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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
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COMPETITIVE

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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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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.