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The Cotton-Textile Institute and the Government: A Case Study in Interacting Value Systems1

Published online by Cambridge University Press:  24 July 2012

Louis P. Galambos
Louis P. Galambos
Affiliation:
Assistant Professor of History, Rice University
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Abstract

The process of mutual accommodation between government and business in the United States is well illustrated in this study of the strategy and tactics of a key twentieth-century business association.

Type
Research Article
Information
Business History Review , Volume 38 , Issue 2 , Summer 1964 , pp. 186 - 213
Copyright
Copyright © The President and Fellows of Harvard College 1964

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References

2 Reynolds, Lloyd G., “Cutthroat Competition,” American Economic Review, vol. XXX (December, 1940), pp. 736–47.Google Scholar

3 Cotton-Textile Institute, “Minutes, Organization Meeting,” October 20, 1926; and Certificate of Incorporation and By-Laws of the Cotton-Textile Institute, Inc. (1927 ed.), pp. 13–14, Northern Textile Association MSS. These minutes and other papers subsequently cited as NTA MSS. are in the office of the association in Boston, Mass. I am indebted to William F. Sullivan, Jessie E. Vint, and Josephine A. Loughry for making these papers available and for assisting me in countless ways during my study of the materials.

4 CTI, “Minutes, Board of Directors,” September 30, 1936, Goldthwaite H. Dorr MSS. These minutes and the papers, hereafter cited as Dorr MSS, were opened for my examination by Mr. Goldthwaite H. Dorr. I am very grateful to Mr. Dorr and to Mr. John K. Watson for assisting my project in this and other ways.

5 By “values,” I merely mean “conceptions of the desirable that are distinctive of some human group.” It is perhaps necessary to distinguish this particular concept of a value from the more commonsense idea of an ethical or moral principle. The former may involve (as it does in the case of CTI) realizable objectives, while the latter of necessity refers to objectives toward which one strives without the possibility of complete attainment. Clark, Burton R., “Organizational Adaptation and Precarious Values: A Case Study,” American Sociological Review, vol. XXI (June, 1956), p. 328.Google Scholar

6 Ibid., pp. 328–29. Clark discusses several of the reasons values may or may not be secure or acceptable, and throughout this article I am using his concept of the “precarious” or insecure value.

7 The fact that the members had not fully accepted the obligations of self-regulation became obvious as early as the fall of 1927. American Cotton Manufacturers Association, Proceedings, vol. XXXII (Boston, 1928), pp. 29, 64–65.Google Scholar ACMA, Proc, vol. XXXIII (Boston, 1929), pp. 86–87. CTI, “The Situation in Print Cloths,” April, 1928, Dorr MSS.

8 At its peak (August, 1932), the Institute was being supported by 88 per cent of the industry. Sloan, George A., Sixth Annual Report of the Cotton-Textile Institute, Inc. (New York, 1932), p. 25.Google Scholar

9 Harris, Seymour E., Twenty Years of Federal Reserve Policy (2 vols., Cambridge, 1933), vol. I, pp. 79–111.Google ScholarSharfman, I. L., The Interstate Commerce Commission (4 vols., New York, 1931–1937), vol. I, pp. 177–244.Google ScholarLecht, Leonard A., Experience Under Railway Labor Legislation (New York, 1954), pp. 14–30.Google ScholarTenth Annual Report of the Secretary of Commerce, 1922 (Washington, 1922), pp. 29–32.

10 Maple Flooring Manufacturers' Association v. United States, 268 U.S. 563 (1925).

11 Cement Manufacturers' Protective Association v. United States, 268 U.S. 588 (1925).

12 S. P. Simpson to W. D. Hines, July 25, 1927; G. H. Dorr to W. D. Hines, October 10, 1927, Dorr MSS.

13 In regard to the statistical program, see: CTI, “Minutes of Carded Yarn Group Meeting,” July 7, 1927; P. B. Halstead, “To AH Manufacturers of Narrow Sheetings,” September 1, 1927; W. D. Hines to W. D. Anderson, June 25, 1929, in Donald Comer MSS. These papers were made available for my examination by the late Donald Comer of Birmingham, Alabama. When I began working on the collection, the papers were in Birmingham, but since that time they have been placed in the Baker Library, Harvard University. I am much indebted to Mr. Comer, who gave me unrestricted access to these materials. On the cost-accounting program, see: B. B. Gossett to B. B. Comer, July 2, 1927; CTI, “Minutes of Narrow Sheetings' Cost Accountants' Meeting,” August 9, 1927, Comer MSS. Ward Thoron, a member from New England, felt that the association's officers were far too careful. Thoron told a convention of manufacturers in 1930 that he felt that publication of the statistics had been a mistake; he said “that any Institute, that is run by a series of officials who are afraid of going to jail, is not worth the paper its circulars are written on or the money that is being put into it. The whole object of an Institute is to make one worthy of jail and try to avoid getting in it.” National Association of Cotton Manufacturers, Transactions, vol. CXXVIII (Boston, 1930), pp 99–100Google Scholar.

14 CTI, “Minutes, Executive Committee,” October 18, 1927, Dorr MSS.

15 G. A. Sloan, “Memorandum for Mr. Hines,” October 18, 1927; G. H. Dorr to W. D. Hines, June 25, 1928, Dorr MSS.

16 Hoover's support for the associations is clearly stated in his annual reports as Secretary of Commerce, particularly the following: Twelfth Annual Report (Washington, 1924), pp. 22–24; Thirteenth Annual Report (Washington, 1925), pp. 10–27; and Fourteenth Annual Report (Washington, 1926), pp. 11–27.

17 Cotton Manufacturers Association of Georgia, Report, vol. XXVI (Atlanta, 1926), pp. 65–66.

18 Textile World, vol. LXXI (February 5, 1927), p. 130.

19 In regard to “legitimation” see Weber, Max, The Theory of Social and Economic Organization (New York, 1947), pp. 124–32Google Scholar.

20 G. H. Dorr, “Memorandum of Conference with the Assistant to the Attorney General, Colonel Donovan, Monday, December 5, 1927;” William J. Vereen, “To Narrow Sheetings Manufacturers,” December 9, 1927, Dorr MSS.

21 The following account of this conference is taken from G. H. Dorr, “Memorandum of Conference with the Assistant to the Attorney General, Colonel Donovan, Monday, December 5, 1927,” Dorr MSS.

22 W. D. Hines to D. Comer, January 25, 1930, with enclosed “Memorandum;” CTI, “Meeting of the Board of Directors,” September 24, 1930; CTI, “Minutes of the Meeting of the Executive Committee,” October 14, 1930, Comer MSS.

23 The advantages of this particular form of agreement are carefully stated in W. D. Hines to D. Comer, January 25, 1930, Comer MSS.

24 W. D. Hines, “Memorandum for File,” February 7, 1930; G. A. Sloan, “Memorandum for Board of Directors,” October 1, 1930; G. A. Sloan to D. Comer, October 17, 1930; G. A. Sloan to R. P. Lamont, October 31, 1930; R. P. Lamont to G. A. Sloan, November 3, 1930, Comer MSS.

25 G. A. Sloan to D. Comer, February 10, 1931, Comer MSS. Textile World, vol. LXXIX (February 21, 1931), p. 881.

26 R. P. Lamont to T. M. Marchant, February 12, 1931; R. P. Lamont to Henry F. Lippitt, February 12, 1931, Records of the Department of Commerce, RG 40, 87481, Box 675, National Archives (hereafter NA).

27 The correspondence file of the Department of Commerce contains material concerning the conference: RG 40, 83057, Boxes 546–547, NA. Also see G. A. Sloan to Herbert Hoover, January 27, 1932, RG 40, 87481, Box 675, NA.

28 G. A. Sloan, “Special Memorandum,” January 26, 1932, Comer MSS.

29 R. P. Lamont, telegram to G. A. Sloan, February 24, 1932, RG 40, 87481, Box 675, NA.

30 G. A. Sloan to D. Comer, with enclosure, October 29, 1930, and January 3, 1931; D. Comer to W. D. Hines, January 16, 1931, Comer MSS.

31 G. A. Sloan to J. J. Manning, July 17, 1933; “Statement of Cotton Textile Industry Committee,” June 27, 1933, Comer MSS. NRA, “Official Transcript of Hearing No. 1,” Transcripts of Hearings, 1933–1935, RG 9, Box 7152, NA.

32 George H. Lanier to Scott Roberts, January 14, 1931; G. A. Sloan to D. Comer, March 27, 1931; D. Comer to W. K. Moore, April 8, 1931; D. Comer to Governor B. M. Miller, May 29, 1931, Comer MSS. ACMA, Proc, vol. XXXV (Boston, 1931), p. 26. For the “unreconstructed” attitude toward such laws see: Cotton Manufacturers Association of Georgia, Report, vol. XXXI (Atlanta, 1931), p. 30; and ibid., Report, vol. XXXII (Atlanta, 1932), p. 72.

33 CTI, “Minutes, Executive Committee,” October 18, 1932; CTI, “Minutes, Annual Meeting,” October 19, 1932, Comer MSS.

34 Hines' talk before the Taylor Society in Philadelphia (April, 1931), was reported in the New York Times, May 1, 1931, and cited by Justice Louis D. Brandeis, in New York Ice Co. v. Liebmann, 285 U.S. 307, note 51. Also see, Handler, Milton (ed.), The Federal Anti-Trust Laws: A Symposium (Chicago, 1932), pp. 75–95, 101–104Google Scholar.

35 U.S. Chamber of Commerce, “Minutes, Board of Directors,” January 23, April 29, and June 26, 1931; “Minutes, Executive Committee,” March 21, 1931. These and other records of the Chamber subsequently cited are in the office of the U.S. Chamber of Commerce, Washington, D.C.

36 Attorney General William D. Mitchell to G. H. Dorr, May 14, 1931; G. H. Dorr to William D. Mitchell, August 18, 1931, Dorr MSS.

37 U.S. Chamber of Commerce, “Minutes, Board of Directors,” June 26, 1931, and September 23, 1932. James A. Emery to W. D. Hines, March 29, 1932; John M. Redpath (U. S. Chamber of Commerce) to G. H. Dorr, November 22, 1932, Dorr MSS.

38 Gilbert H. Montague to W. D. Hines, March 9, 1932; William ? Osbom to W. D. Hines, April 19, 1932, Dorr MSS.

39 G. A. Sloan to W. D. Hines, April 27, 1932, Dorr MSS.

40 G. A. Sloan, “To the Board of Directors,” September 19, 1932, Comer MSS.

41 Galbraith, John K., The Great Crash, 1929 (Boston, 1955), pp. 144–46Google Scholar, gives an engaging description of this type of conference.

42 Appalachian Coals, Inc., et al. υ. United States, 288 U.S. 344 (1933).

43 Compton was also a trade-association officer and the brief was submitted on behalf of the two associations he represented, as well as the Institute.

44 Brief of Hines, Walker D., Dorr, Goldthwaite H., and Compton, Wilson, As Amici Curiae on Behalf of the Cotton Textile Institute, Inc., Window Glass Manufacturers' Association, and National Lumber Manufacturers Association (New York, n.d.), PP. 4, 7–9, 11, 13–27Google Scholar.

45 288 U.S. 372–78.

46 G. A. Sloan, “Memorandum to Executive Committee,” December 21, 1932, and “Memorandum to Board of Directors,” January 13, 1933, Comer MSS.

47 Rerford G. Tugwell, “Notes from a New Deal Diary,” January 14, 1933, Franklin D. Roosevelt Library (hereafter RL), Hyde Park, New York. Gilbert H. Montague to W. D. Hines, January 31, 1933, Dorr MSS.

48 James A. Emery to W. D. Hines, December 22, 1933, and January 31, 1933. Dorr MSS.

49 G. A. Sloan, “Memorandum to Board Members,” February 8, 1933, and “Memorandum to Members of the Board,” February 18, 1933, Comer MSS. “Statement of W. D. Hines to the conference with the House Judiciary Committee,” February 8, 1933; and “Memorandum by WDH,” March 16, 1933, Dorr MSS.

50 G. H. Dorr to Rush C. Butler, February 10, 1933; Draft of Proposed Sill to Create an Economic Emergency Board and for other Purposes, with Memorandum, February 17, 1933, Dorr MSS.

51 W. D. Hines to A. A. Berle, February 21, 1933; W. D. Hines to Gilbert H. Montague, February 21, 1933; G. H. Dorr to Rush C. Butler, February 28, 1933, Dorr MSS.

52 A. A. Berle to W. D. Hines, February 23, 1933; W. D. Hines to A. A. Berle, February 24, 1933, Dorr MSS.

53 W. D. Hines, “Memorandum for Mr. Dorr,” February 13, 1933, Dorr MSS; Rexford G. Tugwell, “A New Deal Diary,” February 12, 1933, RL.

54 W. D. Hines, “Memorandum,” March 8, 1933; J. Harvey Williams to Rush C. Butler, March 10, 1933, Dorr MSS. At this and other meetings of the group interested in a new approach to antitrust, it is significant that the majority of those in attendance were not businessmen in the strictest sense of the word; they were lawyers and professional association leaders.

55 W. D. Hines, “Memorandum,” March 16, 1933, Dorr MSS.

56 “Anti-Trust Conference,” March 27, 1933; John M. Redpath to G. H. Dorr, April 13, 1933, Dorr MSS.

57 Robert L. Lund to Louis McHenry Howe, March 29, 1933, President's Personal File 8246, RL. Henry I. Harriman to W. D. Hines, April 3, 1933; John M. Redpath to G. H. Dorr, April 13, 1933, Dorr MSS.

58 W. D. Hines to M. H. Mclntyre, March 23, 1933, with enclosed Draft of Points for White House, Official File 466, RL.

59 W. D. Hines to Henry I. Harriman, April 14, 1933, Dorr MSS.

60 Press Conference No. 11, April 12, 1933, RL.

61 Press Conference No. 12, April 14, 1933, RL.

62 Schlesinger, Arthur M. Jr., The Coming of the New Deal (Boston, 1959), p. 96Google Scholar. Gilbert H. Montague to John Dickinson, May 3, 1933, RG 40, 94694, NA. Schlesinger's volume (pp. 96–98) contains the best available description of the drafting of the bill.

63 W. D. Hines, “Memorandum for Mr. Dorr,” February 13, 1933, Dorr MSS.

64 W. D. Hines to Gilbert H. Montague, April 18, 1933; Gilbert H. Montague to W. D. Hines, April 20, 1933; W. D. Hines to G. H. Dorr, April 25, 1933, Dorr MSS.

65 G. H. Dorr, “Mr. Dorr's Talk – April 12, 1933;” Henry I. Harriman to W. D. Hines, April 19, 1933; W. D. Hines to William C. Osborn, April 19, 1933; W. D. Hines to James A. Emery, April 19, 1933, Dorr MSS.

66 U.S. Chamber of Commerce, “Minutes, 21st Annual Meeting,” May 3, 1933. G. A. Sloan to D. Comer, May 4, 1933; CTI, “Minutes, Executive Committee,” May 8, 1933, Comer MSS.

67 U.S. Chamber of Commerce, “Minutes, 21st Annual Meeting,” May 4, 1933.

68 Ibid.

69 Ibid.

70 Transcript, The President's Fireside Chat, May 7, 1933, RL.

71 CTI, “Minutes, Executive Committee,” May 8, 1933, Comer MSS.

72 G. A. Sloan, telegram to Franklin D. Roosevelt, May 10, 1933, Official File 372, RL.