Unions in the grocery trade dated to the turn of the century, when clerks at the era’s tiny stores banded together to seek community-wide agreements limiting opening hours. Since the typical grocery store had only two or three workers, the decision to join the union was typically made by the store manager, who worked at least as long and hard as his clerks. As extremely paternalistic employers, George and John Hartford paid their store managers well, avoided layoffs, and did not welcome unions. The rules of the A&P Managers’ Benefit Association, created in 1916, barred members from joining unions, and the Hartfords had introduced a pension plan for store managers during the 1920s in part to deter unionization. Various groups of A&P workers had won union contracts from time to time, but with no federal law structuring labor-management relations, those contracts were perpetually at risk of lapsing; when employees at the Jersey City warehouse went on strike in 1922, the Hartfords threatened to close the warehouse and then made good on their threat, moving the operation to Brooklyn. As A&P installed meat counters in the late 1920s, the Amalgamated Meat Cutters’ union tried to persuade the company to hire union butchers, but A&P refused. Only a handful of A&P workers were unionized in the early 1930s.13
The unions in the grocery sector had correspondingly little love for the chains. “Low Wage Chains Pile Up Profits,” The Retail Clerks International Advocate headlined, explaining: “The story from the inside of these stores reveals underpaid unjustly treated personnel.” The Amalgamated Meat Cutters put A&P on the union’s “unfair” list in 1930. When state legislatures and city councils took up chain-store taxes in the late 1920s and early 1930s, the unions were often on the pro-tax side, because the taxes aided the independent grocery stores and butcher shops where most of their members worked.14
The Food and Grocery Code adopted under the National Industrial Recovery Act late in 1933 required grocers to recognize unions, and labor leaders decided to make A&P a test case. In October 1934, eight unions demanded that A&P agree to employ only union members in Cleveland, one of the country’s biggest industrial centers. When the company refused, the unions of retail clerks, meat cutters, and bakery workers declared strikes. Union “flying squads” went from one store to another, demanding that the stores close. The Teamsters Union stopped deliveries by independent truckers so effectively that even armed escorts could not get merchandise delivered to the stores. On Saturday evening, October 27, A&P shocked the city with newspaper ads announcing that it had closed all 293 of its Cleveland stores and discharged twenty-two hundred workers. Rumors that George Hartford had made an extraordinary visit to the city were false, but John Hartford was there, and he abandoned his normal aloofness to blast the mayor and the president of the local labor federation for condoning violence and failing to protect the trucks, leaving A&P the choice of hiring armed guards or leaving town. “We chose the latter course to avoid bloodshed and disorder,” he asserted, adding, “The whole thing is the most ghastly situation I have ever encountered. The wreckage of our entire Cleveland business in the short space of a few days is difficult to understand.” Thanks to George Hartford’s foresight, all the stores were on short-term leases, limiting the cost of A&P’s departure.15
The conflict made headlines nationwide, and the Roosevelt administration, which had previously declined John Hartford’s requests to intervene, summoned the parties to Washington. After an all-night bargaining session with John Hartford himself, the unions called off the strike, and A&P agreed to reopen its stores and reinstate the fired workers. The company made a public statement that it had no objection to its workers joining a union, but the unions’ victory proved empty. The agreement was not a labor contract, and it did not require the parties to reach a contract. Instead of bargaining with the Teamsters, the Amalgamated Meat Cutters, and other national unions, A&P signed a contract with an independent union that claimed to speak for all of its Cleveland employees. Only with the passage of the National Labor Relations Act in July 1935, establishing an election process for unions to win employer recognition, did the national unions make headway at A&P, and even then progress was spotty. In most of the country, as officials of the Amalgamated Meat Cutters’ union complained, a “bitter anti-union policy” dominated at A&P.16
The Hartfords still imagined that their paternalistic approach might inspire their employees, many of whom had purchased nonvoting shares since 1926. “My brother and I often look back longingly to the days when the Company was small enough for us to know almost every person in it,” John Hartford wrote to his store managers at the end of 1936. “Then we could take a man by the arm, as our father used to do, and talk things over with him.” When they wanted to make important changes, the Hartfords invariably sought approval from their division presidents, whose endorsement was never in question. In October 1936, the division presidents voted to give paid vacations to full-time clerks and managers, to provide company-paid disability insurance, and to give clerks overtime pay when they worked extra hours. The workweek was shortened to five and a half days from six. But one thing the Hartfords refused to do: negotiate with the unions that claimed to represent their nearly ninety thousand employees.17
Byoir, the fixer, called another fixer. Chester Wright was a public relations man in Washington who managed to work simultaneously for the American Federation of Labor (AFL) and its archenemy, the National Association of Manufacturers. Among other things, he published Chester Wright’s Labor Letter, designed to help employers navigate through the crosswinds of intense organizing activity, widespread worker unrest, and conflict between the two large labor confederations, the American Federation of Labor, whose member unions each covered a single craft, and the Congress of Industrial Organizations (CIO), which tried to bring each industry’s workers into a single union across craft lines. Wright and Byoir had known each other since their days as propagandists during the world war, and Wright had lent a hand with the President’s Birthday Balls.18
Almost immediately, the involvement of Byoir and Wright led to a new tone at the Graybar Building. “After twenty-five years of bitter opposition our International has sufficiently sold itself to the A&P Tea Company to the extent that they are treating with us and signing our contracts,” Patrick Gorman, leader of the Amalgamated Meat Cutters and Butcher Workmen, told his executive board in March 1938. Around the same time, William Green, president of the AFL, met with A&P executives, probably including John Hartford. The makings of a deal were obvious: if A&P would sign contracts with the AFL unions, the unions would oppose the Patman bill. As Byoir undoubtedly pointed out, this was by no means the worst possible outcome for the Hartfords. Much as they disliked unions, the deal with the American Federation of Labor reduced the risk that A&P would have to deal with more confrontational CIO unions, such as the United Grocery Workers Union and the United Warehouse Workers Union in Chicago and some of the radical chapters of the Retail, Wholesale, and Department Store Union in New York.19
The new relationship blossomed. In August 1938, Wright worked out a tentative agreement allowing unionization of all A&P employees in Washington and Baltimore, including bakery workers and bread-truck drivers. Byoir met with Gorman in September. “I got along splendidly with him and believe we agreed upon a program that will establish for us a more general, friendly relationship with the Company,” Gorman reported. Among Gorman’s suggestions was that A&P appoint a single person to be in charge of labor relations. At its annual convention in October 1938, the AFL backed away from its normal condemnation of A&P’s anti-labor attitude. Although enough of its member unions remained suspicious of the company that a resolution condemning the Patman tax bill could not win approval, the federation voted to undertake a study of “taxes of discriminatory and punitive character,” such as chain-store taxes.
The Hartfords reciprocated, abandoning their long-held opposition to unions among their workers. Following Byoir’s guidance, in November they made Charles Schimmat, a regional executive from Chicago, responsible for all union contracts nationw
ide. Almost immediately, A&P and five unions signed contracts covering employees in Washington and Chicago. Union contracts followed quickly in Milwaukee, St. Louis, and Toledo. “The past few weeks has witnessed one of the largest increases in membership in the Association that has been experienced for some time,” The Retail Clerks International Advocate proclaimed. The company agreed to have all its printing done in union shops (although it took boycott threats from the Teamsters before the company moved the printing of Woman’s Day to a union plant). A&P also hired one of Chester Wright’s businesses, the International Labor News Service, to include chain-friendly articles in its twice-weekly news bulletins to union newspapers around the country. The fact that Byoir paid Wright $80,000 for one year of pro-chain propaganda was not disclosed.20
Building bridges to labor was only part of Byoir’s effort to change the political environment. In the spring of 1938, an opportunity arose to cultivate the consumer movement. Ada Taylor Sackett, a writer and hotel convention manager in Atlantic City and an officer of a local women’s club, had become involved in efforts to repeal the municipal chain-store tax enacted in 1935. In the spring of 1938, Business Organization Inc. offered to help her establish similar groups in other towns. The Emergency Consumers Tax Council of New Jersey was not entirely A&P’s creation, but Business Organization Inc. financed the venture and provided manpower to aid Sackett in organizing 150 local councils around the state. Byoir announced the company’s gift publicly, and with it A&P’s new policy of supporting groups to study “hidden taxes” such as those levied on retailers.21
Byoir took the concept nationwide, creating the National Consumers Tax Commission in June 1938. Unlike its New Jersey precursor, the National Consumers Tax Commission was no grassroots organization. Housewives constituted the nominal leadership: Byoir recruited the head of a consumer group in Texas, Mrs. Kenneth C. Frazier, to be the president. The national secretary was Milton M. Sittenfield, a Byoir employee, and Business Organization Inc. paid the bills. With a staff of seventy-two based in downtown Chicago, the National Consumers Tax Commission sent out organizers to create discussion groups on women’s issues. For local leaders, it tapped affiliates of the General Federation of Women’s Clubs, one of the largest civic organizations in the country. Each discussion group developed its own locally oriented program, but “hidden taxes” were invariably among the topics. Business Organization’s “research department” helpfully furnished discussion guides. Why Pay Taxes in the Dark? was the title of one of the commission’s pamphlets, which contended that the price of a $5.60 pair of shoes included $1.60 in taxes. Another publication offered a colloquy:
Q. Is the primary purpose of the chain store taxes to produce revenue?
A. No. Of the 22 states which impose chain store taxes, 18 derive less than 1 percent from this source.
The effort burgeoned: by September 1939, the National Consumers Tax Commission claimed to have six thousand study groups with more than 650,000 members. Among them were the wives of many A&P employees, who signed up at John Hartford’s request.22
Bringing consumer groups to A&P’s defense was an easy feat for Byoir to accomplish. Studies confirmed that chain-owned grocery stores underpriced independent stores by 10 to 15 percent, in good part because the chains did not provide credit or delivery. A 1938 survey found chains’ prices below independent grocers’ prices on 96 percent of the items examined. Consumer groups thus had every reason to oppose taxes on chain stores. The government, which later made Byoir a defendant in antitrust suits against A&P, alleged that he tried to keep the company’s involvement in the National Consumers Tax Commission secret, but that assertion was incorrect. Although the commission’s description of itself as a nonpolitical organization of “average American housewives” was far-fetched, its member newsletter publicly thanked John Hartford for A&P’s financial support. Byoir constructed a masterful narrative, planting newspaper stories that described John A. Hartford as an “angel” generously supporting women who wanted to delve into civic affairs.23
On Thursday, September 15, 1938, Byoir’s carefully constructed campaign against the Patman tax bill burst into full public view. Readers across the country opened their newspapers to find a five-column advertisement headlined, simply, “A Statement of Public Policy by The Great Atlantic & Pacific Tea Company.” Over the signatures of George L. and John A. Hartford, the dense text outlined why the Patman bill was against the interests of A&P employees, consumers, farmers, and labor. The bill, it said, would “wipe out” 30 percent of the distribution machinery of U.S. farmers and raise living costs for wage earners. “We have arrived at the decision that we would be doing less than our full duty if we failed to oppose, by every fair means, legislation proposed by the Honorable Wright Patman,” the advertisement announced. “We will not go into politics, nor will we establish a lobby in Washington for the purpose of attempting to influence the vote of any member of the Congress. We expect only a full and fair opportunity to present the case for the chain stores.” The advertisement ran in sixteen hundred publications, and Byoir then sent a press release to thousands of other newspapers calling attention to it.24
The advertisement resounded through the business world, where the Hartfords’ reluctance to engage in political matters was well-known. In years past, when various retailer groups had defended chain stores before Congress, the Roosevelt administration, and state legislatures, A&P had remained aloof. Nor had it allied itself with lobbying groups like the American Retail Federation and the National Association of Chain Stores. The fact that the huge retailer was prepared to devote its vast resources to the opposition cause immediately reshaped the political landscape. “I think the A&P advertisement is one of the most constructive things that has been done for business generally in a long while,” a department-store executive told The New York Times. “If I had any criticism to make, it would be that the ad and the educational campaign should have appeared five years ago.”
17
DEFYING DEATH
For the first time since winning his congressional seat in 1928, Patman faced serious opposition in the July 1938 Democratic primary. He blamed the opposition on chain-store interests, but there was more to the story. Democrats in Texas, and in other parts of the country, had finally split over the New Deal, and conservative Democrats took on Roosevelt supporters in many of that year’s primary races. In Texarkana, though, Roosevelt remained highly popular. Patman portrayed himself as Roosevelt’s man, and his opponents made hay when the president failed to stop in the district on his train trip to California in early July. “This has reached the point I earnestly urge you to send me telegram of some sort as primary only few days off,” Patman telegraphed to Roosevelt in San Francisco on July 15. A frantic telegram to Marvin McIntyre, Roosevelt’s secretary, followed the next morning. Roosevelt, about to embark on a Pacific cruise, evidently had no desire to become entangled with the volatile congressman. Patman heard back from McIntyre, not Roosevelt: “The president asked me to wire you and express his regret that he could not come to Texarkana on his trip across Texas.” Patman used McIntyre’s tepid telegram as best he could, issuing a press release: “President Roosevelt Wires Personal Regards to Congressman Patman.”1
Patman won his primary, and immediately made known his desire to replace a defeated Texas congressman on the House Ways and Means Committee. The position was much coveted, for the committee had jurisdiction over all tax matters, including the chain-store tax bill. Patman’s Texas colleague Sam Rayburn, the House majority leader, controlled the appointment. Another Texas congressman also wanted the job, and Rayburn advised Patman to seek support from other members of the state’s delegation. Patman did so aggressively, writing to his colleagues, their supporters, and their local newspaper publishers. “It is very probable I will be a member of the Ways and Means Committee,” Patman wrote to a supporter in September. But there were problems. Several Texas congressmen strongly opposed the chain-store tax and refused their support. “It lo
oks like the chains are trying to block my selection,” Patman wrote to the head of the Texas Wholesale Grocers’ Association in late October. Rayburn urged him to seek out Vice President John Nance Garner, another Texan and former Speaker of the House, who by this point had broken with Roosevelt and favored more conservative policies. “Dear Sam: I am not going to see Mr. Garner,” Patman rejoined. At the start of 1939, Rayburn and William Bankhead, the Speaker of the House, sent Patman a blunt rejection letter expressing “our desire that you not further consider becoming a member of the Committee on Ways and Means but remain a member of the Committee on Banking and Currency.”2
Someone more skilled in reading signals might have drawn certain conclusions from Roosevelt’s studied avoidance, Rayburn’s hesitation, and Bankhead’s remoteness. These men, occupying high positions in the national government, faced serious worries in 1938. In Europe, an aggressively expansionist Germany was swallowing Austria, threatening Czechoslovakia, and resorting to increasingly violent repression at home. In China, Japan was waging full-scale war. In the United States, labor unrest was rife, and overcoming isolationist sentiment to rebuild U.S. military strength was becoming the administration’s highest priority. Confronted with such weighty issues, Roosevelt and the congressional leadership must have viewed Patman’s high-profile chain-store crusade as a nuisance. The chain-store debate even influenced a congressional investigation of Nazi influence peddling when the Texas congressman Martin Dies, head of the Committee on Un-American Activities as well as an ardent foe of food chains, went after Carl Byoir for associating with a purported Nazi propagandist.3
Patman refused to desist. He had pushed the veterans’ bonus bill through Congress against the wishes of the leadership in 1935, and he planned to repeat the trick with the chain-store tax. In late July, he asked the clerk of the House to assign his bill the number H.R. 1 in the Congress that was to convene in January 1939, the better to promote it. And he laid new plans to go after George and John Hartford. In late September 1938, a few days after A&P’s loud newspaper blast against the chain-store tax, he asked the Department of Justice to investigate the truth of A&P’s advertisement and to gather information about the Hartfords’ tax payments. In November, after voters in Colorado overwhelmingly refused to repeal their state’s tax on chain stores, Patman wrote to Roosevelt suggesting a compromise: “Let A&P keep their fifteen thousand stores and the others the number of retail outlets they now own, but make the prohibitive tax apply to additional outlets. This will not be as drastic as my proposal and I believe will satisfy ninety-eight per cent of the small business men of the country.” Roosevelt responded with a cold thank-you.4
The Great A&P and the Struggle for Small Business in America Page 23
