskeag
payroll
in1935
were
considered
as unem
ployed because of the shut-down.
15.
for description
of company
personnel
records
seeappendix
G.
EFFECTS
OF SHUT-DOWN
81
employmentwithin this period which may have been as long as
22 months
Of the 40 percentof the men in this groupwho
foundprivate
employment,
one-quarter
werereemployed
within
a month of the shut-down and an additional one-third within
6 months (table 18).
As manyas 14.5 percentwere unemployed
at least
a yearbefore
employment
wasobtained.
The womenhadevengreaterdifficulties
in findingwork.
Only20percent
of thewomenin thesample
eversecured
em
ployment,
and onlyone-fifth
of thesedidso withina month.
Anadditional
25percent
ofthose
whofinally
found
workwere
reabsorbed
withinthefollowing
6 months,
andas manyas one
quarterbecameemployedwithinthe 10 monthsimmediately
pre
ceding
thedateofinterview.
EmploymentStatus in October1986
Thesedata, however,overstatethe extentof reemployment
that hadtakenplaceas of theinterview
datesinceby that
time somewho hadbeenreemployed
wereagainwithoutemploy
ment.
Theiremployment
statusas of October15, 1936,is shown
in table 19.
From this table may be seen some of the factors
thatconditioned
thecompetitionforthe
limited
number
of jobs.
In general,it appearsthata largerpercentage
of the men
than of thewomenhadprivate
employment
on thedateof inter
View; thatsinglepersonshad moreemployment
thanmarried
Persons,especially
amongthe women;and thatthe younger
work
ers werefavoredoverthe olderworkers.A closerinspection,
however,
of therelationship
of marital
statusto current
em
ployment
status
ofthemenindicates
thatthetruerelationship
is concealed
bytotals.
Forexample,
ifthesingle
andmarried
men arecompared
by age groups,
it is foundthatin eachage
group a largerpercentage
of the marriedmen comparedwith the
Singlemenwasprivately
employed.
Thisfactis lostinthe
comparison
of totalsbecause
agealsoinfluenced
reemployment
and the unmarriedmen constituteda considerablyyoungergroup
than did the marriedmen.
Reasons for the difference between married and unmarried
men suggest
themselves.
On the whole,the formerwould have
greaterfinancial
responsibilities
whichprobably
wouldlead
them to seekmoreearnestly
for employment
thanwouldsingle
men,
and this would create a greater willingness to accept
EFFECTS
OF SHUT-DOWN
83
101
X
WPA - National
Research Project(Hine)
FIGURE 9.- WORKER " PIECING UP" ON A SLUBBER
Theslubber
transforms
thesliverintoroving
by stretching
it,givingita
slight twist, and winding it on a bobbin.
stopgapor dead-endemployment
thata singlepersonmightre
gard as inferiorand unacceptable.In addition,employers,
realizingthe difference
in financial
responsibilities,
often
favoredmarriedmen,otherthingsbeingequal.
That the oppositerelationship
prevailedamongmarriedand
unmarriedwomenalsoseemsreasonable.The married women, it
hasbeenshown,
weretypically
partof thelaborreserve
and
when themainsource
of supplementary
employment
waseliminated
eitherdid not seekdiligently
for employment
elsewhere
or
EFFECTS
85
OF SHUT-DOWN
Table
21.- PERCENTAGE DISTRIBUTION OF WORKERS,
BY INDUSTRIAL SECTION, SEX, AND MARITAL
AND EMPLOYMENT STATUS AS OF OCTOBER 18. 19888
Marital
employment
and
status
Cotton
section
Worsted
General
section
section
Men
Single, total
Number
Percent
Employed
Unemployed seeking work
Unemployed not seeking work
134
100.0
24
100.0
15
100.0
35.8
84.2
0
25.0
48.7
75.0
53.3
239
90
100.0
100.0
28.0
68.6
3.4
30.0
68.9
O
Married, total
Number
Percent
Employed
Unemployed seeking work
Unemployed not seeking work
1.1
47
100.0
44.7
53.2
2.1
Women
Single,total
Number
Percent
Employed
Unemployedseekingwork
Unemployed not seeking work
88
2
77
100.0
100.0
25.0
70.5
16.9
4.5
77.9
5.2
221
131
100.0
o
100.0
Married, total
Number
Percent
Employed
Unemployed seeking work
Unemployed not seeking work
O
-
100.0
10.4
68.8
20.8
100.0
7.6
86.4
20.0
&NRPfield-survey data.
b
) staffs
.
, andcentral
office
(clerical
Includes
mechanical
,maintenance
EFFECTS
OF SHUT-DOWN
87
were employedin October1936,for example,only aboutone
quarterhad been employedduringthe entireintervalbetween
lossof Amoskeag
employment
and the interview
date,a maximum
of 22 months. Of the married
womenwithjobsin October1936,
onlyaboutone-tenthhad had employment
for the entireinter
An additional10 percentor so of each group, except the
val.
married
women,had beenemployed
at leasta year. On the other
Table 22.• PERCENTAGE
BY MARITAL
STATUS
AND
DISTRIBUTION
DURATION
OF WORKERS,
OF EMPLOYMENT
STATUS
AS OF OCTOBER 18, 1986, AND sexa
Married
Single
Duration
Unem
of
Unem
employment
status
in months
ployed
Em
Unem
Unem
ployed
ployed
Em-
not
ployed
not
ployed seeking seeking ployed seeking seeking
work
work
work
work
Men
Total
Number
61
Percent
100.0
1-3
4-
6
7-9
10-12
13-15
16-18
Entire
intervalo
O
112
100.0
115
251
100.0
100.0
27.0
16.5
2.8
4.4
19.7
18.0
8.3
5.4
21.3
1.8
7.8
0.4
6.6
8.2
0.9
8.7
8.7
1.2
0.4
3.5
O
1.6
10
100.0
10.0
O
-
24.8
27.8
85.6
90.8
90.0
Women
Total
Number
Percent
36
100.0
1-3
27.8
5.8
4-6
7- 9
22.2
2.5
2.8
5.5
1.6
10-12
13-15
16-18
Entire
intervalº
11.1
0.8
0.8
238
80
100.0
100.0
2.1
0
44.1
23.5
11.8
5.9
11.1
O
2.9
o
100.0
O
2.8
27.8
34
100.0
9
122
100.0
88.5
88.9
11.8
1.3
1.7
O
0.4
o
0.8
1.2
1.7
O
93.3
97.5
NRP
P field-surveydata.
Entire
perlod
(13-22months)
betweenlossoflast
Amoskeagjoband
October
15,1938.
EFFECTS
OF SHUT -DOWN
This could only mean an increase
91
in the number
of unskilled
jobs in the 22 monthsimmediately
followingthe shut-down.
Therewerealsomorein clerical
positions,
whichin thisin
stance may be regarded as an improvementof status since the
additions
came from thosewithsemiskilled
or unskilled
jobs
at Amoskeag.
Location
of Jobs
Thisreemployment
levelwas attained
onlyby seekingand ac
20
Almost 45 percent
ceptingemployment
outsideof Manchester.2
of the total of 319 jobs were located in communities other
thanManchester.Onlytwo jobswereoutsideof the NewEngland
region,withone-fifth
of the employment
in New Hampshire
out
sideof Manchester;
more thanone-fifth
were in the remaining
five States of New England,but chieflyin Massachusetts.
Althoughonly4 of the 81 textilejobs were in Manchester,
all but 5 of the 42 jobs in the shoe industrywere obtained
locally;the latterwas also true for nearly three-quarters
of
the greatvarietyof jobs other than in manufacture.
Fromtheavailable
data,agedoesnotseemto havebeenthe
controlling
factorin seeking
or obtaining
outside
employment
sincefrom50 to 60 percentof the personsin each of fiveage
groups
werereemployed
in Manchester.
Although
relatively
more
marriedpersons(44.7percent)
as compared
withsinglepersons
(39.5percent)
wereemployedoutsideof Manchester,
thisprob
ablywas not a significant
difference,
and the same probably
appliesto thefactthatthe percentage
of womenhavingoutside
employment
was somewhathigherthanthe percentage
of men.
The Regularly Employed and the Labor Reserve
After
the
Shut-dowa
The vicissitudes
experienced
in thisperiodafterthe shut
downby thosewho hadbeenregularly
employed
at Amoskeag
and
by thoseintermittently
employed
areof special
interest.
In
the10-percent
sampleof the personnel
files,741 workerswere
in thesetwogroups
(seeappendix
E). Of this number, occupa
tional historieswere securedfrom 548. With respect to sex,
age,and maritalstatus,thissmallersampleis representative
20the
point
madeat theoutset
ofthediscussion
that
is understatedin the sample
-
should be recalled.
the extent of migration
EFFECTS
OF SHUT-DOWN
95
new entrantsinto the labor market. None of the 104 were mar
ried,and three-quarters
were betweenthe ages of 15 and 19;
all but 2 of the remainderwere betweenthe ages of 20 and 24.
Withtheexception
of onedaughter
aged28,allwere"normal"
entrants,
personswho had reachedtheworkingage.
EMIGRATION
AFTER
THE
SHUT- DOWN
Unfortunately,
it is not possible
to determine
fromthe
available data what percentage of the Amoskeag workers left
Manchester. Use of other data can, however,extend somewhat
ourknowledge
of thisformof meeting
theunemployment
problem
createdby the shut-down. Use is made of the emigrants re
cordedin thefilesof theBoardof Registrars
of Voters.21
Thesepersonsare the oneswho changedtheirlegalresidence;
that is, they were probablypermanentemigrants. The names
of such personswere availableonly for 1935 and the first
3 months of 1936.
An analysisof the workerswho emigrated,
however,must be
supplemented
by an analysisof thoseAmoskeag
workerswho were
employedin textilemillsoutsideof Manchesterbut did not
changetheir legal residenceor move theirfamilies. They
eithercommuted
dailyfrom Manchester
or returnedto Manchester
at moderately
short intervals.Employmentof this sort was
available in the latter part of 1935, all of 1936, and the
early part of 1937. Theseemployment
opportunities
werepres
ent as a result of the fact that mills in the surrounding
territory
were runningthirdshiftsto take advantageof the
improvedoutlookin the cotton-textile
business. In many of
thesecommunities
the locallaborsupply,especially
for cer
tain skilledoccupations,was inadequateto staff a third
shift, and for this reason their labor reserve was extended
to Manchester. These workers will be referred to as commuters
to distinguish
themfromtheemigrants.
The namesof the commuters
were obtainedin partfrom lists
prepared
by theout-of-town
millsfortheuseof a newmillin
Manchester.Other names were securedfrom recordsin the local
officeof the United TextileWorkersof America. Still others
weresuppliedby the Manchesterofficeof the UnitedStates
21
See append1x
E fordiscussion
of theserecords.
EFFECTS
OF SHUT-DOWN
97
Among the men commuters,
77 percent were married comparedwith 68 percent of the male
true for both the men and the women.
emigrants
and 67 percentof Amoskeag's
men employees
in 1935.
This
is in accord
with
the results
obtained
from
the work
historyinterviews;
that is, the marriedmen got relatively
morejobs than the singlemen. Among the women commuters,
63 percent
weremarried
compared
with54 percent
of thewomen
emigrants
and71 percent
of thewomenworkers
at Amoskeag
in
its last year.
Apparently
the marriedwomenoperatives
could
moreeasilymanageout-of-town
employment
withincommuting
dis
tancethantheycouldmanageemigration.
The formersituation,
obviously,
was tenablewhenthe husband
was employed,
but it is
improbable
thata womanwouldemigrateunderthe same circum
stances.
Nevertheless,
it shouldbe notedthat even in the
caseofcommuters
themarried
women
weresomewhat
underrepre
Thiswouldsuggest
thatevenin moderately
favorable
circumstances
a disproportionate
number
of supplementary
work
sented.
ers withdrew from the labor market. These considerations also
explain
whytheratioof womento menwassomewhat
higher
among
thecommuters
thanamongthe emigrants 41 percentas compared
with 33 percent.
With respectto the degreeof skillof the formerAmoskeag
workers,as judgedby theirlast job at Amoskeag,therewas
only one importantdifferencebetweenthe emigrantsand the
commuters.Amongthe lattertherewereno officeworkers.The
overrepresentation
of skilled
workers
amongboththemenand
womenwas about the same in the two groups.
Sincethe commuters,
unlikethoseemigrating
priorto 1935,
did not separatefrom Amoskeagvoluntarily,
it is but natural
that theirlengthof attachmentto the companyshould have
beensomewhatlongerthan for the emigrants. For example,
two-thirdsof the men commutersand three-fifthsof the women
commuters
had beenattached
to Amoskeag
overa periodof at
least 10 years.
Only half the emigrants,
both amongthe men
and women, had had attachmentsof this duration.
It is to be expected
alsothat,if ourterm"commuters"
is
properly
applied,theirmoveswouldhavebeenwithina smaller
radiusof Manchesterthan the movesmade by the emigrants.
Accordingly,
abouthalfthecommuters
hademployment
in Hills
boroughCounty other than Manchester,more specifically
in
thecityof Nashua,
some18 milesdowntheMerrimack
Valley,
EFFECTS OF SHUT-DOWN
101
and others until such time as their services were
again required.
During the winter a loan of $25,000 was authorized
to provide work for the unemployed in Manchester
throughthe street department,and charitableorgani
zationsdid considerable
work in furnishingpecuniary
assistance and nourishing food at a nominal
22
the unfortunate poor for a time
price to
situations,
however,
thetradition
Except
in suchspectacular
intact.Despitethisstigma,an ever
of paupers'
aid remained
numberwas reducedto seekthisaid withthe worsen
increasing
ing of conditionsat Amoskeagduringthe twenties. In 1929
the monthlyaveragenumberof cases grantedgeneralrelief
(poorrelief)by Manchester
was 805, or 4.3 percentof all of
Manchester's
families
as reported
in the1930census;
expendi
tureson this scoreamountedto $159,444.With the onsetof
the great depression,the unemploymentsituationin Manchester
naturally
wasaccentuated
andreflected
in thegeneral
relief
load.
Thus in 1930 more than $188,000was distributedto 1,171
cases,thatis, an increase
of 45 percentin the caseload
withan 18-percent
risein expenditures.
In each of the two
following
yearsthepercentage
risesin thecaseloadoverthe
previous
yearwere38 and 50, respectively,
whilethe percent
ageincreases
in expenditures
were24 and53, respectively.
The effectof the depression
may be expressedin anotherway
by relating
the reliefsituation
in 1932to thatwhichobtained
in 1929. On this basis,the averagereliefload trebled,
and
the annualexpenditures
more thandoubledwithinthis 3-year
period
and all this occurred while assistance was still re
gardedas poor relief.
Privatewelfareagencies,moreover,
were not in a position
to rendermuch assistance.Societies of this character had
beencomparatively
underdeveloped
in Manchester.In 1929, for
example,therewere only threeagenciesof any importance
in
additionto the SalvationArmy: FamilyWelfare,Children's
Aid Society,and the Milk Fund. These four agencies in 1929
expended
$21,040,
aboutone-third
beingcontributed
by the
Salvation
Army;in 1932 thesesame agencieswere able to in
creasetheirexpenditures
only to $28,543,more thana third
beingcontributed
by the Salvation
Army.
22.
2ntemporary
AidtoUnemployed,"
Second
AnnualReport:
1894 (concord,
N. H.:
Bureauof Labor,Stateof New Hampshire,
1894),pp. 437-8.
23Howmuch
aidmayhavebeenextended
through
church
agencies
isnotknown.
EFFECTS
OF SHUT-DOWN
103
WPA - National Research Project(Hine)
FIGURE 13.- HIGH-SPEED BEAM WARPER
Thismachine,whichtakesthreadsfromhundredsof spoolsto form a warp,
stops automatically when a thread breaks.
mills,Manchester's
reliefburdenwas alreadyconsiderably
more
27
onerous
thanin mostof NewEngland's
larger
cities.2
The peak reliefload in Manchester,
however,had yet to be
reached. Naturally,
the gradualrunningout of work by the
Amoskeagmills,begunin the earlyspringof 1935,and their
finalclosing
inSeptember
wouldbe reflected
in thesizeof the
relief
rolls.
Thus in the first quarter of 1935 the average
caseloadwas 2,819compared
with3,170in the secondquarter.
Thedefinite
closingin September
drovemanywho had beenhold
ingoutin hopeof an earlyreopening
of themillsto askfor
assistance.
Accordingly,
the Augustreliefloadof 3,491cases
was increasedto 4,118in the followingmonth. The all-time
peakin generalrelief(excluding
WPA employment)
was reached
in November
witha caseloadof 4,270involving
16,216persons.
This meant that 22.8 percentof Manchester'sfamiliesand
21.2 percentof its populationreceivedgeneralassistance
in that month.
27
If Boston with 20.4 percent of its familles receiving general relief is excluded
fromthe total of 18 cities,the average percentagefor the remaining17 cities
1s 11.8 compared with 13.2 for Manchester.
EFFECTS
OF SHUT-DOWN
105
Withtheestablishment
of newcompanies
in theAmoskeag
mills
in 1937,whichby July had employedmore than 3,000workers,
therewere moderatedecreasesin the numberon the WPA pay roll
as wellas in the numberreceivinggeneralrelief. But even
in this year of relativeprosperitythe jointcase load was
of the city'sfamilies,
on
of suchproportions
thatone-quarter
assistance.In the
theaverage,
weredependent
uponGovernment
of PacificMills
first9 monthsof 1938,with the withdrawal
and the curtailedemploymentin the othercompaniesin the
Amoskeagmills,the jointcase loadwas once moreat the 1936
levelwhen 28.8 percentof the familiesreceivedpublicaid;
claimswere
duringthesesame monthsunemployment-compensation
aid distress
beingpaid. Clearly,withoutdirectGovernment
.
would have been extreme and in a short time would have envel
oped also the commercialactivitiesof the city.
On the basisof generalreliefonly(thatis, excluding
WPA)
11.6and12.6percent
of allfamilies
inManchester
received
relief
in 1937andin thefirst9 months
of1938,respectively.
In no one of the other 23 New England cities were the respec
tive percentages
as highas in Manchester.Even in Lowell ,
also once an importanttextilecenter,the percentages
were
only6.8 and8.8. Manchester,
then,standsout in highrelief,
and by New Englandstandards,at least,it must be regarded
since the shut-downas a town on relief.
What this meant to the business community can be readily
appreciated
fromthesumsexpended
forrelief.In 1934 this
expenditurereached$886,648,the Federalcontributionamount
ing to 35 percentof the total. With the gradualclosingof
the Amoskeag
millsin 1935,the totalfor directreliefand WPA
wageswas$1,460,041,
of whichaboutone-quarter
represented
the share of the Federal Government. In the same year food
storesin Manchester
reportedto the Censusof Businesssales
30
We know from records in the Manchester relief
of $9,082,000.9
officethat53.7percentof the totalgrantsfor general
relief
was spent on food and household necessities.31
On the
as
sumptionthatWPA earningswere spentin the sameway, almost
10 percent of the sales in Manchester's food stores may be
30
Censusof Business:1935, vol. III, "Retail Distribution
Bur. Census, Dec, 1936), D. 188.
(U. S. Dept. com.,
31virtually
allrellegrants
inManchester
areinkind
(grocery
orders).
The
figure53,7 percentis basedon expenditures
in 1937.
EFFECTS
OF SAUT-DOWN
109
otherhand,of the 3,064casesaddedto the reliefrollsduring
thisperiod(exclusive
of thesupplementary-relief
cases),
1,912,or 62.4percent,
wereobliged
to seekreliefbecause
theyhad losttheiremployment
in privateindustry
withinthe
4 monthsprecedingtheirapplication
for relief. Moreover,
82.8percentof all casesadded(including
supplementary-relief
cases)hadpreviously
received
generalrelief.34All
these
relationships
suggestthat even under the adversecircumstances
thatprevailed,
therewas considerable
turn-over
in the relief
population.
SOME
OTHER
CONSIDERATIONS
Mentionshouldalso be madeof otherconsiderations
directly
or indirectly
affected
by theshut-down.
Theyaredemographic
and occupational
in character
and havelong-runeffects;they
beganbeforethe shut-down
and havecontinued
afterthatevent.
Amongtheseconsiderations
and of primary
importance
is the
fact that Manchester's
populationhas been becomingolder.
This,of course,has been true of our entirepopulation,
es
pecially
theincreasing
proportion
thatis resident
in urban
communities
(table
28) .
The increase in age had proceeded
furtherin the caseof the urbanpopulation
of New Englandthan
in the entire urban population,but not quiteso far as in
Manchester. This situation obtaineddespite the fact that in
Manchester,
as wellasin all citiesof the region,the percent
agesof the respective
populations
represented
by personsunder
20 years of age were slightly higher than in the total urban
populationof the country both in 1920 and 1930. The rate of
the decennial
changein the proportion
in that age groupwas
highestfor the totalurbanpopulation.Accordingly,
it must
be dueto emigration
thatthosebetween
20 and44 yearsof age
constituteda smaller fraction of their respectivetotals in
Manchester
and New Englandcitiesthanin all cities. The
de
cennial
decrease
in thispercentage
was sharpest
in Manchester,
as was the concomitant increase in the percentage aged 45
or over .
Thisshiftin the age composition
of Manchester's
population
suggeststhat in the not-so-far-off
future Manchestermay well
be handicapped
in the competition
of attracting
new industry
345imilar
data
arenotavailable
forWPAworkers
inManchester.
EFFECTS
OF SHUT-DOWN
111
absenceof catastrophic
acts of God or mass migration,the
absolute
declinein the numberof womenin the childbearing
age
cannotbe largeover a 10-yearperiod. If, therefore,there
shouldbe an appreciable
decline
in the numberof births,
it
couldnot be whollyexplained
by the smallernumberof womenof
childbearing
age.
Over the 5-year interval1925-29, the number of births per
year was 1,642. In the succeeding
5-yearperiod,1930-34,
the
annual
average
of births
was1,289,a decline
of 21.5percent.
For the 4 years followingthe Amoskeagshut-down,1935-38,
the births per year numbered1,209, a further decline of 6.2
percent
fromthe preceding
quinquennium.
Declines
of these
magnitudes
cannotbe accountedfor by the diminutionin the
numberof womenof childbearing
age that probablytook place
over these same years.
The fewerbirthsoccurred
despitethe increase
in the number
of marriages,
whichitself
is contrary
to expectation
whenthe
numberof womenreachingmarriageable
age (15 yearsor over)
is declining.For example,the numberof marriagesper year
between 1925 ana 1929 was 613 and remained at about the same
level(607)duringthe next5-yearinterval.The annual aver
age numberin the 4 yearsfollowing
the closingof the Amoskeag
mills,however,
was700,an increase
of 15 percent
overthe
average
number
of thepreceding
period.37
Thisprovides
some
basisfor the beliefthat an increasingpercentage
of women
regardedmarriageas an adjustment
to the loss of employment
opportunities.
It shouldnot be inferred
thatthisnecessarily
means the withdrawal of that number of women from the labor
market,especiallyif they continueto refrainfrom raising
largefamilies.38
Anotherlong-runadjustmentthat deservesmentionis the lack
of interest
of the younger
generation
in millwork.This
had
cometo be of someconcernto the Amoskeag
personnel
officerto
36Thenumber
of womenin Manchester
between
theagesof 20 and44 declined
by
7.5 percent between 1920 and 1930. Il we are right in assuming a smaller volume of
emigration
between
1930and1940thaninthepreceding
decade,
thisdecline
should
not be as large during the decade of the 1930'S.
37.
It is not without interest that in 1926, according to a census of religions taken
bythe U. S. Bureauof theCensus,
80 percent
ofall church
members
inManchester
and 60 percentof its 1920 populationwere membersof the Roman CatholicChurch.
Statistics adapted from The World Almanac, 1938 (New York: New York World-Telegram,
1938), pp. 280, 286.
387
For thesameperiods
thedeathsperyearwere929,872,and860,respectively.
This trend is not usually associated with an aging population. The reduction in
thenumberof birthsveryprobably
hasan important
effecton totaldeathssince
infant mortality rates are still very high.
EFFECTS
Not even
the
113
OF SHUT-DOWN
mechanical
trades
which
were
SO
at
tractive a generationago have any appeal to them.
This attitude is puzzling. If you ask the young man
what he proposes to earn his living at he will shrug
his shoulders and say, "Don't know ." Just trying
pot luck that sometime, somewhere, he will get a
break but he does not intend
get the so-called break.
to make much effort
to
It is evident that not much can be expected in
the way of future textile workers from the families
now occupying tenements.
Nearly 30% of the members
(livingin companytenements
and]employed
in gainful
occupations are employed outside the mills.
There is no reason to believe that this was not a character
isticdevelopmentamong the mill familiesresidingoutside
thecompany
tenements,
withtheexception
of thePortuguese.
Because
of the exceptional
behaviorof this nationality
group
thereportrecommended
that
the tenements located in Amoskeag Village would make
an ideal colony for Portuguese families. We have had
harmonious relations with the Portuguese as employees
and my experiencewith them is they don't want to be
influenced by labor agitators, preferring to work
out
their
own
destinies
.
These
families
are
usually
large and have no other interest than being a fac
tory worker.
The occupational
shiftdescribedby the personnelofficer
would appear to be in the desired direction. If manufactures
willnotdevelop
in Manchester
to thepointof absorbing
the
present
laborsupply,
thereis no pointin training
theyounger
persons
for millwork.Moreover,
preparation
forjobsin the
services
and tradewouldbestfit themfor employment
in other
localities.
EFFORTS
TO ATTRACT INDUSTRIES
115
was rentedby the J. F. McElwainCompany,one of the largest
manufacturers
of shoesin NewEngland.Although
theManchester
city government
earlyin 1936 paid$1,500as movingexpenses
to another
shoecompany
to locatein Manchester,
it occupied
millspaceoutsideof the Amoskeag
mill yard. It would appear
from this evidence,then,that the organization
of Amoskeag
Industries,
Incorporated,
wasa moreeffective
method
of con
tinuing
a policyinitiated
earlier.
The new liquidating
corporation
couldnot havesecuredmuch
encouragement
for its task from the recordof new companies
thatlocatedin Manchester
in the decadeand a halfpreceding
its organization.Between1921 and the fall of 1936, when
AmoskeagIndustriesgot under way, 62 manufacturingcom
paniesemploying
10 or moreworkershad startedoperations
in
Manchester. Morethan half,34 of the 62 companies,
had been
engagedin manufacturingeither boots and shoes or accessories
of thisindustry;
6 companies
producedsome itemof clothing;
and 5 processed food products. The remainder, 17, were too
miscellaneous
for classification.
The predominance
of the shoe
companiesis more truly revealed by measuring the volume of
new enterprisesin terms of wage jobs. Out of a total of
7,657jobscreatedby the62 companies,
6,283182percent)
were
in the shoe
or related
industries.
Thus Manchester,already
a shoe-manufacturing
center in 1920, succeededchieflyin
thefollowing15 yearsin attracting
additional
shoe manufac
turers.
Virtuallyno progresshad been made toward industrial
diversification.3
Littlecomfortcouldbe derived,either,from the degreeof
mortality
amongthe incomingfirms. Of the 62 companies
that
were established in Manchester between 1921 and the fall of
1936,37 companies
involving
3,973jobseither
failed
or moved
fromManchester;
23 of these,accounting
for 3,383jobs,were
shoe manufacturers. To completethe surveyit is necessary
to add thefailurein this16-yearperiodof 23 additional
companies,
exclusive
of Amoskeag,
employing
10 or morepersons.
These had been establishedin Manchesterprior to 1921.
In the
3theinformation
on newenterprises
andthose
thathavefailed
ormoved
outhas
been compiledfrom reports on file with the New HampshireDepartmentof Labor.
A changein ownership
has not beenconsidered
as a failureof an old companyor the
creation of a new enterprise. The numberemployedis not an average but merely
thenumber
thathappened
to be employed
on thedaythefactory
inspector
called.
EFFORTS
POLICIES
TO ATTRACT
INDUSTRIES
OP AMOSKEAG INDUSTRIES,
117
INCORPORATED
Amoskeag
Industries,
Incorporated,5
purchased
allthe prop
erties
of the Amoskeag
Manufacturing
Company
for $5,000,000.
To appreciate
subsequent
developments
it is necessary
to know
the source of the purchasemoney. It may be recalledfrom the
concluding
discussion
of chapter
IIIthatManchester
residents
pledgedto purchase$500,000worth of stock; the PublicService
Company
of New Hampshire
agreedto repurchase
the Amoskeag
hydroelectric
station,canals,and water wheelsfor $2,250,000;
andthefinancial
institutions
of the cityagreedto a loan
of an equal amount.
The entirearrangement
for attractingindustrypossessed
advantages
oversimilarattemptsin otherNew Englandcities,
such as Lowell, New Bedford, and Fall River. The abandoned
textilemills in any one of these cities had not been owned by
onecorporation;
as a consequence
therewerecompeting
unitsin
liquidation
in contrast
to the coordinated
and integrated
plan
which could have been rather easily evolved from the Amoskeag
One largeunitcouldmoreeasilyprovideservices
thana smallunitcouldnot affordto supply. The very vital
economicinterestsof the Manchesterbanksin the salvaging
possibilities
gave to the Industries
anotheradvantage
- the
situation.
possibility
of providing
an incoming
enterprise
withcredit
morereadilythancouldhavebeendoneif the bankshad had no
immediate
and directinterestin disposingof mill spaceand
equipment. This was accomplishedthroughthe Industries
borrowingfrom the banks againstits total assetsand then
lendingthese same funds to individualenterpriseswhich
probablywere not eligiblefor a loan from the banks.
Since AmoskeagIndustriesis a liquidatingcorporation,
it has been primarily
interested
in disposing
of its property
Sale,
moreover,
is more
to purchasers
ratherthanto tenants.
indicative
of the potential
stability
of employment
to be
provided
by theincoming
company
thanis rental,
andtheowners
5
According to the statement of Amoskeag Industries as of December 1938, 7 of the
13 directorsrepresentlocalfinancial
institutions;
4 are localbusinesspersons;
1 representsthe city's newspaperpublisher;
and i representsthe PublicService
Company. However,since the four businessmen,
the publisher,and the represen
tative of the Public Service Company are all members of at least one financial
institution located in Manchester, the banks and the public utility may well be
said to have completecontrolof AmoskeagIndustries.or the 15 directors of the
Public Service Company of New Hampshire, 8 serve on one or more directorates of
Manchester's financial institutions. The executive officer, called the agent,
is presidentof the leadingManchestersavings bank and a member of the board
or directors of the leading national bank and of the Public Service Company.
EFFORTS
WPA
TO ATTRACT
INDUSTRIES
119
-National Research Project (Hine)
FIGURE 16.- WORKER OPERATING A MACHINE WHICH AUTOMATICALLY TIES
THE ENDS OF ONE WARP TO THOSE OF ANOTHER
THAT IS TO REPLACE IT
are checkedto establishthe degreeof financialstability,
and the Industries
consults
the local chamber of commerce
to ascertainthe concern'sreputationfor fair dealingin
generaland with laborin particular.An enterprise
that is
just beingorganizedis discouraged
from startingactual
operationsin Manchesterunlessit soundsconvincingon its
specific and definiteplans for marketingits product. A
consideration
as obvious
as thisis oftenslighted
by an
inexperienced
manufacturer
in his overenthusiasm
for beingon
his own.
Amoskeag
Industries
is ableto offerincoming
concerns
expert
adviceon plant lay-outand machineryinstallations.It is
alsoin a position
to lendmoneyto or to contribute
to the
capital
of a corporation
through
thepurchase
of stock,
through
the closeconnection
of the Industries
withthe localbanks.
Publicityfor the activities
of the Industries
was readily
In the first place, the AmoskeagManufacturing
Company had enjoyed an enviablereputationin the trade,
and as a consequence
its subsequent
fatemadenewsin tradeand
financialjournalsand newspapers.The fact of the formal
available.
EFFORTS
TO ATTRACT
INDUSTRIES
121
the "goingwages",the mill was unableto competewith the
southern manufacturers of print cloth.
As a consequence,
the companysoon found that it was manufacturingfor inventory
only. This situationwas aggravated,
of course,by the re
cessionin textilebusinessthat set in duringthe summer
of 1937:
A year later, and after many months of part-time
operations,
the companywithdrewfrom Manchesterand moved
the machinery,among Amoskeag'sbest, to its plant at Dover,
some 40 miles east of Manchester.
Subsequent developments of Pacific Mills are not without
significancefor Manchester. In the fall of 1938 there was
anotherrevivalin the textileindustry,
and the Doverplant,
nowproducing
a blendedfabric,had to startup a thirdshift
whichwas staffedinpart by its former employeesin Manchester.
AmoskeagIndustries,on the other hand,was somewhathandi
cappedin takingadvantage
of theseimprovedconditions
since
it had lost its best machinery.
Othertextilecompanies
thatfollowedcloseupon Pacific's
entrance
intothe millyardalsoinvolved
the expansion
of
going concerns. Thus the ChicopeeManufacturing
Company,
producerof gauzeand bandagesfor its parentcorporation,
Johnsonand Johnson(leadingmanufacturer
of pharmaceutical
supplies),
was undergoing
an expansion
at thistime. Its
demandfor additional
capacitywas satisfiedby the purchase
of Amoskeag's
newestmillalongwithits machinery.Onceagain
theattraction
wasthecheapness
of thecapital
equipment
and
theavailability
of a trainedlaborsupply.
Sincethe productis notsubjectto seasonalfluctuation
and
the parentorganization
haswell-established
markets,
the
concern
hasbeenableto provide
stableemployment.
Despite
this,the workersare reportedto preferemployment
elsewhere
because
of thelengths
to whichthespeed-up
andstretch-out
are reported to have been carried. The experienceof this
companyalso illustrates
anotherdifficulty
to be facedby the
displacedManchester
workers- that of technological
change.
Some80 slubbertenders,
for example,
weredismissed
whenthis
taskwaseliminated
through
installation
of improved
machinery
whichmakes this stage of the processa continuousone.
The expansion
of the othertextileconcernsinvolved
efforts
to achieve a further degree of vertical integration.
Thus
EFFORTS
TO ATTRACT
127
INDUSTRIES
Massachusetts.
Accordingly,
a location
in northern
New England
couldqualifyin morerespectsthan
was desirable. Manchester
this.
A lifelongfriendof the manufacturer
had been in the
securities business in Manchester for many years and by virtue
of this was able to raise capital locally. The Amoskeag
foundrywas availableand could be occupiedwith a down payment
of 25 percent
of thepurchase
price.Amoskeag
Industries
was
readyto turn overscrapiron in the form of junkedmachinery
in return for notes convertible
into stock.
The process
requires
softwaterfor whichNewEngland
streams,
including
the Merrimack, are famous. Finally, laborers are available
at lowerratesthanin the largercenters.
It hasturnedout,however,
thatthe granite
quarries
have
notbeenthe maincustomers
of thiscompany;rather,its major
marketshavebeenin the MiddleWest,especially
the auto
mobile centers. The companyadmitsthat it is at a freight
disadvantage
for thisbusiness,
but it remainsin a competitive
positionsince a midwesternmanufacturer
would have higher
laborcostand theadditional
expenseof treating
thewater
supplychemically
in orderto softenit.
Theremaining
company,
whileit didnotoperate
in Manchester
in September1938, located there shortly afterward. It spe
cializesin turned-woodhandlesfor screw drivers,hammers,
and the like.
For more than 60 years the company had been
locatedin Weare, New Hampshire,about 15 miles northwest
of Manchester.
When, some 2 years prior to its moving to
Manchester,
railroad
service
hadbeendiscontinued
on thespur
line, the company realized that its location was untenable.
Consequently,
it utilized
the destruction
of its plantby
the hurricane and flood in the fall of 1938 as an opportune
In the Amoskeagyard,space is available
on short notice, and Manchester's railroad connections to
occasion to relocate.
northern
NewHampshire
and nearby
Canada(thesources
of its
woodsupply),as well as to all markets,are excellent.Only
about20 of its workingforce of 65 decidedto remainwith
the company in its new location.
The remainder
were
hired in
Manchester.
This imposedno seriousproblemsincethe training
period is only a matter of weeks. However,it shouldbe made
clear that while the company may be consideredan additionto
Manchester's
employment
opportunities,
it cannotbe regarded
as a netaddition
to employment
in the Manchester
area.
EFFORTS
TO ATTRACT
INDUSTRIES
129
counterslocated in a nearby town in Massachusettswas under
It attempted
to avoidthe termsof the
contractbefore its expirationby establishinga shop in
contract
to the union.
Manchester
anddiverting
itsproduction
there.The
union cited
thecompanyto the National
LaborRelations
Boardfor engaging
in an unfair labor practice. The union's position was SUS
tained by the board, and the company was ordered to fill all
ordersfrom production
in its Massachusetts
plantup to full
capacity
beforefillingordersfrom its Manchester
plant. Its
volumeof business,however,was insufficient
to warrantthe
maintenanceof two factories,and as a consequencethe one in
the Amoskeag
yardwas dismantled.
Similarly,
a knit-goods
concern
located
in theBostonarea
rentedspacein an Amoskeag
mill,presumably
in orderto divert
productionfrom its unionizedshop, althoughthecompanyclaimed
to be interested in manufacturing another type of product.
Beforethe companycouldmoveany machinery
intothe Manchester
shop,however,the unionworkersin the Bostonshop went out
on strike. Sinceit was the beginning
of the busyseason,the
company acceded to the demands of the union that the company
observe
thesamelaborstandards
(wagesand hours)in Manchester
as in Boston. The companythensaw no advantage
in maintaining
theManchester
unitand soughtrelieffrom its leasewith
the Industries.
Finally,
mention
shouldbe madeof a smallshoemanufacturer
who leasedspace from one who had purchaseda mill building
from AmoskeagIndustries,and accordinglythe latter had
no control over the locationof this company in the mill
yard. The proprietor
of the shoecompanyhad been in the same
businessthreetimesbeforein otherpartsof the State,and
each time had been cited for violations of the State labor laws.
TWO
YEARS
OF
AMOSKEAG
INDUSTRIES
Ourcriterion
in judgingthesuccessof the Industries
is the
extentto whichits activities
havecreatednew job oppor
tunities
fortheresidentsof
Manchester.
Interest
is therefore
centered
on the extentto whichmillspacehas beenoccupied
by
companiesnew to Manchester,since there is no additionto
Manchester's
jobopportunities
whena concern
movesintothe
mill yard from another locationin Manchester. The only
EFFORTS TO ATTRACT INDUSTRIES
accounted for more than 1,800 of the total number.
131
By April
as many as ll concerns had taken up space in the mill yard,
but theywere not largeemployers,
as is evidenced
by the fact
that the total number employed was only 2,389. The peak of
employment
in this21-monthperiodwas attainedin July 1937
when 3,190 personswere employed by 14 companies;nearly
three-quarters
of the totalwereemployed
by 3 concerns.
The recessionin generalbusinesswhich set in about the
autumnof 1937was not withoutits effectuponAmoskeagIndus
tries.
During the balanceof 1937 only 2 additionalcompanies
wereattracted
to theAmoskeag
mills,
andin thefirst9 months
of thefollowing
yearonly4 newconcerns
locatedthere,no one
of which employedas many as 30 persons. As an offset to
thisslightincreasewas the discontinuance
of the largest
unit, a branch of Pacific Mills, in June. Thus in September
1938,2 yearsaftertheorganization
of Amoskeag
Industries,
Incorporated,
17 companies
gaveemployment
to 1,604workers.
To gain some idea of the extent to which employment in
the new companieswas able to replacethe employmentthat
had been providedby the AmoskeagManufacturing
Company,a
comparison
has beenmade betweenthe employment
and wagespaid
by the latterin 1934,the last full yearof operations,
and
the employment
and wage recordof the new companiesin 1937.
Amoskeag in 1934 employed on the average 8,852 persons and
disbursed$6,400,000in wages. The new companieslocated
in themillyard3 yearslateremployed
on theaverage
2,662
workers who received$2,200,000 in wages. That is, Amoskeag
Industries
in itsfirstand bestyearof operation
to date
replaced30 percentof Amoskeagemploymentand 34 percent
of itswagebill. Mention
hasalready
beenmadeof thewith
drawal of the branch of Pacific Mills after a year and a
half of operation. This unit had employedfrom 1,000 to
1,500operatives
and had occupiedsome 1,200,000squarefeet
of mill space. The relative ease of starting and stopping
operations
waspossible
because
thespacehadbeenleased.
The purchase of mill space for use usually involves longer
attachmentto the communitythan is the case with a short-term
For thisreasonit becomespertinentto inquireinto
the extentof employmentcarriedout on premisesthat have
been purchasedand on premisesthat have been leased as of
lease.
September1938.
EFFORTS
TO ATTRACT
INDUSTRIES
133
diversification
of industry: One produces
metalstampings
and
electrical
wiringdevices;
another
manufactures
chilled
steel
shotand grit; a thirdturns out electrical-coil
measuring
instruments;
andthefourthmakesmen'sclothing.The aggre
gateemploymentof all four in September1938 was only 119.
In this connectionmentionshould also be made, because of its
fairprospectsfor development,
of the soup cannerythat was
operating
in thatmonthbut withlessthanfourpersons.
There is some information available on a few of the qual
itativeaspectsof this new employment.For example, in
15 instances the full-time weekly hours are known. In nine
establishments
this amountedto a 40-hourweek, in eight of
them on a 5-day basis. Fiveothers
wereon a 52-dayschedule
with hours varying from 44 to 50. One other operated on
a 5-day,45-hourschedule.7
Some information is also available on hourly wage rates.
Over the first 9 months of 1937 it was necessary to report
to the Unemployment
Compensation
Divisionthe aggregate
number
The
division
of
the
of man-hours
together
withwagepayments.
latter by the former would yield an average hourly wage rate
fortheentireemployer
unitwithout
regardto occupations.
It is these rates that are used. Within this 9-monthperiod15
establishmentswere operating. Of this number, nine belonged
to the textile industry. For eight of these nine concerns
theaveragehourlyearnings
variedfrom42 to 51 cents;for one
companydevotedto dressing,warping,and weavingworsted
goods
– processes
involving
thebetterpaidoccupations
- the
averageearningswere 62 cents. The comparable
averagefor all
sections
of the Amoskeag
Manufacturing
Companyin 1934was
41 cents.
Of the threecompaniesthat providedsome degreeof indus
trialdiversification,
one, makingmetalstampings,had an
average
of 51 centsper hour,but the othertwo paidan average
below that of Amoskeagin 1934. These hourly earnings were
37 and31 cents,withtheloweraverage
in themen'sclothing
factoryand thesomewhathigherone in the establishment
making
the electrical-coil
measuringinstruments.
It appearsfrom all this evidencethat the resultsof 2
years'
activities
on thepartof Amoskeag
Industries
mustbe
?This
information
hasbeen
adapted
from
Inspectors'
reports
totheMinimum
Wage
Divisionof the New Hampshire
Bureauof Labor.
EFFORTS
TO ATTRACT
INDUSTRIES
135
chapter
III,the worstedsectionhadmadea profitoveritslast
decade under Amoskeagmanagement,and it could very well
have remaineda going concern. For this reasonit was expected
that someone would resume operationsof this unit even after
a lapse of a year. However, no one with the requisite com
bination
of capitaland couragecameforward.That couragewas
requiredmay be inferred
from the fact thatduringthe period
underconsideration
the priceof raw wool was rising,while
the priceof finishedgoodsremainedaboutconstant.Amoskeag
Industrieswas unwillingto assumedirectresponsibilities
becauseby the verynatureof the process,
and especially
in view of the rise in priceof wool,the numberemployedper
dollar of investment would be small.
Consequently,
whenit becameimperative
in the latefall
of 1938 to organizenew enterprises,
Amoskeag
Industries
establishedthree companies,each of modest proportions.
Onlyonewasplanned
to manufacture
worsted
greygoods;
onewas
to producespun rayons;and the third was to spin mohair yarn.
All three were largelyfinancedby the Industriesthrough
stocksubscription.
A fourthcompany
promoted
by out-of-town
interestsarrangedto purchasesome of Amoskeag'sfinishing
equipmentand to establisha unit in the mill yard for finish
ing liningcloth used in the manufacture
of shoes.
All four
expected
to go intoproduction
sometime
duringthewinterof
1938-39
andhopedto achieve
eventually
an aggregate
employment
of 500 to 600 workers.
The effectof the operation
of Amoskeag
Industries
upon
Manchester's
volumeof unemployment
may be bestsummarized
by
considering
the numbersregistered
with the Manchester
office
of the New Hampshire Employment Service. The number in the
activefile of this office would reflect,of course, more than
theactivities
of Amoskeag
Industries.
For example,
employment
fluctuationsin the shoe industry also would be represented
there .
Nevertheless
it is not without
interest
that the
monthly
averageof the numberregistered
in 1937was 7,555
comparedwith 10,873in the preceding
year,beforeany of the
newcompanies
had reallystartedup. Althoughthis represented
a declineof 30 percentin the numberseekingemployment,
it meantthat22 percentof the city'sgainfully
occupied
population
was stillseekingemployment
throughthe State
CHAPTER
SUMMARY
VI
AND CONCLUSIONS
8UMMARY
The basicquestionsto whichthisinquiryhas beendirected
were stated
at the
outset
as :
What are the more important
considerations
that transformedone of the first industrialized
regionsinto one of the first"depressed
areas"of an indus
trial character? What types of adjustment do workers make
who are economicallystranded in a depressed area, and what
adjustmentsmay they hope to make?
The majoranswerto thefirstquestion
was givenin terms
ofexcess
productive
capacity
resulting
initially
fromthees
tablishmentof new textilefactoriesin considerablenumber in
the South. These had been establishedby local entrepreneurs
to takeadvantage
of cheaplaborat a timethatcoincided
with
the introduction of the automatic loom. As a consequence ,
the new productive capacity was an addition to rather than
a replacement
of the oldermachinery.The
World
War demands
uponthe industry
servedto concealthisexcesscapacity
at the
verytime that largeprofitsderivedfrom wartimeoperations
provided the basis for further expansion of the industry
in subsequent years. Added impetusto the southwardshift
of the industry in pursuit of low labor costs came from the
virtualcessationwith the WorldWar of the influxof cheap
immigrant
laborintoNewEngland.Sincecheaplaborno longer
cameto the industry,
the industry
movedto the cheaplabor.
Nor could this major maladjustment in the cotton-textile
industry
be mitigated
by an expansion
of markets.In theface
of the increasedcompetitive
strengthof substitutetextile
fibers,cottoncouldmanageonlyto retainits relativeshare
of the textile market .
Even this could be accomplishedonly
by manufacturing
to an increasingdegreefor the producer
goodsindustryand by cateringto the consumer-goods
industry
through
increased
attention
to thestylefactor.Bothpolicies
tendedto impartadditional
instability
to manufacturing
operations
and additional
risksto profitmaking.
137
SUMMARY
AND CONCLUSIONS
139
evident
whentheyareviewed
in thelightof general
locational
It should be clear that industries which
are oriented toward raw materials will not be attracted to
considerations.
Manchester
for the simplereasonthatthe Manchester
area has
virtually
no raw materials,
organic
or inorganic.
A possible
exception to this are the forests in the northernend of the
Stateand in nearbyCanadathathaveprovided
thebasisfor
Manchester's
woodworkingfactories. Since, however,woodworkingindustries
in generalhavebeendeclining
for morethan
a decade,one wouldnotlookfor any appreciable
expansion
of the industryin the Manchester
area,especially
since the
nearestforestsare not very extensive.
Nor is Manchesterso situatedthat it would have any special
attraction for industries that should be oriented toward
markets,
and againfor a simplereason. AlthoughManchesteris
probably
a gooddistribution
centerfor northernNew England,
this market, whetherfor consumers'or producers'goods,
is in itself
toosmallto support
industries
of anyappreciable
size. Although
Manchester
is onlyabout56 milesfromBoston,
a majormarketing
area,fromthe viewpointof
transportation
costs a plant location in the southern part of New England
is preferable;
sucha location
wouldenablea plantto tap
the Boston market, that of southern New England, which has
a considerablyhigherdensitythan the northernsectionof the
region,and thatof the New YorkCity-Philadelphia
area,
whereasa plant locationin Manchester,in additionto the
smallmarketof the localarea,would be as economicalonly
for servingthe market of the Bostonarea.
Moreover,to the naturaltransportation
disadvantage
due
to distance
frommajormarketstheremustbe addedthe economic
disadvantageof the low volume of trafficand its uneven
distribution, that is, a larger volume of incoming freight
thanof outgoing
freight.Theseconsiderations
are especially
importantsince they make for a high cost of living in an
area such as Manchester that imports most of its food and
fuelsupplies.
Thereare communities,
however,that havedevelopedindus
triallydespitedistancefrom the majormarketingareasand
the absence of raw materials. Buffalo, New York, is a case
in point. Communitiesof this type are usuallylocatedat
natural
"breaking
points"alongimportant
throughroutes.
SUMMARY
AND CONCLUSIONS
141
foundry,dyeing equipment,and part of the finishingequipment,
by thattimewas alreadybeingutilized.Thus within 2 years
the attractiveforce of low capital costs seems to have spent
itself,despitethe fact thatmorethan3,000,000
squarefeet
of mill space at modestrentalswas still unoccupied.The
latter,however,
couldscarcely
be considered
an advantage
peculiarto Manchester;for urban New England,at least,
it probably
approaches
an ubiquity
in viewof the extensive
liquidation
of textilecompanies
thatoccurred
throughout
most
of the region.
If our analysisthus far is valid, the establishment
of
new companiesin Manchesterafter 1938 must dependlargely
uponthe existence
of relatively
low laborcostscompared
with alternative locations. This would not result from the
possibility
of drawingupon unemployed
workerswho are highly
skilled,for the skillsthat prevailin Manchester
are those
used in the textile and shoe industries. In neither case
do the tasks require highlydevelopedskills as evidenced
by the fact that both industriesin recentyears have been
transplanted
intoruralareasand madeto flourishin a short
time. Accordingly,
Manchester
would hold no attractionfor
industries
that mustbe mannedby highlyskilledworkerssuch
as machinists,for example.
To the extent,then,that labor-oriented
industries
would
locatethere, it would be those in which labor costs are
a highpercentage
of totalcostsowingto considerable
process
ing by semiskilledand unskilledoperatives.Industriesof
thatdescription
includetextilemanufactures,
knitgoods,
shirts,clothing,leatherand its manufactures,
and assorted
articles used in the novelty trade. Most of these are among
thetraditionally
"sweated"
industries.
Thiswouldalso
include
any industrymakinguse of womenon an assemblyline,such as
the manufacture
of the electrical-coil
precisioninstruments
countedamongthe new establishments
locatedin the Amoskeag
mills. Such enterprises
are also characterized
by the fact
thattheycan be housedin millbuildings
of general
design
and that the totaltransportation
costsof theirproduct
are a small fraction of the wholesale price
important con
siderations
foran industry
if it is to operate
successfully
in an areasuchas Manchester.
SUMMARY
AND CONCLUSIONS
143
To attractindustries
throughlowerwagesin thefallof 1938
was not as easy as in earlier years. Since the National Labor
Relations Board has ruled that it is an unfair labor practice
to divertproductionfrom a unionfactorytoa nonunionfactory,
theprecarious
employment
thatmightbe provided
by "run-away"
companieswas greatlyreduced. Moreover, the Fair Labor
Standards
Act tendsto reducethesizeofthewagedifferentials
thatManchester
employers
couldconceivably
offer. To the same
effect is the general occupationalshift away from mill jobs
and the continuous decline in the absolute numbers of persons
in the mostproductive
age groups.WPA employment
probably
also served to maintainthe wage structure.
The locationalconsiderationsrelating to new enterprises
that havebeendiscussedalso apply to the expansion
of con
cerns already located in Manchester. The problem may be
reduced to a considerationof the possibilitiesof expansion
in Manchester's boot and shoe industry. It would appear
that in the near future the industry will not undergo any
large expansionof productivecapacity,and, accordingly,
any absoluteor relativeexpansionof the industryin the
Manchesterarea would be at the expense of some other area.
Indeed,the formerhad occurredbetween1929and 1935. That
is, the averageemploymentbetweenthese years increased
3.4 percentin the boot and shoe industryof New Hampshire,
which is all but exclusively located in the tier of three
lower counties,Hillsborough
(which containsManchester)
,
Rockingham,and Stafford,while averageemploymentin the
entire
industry
declined
by 1.7percent
overthesameperiod.
The latter occurred between 1935 and 1937 when the biennial
increase
in employment
in theentireindustry
was6.8percent
compared
with17.8percentin NewHampshire's
shareof the
industry.5
Andmodest
expansion
in Manchester
itself
continued
between1935and 1938in the formof two established
companies
occupying
Amoskeag's
millsin orderto add to production.
This involved in the neighborhoodof 500 workers. When one
considers,however,that only two companiestook advantage
of the low-priced
millspacethathad beenavailable
for
3 years,one cannotexpectany large-scale
expansionof the
4[Con.)
inNewEngland
wasthehighestofthe
nine
regions.
The cost of
food in the
New Englandcitieswas 103.5 percentof the averagefor all 59 cities,while the
cost of fuel was 132.6 percent of the average. (Ibid.,p. 168.)
5.
percentagesare
based
onfigures
adapted
from
theCensus
ofManufactures
for1929
and 1935 and preliminarycensus releases for 1937,
SUMMARY
AND CONCLUSIONS
145
market-oriented
consumer-goodsindustriesin which labor
costsconstitute
a relatively
highpercentage
of totalcosts.
It has also been explainedthat for such industriesa location
southof Bostonwas preferableto one north of that metro
politan
areaif otherthingsareequal,whichon ourshowing
has been the case.
According
to thisanalysis,reemployment
in Fall River and New Bedford should have proceeded further
than in Lowell.
This is borne out in a comparison of the monthly average
numberof wage earnersemployedin manufactures
other than
cotton textilesfor specified years.
Between
1923 and
1929,
a periodof liquidation
in the cotton-textile
industry
of those
cities,the numberof wagejobsin othermanufactures
increased
2.6 percent in Fall River and 6.2 percent in New Bedford but
decreased
9.9 percentin Lowell.The difference
in development
is more strikingif the periodof revivalafter the great
depression
is comparedwith the volumeof employment
in 1929.
Thus,between
1929and1936wagejobsin industries
otherthan
cottontextileshad a rise of 36.2 percentin Fall Riverand
more than doubledin New Bedford(an increaseof 107.6 percent)
,
whilein Lowell
thenumber
remained
practically
stationary.7
WhetherManchester
willsharethe fate of otherNew England
textiletowns locatedsome distancefrom presentmarketing
centers is not known. What is known is that a once pra
US
manufacturing
city has been leftstrandedby the declineand
failureof its largestcompany. That this company was one of
thelargest
textile
millsin theworldand hadbeenin exist
ence for over a hundredyears is not withoutsignificance.
Although
manyfactorsaffectedits decline,the mostimportant
was the withdrawal
of neededcapitalfundsat a criticalpoint
in the historyof the company. The loss of employmentoppor
tunityfor 11,000 or more workerscreatedmore social and
economicproblemsthan are visualizedin the unemployment
figures alone.
This case study illustrates not only the
problems
of textile
NewEngland
in decline
butalsoindicates
the broaderproblems
consequent
uponthe migration
of industry
in the countryas a whole.
?Itisnoteworthy
that
inNewBedford,
forwhich
thereare
some
detailed
statistics,
- one
the bulk of the reemployment was created by the silk and rayon industry
that satisfies the specificationssuggested by our analysis. Thus the wage
jobs in manufacturesother than cotton textilesnumbered 13,138 in 1936, an
increase of 6, 807 over the 1929 figure.
of the total of 13,138 wage jobs,
5,793 were in the silk and rayon industry.
In 1929 wage jobs in this industry
for all of BristolCounty,in which both New Bedfordand Fall Riverare located,
totaled 2,234.
APPENDIXES
Page
Appendix
A.
THE
EARLY
B. EMPLOYMENT
LABOR
SUPPLY
AND
WORKING
CONDITIONS , 1911-22
C. EMPLOYMENT CONDITIONS, 1923-32
D. EMPLOYMENT
CONDITIONS,
CONDITIONS
.
.
148
172
.
.
1933-35
204
248
E. EFFECT OF AMOSKEAG'S DECLINE ON EMPLOYMENT,
EARNINGS,
F
SUPPLEMENTARY
AND MIGRATION
TABLES
G, THE COMPANY PERSONNEL
265
312
AND INCOME - TAX RECORDS
321
H. OCCUPATIONAL-HISTORYSCHEDULE AND DEFINITIONS
OF IMPORTANT TERMS .
I. SOME EVIDENCE ON THE RELIABILITY OF AN EMPLOYMENT
HISTORY BASED ON THE WORKER'S MEMORY.
338
339
APPENDIX
A
149
Lawrence, Chicopee, and Manchester, had been es
tablished by capital accumulated through neutral
trading. Every country town with a good-sized brook
or river set up a textile or paper mill or iron
foundry; and a similar expansion in shoemaking al
tered the economy of fishing villages.
of interest
in Massachusetts
shifts
The
from
center
wharf
to
waterfall; by 1840 1she had become predominantlya
manufacturing state.
THE
WALTHAM
MODEL
The new technologyin the form of the power loom and the
entranceof the financier and merchant prince into the pro
motion of manufacturesdid more than accentuatethe shift in
economic
enterprise;
theyprovided
alsoa new patternformanu
facturingactivity. There was still the dependenceon the
rivers
forpowerandtransportation,
butin allotherrespects
there
wasa thoroughgoing
change.Formerly,
"(the)millswere,
11, controlled by men intent upon the process
production,
spinnersand mechanicsat heart,whose businesswas
one
and
themakingof cottonthreador cloth."2
Afterthe war,the development
of the industry
was
taken up by men with the best business imagination
in the land, unhampered by its traditions, concerned
with making fortunes and buildingstates, not with
manufacturing
cotton cloth.
These men relied not on their technical knowledge
of production but on business organization, e x
ecutivecapacity,and their ability to lure the best
talent
in every
field.
This
fact
in
itself
was
reason for their success, for it left them un
concernedwith detail and free to organizeand plan,
one
to financetheircompanies,markettheir product,
and consider
the social
as well
as
ductive
theprodu
problem involved in their hiring of labor.
The availability
of largeramountsof capitaland the advent
of the power loom combinedalso to alter the structureof the
productive
organization.
Formerly
a givenstagein production,
suchas spinning,
composedthe productive
unit. In the newer
ITheMaritime
Historyof
Massachusetts,1783–1860
(Boston,
Mass.:
HoughtonMirrlin
Co., 1921),
PD.
213-4.
See also victor S. Clark, History of Manufacturesin
the UnitedStates,1607-1860
(Washington,
D. C.:
Washington, 1916), D. 545.
2
The Carnegie Institution of
Caroline
F. Ware,TheEarlyNewEngland
Cotton
Manufacture
(Boston,
Mass.:
HoughtonMifflinCo., 1931),p. 60.
3Ibid.,
pp.81-2.
APPENDIX
A
151
Eventhe typeof product
andthe methodof marketing
were
not immunefrom the sweepingchangesof the period.
The old mills
had had their
yarn woven
into stripes
in
and plaids which required more or less skill
weaving and which varied in fineness and fashion.
The Waltham companystarted producingplain, coarse,
white sheeting made from number fourteen yarn which
the power loom could turn out easily and which could
be used for almost all purposes, especially by the
western pioneers. . . . . It lent itself to mass
productionasthe more varied output of the earlier
mills had not.?
Moreover,
insteadof selling to a variety of small jobbers or
commission merchants scattered all over the country,
a practicewhich the old mills found both expensive
and risky, the Walthan company disposed of its entire
productthrough one agent who receiveda commission
of only one per cent and was
wholly responsiblefor
8
marketingthe mill's output.
What occurredin Walthamand later in Lowelland Nashuaalso
came to pass in Manchesterbeginningwith the organization
of the Amoskeag
Manufacturing
Companyin 1831;norwas the
organization
of the latterby any meansthe end of the process.
The highprofitsof theformative
yearsprovided
the basisand
incentive
for a continuous
repetition
of the Walthamexperiment
until1846withonlyshort-lived
interruptions.
In thatyear
" the cotton industry
peak.
may be said to have reached a
Dividends
hadneverbeenso high,expansion
neverso
rapidas in the years1844-46."
From about that date furtherexpansioncreateda highly
competitive
situation
whichcouldonlyresultin the narrowing
of millmargins.Thus,
only huge sales could bring profits, and the very
size of these sales in turn increased competition
and forced the price ower still, The decline
in
cloth prices was practically constant from 1820 on,
except for a slight recovery in the fifties from
It responded
very slightly to fluctuationsin the general price
level and at times diverged conspicuouslyfrom the
price of cotton. This decline was not forced by
the bottom prices of the late forties.
7Ibid.,
D.65.
81bid.,
D.66.
9Ibid.,
p.108.
APPENDIX
for
the
army
of useful
A
people .
153
The
mechanic
and
machinist came, each with his home-made chest of
tools
and
his
wife
and
little
ones .
The
widow
came
with her little flock and her scanty housekeeping
goods to open a boarding-house or variety store,
and so provideda home for her fatherless
children.
Troops of young girls came from different parts of
New England, and from Canada, and men were employed
them at so much a head, and deliver them
to collect
at the
factories.
Some of these were daughtersof professional
men or
teachers, whose mothers, left widows, were struggling
to maintain the younger children.
A few were
the
daughters of persons in reduced circumstances,who
had
left
home
" on a visit"
to send
their
wages
surreptitiously in aid of the family purse. And some
were the granddaughters of patriots who had fought
at Bunker Hill, and had lost the family means in the
war for independence. There were others who seemed
to have mysterious antecedents, and to be hiding from
something; and strange and distinguished looking men
came
and women sometimes
to call upon them. Many
farmers ' daughters
came to earn money to complete
their wedding outfit, or buy the bride's share of
housekeeping articles.
At first only a few came; others followed,
and in a short time the prejudice against factory
.
labor wore away, and the Lowell mills became filled
with blooming and energetic New England women.
In 1843 over one-half of the depositors
in the Lowell Institution for Savings were mill
girls, and over one-thirdof the whole sum deposited
belonged to them,
in round numbers, $101,992. It
is easy to see how much good such a sum as this would
do in a rural
community
where
money,
as
a
means
of
exchange, had been scarce. Into the barren homes
many of them had left, it went like a quiet stream,
carrying with it beauty and refreshment.
The
mort
gage was liftedfrom the homestead;the farmhousewas
painted;the barn rebuilt; modern improvementswere
introduced into the mother's kitchen, and books and
newspapersbegan to ornamentthe sitting-roomtable.
Young men and women who had spent their two or
threeyearsof probation
in the Lowellmills,often
returned to the old place, bought land, built their
modest houses, and became new and prosperousheads
of families.
Some of the mill-girls helped maintain
widowed mothers, or drunken, incompetent, or invalid
fathers.
Many of them educated the younger children
of the family and young men were sent to college
APPENDIX
A
155
from British America (Canada) numbered2,501. By 1860, when
the United States Bureau of the Census for the first time
presentednativityfiguresfor Manchester's
population,
the
foreign-born
numbered
5,480persons,
or 27 percentof the total
population
of20,107.14
There
were3,976
persons
fromIreland,
800 from British America, 395 from England, and 153 from
The Englishand the Scotchvery probablyhad had
previous
industrial
experience,
but the otherscamefromrural
areas.
Many of the Irishwere thosewho performedthe heavy
Scotland.
labor in the constructionof the country'scanals, mill build
ings, and railroads. A lackof industrial
experience,
however,
has not been a serioushandicapin an industrysuch as textiles
wherethebulkof thejobshasbeensemiskilled,
requiring
only
a short trainingperiod.
IMMIGRATION
French-Canadian
FROM
1860
TO
1890
Immigration
The CivilWar couldhavehad the effectonlyof intensifying
thisdependence
of the millsuponimmigrant
laborbecause
of the drafting
of the nativepopulation
for military
purposes.
It was towardthe closeof these yearsthat the New England
millsencouraged
French-Canadian
immigration
in earnest.Most
historiansof this migration,followingP. Hamon, distin
guish three groups of immigrants: temporary immigrants, a
groupcomposedof indebted
farmerswho wentsometimesfor one
or severalseasons,sometimesfor severalyears,to work in
theAmerican
factories
andto return
withsomesmallsavings;
casualimmigrantswho worked in one city after anotherac
cordingto theircapriceand opportunities
for employment
and
didnotsettleanywhere;
andfinally
thepermanent
immigrants,
muchthe largestgroup,composedof thosewho mightor might
not havebeenonceamongthe othertwo groupsand who disposed
of theirpropertyand leftwith theirfamiliesfor the United
15
Stateswithoutany intentionof returning.
A classification
of thissort, however,fails to indicate
thatmuch of thisexodushad not been initiatedby the immi
grantsbutratherhad beendeliberately
and directly
stimulated
14
Between 1840 and 1860 there was more than a sixpold increasein Manchester's
population from 3,235 to 20,107.
15
Padapted
fromGeorges
Lang101s,
Histoirede
la population
canadienne-francaise
(Montreal,Canada: Documents
historiques,
EditionsAlbertLevesque,1934),p. 173.
(Authors' translation.)
APPENDIX
A
157
the children having grown up in city surroundings
found repugnant the idea of returning to the Canadian
land as farmers,an occupationfor which they hadno
17
aptitude after their contact with industrial life.
Despitedisappointments
and misgivings,the streamof im
migration
fromFrenchCanadawas a steadyone for manydecades.
Whilethe immigrants
soon discovered
that New Englandwas not
a land of gold, the hard fact remainedthat it was a land
of cash wages which were conspicuously
absentin the rural
Canadian
scene.
To this real economic advantage must be
added the constantrecruitingby agents a factor of no
littleimportance
in feedingthe streamof migration. Some
fragmentary
evidenceon thisscorehas come to our attention.
Thus, to quote Belisleonce more,
during the last week of April 1889, the trains
passing by St. Albans from Canada transported2,300
Canadian
emigrants.
to engage
back
about
The
workers
600
of
Americans
3
and on May
them
" in
locked
went
to Canada
train
a
brought
coaches
in
o r
der to avoid any confusion and to make desertion
impossible.18
Obviously,
sincethiswas goodbusinessfor the railroads,
it
is notsurprising
to findthattheyalsoservedas agents. To
thiseffectis the testimonyof the editorof Le Travailleur
before the chief of the Bureau of Labor Statistics
of the
Commonwealthof Massachusetts
in 1881. He stated:
I have a letter from an agent of the Boston and
Albany Railroad at Worcester, who says he is ready to
testify that since two years, no
less
than
one
hun
dred superintendents or agents of mills have applied
to him for French help, one mill asking for as many
as fifty families at a time.
And Mr. E. I. L'Hérault,
justice of the peace at Fall River, could testify
in the
same
manner.
19
Whetheror not Amoskeag
followedthe generalpractice
of the
region by engagingrecruitingagents is not known.
If it did
deviate from the usual procedure,it would probablyhave been
becauseits favoredgeographic
position
obviated
the necessity.
Manchesterwas the nearestlarge industrialtown along the
railroadroutebetweenMontrealand Boston,and it was only
naturalthat,once the exodusfrom Canadabegan,many would
17
'Ibid.,pp. 8–9. (Authors' translation.)
181bid.,
pp.63-4.(Authors'translation.)
19"theCanadian
French
inNewEngland,"
Thirteenth
Annual
Report:
1882
(Bur.
Sta
tistics of Labor, Commonwealth of Massachusetts, 1882), D. 17.
APPENDIX
A
159
caringto take up with fomentersof strikesand drawinga
certain number after him. 1123
The fact that these characteristics
also made them useful as
strikebreakers
very likelyexplainspart of the hostility
of
theothertextile
operatives
toward
theFrenchCanadians.
In
theFallRiverstrike,of
1878,for instance,
theywereemployed
1124
as strikebreakers
and earnedthe nicknameof "knobstickers.
Thus,as the continueddevelopment
of the textileindustry
in NewEngland
in thedecades
preceding
theCivilWardepended
on the Irishand Englishimmigrants,
so in the post-Civil
War
decadesit depended
on the immigration
of theFrenchCanadians.
The development
of the railroadduringthose yearsextended
the labormarketof the cottonmillsfrom rural New England
to ruralQuebec.For the moreskilledjobs,however,
the mills
stillrelieduponthe immigrants
fromnorthern
Europe.
Northern-European
Immigration
Manyofthe northern
Europeanswhofinally
settledin
Manchester
came originally
as contractlaborersin accordancewith the
Federalregulations
laiddownin "an act to encourage
im
migration"
approved
July4, 1864. Amoskeag,
for example,
in
October 1865 entered into an arrangement with the American
EmigrantCompanyfor the importation
of Englishtextileoper
atives;and between1868 and 1870 Amoskeagbroughtover under
contractseveralscores of Scottishweavinggirls who had
It
hadexperience
on weaving
checked
andfancyginghams.
was
in this mannerthat Amoskeagestablishedits reputationat
an early date for beautiful,durableginghams. The terms
included
in the following
contract
were thoseusuallydemanded
by Amoskeag:
Glasgow 9th May 1868
This is to certify that I have entered into an
engagement with Susan Cunnion to act as gingham or
check weaver for the AmoskeagCompany of Manchester,
New Hampshire, United States of America, (Mr. E. A.
Straw, Agent) for the period of twelve calendar
23
Adolphe
Robert,
"AuNewHampshire,"
LesFranco-Américains
peints
pareux-mêmes
(Montreal, Canada: EditionsAlbertLevesque,
1936),pp. 221-2.
24
*HugoAdelard
Dubuque,
Le Guidecanadien-français
de FallRiveretnoteshisto
riquessurles Canadiensde
Fall River(FallRiver, Mass,: E. U. & E. F. Lamoureux,
1888),D. 125.
161A
APPENDIX
Table A-1.- DISTRIBUTION
IN
EIGAT
NEW
ENGLAND
OF FOREIGN-BORN
CITIES
POPULATION
A POPULATION
HAVING
OF 50,000 TO 126, 000 IN 1930,
a
1890-1980a
Brockton
Fall
River
Lawrence
Lowell
Year and nationality
Number
Percent
Number
Percent
27,294
100.0
74,398
100.0
6,274
23.0
Number
Percent
Number
Percent
77,696
100. O
1890
Total population
Total foreign-born
French
Irish
Canadians
b
Poles
Greeks
Italians
Other
37, 734
50.7
5.8
20.3
8.9
0.1
0.1
12.3
0.1
O
0.1
8.1
17.9
O
44, 054
20,518
100.0
46.6
34,610
10.1
17.5
44.5
20.3
16.2
O
0
0.1
18.9
0.1
7.9
1900
Total population
Total foreign-born
French
Irish
Poles
Greeks
40,063
100.0
9,484
23.7
104,883
50,042
1.3
6.7
Canadians
Italians
Other
100.0
62,559
100.0
47.7
28,577
45.7
0.8
19.2
7.0
0.5
0.1
0.4
14.4
0.1
0.3
11.2
11.3
0.7
0.1
1.4
20.6
21.0
94,969
40,974
100.0
43.1
15.4
12.8
0.5
1.3
0.1
13.0
1910
Total population
Total foreign-born
French
Irish
56,878
15, 425
100.0
27.1
119,295
50, 874
1.6
5.1
5.6
0.3
Canadians
Poles
Greeks
Italians
42.6
85,892
100.0
106,294
41, 319
48.1
43,457
12.8
4.4
1.8
0.1
0.9
1.7
12.8
Other
100.0
9.0
8.9
5.1
0.2
7.8
19.1
22.6
100. O
40.9
11.6
9.4
1.7
3.6
0.2
14.4
1920
Total population
Total foreign-born
66,254
17,124
French Canadians
Irish
Poles
Greeks
Italiens
Other
100.0
25.8
120,485
42,331
100.0
35.1
94,270
39,063
100.0
41.4
1.3
3.7
0.7
8.9
2.7
6.3
4.5
2.1
0.7
2.8
16.6
0.1
0.8
2.7
0.4
112,759
38,040
33.7
9.0
6.6
2.0
3.3
0.4
12.4
9.0
20.5
100.0
18.5
1930
Total population
Total foreign-born
French
Irish
Canadians
Poles
Greeks
Italians
Other
See footnotesat end of table.
63,797
14,275
100.0
22.4
1.1
3.1
1.1
0.6
3.0
13.5
115, 274
32,078
100.0
27.8
7.4
1.8
1.7
0.1
0,7
16.1
85,088
28,633
100.0
33.7
6.2
3.5
2.0
0.2
7.7
14.1
100,234
26,129
100.0
28. 1
7.7
5.0
1.7
1.9
0.3
9.5
APPENDIX
163
A
If thegrowthof theNewEngland
branchof theindustry,
even
beforesouthern
competition
becamea factor,hadcometo depend
on successivewaves of immigrants, 2w nuch greater wou
thisdependencebecomewith the development
of the industry
in the South?
BEGINNINGS
OF COTTON
TEXTILES
IN THE
SOUTH
It was aboutthistime,1880-90,
thatthe southernbranchof
the cotton-textile
industrybeganto achieveimportance.The
considerations
thathad originally
conditioned
the location
of
theindustry
in New Englandhad by thattimelosttheireffect.
The tremendousadvancein the generalindustrialization
of
the country,along with the developmentand integration
of
the commercialand financialinstitutions,
meantthat the
ever-increasing
capitalresourceshad moremobilitythan
formerly.The buildingof the railroads,
moreover,
had freed
manufacturesfrom their dependenceupon the rivers and streams
for powerand transportation.
In view of these developments
and the availabilityof a large local labor supply in the
southernseaboardStates,as well as the existencethere of the
minorrequisites
of a humidclimateand softwater,it is clear
that by the end of the century the New EnglandStates had only
theadvantage
of an earlystartwithrespectto cottontextiles.
It was not,however,
untilsometechnological
changesin
the textile process had occurred that local entrepreneursin
the SouthAtlanticStateswere able to take advantageof the
locational factors that had been altered in their favor.
Thus
in 1871the Sawyerringspindleand shortlythereafter
the
Rabbethdouble-spinning
ringspindlewere perfected.Of more
importancewas the Draperautomaticloom.
latterin 1895 occurredin
The invention of the
a period of "easy" money characterized by the intense
interest
of the
financial
markets
promotions and consolidations.
The
in industrial
result
of
the
coincidenceof these two factors,so far as the cot
ton textile industry was concerned, was the greatest
expansionin its history,encouragedprimarilyby the
prospect of high profits to be obtained in new mills
equipped with the Draper automatic looms. Thus the
installed spindles in the industry increased from
19,472,000 to 28,267,000 during the ten years 1900
to 1910, an increase of 45 per cent.
of this
new
APPENDIX
A
165
The samesentimentswereexpressed
in 1905byMr.F. C. Dumaine
whobecamea memberof Amoskeag's
boardof directors
in 1904
and treasurer in 1905
a positionhe retaineduntilliqui
In thelatteryearthe Legislature
of
NewHampshire
wasconsidering
theenactment
of a billreducing
dation
was
ordered.
the workweekfrom60 hoursto 58. Amoskeag
attempted
to bring
about its defeat by havingpressurebroughton the local
legislatorsfrom above. To this end Mr. Dumaine wrote to the
Honorable
J. H. Gallinger,
UnitedStatesSenatorfrom New
Hampshire,
pointingout the difficulties
of meetingsouthern
competition. The letterfollows:
February
3, 1905
The HonorableJ. H. Gallinger
United States
Senate
Washington, D. C.
My dear Senator Gallinger:
I understandafeelinghasgot abroadinNew Hampshire
that the mills in Manchesterare not particularabout
the 60 hour bill, and that you among others had got
the same impression.
I am taking the liberty to address you on this
subject,to controvertthat feelingin your mind, and
to assure that the management of the mills are very
strongly of the opinion that it would be a serious
detrimentto their interestif N. H. should adopt the
58
hour
law.
You will remember, in my conversation
with you
yesterday,that I called to your attention the fact
that within five years eight or ten of our large in
dustrialconcerns
in Massachusetts
have beenobliged
to reorganize, or shut up entirely. I feel strongly,
and Mr. Coolidgeagrees,that this is largely due to
the excessive taxation, and increased hardships of
the laborlawswhichMassachusetts
has incorporated
upon her books each year.
You know perfectly well of the growth of the mills
in the Southern States, where the hours of labor are
very much in excess of ours, to say nothing of the
wages and cost of raw materials, and it seems to me
that it behooves us all to do what we can to preserve
in our State the industries
that already
exist there.
I understand that some of the leaders in N. H. are
not
as strong on this measure as might be wished for,
because they have an idea you feel the same way,
andI am writing
thisthatyoumightsay a wordto
correctthat feelingif you feel so disposed.
APPENDIX
A
167
Several months elapsed before the first Polish couple were
roomof the
given a chance to work andthisin theweaving
Stark Mill.
It was not untilseveralyearslater that any
of theircompatriots
joinedthem. Havinghad experiencein
the textilemills of Suncookand in the mills of Massachusetts,
they had an easier time finding employmentin the weaving and
cardingdepartments
of the Stark. Afterthe firstbeginnings
had been made, the colonydevelopedvery slowlyuntil1896
whenAmoskeag
officials
heardof the reputation
as hard-working
operativesthat the Poles had earned at the Stark and decided
to employ them.31 In the census of 1900, 426 Manchester
residentswere reported as born in Poland. In the preceding
yeartheirnumbershad beensufficient
to justifythe appoint
ment of a Polish priest by one of the Roman Catholicchurches
of Manchester,
and in 1902,850Polishparishioners
joinedto
organize
theirownchurchand parish.
Manyof the additions
to the Polishcolonyhadcomedirectly
from Polandto Manchester,
usuallyupon the invitationof a
friend or relative.
The local steamshipagent was frequently
the intermediaryand financier. That is, the agent would
providethe prospective
immigrant
with a steamship
ticketupon
advancepaymentof halfof the fare by the Manchester
resident
and uponthe latter'sgivinghis guarantee
that the immigrant
wouldpaythe balance
to theagentbeforehe discharged
any
otherfinancial
obligations.32
The immigrant
usually
hadto
make payments over a period of 2 years before he could repay
boththesteamship
agentand hissponsor.
Accustomed
to back-breaking
workand longhourson the Polish
farms in return for the bare necessitiesof life, the Polish
peasantregardeda 60-hourweek in the Amoskeagmillsand a
biweeklypay of $7.00to $11.00a considerable
improvement
in
his economic status.
For the same reasonshe developedinto
an industrious
workerand a valuableemployee. It is little
wonder then that by 1920 there were nearly 2,000 foreign-born
Poles in Manchester.
31Thedepression
of theearly
nineties
very11kely
hadsomething
todowiththe
slow increase
in their numbers,
32For
a description
oftheeconomic
circumstances
ofthePolish
peasant
be
fore his emigration,see WladyslawS. Reymont'snovel,The Peasants(New York:
Alfred A. Knopf, 1925), 4 vols. A typical pattern of the settlement of a Polish
group in an industrial city of the United States is presented by William I. Thomas
and FlorianZnaniecki,The PolishPeasantin Europeand America,Vol. V, "organ
ization and Disorganization in America" (Boston, Mass.: Richard G. Badger, 1920),
PD. 30-3 in particularand all of chapter II for a general discussion.
APPENDIX
A
35
was bound to persist for many years.
169
Nonetheless,immigra
tioncontinued,
and by 1910the censusreported1,330foreign
born Greeks in Manchester.
Although
as manyas 200returned
to
their native land during the course of the Balkan War of 1912,
theycame back afterward,
urgingotherGreeksto bringtheir
familiesand to settle in Manchester. This form of advertising
wasnotwithout
itseffects,
andby 1920thecensusenumerated
verynearly3,000foreign-born
Greeksresident
in Manchester.
ManyGreeksfoundtheirway to the UnitedStatesas victims
of the steamshipcompanieswith the aid of some of their
unscrupulouscompatriotswho had developedthe scheme of
the padrone, a form of indentured labor.36 The Greeks in
Manchesterdeny that any such methods were involved in their
immigration. It was much more spontaneousand unguided. It
is pointedout, for instance,that a ManchesterGreek would
go to New York to meet a steamerbringinghis wife or other
relatives. On the same boat would be many Greeks who had very
littlemoneyand no knowledge
of the Englishlanguageand who
were very much bewilderedby the vastnessof the country.
It
was onlylogicalthattheywouldbe morethanwillingto follow
this man who knew their native tongueand who told them of the
manyemployment
opportunities
thatManchester
couldoffer.37
Continued
French-Canadian
Immigration
Despitethe
entrance
oftheEuropean
immigrants
intoManchester
after1890,the companynevertheless
was stillinterested,
even
as late as 1913, in maintainingthe immigrationof French
Canadians. The Canadian-AmericanAssociation,a beneficial
association
withheadquarters
in Manchester,
at thattime
published
biweekly
a French-language
newspaper
that had a wide
circulation
amongthe FrenchCanadians
of New Englandand the
province of Quebec. From October 1913 to June 1914 this
newspapercarriedaseriesofarticlesunderthe title"Manchester
and Its Advantages
for Canadians."The copy was preparedby
350ther
factors
thatmayhavemadeforfriction
werethereligious
differences
and
the
fact
that
the
Greeks
had
been
used
as strikebreakers.
Neither
of these
considerationsapplied to the Poles, most of whom were Roman Catholics.
36Fora discussion
of Greek1mm1gration
to the UnitedStates,covering
economic
conditions
in ruralGreece,methodsof recruiting,
the padronesystem,and problems
of adjustment
in the new country,see HenryPratt Fairchild,GreekImmigrationto
the UnitedStates(New Haven,Conn.: Yale University Press, 1911).
37
Cateras,
loc.cit.
APPENDIX
A
and many more merely found their way to Manchester.
171
With
WorldWar all foreignimmigration
virtuallyceased.
connection
mud
the
In this
the same pattern was discerniblein the other
textile
cities
of theregion.40
It seemsto be morethana merecoincidence
thatan acceler
ation in the rate of the locational
shift of the cotton-textile
industryoccurredafterforeignimmigration
had stopped. In
1910, for example, active spindleage in the South amounted
to66.7percent
ofthatofNewEngland;
by1914itamounted
to 73.0percent.Duringthewaryearsandthoseimmediately
following,
abnormalpricerelationships
and profitsrelieved
considerably
the pressureon costsand wage rates. By 1921,
nevertheless,
spindleage
in theSouthcomprised
85.4percent
of
thatof New England;
in thisyearthe numberof activespindles
in New Englandreacheda peakof 18,388,000.Thereafter,
the
locational
shiftproceeded
morerapidly.By 1925spindleage
in the South exceeded that of New England, the percentage
standing at 108.2. Five years later the percentage rose to
In this year,1930,spindleage
in the Southattained
a peak of 18,586,000.By 1935 southernspindleagewas more
thantwicethatof New England 233.1 percent.
163.7.
It is probablethat if New Englandtextilecitieshad been
ableto rely,as they had in the past,on a continuous
influx
of impoverishedpeasantsfrom abroad,who would have been
willing to accept low wages since even that represented an
improvementin their economicposition,the southwardshift of
the industrywould not haveassumedthe extremeproportions
that it has actuallyassumed.
40see
table
A-1.on thisshowingit wouldappearthatby 1920 in the factorytowns
the native Yankees constituted a vanishing group. While some Yankee chauvinists
bemoanedtheir relativeloss of numbersand communityinfluence,at least one of
them found solace in the fact that "the mixture of many nationalities may produce
the finest generations the world has yet seen. The immigrants are changing their
ideas and character,
yea, even their stature
language, names, occupations,
and facial expressions.
They look, talk and act just like Yankees after two
generations." EverettS. Stackpole,
Historyof NewHampshire
(New York: The
American Historical Society, 1918), vol. III, D. 193..
APPENDIX
B
173
The welfare program got under way in April 1911 with the
construction
of a playground.1
Between
this date and further
implementation
of the programthere occurredin Lawrence,
Massachusetts,
an important
textilestrikewhichwas notwith
outits repercussions
in Manchester.2
The workersin Manchester
showedtheirsympathy
for the
Lawrencestrikers at an early date. Thus in the "Happenings
of February
2, 1912,we readthefollowing
item:
Three meetingswere arrangedto take place in this
city last night by local trades unions, the same
to be addressed by sympathizers of the Lawrence
strikers.
The Chief of Police forbid the same taking
placeand had one of the speakerswho persistedin
speakingfrom the curbingplacedunder arrest.
Manchester'sinterest,however,did not cease with this
incident. We know,for example,
thaton or aboutFebruary17
a numberof familiesin Manchester
agreedto take care of 40
children
of Lawrence
strikers3
and thaton February
23 " a large
mass meeting was held
on HanoverSquare(Manchester]
in aidof theLawrence
strikers."4
According
to theManchester
local of the Cigarmakers'International
Union of America,
financial
as wellas moralsupport
wasforthcoming.
Thisgroup
of artisans,the most highlypaid in Manchester,
is reported
by union
sources
to havecontributed
$40,000
to theprosecution
of the strike.
Insulationagainstthe effectsof the strike was desired not
onlybecauseof the enthusiasm
engendered
whilethe strikewas
in progress but also because of its successful conclusion
on March 14.
Although
the business
outlook
was notexactlya rosyone,
Amoskeag
advanced
wages5 percent
on March11 - 3 daysbefore
the termination of the Lawrence strike.
This increase,how
ever,was insufficient
to halt a contagionof unrestin the
mills,whichtooktheformof sporadic
walk-outs
towardthe end
of the same month. For example:
1some
ofthedata
concerning
Amoskeag'swelfare
program
were
secured
from
a type
writtenrecordof daily happeningskept by the company until 1922. Hereafter
the citationwill appear as "Happenings." The reference in question is under
the date of April 19, 1911.
2Fora fulldiscussion
ofthecourse
ofthestrike's
development
seeSamuel
Yellen,
AmericanLabor
Struggles
(1sted.;New York: Harcourt,
pp. 171-204.
3yellen,
op.cit.,
p.190.
4 Happenings,"
February24,
1912.
Brace and co., 1936),
APPENDIX
B
175
The years that coincide with the World War have come to be
regarded,
in retrospect
at least,as the halcyondaysby some
present-day
residents
of Manchester
who formerlywere Amoskeag
workers.The welfareactivities,
the highnominalwagesof the
latter part of the period,and the shortenedworkweek,as well
as the hardships
of the post-waryears,haveall combinedto
create this impression. A more detaileddescription
of the
milleventsofthese
yearsmay,however,
modify
'this
impression.
THE
COMPANY
WELFARE
PROGRAM
The welfareprogramattempted
to run the gamutof activities
usually
associated
withproviding
health
safeguards,
including
home building,and offeredopportunities
for educationand
recreation for the workers and their families.
The
first
function
wasdirectly
underthecontrol
of themanagement,
as
was the granting
of pensions,
and the remainder
of the activi
tieswasdirected
by theaforementioned
Amoskeag
Textile
Club.
Until the strike of 1922 the companymaintaineda small
hospital
with a doctorand nursein attendance
duringworking
hours.
There were first-aidrooms in the various mills, and
the physicianmade a daily round of calls throughthe mills at
specified
hoursto savetimefor theworkers
as wellas for
the management.
The company also maintained a staff of nine nurses who,
togetherwith a supervisor,
made homevisitsto employeesor
their families without charge. If the homemaker was ill,
thecompanyfurnished
a maidgratisto carefor the homeduring
the illness. In additionto the nursing
care,the supervisor
had chargeof givingreliefto familiesin need. Tne super
visorwas
empowered
to giveclothfromthemillto makeclothes
for the family, and if the mother was unable to sew, the
clothing
was madeup for her. Fuel wood from the large tracts
of woodland owned by the company was offered to employeesat
a reducedpriceor givenas an outright
giftto its needy
workers.
The nursesalsoadvisedfamiliesin planningtheir
expenditures and otherwise acted as case workers for the
Amoskeag
personnel.
8
Amoskeag
Bulletin,
March15, 1920. (Fortnightly
bulletinissuedby the company.)
91bid.
APPENDIX
B
177
the pensioner,althoughthe board could and did alter the
amountof the monthlystipendat will,
Only overseersor those who had directcharge of some depart
ment in the plant were consideredeligiblefor pensionsat
theinception
of the policyin January1913. Accordingly,
the
first
to
receive
this
benefit
was
an overseer
in the
company'sservicefor 30 years. The monthlygrantwas $40.00.
By theendof theyearfiveadditional
pensions
weregranted,
and two others were added to the list in 1915.
Ma
Not
until
ch 1916was eligibility
extended
to includethe wageearners
of longservice,
threeof whomwerepensioned
at $20.00a month
date.
This came to be the usualmonthlygrantfor
on that
wage earners.
In the course of the year 1916, the number of pensionerswas
increased
from11 to 40, at a monthly
costof $710. Thereafter
the pensionlist was addedto more rapidly.
appears that
the maximum number on the pensionlist in any one year was 94
in 1922,althoughit shouldbe notedthatthe figuresfor 1920
and 1921 are not available.
The maximum annual expenditures
on thisaccountalsooccurred
in 1922and amountedto $27,280.
AfterOctober1923 only one pensioner
was addedto the list,
according to the minutes of the board of trustees, but the
monthlypayments
werecontinued
to thosepreviously
on the list
until they were removed by death. Since the service by its
verynaturecouldnot be completely
terminated
in 1922,as was
the remainder
of the welfareprogram,paymentswere continued
untilJuly1936whenliquidation
was ordered.Fourteenpersons
were on the list when paymentsceased.
The monthly grant paid to wage earners
was
reduced
from
$20.00to $18.00in 1928and furtherreducedto $16.20in 1932.
However,
in 1929 a formeremployee"who had renderedmuch and
valuable
serviceto Amoskeag"
received
a monthlypension
of
$200.Thisperson,
too,sustained
several
reductions,
andthe
rate was settledat $50.00 in February1933.
Therecan be no doubtthatthepensioners
werefullydeserv
ing of the assistance. The Amoskeagtrusteeshad approved
Only two pensionershad
beenemployedwith Amoskeagfor less than 30 years. Nearly
one-fifth
of the total(19.2percent)had beenattachedto the
grants for 147 of their workers.
7
APPENDIX
B
179
sample
of the Amoskeag
personnel
files,12
duringthesame
years 29 workers with 30 years or more of Amoskeagservice
were separatedfinallyfrom the pay roll. Thus the actual
coverage
of the pensionplanwas 137 compared
withan estimated
potential
coverage
of 290.
It could not be convincinglyurged, moreover,that the
pensioncosts actuallyincurredwere so onerousthat a more
complete
coverage
wouldhavebeenfinancially
prohibitive.
In
tableB-1 the annualpension
costsare expressedas
a percentage
of the annual manufacturingcosts. The highest percentage
was eight-hundredths
of i percent,with the exceptionof 1922
when the mill was in operationfor much less than 6 months.
A costof thismagnitude
couldscarcely
haveplacedAmoskeag
at
13
a competitive
disadvantage.
The remainderof the companywelfare activitieswas carried
out throughthe instrumentality
of the AmoskeagTextileClub,
theoriginof whichhasalreadybeendescribed.Control by the
companymanagement
was assuredby the companyagent'sserving
as presidentin its formativeyears. Certainly the club's
programin many respectswas closely correlatedwith the
company's needs and not unrelatedto the workers' interests
as they conceivedthem at the time.
For example,an arrangementwas made with the International
Correspondence
Schoolof Scranton,Pennsylvania,
whereby
courses of study in several technicalfields were offered to
employees
at especially
advantageous
terms. Those who received
diplomasfrom the International
Correspondence
Schoolfor
the textile course were refunded half the cost of the course
3 monthsafteritscompletion,
and the otherhalfwas returned
to the employeeif he was stillwith the companyat the end
of 6 months. The upperfloorof one of the officebuildings
was fitted up as a study room, and an instructorwas paid by
the company to aid the students. A textileschoolcompletely
equippedwith the latestmachinerywas also established
for
purposes
of practice.14
Instruction
in sewingand cookingwas givenwithoutchargeto
any memberof the family of an Amoskeagworker.
An instructor
12See
appendix
G fora description
ofthis
sample.
13the
total
costs
porpensions
over
a period
of23years
were
$299,411.25
18the
costsin 1920 and 1921 (yearsfor which figuresare missing)are assumedto equal
the costs in 1922, the maximum amount on record.
14
Amoskeag
Bulletin,
December
12,1912.
APPENDIX
B
181
18
shareon each fortnightlypay day untilit was paid for.
Apparently
it was not untilthe stocksplit-up
in 1920thatany
of the employees
tookadvantage
of the offer. From July 1920
to August1921,according
to entriesin a ledger,475 employees
paid$199,069.97
for 2,647 sharesof preferredstock. That
is,3.3 percent
of theaverage
number
on the payrollduring
1920-21purchased
1.3 percentof the preferred
sharesthat had
been issued. More than three-quarters
of the purchaseprice
wasregarded
by Amoskeag
as a profit.Thus in the general
ledger we find, under the profit-and-loss
accountfor the
6 monthsendingMay 30, 1921, an entry of $71,697.90which
is describedin the journal as profitfrom sale of stock
to employees. An entry of similarcharacterto the amount
of $44,383.44was recordedin the accountfor the 6 months
ending November30, 1921. In the following6 months this
profitamountedto $17,850and in the succeeding
6 monthsto
$20,384.11.
The otheractivitywas the fortnightly
publication
of the
Amoskeag
Bulletin,
whichhasbeenthemainsourceof informa
tion on the welfare program. Its purposewas to keep the
workers posted on all the events of the mill and to serve as
a liaison between the workers and the management, although
it probably
was nota freeforumfor discussion.
Obviously,the annualdues of $2.00 were insufficient
to
financethisvariedprogram.Muchthe greaterpartof the bal
ance,however,
was notdefrayed
by the Amoskeag
Manufacturing
Company.The fundswerederivedfromthe sale of remnants
and
imperfect
goodswhichweresoldto theTextile
Clubby Amoskeag
at cost price. The club maintained
a storewherethe public
couldpurchase
theseremnants
at lessthanretailpricebut
at enoughof a profitto theclubso thattheincomecarried
the activitiesof the AmoskeagTextileClub. Thus the only
cost to the companywas the salariesof about a score of
19
professional
persons.
EMPLOYMENT
CONDITIONS
PRIOR
TO
AND
DURING
THE
WAR
Howeverlarge or small may have been the additionof real
income
provided
by thewelfare
program,
it musthavebeenvery
18Ibid.,
February
1, 1913. The price range of the stock betweenJuly 1920 and
August 1921 was 70 to 90.
19.
This information was supplied by an erstwhile chairman of the ATC'S Pinance
committee who had been paymaster of the company for many years previous to
liquidation.
APPENDIX
183
B
When in January1914 the law providingfor a 55-hourweek
superseded
the 58-hourlaw, Amoskeag
retainedthe weeklywages
of the longer week. The companycommentedonthis on January1,
1914,in the Amoskeag
Bulletin,
in the following
manner:
At this time of nation-wide industrial depression
and uncertainty,when securities of all kinds have
shrunk to the lowest level seen for years, with the
strong probabilitythat the end is not yet, when
the great industriesthat give the people employment
see themselves
confronted
with
a lack of orders
and
the consequentdeplorablenecessityof a reductionin
their working forces , the action of the Amoskeag
ManufacturingCompany,in keeping the 55-hour weekly
wage the same as the 58-hour weekly wage, stands out
with especialsignificance.
In the face of a very unsettled gingham and dress
goods market, brought about by the reduction in
reasons
tariffratesby the presentadministration,
were at hand in abundance to keep the hourly rate the
It means that $350,000 and $400,000 more money
same.
will be paid to Amoskeag employees each year than
would have been paid, and this amount must be lost by
21
the shareholders.
Withthedeclaration
of warby theEuropean
powers
therewas
additional
evidence
of depressed
conditions
and the millswere
closed for several weeks in the summer of 1914.
While this actionmay have forestalleda completeshut
down in the winter of 1914-15, it did not prevent part-time
employmentin some of the departmentsin the fall of 1914.
The cotton-weaving
departments,
for example,beginningwith
September
21,had to stopworkat Fridaynoonof eachweekuntil
further notice.
In September1915 the entirecottonsection
had to stop work each week on Thursdays;that is, a working
scheduleof 40 hoursper week was put intoeffect. What
this meant in terms of economic welfare can be surmised when
one learnsfrom a company record that the average hourly
rate in the manufacturing
departments
for the 2 weeksending
October
22, 1915,was 18.43cents,or $7.37for a 40-hourweek.
In the mechanical
departments
the comparable
figureswere
24.06 cents and $9.62.
21the
followingnotice
posted
onJanuary
5,1914,
isalso
significant:
"Straggling
of employees
fromdifferent
departments
through
the yardand congre
gatingin thehall and stairwaysJust beforenoon and nightmust be stopped. The
matteris entirelyin the hands of the overseersand may be overcomeby a little
attention on their part.
"With the new 55-hourlaw it becomesmore than ever necessarythat employeeswork
and that machinesbe kept running the full time requiredby the rules of the
company. "
("Happenings,"January 5, 1914.)
APPENDIX
B
185
Obviously,
itshouldnot be inferred
fromthisstatement
that,
since thesewere yearsof laggingwages and relativelyhigh
profits,there had been no advancesin wage rates. On the
contrary,
wage-rate
increases
in the industry
weremadefre
quentlyin theseyearsthroughout
the regionin an effortto
keepup with the advancing
cost of living. AlthoughAmoskeag
wasobliged
to fallin lineit tended
to makesmaller
advances
thanitscompetitors
in the Merrimack
Valley.
For example,twice in 1917, in May and October,the mills in
Lawrence advanced wage rates 10 percent,28 whileat Amoskeag
the increase
on eachoccasion
was only73 percent.It
was
this inequalityin treatmentthat providedthe basicreason
in the beginning
of 1918for the organization
of a tradeunion
by the UnitedTextileWorkersof America,a campaignthat had
to be carried on under cover.
In April 1918 Amoskeagmatchedthe regionalincreaseof
10 percent. Althoughthis forestalled
any labor troubleat
that time, such difficulties soon appeared, On May 14 the
workmenin the dye house,numbering
about175,wentout on
strikewhentheirdemandsfor an averageincrease,
saidto have
amountedto 25 percent,
wererefused.29This disputewas
settled and other difficultiesremaineddormant until the next
wage increasewas announcedon June 17.
Thisamounted
to an increase
of 12 percent,
although
the
advance in Lawrencewas only 10 percent. However,six mills,
according
to theBureau
of LaborStatistics,
granted
increases
of 15 percentat thistime.30 The reappearance
of the differ
entialwage increase
was realizedby the Amoskeag
workers,or
at leastby thesmallorganized
sectorwhichdecidedto put
a haltto the practiceby strikingfor a raiseof 15 percent.
Accordingly,
theUTWcausedits workers
to strikethefirst
week in July at Amoskeagas well as at other mills in the
region.31This was the firsttrade-union
strikein Amoskeag
28
"Advancesin Lawrence,
" loc.cit.
29
Manchester Union, May 15, 1918.
30
"Employmentin SelectedIndustries
in July,1918,
" MonthlyLaborReview,
Vol. VII, No. 3 (Sept.1918),p. 296.
31nStrikes
andLockouts
in theUnited
States,
JulytoSeptember,
1918,"
Monthly
LaborReview,Vol. VII, No. 6 (Dec. 1918),pp. 359-60,reported: "Early in July
several large strikes attracted considerable attention, notably those in the
tor
mills in RhodeIsland,Lowell,and Manchester,
N. H., in which 35,000 operatives
were concerned
APPENDIX
a number of years.
B
187
An importantfactor in breakingdown oppo
sitionin Massachusetts
was the certainty
thatthe legislature
would eventuallypass such legislation, Since there were
no changesin the timeor piecerates,thiswas equivalent
to
a reduction
of about7.7percent
in full-time
weekly
earnings.
Presumably
for thisreasonand becauseof the ever-mounting
cost of living, the ManchesterTextile Council requested
a 15-percentincreaseon May 14, 1919, to becomeeffective
35
on June 2.
Within a week the companyaccededtothis request,
as did othermillsin the region.Therewas thefurtherstipu
lation that the agreement was to remain in effect without
changeuntilthe thirdMondayin April1920.
Despitethisagreement
andin concertwithothermillsin
NewEngland,
anadditional
voluntary
advance
of 12 percent
was granted on December 1, 1919.
The
continued
increase
in
thecostof necessities
was doubtless
a motivating
factor,
particularly
in viewof thecompany's
having
earnedmorethan
$2,000,000 above dividend disbursements in the fiscal year
ending November30, 1919, althoughphysicalproductionhad
declined
some16 percentin thesame12 months.
The lastwage increasein the post-warboom occurredtoward
the end of May 1920.
Within a week, however, there were un
mistakable
signsof theapproaching
depression,
particularly
in
On June2, for example,the wool-sorting
and top-making
departments
were put on a 5-dayschedule,and
thespinning,
drawing,
twisting,
dressing,
weaving,
and burling
the worsted section.
departments
wereto operate
3 daysperweek,withthedyeing
and finishing
department
on a 4-dayweek. Furthercurtailment
in operations
occurredin the following2 months,and at the
end of July the worstedsectionwas shut down indefinitely
becauseof "business
conditions
and the uncertainty
of the coal
supply."It remained
closeduntilJanuary1921whenoperations
were resumedon a part-timebasis.
By the latter part of Octoberin 1920 the cotton sectionwas
also affected.
Thus on October 20 three weaving departments
wenton a 3-dayschedule,
and one spinning
department
was shut
down.
In December the entire cotton section was to run only
35-Adjustments,"
vol.I, May14,1919.The
management kept a record of its
transactions with the union in chronological order in loose-leai form and labeled
10 "Adjustments." Hereafter the reference will be as in the above.
@FedFRASER