The Great A&P and the Struggle for Small Business in America

by Marc Levinson

  12. M. M. Zimmerman and F. R. Grant, “Warning: Here Comes the Super-Market!” Nation’s Business, March 1937, 21; Phillips, “Supermarket,” 190.

  13. Adelman, A&P, 41–42; Gx 134.

  14. Minutes of Central Western Division, January 13, 1933, Gx 146.

  15. A&P’s gross profit on coffee was 45 percent in 1920 and 1921, implying an 82 percent markup; after dipping as low as 20 percent in 1928, it settled in the 30 percent range for several years; see “Charts, Presidents’ Meetings, year ending March 1, 1941,” 162, box 36, Danville trial exhibits.

  16. Minutes of division presidents meeting, June 25, 1931, box 67, Danville trial exhibits.

  17. Dx 420; Tr 20438; Phillips, “Supermarket,” 195; “The Consumer Accepts the Supermarket,” Super Market Merchandising, November 1936, 15. Retail food sales were $10.8 billion in 1929, but due to deflation fell to $8.4 billion in 1935.

  18. “Grocers Call A&P a Monopoly; Put Up the Money to Prove It,” Business Week, June 22, 1932, 8. According to Dipman, Modern Grocery Store, 4, the average margin in food retailing fell from 25 percent around 1920 to 20 percent or less by 1931.

  19. See, for example, “People,” Time, September 21, 1931; “$100,000, Please, for Charm and Poise,” Xenia (Ohio) Evening Gazette, September 19, 1931; “Highlights of Broadway,” Albuquerque Journal, November 19, 1931; “Mystery Romance of the Chain Store Heir,” Hamilton (Ohio) Daily News, November 28, 1931; “Josephine Hartford Bryce,” NYT, June 10, 1992.

  20. “Private Lives,” Life, January 25, 1937, 58; “Spotlight Hits Shrinking Hartfords,” New York Sunday News, January 9, 1938; “Huntington Hartford, A&P Heir Adept at Losing Millions, Dies at 97,” NYT, May 20, 2008.

  21. For contemporaneous discussion of the social factors behind the anti-chain movement, see James L. Palmer, “Economic and Social Aspects of Chain Stores.” On the anti-chain movement in Chicago, see Deutsch, Building a Housewife’s Paradise, 78–80.

  22. The 1939 Census of Business, vol. 1, Retail Trade, pt. 1, 170, shows that 119,024 independent grocery stores then in operation were established from 1930 to 1937; typical mortality estimates imply that the number surviving in 1939 was less than half the total number established in 1930 to 1937. The number of proprietors rose from 284,277 in 1929 to 318,736 six years later and reached 351,981 by 1939; ibid., 57; Adelman, A&P, 430.

  23. Baxter, Chain Store Distribution and Management, 17; FTC, Final Report on the Chain-Store Investigation, vol. 5, 38; FTC, Chain Store Inquiry, vol. 3, Chain Stores: Chain-Store Leaders and Loss Leaders, Senate doc. 51, 72nd Cong., 1st sess. (1932), xi.

  13: FRANKLIN ROOSEVELT

  1. Alter, Defining Moment, 77.

  2. Seamans to Roosevelt, January 19, 1933; Rund to Roosevelt, February 18, 1933; McKay to Roosevelt, April 13, 1933; Applegate to Roosevelt, n.d., all in OF 288, Chain Stores, 1933–34, FDR.

  3. The foundational texts of 1920s consumerism were Chase, Tragedy of Waste, one of the first books to explore the manipulation of consumer preferences by advertising, and Chase and Schlink, Your Money’s Worth, which became a bestseller. Chase and Schlink were the co-founders of Consumers’ Research. Means, “The Consumer and the New Deal,” 7.

  4. U.S. Bureau of the Census, Historical Statistics of the United States, 319; Bolin, “Economics of Middle-Class Family Life.”

  5. Perhaps the earliest articulation of the consumerist view was Orleck, “‘We Are That Mythical Thing Called the Public.’” See also Orleck, Common Sense and a Little Fire, 235–39. Alan Brinkley goes even further, contending, “The ‘New Dealer’ anti-monopolists were worried principally about protecting consumers”; End of Reform, 64. Subsequent assertions of consumers’ preeminence can be found in Lizabeth Cohen, A Consumers’ Republic, 24; Donohue, Freedom from Want, 171–82; McGovern, Sold American, 135; Deutsch, “From ‘Wild Animal Stores’ to Women’s Sphere.” Jacobs, Pocketbook Politics, 95–135, provides a more balanced exploration of the tension between the New Deal’s producerist and consumerist inclinations. The quotation is from Donohue, Freedom from Want, 228.

  6. Brinkley, End of Reform, 59.

  7. Federal Reserve Bank of Boston, “Closed for the Holiday: The Bank Holiday of 1933,” n.d.; Huff, Chain Store Tyranny and the Independent Grocers’ Dilemma.

  8. Donovan, a Wall Street lawyer, was among a small number of guests at Roosevelt’s birthday party in Warm Springs, Georgia, in 1933. Roosevelt subsequently named him head of the new U.S. intelligence agency, the Office of Strategic Services, during World War II. “Report $99,460 Spent on Donovan Campaign,” NYT, November 19, 1932; “Ford Paid $25,000 Radio Bill,” NYT, January 7, 1933.

  9. 48 Stat. 31, sec. 8; 48 Stat. 195, sec. 3.

  10. National Association of Chain Stores, The Chain Store Industry Under the National Industrial Recovery Act (New York, 1934), 41, 53.

  11. Dx 144, box 66.

  12. National Association of Chain Stores, Chain Store Industry, 65–67.

  13. Dameron, “Retailing Under the N.R.A., I,” 1.

  14. Hawley, New Deal and the Problem of Monopoly.

  15. Alexander, “N.R.A. and Distribution,” 197.

  16. M. L. Toulme (secretary, National-American Wholesale Grocers’ Association) to McIntyre, November 4, 1933; NAWGA, “News About Codes,” November 3, 1933; NAWGA, “A Special Petition to President Roosevelt,” November 3, 1933, all in PPF 2538, FDR. NRA Consumer Advisory Board, “The Purpose of the N.R.A. as Seen by the Consumers’ Advisory Board,” Gardiner Means Papers, box 2, FDR. On the use of meat as a loss leader due to its exclusion from the food retail code, see Emanuel Celler to Hugh Johnson (administrator, NRA), August 24, 1934, in Leon Henderson Papers, box 11, FDR.

  17. In 1933, 3.1 percent of A&P’s stores were unprofitable, but 84 percent of the unprofitable stores had been open for three or more years, meaning that at most seventy-five of the hundreds of stores in operation for less than three years lost money; see data in Adelman, A&P, 450. Pelz, “Developments Under the N.R.A. and A.A.A.,” 21–22; Dameron, “Retailing Under the N.R.A., I,” 20. For discussion of various proposals, see Retail Clerks International Advocate, September–October 1933, 12, and January–February 1934, 14. As Charles F. Phillips points out, grocers conventionally took low markups on staples such as lard and sugar and higher markups on slow-moving items; attempts by chains to standardize markups during the 1920s proved “disastrous” and drove away business. See Phillips, “Price Policies of Food Chains,” 379.

  18. Dameron, “Retailing Under the N.R.A., II,” 201; Records Related to the Roberts Committee Investigation, box 2, Records of the Compliance Division, Records of the National Recovery Administration, RG 9, NARA-CP; “Complaints Docketed by NRA State Offices,” Office Files of Enid Baird, box 3, Records of the Trade Practice Studies Section, Records of Division of Review, Records of the National Recovery Administration, RG 9, NARA-CP; NRA, “Retail and Wholesale Distribution Project of the Division of Research and Planning,” Leon Henderson Papers, box 4, FDR; Dx 419, box 66.

  19. “State Chain Store Taxes (as of May 15, 1937),” Office of Tax Policy, Subject Files, box 13, RG 56, General Records of the Department of the Treasury, NARA-CP; Davis, Don’t Make A&P Mad, 93.

  20. Tide: Of Advertising and Marketing, February 1935, 13.

  21. Alfred G. Buehler, “Chain Store Taxes,” 180; Morris, “Economics of the Special Taxation” (Ph.D. diss.), 36; John P. Nichols, Chain Store Manual (New York, 1936), 74. A&P’s financial reports did not distinguish chain-store taxes from sales taxes, which came into use during this period but were low and frequently exempted food; see Dx 499.

  22. Ross, “Store Wars,” 131; Morris, “Economics of the Special Taxation,” 36.

  23. “Food Trade Heads Aid Farm Revival,” NYT, July 10, 1933; “Support Pledged for Blanket Code,” NYT, July 22, 1933.

  24. Brinkley, End of Reform, 61; Committee on Unfair Trade Practices, “Code-Making and Code-Enforcement,” March 21, 1935, RG 40, Department of Commerce, Office of the Secretary
, Business Advisory Committee Records, 1933–38, box 2, NARA-CP. “Five Picked to Pass on Industry Loans,” NYT, July 4, 1934; Robert H. Jackson, “The Big Corporations Rule,” New Republic, September 4, 1935, 99–101; Gx 156, box 68; “A Vote on the NRA,” Barron’s, July 2, 1934, 5. In 1937, after he had become assistant attorney general for antitrust, Robert H. Jackson told lawyers that only when all laws “are brought to exert their pressures toward the encouragement of small business rather than toward its destruction, can we say that we have a national policy against monopoly.” “The Struggle Against Monopoly,” speech to Georgia Bar Association, May 28, 1937.

  25. “NRA and Business Profits,” Barron’s, July 2, 1934, 6; Dx 506, box 66; Adelman, A&P, 51, 430, 434, 438; “Brief for the United States,” 166, Danville trial.

  26. Schechter Poultry Company v. United States, 295 U.S. 532, 537 (1935).

  27. F. M. Massman (president, Food and Grocery Chain Stores of America Inc.) to members, telegram, May 27, 1935, OF 288, FDR; A. T. Martin (executive secretary) to W. P. Robert (chairman, Committee to Report on Changes in Labor and Trade Practice Standards), memo, August 24, 1935; Edward D. McLaughlin (state NRA director, Arkansas) to Major General Amos A. Fries, memo, August 1, 1935; W. H. Loughry (executive secretary, Food and Grocery Bureau of Southern California) to G. F. Ashley (NRA, San Francisco), July 2, 1935; all in box 5; J. E. Wrenn (state NRA officer, Kansas) to Fries, July 15, 1935, box 6, Records Related to the Roberts Committee Investigation; Report by Wesley O. Ash, NRA office, San Francisco, Miscellaneous Records of Legal, Compliance, and Other Divisions, box 77, Records of the National Recovery Administration, RG 9, NARA-CP; Food & Grocery Distributors Code Authority, District No. 2, California, Miscellaneous Records of Legal, Compliance, and Other Divisions, box 76. On the repeated attempts to restore NRA-like price regulations in California, see McHenry, “Price Stabilization Attempts in the Grocery Trade in California.”

  28. “Departures from Code Standards of Hours and Wages by Chain and Independent Grocers in the Retail Food and Grocery Trade,” Records Related to the Roberts Committee Investigation, box 5; Adelman, A&P, 434, 438.

  29. Hawley, New Deal and the Problem of Monopoly, 40, 255–56.

  14: WRIGHT PATMAN

  1. On Jacobs, see George Purl (Texas state senator) to R. W. Lyons (national chain-store lobbyist), March 2, 1935, in “Special Investigation Concerning Chain Store Bill,” September 30–October 2, 1935, Governor James Allred Files, box 2000/188, 17, TSL; “Carry Chain Store Fight to Capital,” Chicago Journal of Commerce, February 16, 1935.

  2. Nancy Beck Young, Wright Patman, 11–22. Young notes that in 1965, five of the thirty committee chairmen in the U.S. House of Representatives were Cumberland graduates. Boxes 77(B) and 81(C), WPP; David A. Horowitz, Beyond Left and Right, 103.

  3. Watkins, Hungry Years, 132–36.

  4. Nancy Beck Young, Wright Patman, 31, 56, 63; box 76(A), WPP; “Statement of Receipts and Disbursements on Books and Folders,” May 7, 1935, box 127(C), WPP.

  5. Ickes, Secret Diary of Harold L. Ickes, 356; “Merchants of the Nation Organize to Act as Unit on Economic Issues,” NYT, April 17, 1935; House resolution 203, 74th Cong., 1st sess., April 24, 1935; “Representative Cochran Ill,” NYT, May 4, 1935; Cochran to Patman, n.d. [June 1935], box 37(C), WPP.

  6. Patman to John J. O’Connor (chairman, House Rules Committee), May 31, 1935, box 37(C), WPP.

  7. J. F. Carroll (president, General Marketing Counselors Inc.) to Patman, May 29, 1935, box 37(C), WPP; Retail Ledger, Report No. 98, July 5, 1935.

  8. Everett MacIntyre (Special Investigating Committee staff) to Harry L. Underwood (Office of the U.S. District Attorney), Washington, D.C., June 14, 1935, box 37(C), WPP; deposition of John E. Barr, June 10, 1935, box 90(B), WPP; Retail Ledger, Report No. 98, July 5, 1935. Logan’s connection with Barr had an even stranger aspect: Logan testified that Barr had told him that the National Anti–Chain Store League was secretly accepting money from German sources to establish a journal, to be distributed through small merchants, that would be used as a vehicle for Nazi propaganda. Logan to Patman, July 25, 1935, box 37(C), WPP.

  9. Logan to Patman, July 25, 1935, box 37(C), WPP.

  10. The original version of the bill, labeled “Drafted by the General Counsel of the United States Wholesale Grocers’ Association Inc.,” is in box 37(C), WPP; Congressional Record 79 (June 11, 1935), 9077, 9318, 9423; J. H. McLaurin (president, United States Wholesale Grocers) to members, July 22, 1935, box 37(B), WPP. Hawley, New Deal and the Problem of Monopoly, 250, ties the bill directly to the demise of the NRA. On the dinner, see J. H. McLaurin to Hatton W. Sumners, June 18, 1935, in Judiciary Committee, U.S. House of Representatives, Papers Accompanying Specific Bills and Resolutions, 74th Cong., RG 233, HR 74A-D21, box 186, NARA-LA.

  11. Total sales at food stores of all types, from candy stands to fish markets, were $8.36 billion in 1935. A&P’s sales were $872 million, or about one-ninth of total food-store sales. Sales at grocery stores were $6.3 billion, giving A&P a 14 percent market share. Aggregate sales figures are from U.S. Bureau of the Census, Census of Business, vol. 1, Retail Trade: 1939, Part 1 (Washington, D.C., 1941), 57; Report by the Special Investigating Committee on that Part of House Resolution 203 Relating to the Organization and Lobbying Activities of the American Retail Federation, vol. 1, 430, 460–61; Daughters, Wells of Discontent, 175.

  12. Report by the Special Investigating Committee, vol. 1, 448–67; Retail Ledger, Report No. 99, July 10, 1935.

  13. Report by the Special Investigating Committee, vol. 3, 90; vol. 4, 1–12; Wolff, “Patman Tax Bill on Chain Stores.”

  14. Report by the Special Investigating Committee, vol. 2, 16; Congressional Record 79 (June 11, 1935), 9077.

  15. For Allred’s message to the legislature of February 25, 1935, see “Special Investigation Concerning Chain Store Bill,” box 2000/188, 37, TSL. The letters are in Allred Files, box 1985/024-42, TSL; “Texas: Bluebonnet Boldness,” Time, June 8, 1936.

  16. James V. Allred, Legislative Messages of Hon. James V. Allred, Governor of Texas, 1935–1939 (Austin, 1939), 83; “Special Investigation Concerning Chain Store Bill,” box 2000/188, 3–15, TSL.

  17. Provisions of tax laws are compiled in Morris, “Economics of the Special Taxation,” 266–69.

  18. Elmore Whitehurst, “Hatton W. Sumners: His Life and Public Service,” www.hattonsumners.org/library/public_service.pdf, accessed October 5, 2009.

  19. Roosevelt to the 1934 Boston Conference on Distribution, PPF 1802, FDR; comments to press are cited in OF 288, Chain Stores, 1935–36. See also Emanuel Celler, “Statement in Opposition to Patman Bill H.R. 8442,” Judiciary Committee, U.S. House of Representatives, 74th Cong., RG 233, HR 74A-D21, box 186, NARA-LA.

  20. Stevens, “Comparison of Special Discounts and Allowances”; United States Wholesale Grocers’ Association, Bulletin, no. 67, July 3, 1935, and E. S. Briggs (general manager, American Fruit and Vegetable Shippers Association) to Sumners, July 8, 1935, both in Judiciary Committee, U.S. House of Representatives, 74th Cong., RG 233, HR 74A-D21, box 187, NARA-LA; testimony of Horace Herr, Hearings Before the Committee on the Judiciary on H.R. 4995 and H.R. 5062, 74th Cong., 1st sess. (1935), 7.

  21. Hearings Before the Committee on the Judiciary on H.R. 4995 and H.R. 5062, 30–31; W. W. Schneider (Monsanto) to Sumners, telegram, July 10, 1935, box 186; Sydney Anderson (vice president, General Mills) to Sumners, February 20, 1936, box 187; Hausler-Kilian Cigar Company, San Antonio, to Sumners, telegram, April 28, 1936, box 187; O. V. Snyder (president, Pacific Match Company) to United States Wholesale Grocers’ Association, July 12, 1935, box 187; all in Judiciary Committee, U.S. House of Representatives, 74th Cong., RG 233, HR 74A-D21, NARA-LA.

  22. Hearings Before the Committee on the Judiciary on H.R. 4995 and H.R. 5062, 366; Morris, “Economics of the Special Taxation,” 126.

  23. McIntyre to Patman, November 27, 1935; Patman to McIntyre, November 30, 1935; Patman to Roosevelt, January 13, 1936; all i
n box 37(B), WPP; McIntyre to Roosevelt, memo, December 13, 1935, OF 288, FDR; McIntyre to Patman, telegram, December 21, 1935, PPF 3982, FDR.

  24. Statement of women’s groups, Judiciary Committee, U.S. House of Representatives, 74th Cong., RG 233, HR 74A-D21, box 187, NARA-LA; Hardware Trade Journal, April 1936, 21. The petitions are filed in RG 233, Committee Papers, House Committee on Interstate and Foreign Commerce, 74th Cong., HR74A-H6.7, box 407, NARA-LA. Druggists’ letters are in RG 233, HR 74A-D21, box 187, NARA-LA.

  25. Charles M. Marsh (chairman, Federal Trade Commission) to Hubert Utterback, March 4, 1935, Judiciary Committee, U.S. House of Representatives, 74th Cong., RG 233, HR 74A-D21, box 186, NARA-LA; most food-trade associations agreed in late 1935 to support a grocery price-fixing plan that would be administered by the FTC, but the plan was so extreme that the agency would not endorse it; “For FTC Control,” Business Week, January 4, 1936, 4. U.S. Department of Commerce, Business Advisory Council, “Report of the Committee on Distribution Problems,” 1936, RG 40, Department of Commerce, Office of the Secretary, Business Advisory Council, Records, 1933–38, box 2, NARA-CP; Filene to Roosevelt, April 1, 1936, and Wood to McIntyre, February 21 and June 5, 1936, OF 288, FDR; “Odds on Price-Control Law,” Business Week, March 7, 1936, 9.

  26. Sumners to Adolf Mayer, Dallas, Texas, March 26, 1936, Judiciary Committee, U.S. House of Representatives, 74th Cong., RG 233, HR 74A-D21, box 187. Kurtz, Vorhies, and Ozment, “Robinson Patman Act Revisited.”

  27. Nancy Beck Young, Wright Patman, 81; Congressional Record vol. 80 (1936), 8102.

  28. Ross, “Winners and Losers Under the Robinson-Patman Act”; Adelman, A&P, 430.

  29. R. J. Coar (United States Recording Company) to Patman, June 10, 1936, box 76(C), WPP; J. A. R. Moseley Jr. to Patman, May 20, 1936, and Patman to Moseley, May 25, 1936, box 77(B), WPP; “Itinerary,” box 77(B), WPP; Patman to Roosevelt, October 6, 1936, PPF 3982, FDR.