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Herbert Hoover, the U.S. Food Administration, and the Dairy Industry, 1917–1918

Published online by Cambridge University Press:  11 June 2012

James L. Guth
James L. Guth
Affiliation:
Associate Professor of Political Science, Furman University
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Abstract

When the United States entered World War I, economic interest groups were far better developed and vocal than they had been at the beginning of the Progressive era. Resolving differing views of equitable policy as entertained by these groups resulted in government economic planning for prosecution of the war effort that, so far from being expertly organized and scientific, was confused and ad hoc. Further dramatic proof of this generalization is provided by Professor Guth in his essay on the marketing of fluid milk and its surplus during the war emergency. Producers had been moving towards marketing cooperatives, with all the risk of violation of antitrust laws that entailed. Much of the volume of milk sales had become concentrated in the previous three decades in a few large dealers who were economically strong, especially in the major milksheds. And a new force, the consumer groups, emerged to try the patience of all concerned with orderly marketing of milk in a time of rising production costs, including Herbert Hoover and his subordinates in and around the Food Administration. Quickly dismantled after the Armistice, the mechanisms they worked out nevertheless became the foundation for massive intervention in a highly demoralized industry after 1933.

Type
Research Article
Information
Business History Review , Volume 55 , Issue 2 , Summer 1981 , pp. 170 - 187
Copyright
Copyright © The President and Fellows of Harvard College 1981

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References

1 For a typology of contemporary varieties of regulatory politics, see Ripley, Randall B. and Franklin, Grace A., Congress, the Bureaucracy and Public Policy (Homewood, Illinois, 1976).Google Scholar A good survey of historians' work on regulation is McCraw, Thomas K., “Regulation in America: A Review Article,” Business History Review, XLIX (Summer, 1975).Google Scholar

2 The origin of Progressive regulation has been the subject of sustained controversy: farmers, consumers, large and small businessmen have all been identified as instigators. Kennedy, David J., “Overview: The Progressive Era,” The Historian, XXXVII (May, 1975), 453–468.CrossRefGoogle Scholar

3 For the impact of urbanization, see Bunger, Eric, “Dairying and Urban Development in New York State, 1850–1900,” Agricultural History, XXIX (October, 1955), 169–174.Google Scholar From 1900 to 1913, retail milk prices rose 40.2 per cent over the 1890–1899 average, compared with a 67 per cent increase in the Bureau of Labor Statistics' index for all foods. From 1913 to 1915 prices actually declined slightly. Federal Trade Commission, Milk and Milk Products, 1914–1918 (Washington, D.C., 1921), 107–110.Google Scholar Prices paid farmers are less well-documented, but some evidence supports economist B. H. Hibbard's observation that farmer prices often remained unchanged so long as to become “traditional.” Effects of the Great War Upon Agriculture in the United States and Great Britain (New York, 1919), 60–63.

4 The early days of the dairy cooperative movement are discussed in Holman, Charles W., The Cooperative Way Wins in America (Syracuse, 1957), 26–37.Google Scholar

5 NAOS operations are fully described in McCarthy's letters to Sir Horace Plunkett during 1916 and 1917, Plunkett Correspondence, Wisconsin State Historical Society, Madison. The organization is also the subject of much material in the McCarthy Papers, especially Boxes 31–33, Wisconsin State Historical Society.

6 Chartes W. Holman, Columbia Oral History Project interview, 37–51.

7 National Conference on Marketing and Farm Credits, Report of the Fourth Annual Session (Chicago, December 4–9, 1916), 347–514Google Scholar; Hoard's Dairyman, LII (December 29, 1916), 805; and, Charles Lyman to McCarthy, September 15, 1917, McCarthy Papers.

8 G. P. Warber to Charles J. Brand, December 29, 1916, “G. P. Warber” file, accession 319, drawer 548, Records of the Bureau of Markets, Record Group 83, National Archives.

9 For two accounts of local activism, see: Boston Chamber of Commerce, The Milk Question in New England (Boston, 1917), 1–9Google Scholar, and Balderston, R. W., “Marketing Milk in Philadelphia,” Annals of the American Academy of Political and Social Science, CXVII (January, 1925), 232–233.Google Scholar

10 Hoover's priorities are described in Hall, Tom G., “Cheap Bread from Dear Wheat: Herbert Hoover, the Wilson Administration, and the Management of Wheat Prices, 1916–1920,” (unpublished Ph.D. dissertation, University of California-Davis, 1970), 45–57.Google Scholar The dairy conference is reported in New England Dairyman, I (July. 1917), 4.

11 Haskell's plans are reviewed in a report to Hoover, July 3, 1917 in “Dairy Products” file, Box 1056, Records of the United States Food Administration, Record Group 4, Washington National Records Center. See also the correspondence with industry leaders in “National Dairy War Council” file, Box 1057, USFA Records.

12 Mrs. Howard Cheney to Hoover, July 16, 1917, “Milk Prices” file, Box 1051, USFA Records; Hall, “Cheap Bread,” 11–12; and, Hoover to “Miss Hagerty,” August 2, 1917, “Milk Prices” file.

13 Requa to Hoover, August 13, 1917; Haskell to Requa, August 17, 1917; and, Hoover to Requa, no date, all in “Milk File for Dr. King,” Box 1104, USFA Records. For the farmers' meeting with Hoover, see New England Dairyman, I (September, 1917), 3.

14 Hoover's advisers were all quite confident that “the publication of these facts will tend to stabilize prices of milk” Haskell to A. H. Barber, September 12, 1917, “Milk Costs” file, Box 1055, USFA Records.

15 “Milk Conference, September 13, 1917,” 1–20, in “Miscellaneous Reports” file, Box 1058, USFA Records.

16 New York Produce Review and American Creamery, XLIV (September 19, 1917), 785.

17 Duncan, C. S., “The Chicago Milk Price Inquiry,” Journal of Political Economy, XXVI (April, 1918), 321–346CrossRefGoogle Scholar: Charles McCarthy to Mark Requa, October 7, 1917, McCarthy Papers.

18 “Stenographic Notes of the Milk Conference Held in U.S. Food Administration Conference Room,” October 10, 1917, Box 1058, USFA Records. For Lyman's account, see his letter to McCarthy, October 31, 1917, McCarthy Papers.

19 New England Dairyman, I (November, 1917), 10; Lyman to McCarthy, October 31, 1917, McCarthy Papers.

20 For these conflicting perspectives on cooperatives the following sources are instructive: Lyman to John D. Hervey, October 26, 1917, McCarthy Papers; Charles J. Brand to Secretary of Agriculture David F. Houston, October 17, 1917, “National Milk Producers Federation” file, BOM Records; “Stenographic Notes,” October 10, 1917, 6–8. Although continuing to work with the BOM on organizing matters, the Milk Producers soon joined the McCarthy-Pinchot farm group alliance: Guth, James L., “The National Board of Farm Organizations,” Agricultural History, XLVIII (July, 1974), 418–440.Google Scholar

21 The following account is drawn from “Stenographic Report of the Private Conference,” October 19, 1917, “Miscellaneous Reports,” Box 1058, USFA Records.

22 R. E. Miles, “Memorandum on Method and Procedure,” May 24, 1918, “Ohio Milk Commission,” Box 1062, USFA Records.

23 The unavailability of expert help was a continuing concern of Haskells: “Stenographic Notes,” October 10, 1917, 9.

24 FTC, Milk and Milk Prices, 1914–1918, 107–109; Hoover to Powell, October 29, 1917, “Dairy Products,” Box 1049, USFA Records; Hoover to Wilson, November 23, 1917, in O'Brien, Francis W., The Hoover-Wilson Wartime Correspondence (Ames, Iowa, 1974), 107–108Google Scholar; Hoover to Gregory, October 30, 1917, “Dairy Products,” Box 1049. The Justice Department reserved the right to act in “aggravated cases.” Memorandum from the Chief Counsel, USFA, to Lamb, December 10, 1917, “L” file, Box 1103, USFA Records. Local authorities occasionally ignored Hoovers requests: Lamb to William A. Glasgow, November 14, 1918, “H” file, Box 1103, USFA Records.

25 Most negotiations took place on a market-by-market basis, but the same issues were raised: “Stenographic Report of Conference of Milk Producers and Distributors of New York City,” November 9, 1917, “Miscellaneous Reports,” Rox 1058, USFA Records; C. S. Duncan, “The Chicago Milk Price Inquiry” 321–330; and, New York Times, November 21, 1917, 10.

26 “Stenographic Report,” November 9, 1917.

27 Hoover to Wilson, November 23, 1917, in O'Rrien, Wartime Correspondence, 107–108; Dairymen's League News, I (December, 1917).

28 California Milk Commission to Ralph Merritt, December 29, 1917, “Milk Situation — San Francisco” file, Box 1049; “Federai Milk Commission for the Middle States: Public Hearings,” five volumes in Boxes 1104 and 1105, USFA Records.

29 Campbell to Lamb, December 19 and 22, 1917, “A” file, Box 102, USFA Records.

30 W. H. Jordan to H. J. Eustace, January 2, 1918, in W. H. Jordan Papers, Collection of Regional History, Cornell University; “Minutes of the Executive Session of the Federal Milk Commission for the Middle States,” 248–260, “I” file, Box 1103; Philip R. Allen to Lamb, January 3, 1918, “Milk in New England” file, Box 1047; and, California Milk Commission to Merritt, December 29, 1917, “Milk Situation — San Francisco” file, Box 1049, USFA Records.

31 “Proceedings of Conference — Pittsburgh District,” January 10, 1918, Box 1049; Campbell to Lamb, January 24, 1918, “A” file, Box 1102; Wheeler to Lamb, December 15 and 17, 1917, Wheeler to Hoover, February 5, 1918, both in “W” file, Box 1103; and, H. A. Russell to Walter Rogers, February 5, 1918, “R” file. Box 1106, USFA Records.

32 “Distribution reform” projects are outlined in Eugene Schoen to Hoover, January 2, 1918, Box 1047, and W. H. Jordan to Hoover, February 19, 1918, Box 1049, USFA Records. Hoover favored a “controlled combination” of dealers “in this most fundamental commodity.” He wrote W. H. Jordan, chairman of the New York Commssion, that “the milk supply in the large cities is even more vital than electric lights, and I see no reason why the state should not undertake to secure such combination and its complete regulation.” February 25, 1918, W. H. Jordan Papers. Most dealers resisted such “reforms,” but in San Francisco, the larger dealers used Commission proposals to improve their competitive position: Representative John C. Nolan to Hoover, April 10, 1918, “Milk Situation — San Francisco” file, Box 1049, USFA Records.

33 Lamb to Philip R. Allen, April 9, 1918, “Dairy Products” file, Box 1049, USFA Records.

34 For Lamb's description of the evolution of the “conference method,” see his letter to A. E. Stewart, September 16, 1918, “S” file, Box 1103. Clyde King had from the first operated in this fashion in Pennsylvania: King to R. E. Miles, July 17, 1918, “King” file, Box 1060, USFA Records.

35 Lamb to Philip Allen, November 9, 1918, Box 1102, USFA Records.

36 Lamb to G. Harold Powell, October 2, 1918, and Powell to Lamb, same date, “Lamb” file, Box 1048, USFA Records.

37 Campbell to Hoover, September 20, 1918, “Dairy Products” file, Box 1049, USFA Records. For the producer and dealer reaction to Lamb's first hints on the national conference idea, see: New York Produce Review and American Creamery, XLVI (June 19, 1918), 316, and New Enghnd Dairyman II (June, 1918), 4.

38 King to Lamb, November 14, 1918, “King File,” Box 1049, USFA Records.

39 Relations between Lamb and King were greatly strained due to profound disagreement over the handling of an explosive New York situation; Lamb to King, October 16 and November 16, 1918, in “King” file, Box 1049. “Conference of Committees Appointed by Various Branches of the Milk Industry to Consider the Nationalization of the Milk Industry and Milk Prices Throughout the United States,” November 19, 1918, “Miscellaneous Reports” file, Box 1058, USFA Records. All of the following quotations are taken from this transcript.

40 For postwar continuation of regulation, see G. P. Warber, NMPF press release, April 7, 1920, in John D. Miller Papers, Collection of Regional History, Cornell University.

41 Cuff, Robert D., The War Industries Board: Business-Government Relations During World War I (Baltimore, 1973), 7.Google Scholar

42 The dairy cooperatives' success in “pushing their way into the system” illustrates William A. Gamson's contention that during wartime dominant elites may be required to recognize some “challenging groups” as the price of continued exercise of power. The Strategy of Social Protest (Homewood, Illinois, 1975), 116.

43 For a typical postwar situation, see Balderston, “Marketing Milk in Philadelphia,” 233–235. The second venture in milk regulation is described by Black, John D., The Dairy Industry and the AAA (Washington, D.C., 1935).Google Scholar Many cooperative officials demanding New Deal intervention used the 1917–18 experience as their model.

44 Edelman, Murray, The Symbolic Uses of Politics (Urbana, Illinois 1964), 22–23.Google Scholar According to the FTC study, milk prices did stabilize during the Administration's involvement, but this was primarily due to other factors, especially increased supplies. After the Administration withdrew, milk and other food prices jumped again. Milk and Milk Products, 1914–1918, 106–110.