The Country AndThe Industry PullOut Of The DepressionThe Depression lasted 42 months, reaching a
low point in March, 1933, according to the technical definition of economists. For most people, the
Depression lasted until the onset of World War 11.In human terms, the 42 months were devastating:
industrial output cut almost in half; one in four without jobs; one-third of the railroad mileage
held by bankrupt companies; foreclosures on farm mortgages so widespread that gangsters robbing
banks were folk-heroes; banks themselves threatened by runs and unpaid loans. The Commodity Price
Index (1910-14 = 100) fell to 86.4 in 1930; to 73 in 1931; to 64.8 in 1932. The Census Bureau index
of all stocks 11926-100) went from 149.8 in 1930 to 48.6 in 1932.In July, 1930, The Reporter was
talking of “conservative optimism”; the official line from Washington was that “prosperity is just
around the comer.”But, said The Reporter, “unless large gains in consumption are chalked up,
production this year is going to be a considerable extent below the estimates that were made at the
beginning of the year.” Mill production was then estimated at barely 50% of capacity.Mills Start
ClosingCotton consumption in the U. S. and overseas in May was the lowest since September 1924;
wool consumption for the first four months was the lowest since 1920. Mills were able to sell in
May only 66.9% of production and at the lowest prices in 15 years. Inventories piled up. Cash and
credit ran low. Mills began closing.The Reporter, realistic but positive, sought silver linings in
the clouds: Why is the textile industry singled out as one that is suffering What other industry is
in better shape Isn’t the whole industrial and business structure of the country depressed “Last
year (1929), something more than 500 state and national banks failed. The other day, the Hamilton
Brown Shoe Co., one of the biggest in the country, went into receivership. Anyone who knows Lynn,
Brockton and Haverhill, the great shoe centers of the country, is aware of the fact that the shoe
business is very quiet.”Last year, the Fisk Rubber Co. Lost $7 million; the United States Rubber
Co. Lost $3 million; the Hood Rubber Co. was taken over by a stronger organization; so was the
Miller Rubber Co. and previously the Apsley Rubber Co. “One radio company after another has folded
up. The automobile business isn’t good. Dodge Brothers was taken over by Chrysler; Pierce Arrow
taken over by Studebaker; the Jordan people asked their stockholders to put up more moneyand that
is only a small part of the story. Packard has just slashed prices. Chrysler announces a big cut.
The non-essentials are getting it just as much as the staple industries.”The machine tool business
is bad. The newsprint producers are suffering. The Canadian government itself has interceded in the
newsprint situation endeavoring to raise prices. It isn’t only textiles.”In the cotton goods
industry, the line of demarcation between the North and the South has been obliterated. The
situation in the South is no better than in the East, if as good.”The Maginnis Cotton Mills of New
Orleans has been shut down since January first. The 50-50 plan of curtailment to better market
conditions is to help the southern mills. The F. W. Poe Mfg. Company shares sold the other day at
$28, and this has been one of the most successful print cloth mills in the country for a great many
years, and, for the last half dozen years, on fancy goods from print cloth numbers. Victor Monaghan
is cutting the dividend. “The condition of the textile industry parallels the condition of every
other industry in the country. It isn’t only textile shares that are selling low. Obviously, then,
selected mill shares offer Just as good opportunities for a long term investment as do the
securities of any other industry.”Bennett’s SuggestionsAs the Depression deepened, Editor Bennett
inveighed against inefficiency and the differing job assignments in unionized and non- union mills.
In July, 1930:”In one big worsted mill here in Massachusetts, there are 60 clerks in the efficiency
department with a payroll in that one department of at least $90,000 a year, equal to 6 percent on
$1,500,000. If the mill is profitable, it is in spite of this so-called efficiency work,” he wrote,
declaring that a firm of consulting engineers could lay out an efficiency program for a fraction of
the cost of the clerks, 4but a whole litter of efficiency clerks 60 of themare a dead weight.”And,
in September:”The full-fashioned hosiery branch of the textile industry exemplifies the effect of
complete unionization. Full-fashioned operatives in unionized millsand these are mill workers, not
presidents and treasurersaverage $100 a week wages, and, in some mills, earn $150 a week wages.
These operatives tend only one full-fashioned knitting machine. They are very arbitrary about
apprentices. The owner of a full-fashioned mill can’t put his own son into the mill to learn the
business unless the union lets him. The unionized operatives, not the owners, run the mill.”The
operatives in the non-union full-fashioned hosiery mills in North Carolina, for instance, earn $40
a week and tend two machines.”And he cited another example in September:”Nearly two years ago, the
cotton mill operatives of the Newmarket Manufacturing Company were induced by the board of
officials of the United Textile Workers to go out on strike. For more than 19 months, now the
Newmarket cotton division has been shut down, and today the machines are being sold and the mill is
to be given up. But, as of July 30th, the official report of the United Textile Workers of America
reads as follows:’The Newmarket strikers were very cheerful at their meeting I attended Tuesday,
July 15th. Much credit is due these people for the manner in which they have fought the New- market
Manufacturing Company. After 18 months of struggle, they are still determined to see the strike to
the bitter end, and their morale is in splendid shape.’But, the cotton mill is shut down, all the
operatives have lost their jobs and the town is to be abandoned.More Work AssignedThe Reporter gave
an example of how to properly apply an increase in job assignment, called by workers “the
stretch-out”:In a Southern mill, a woman weaver tended 24 looms. The superintendent thought she
could handle more and suggested she try 60. She did, but found the work too much. The
superintendent then suggested she try 55, which she found she could handle. By agreement, half the
savings went to the weaver, half to the company. The weaver was told not to talk about her pay
increase, but word got around and other weavers applied to tend more looms. “Now,” said the
Reporter, “a thousand looms are operated with less than half the weavers.”Despite the sharp
downturn, some business was good. The Goodyear tire fabric plants were being expanded while many
mills were closing. Goodyear then had mills at St. Hyacinthe, Quebec; Atco, Cedartown and Rockart,
Ga.; New Bedford, Mass.; Killingly, Conn.; Los Angeles, Calif.; and in England, Australia and
Brazil.And, complained Editor Bennett, people owning “toy golf courses” were getting rich overnight
while real business suffered. The miniature golf courses were springing up everywhere, in vacant
lots and empty stores, a craze that peaked and quickly slumped.By October, The Reporter said the
textile business was “much improved” with employment up 18%. At the Southern Textile Exposition
that month, exhibitors filled all permanent space plus that in a steel annex and temporary wooden
annex 130 x 40. Some 40,000 visitors jammed the aisles, and sales were said to be good. The
Southern Textile Association and the textile section of the American Society of Mechanical
Engineers met concurrently. A hit of the show was Draper’s new looms for rayon and silk, and a new
high-speed warper.Four million spindles had been junked by that time. Of the 20 million spindles in
the Southern states, 10 million were on 24-hour operation. The Cotton Textile Institute called for
an end to night operations by March 1, 1931.False DawnBut, the upturn was a false dawn. By
mid-1932, American industry was operating at less than half of the 1929 production rate.Spindles in
the textile industry had peaked in the Twenties, and the decline was to continue over the years as
improved machinery and methods increased the output per spindle. For woolen and worsted machinery
the figures were not spindles and looms as well as those in Mass. R.I., and Pa., the main woolen
and worsted producing states.The dominant company, American Woolen, was operating 744,737 spindles
and 8,437 looms. As an aside, Howard Bennett was responsible in 1936 for continuing the annual
meeting of the American Woolen Co. for three days and two nights, without adjournment, to force
through a change in management. Time Magazine referred to the event as the rowdiest, longest annual
stockholders meeting ever held. The Reporter participated in the fight, conducted it, paid for the
proxy solicitation and the lawyers’ fees, and ended up eliminating the incumbent president and
chairman.All Business SuffersThe total amount of wages paid in all business and industry in all of
1932 was only 40% of the 1929 total.Business suffered a net loss for the year of more than $5
billion, and that was when a billion dollars was BIG money. Total dividends were cut by 57%. Stock
values, followed the over-the-clifftrend: U. S. Steel from 261 3/4 in 1929, to 21 174; General
Motors from 72 ¾ to 7 5/8. Cotton sold for five cents a pound, sometimes less.President Hoover
worked hard at trying to organize optimism. He summoned the big bankers, the top industrialists and
businessmen to Washington where they conferred and issued statements saying that conditions were
fundamentally sound and that prosperity really was just around the corner. But nothing
changed.Then, Hoover declared a moratorium on reparations from Germany and on war debts due from
the Allies, hoping to stimulate foreign trade. The world only went deeper into depression.Despite
pleas from around the country, the president refused to entertain the idea of any federal action to
relieve the distress of the millions of unemployed; that was a matter for individual charity and
local government.Then he set up the Reconstruction Finance Corporation to provide federal aid to
banks and businesses. Banks continued to fail, businesses continued to close.Washington was greatly
alarmed that summer when World War I veterans including a few who talked revolution, marched into
the city to demonstrate for war-service pay bonuses. The 17,000-man “bonus army camped for weeks,
then was driven out by troops headed by Army Chief of Staff, Douglas MacArthur. Roosevelt
Elected,More Banks CrashAnd so Franklin Delano Roosevelt easily won election over Mr. Hoover in
November, but Mr. Hoover’s tribulations had yet to reach their depth. That winter, the banks
crashed. By March 2, 1933, two days before the inauguration of the new president, 5,504 banks had
closed, and 23 states had suspended or drastically restricted banking operations. By Inauguration
Day, nearly every bank in the United States was closed or under restriction.President Roosevelt
sparked hope with his inaugural address, the famous “we have nothing to fear but fear itself,” and
immediately took action. He declared a four-day national bank holiday to allow bankers time to
reorganize. Within three days, 4,507 banks reopened, and within two weeks, stock prices rose 15%.
He called for a special session of Congress to convene March 9th.The importance to morale of
Roosevelt’s words and actions was deeply impressed on this writer’s mind the following Sunday when
he heard J. W. Arrington, president of Union Bleachery, Greenville, S. C., say to “the Dunean
crowd” as he joined them in front of Christ Church: “Gentlemen, we have just escaped
revolution.”100 DaysIn 100 days of legislative action, that special session of the Congress changed
life in these United States. Among the acts that emerged from frenetic sessions of the House and
Senate:
- The Emergency Banking Relief Act.
- The Economy Act, cutting government pay and veterans pensions 15% to help balance the
budget. - The act creating the Civilian Conservation Corps that put 250,000 jobless young males to work
in the forests and national parks. More than 500,000 were on the rolls at peak point, and, by 1941,
some 2,000,000 had passed through the CCC ranks. - The Beer-Wine Revenue Act legalizing beer and wine with up to 3.2 per cent alcoholic
content. - The Federal Emergency Relief Act providing $500 million in grants to states and municipalities
for work relief projects. - The Agricultural Adjustment Act providing subsidies to farmers for reducing crops.
- The act creating the Tennessee Valley Authority to build dams and power plants and develop a
vast area involving Tennessee, North Carolina, Kentucky, Virginia, Mississippi, Georgia and
Alabama. - The Federal Securities Act.
- The National Employment System Act, establishing the U. S. Employment Service.
- The act creating the Home Owners Loan Corporation to refinance home mortgages.
- The act creating the Federal Deposit Insurance Corporation, guaranteeing deposits up to
$5,000. - The Farm Credit Act.
- The Emergency Railroad Transportation Act.
- The act creating the Commodity Credit Corporation to lend to farmers on their crops; in the
early years, loans primarily to cotton farmers, bolstering cotton prices. - The act creating the Public Works Administration which spent $4.25 billion on 34,000 public
works projects, mostly road and public buildings. - And, most important of all, the National Industrial Recovery Act, providing for industry
self-regulation through “fair competition” codes governing operating conditions; participating
industry was exempt from the anti-trust laws.
Section 7a of the Act guaranteed the right of labor “to organize and bargain collectively
through representatives of their own choosing,” applying to 22 million workers in 500 industries or
areas of business. A National Labor Relations Board was set up to enforce the right of collective
bargaining.In a few brief months, the Congress had enacted into law nearly all the planks in the
socialist platform of the 1890’s and l900’s.Yet, business and industry welcomed the NRA at first,
principally because it promised stability. In those days, state legislatures were continually
considering legislation on hours, wages and other matters affecting business and many executives
claimed they spent more time on political matters than in running their business.Spread The
Work;Spread The Jobs!In the spirit of the times spread the work, spread the jobsThe Cotton Textile
Institute that spring recommended to the textile industry that the work week in cotton mills not
exceed 40 hours, and that production machinery not be operated more than two 40-hour shifts per
week.The original members of the Cotton Textile Industry Committee which negotiated with the
National Recovery Administration on the NRA code for the mills were: George A. Sloan, president of
the Cotton Textile Institute; Thomas M. Marchant, president of the American Cotton Manufacturers
Association; Ernest N. Hood, president of the National Association of Cotton Manufacturers; William
D. Anderson, Robert Amory, Harry L. Bailey, Bertram H. Borden, G. Edward Buxton, Cason L. Callaway,
Charles A.Cannon, A. E. Colby, Donald Comer, Stuart W. Cramer, B. B. Gossett, R. E. Henry, Gerrish
H. Milliken, Frank I. Neild, H. Nelson Slater, Robert T. Stevens and Robert R. West. They dealt
with General Hugh (lronpants) Johnson, NRA administrator.Pick-up In ’33The Reporter noted that “the
cotton textile industry has advanced from 51% of capacity in July, 1932 to 129. 1% of capacity in
June, 1933, and some textile machinery firms are sold ahead for many months.”The industry’s former
over-capacity was being drastically reduced: “Never before has there been such a liquidation and
junking of textile equipment as has been carried out in New England during the last few years,” The
Reporter said in commenting on the reduction in New England from 20 million to 12 million spindles,
a loss of 6 million spindles in Massachusetts alone.By spring of 1934, disenchantment with NRA and
its codes and multitude of regulations was growing. The Reporter said it received seven and a half
pounds of mail from NRA in one day.”Manufacturers generally seem to be afraid to tell the whole
truth about how the NRA affects their business. Some of them have government contractsperhaps they
are afraid the government will cancel the orders. The present government does cancel contracts and
does go back on its word. It does make the profoundest promises worthless.”They may be afraid of
labor troubles initiated by someone outside the mill. There are authorities in political office who
could start a strike in any mill. The whole country is intimidated. Business has been bad for so
long a period that the hope of a quick profit, perhaps a phantom profit, and the opportunities for
speculative advance in raw materials seem to have destroyed the old time insistence on the part of
American businessmen that the truth and sound practices are more important than a temporary
advantage.”Labor Unrest GrowsIn mid-April, Bennett reported: “A Fall River mill operating executive
writes us that the labor leadership in that town is dominated by aggressive people. Tuesday, April
10th, the employees in a very large plant in that city walked out. The labor leaders presented a
long list of alleged grievances, one of the most serious being that overseers within the mill
favored with the work certain operatives who were undeserving of it and that the favoritism was for
ulterior purposes. Thursday, April 12th, the labor leadership presented the management with a list
of 35 persons who must be discharged before the strike can be settled. Who is running the mill”Mill
workers had grown bolder about union membership since the Government placed its stamp of approval
on unions with Section 7a of the National Industrial Recovery Act guaranteeing the right to
organize. For many, the stigma formerly attached to unions was removed. Many new locals were
organized. In mid-August, the United Textile Workers’ board voted to call a general strike in the
textile industry on or by September 1st, demanding a 30-hour maximum work week, six hours for five
days, at the same pay as for the current 40-hour week; industry-wide recognition of the union as
representative of all industry workers, and the adoption of specified work loads (described by
management as “ridiculous”).The strike was on, but not all workers struck.Newspapers reported that
as of September 6th, 73% of the industry’s 410,000 operatives were at work. In the North, 32,000 of
100,000 workers walked out; in the South, 60,000 of 154,000. The percentage of strikers varied
widely by locality. And not all who walked out stayed out. There were hotbeds of union fervor, such
as Gastonia in North Carolina and Spartanburg in South Carolina.Union ViolenceThe hotbeds spawned
“flying squadrons”caravans of trucks and cars loaded with strikers moving from mill to mill,
rushing into plants, cutting off machinery, flourishing clubs (and an occasional pistol) and
intimidating those at work. Half the mills in the Carolinas closed, but only briefly, for the
National Guard was called out to protect mill property and those who wanted to work.Tempers flared
when strikers attempted to block men trying to enter the mills to work. Deputies were guarding the
main entrance and strikers were gathered in front when first shift workers appeared at Chiquola
Manufacturing in Honea Path, S. C. Angry words were exchanged, gunfire erupted. Six strikers died
and 13 were wounded.Reaction To ViolenceReaction to the flying squadrons resulted in stories still
told today, some of them surely apocryphal. They tell of:
- The dyehouse worker at Cliffside, N. C., who climbed to the mill tower and aimed a stream of
sulfuric acid at the squadron below. - The workers at a Greenville mill who had walked out a few days earlier in a dispute with
management, had returned, asked for, and received an issue of picker sticks with which to greet the
squadron. - Col. Elliott White Springs, a World War I fighter pilot, flying out from the mill to scout the
approach of a squadron reported moving in from Gastonia and, so goes one version, rolling his
plane’s wheels on the cab of the lead truck, causing the group to turn back lest the Colonel “get
real mad.” To protect his workers, Col. Springs did close several plants until the National Guard
could arrive to protect them.
A presidential commission brought an end to the strike, a failure for the UTW whose memory has
lingered for decades, often thwarting the efforts of other organizers. Not long afterward, the
ClO’s Textile Workers Organizing Committee (TWOC) moved in to salvage what they could of the UTW
faithful and work just as unsuccessfully on their own. The organizing group included Miss Lucy
Randolph Macon (of the Virginia Randolphs) who served as publicity director.A side effect of the
UTW strike was the postponement of the October, 1934 Southern Textile Exposition to the spring of
1935 because Textile Hall was commandeered for use as barracks for the National Guardsmen called to
the Greenville area.Peace Restored:Technology RevivedWith labor peace restored, interest in new
machinery was mounting by the time of that Spring 1935 show. The Reporter had commented earlier
that “big package spinning is very interesting to the worsted industry….the changeover from cap
spinning with one-ounce packages to ring frames with 4-oz. packages is being generally
considered.”President Roosevelt NRA was declared unconstitutional by the Supreme Court in 193S, but
FDR succeeded in getting Congress, to pass a National Labor Relations Act to continue government
backing for unions. Also passed then was the Social Security Act. In 1937, the president became a
cropper when he tried to pack the Supreme Court; the Southern Democrats defected from his cause.
But, he staged a comeback in 1938 with the wages and hours law setting a minimum wage of 40 cents
an hour within eight years, beginning the stairstep with a 25 cents an hour minimum, and a maximum
work week of 40 hours within three years, beginning with a 44 hour maximum. The act also mandated
time-and-a-half pay for over 40 hours, and forbade labor by children under 16.Improved Rayon
ThrivesThe 10- and 12-hour work day and the six-and-a-half day week were to become memories, as
were the days when the natural fibers were sole rulers of the textile roost.Consumption of rayon
had outpaced that of silk in the late 1920’s. Now, in the late 1930’s, the first resin finish for
rayon was available, substantially improving the hand of rayon fabrics, and the first rayon tire
cord was being produced.The Reporter was running weekly sections on rayon, and commented that “a
very large percentage of the growth and profits of the textile industry is going to come from the
cotton goods industry going into rayon work. The rayon weaving is going to be in the old,
established cotton mills, rather than in the silk mills, because cotton manufacturing has always
been a more economical, more efficient industry than silk manufacturing. Cotton mill methods are
far ahead of silk mill methods.”The domain of the natural fibers was also being invaded by other
fibers besides rayon. Commercially useful glass fiber was produced by Owens-Corning Fiberglas Corp.
in 1938, used first as a filter medium for air conditioning and as insulation. By the end of the
decade, glass yams and fabrics were established in a number of industrial uses and in draperies,
curtains and tablecloths.Cotton responded to the challenge. The National Cotton Council was
organized November 21, 1938 at the Peabody Hotel in Memphis, Tenn., by cotton producers, ginners,
seed crushers, warehousemen, and merchants. The Council’s major thrust at the beginning was
research and promotion, but it quickly became involved in government affairs. Textile Manufacturers
joined the Council a few years later. Cotton co-operatives, which had been part of other interests
from the beginning, became a separate interest in the Sixties. Observers say the Council has held
together for nearly 50 years because of a key bylaw provision that no position is taken without at
least majority approval of the delegates from each interest voting separately DuPont’s nylon fiber,
on which Wallace Carothers had begun research back in 1928, went into commercial production at
Seaford, Del., in 1939. The first nylon stocking would captivate the nation’s women in 1940.In the
summer of 1939, The Reporter was commenting that the “worsted business, particularly on
lightweights and tropicals for men’s wear, is already feeling the effect of Southern competition,
and cut worsted staple and cut rayon staple blended yarns, are generally made in the South, and
much of it woven in the South. Riverside and Dan River have 500 looms on woolen mixture men’s wear,
a big cotton mill. A weaver in New Hampshire has purchased a lot of cut worsted and rayon blended
yarns for weaving men’s wear fabrics, the yarn coming from Cannon and from Textiles, Inc. in
Gastonia and from other Southern mills. There isn’t any status quo in any branch of the textile
industry.”Rising Tide Of WarNor was there any status quo in the world. Hitler’s Germans and
Mussolini’s Italians had successfully dueled with Russia in the Spanish civil war, and had won.
Then, Hitler brow-beat the British and French into appeasement at Munich in 1938 and Czechoslovakia
died. In April, 1939, Italy invaded Albania, and, in May, signed a military alliance with
Germany.On August 2, 1939, Albert Einstein wrote President Roosevelt alerting him that recent
research made possible an explosive device based on splitting the atom.On August 23rd, the Russians
and Germans signed a non-aggression pact.On August 31st, The Reporter commented on “a sense of
foreboding” in the textile industry: markets uncertain, woolens withdrawn by large producers and
the wool auction at Sydney postponed.On September 1st, Germany invaded Poland.World War 11 had
begun. The atomic bomb had been conceived. Vast changes lay ahead.
