"A Business Without a Boss": The Columbia Conserve Company

Three days before Christmas in 1917, workers at the Columbia Conserve Company, an Indianapolis canning plant that manufactured condensed soup, catsup, boned chicken, and other items packed and sold under private brands of customers throughout the country, gathered in the firm’s dining room to hear the annual report from the company’s president.

Instead of a bland rendition of profit and loss, however, Columbia employees learned they were to be part of an experiment in workplace democracy, an effort to create “an industry of the worker, by the worker and for the worker.” The employees, of which there was only one with a high school education, were to be responsible for determining the length of time they worked, how much they were paid, their share of production, and all other policies involved in running a business. They also shared in any profits—an almost unheard of business practice at that time—and eventually used them to buy, through stock held collectively, the firm in which they toiled.

Initially, the plan met with, at best, skepticism from those who would be its chief beneficiaries. “Those [workers] who understood did not believe me, and very few understood,” noted the plan’s architect, Columbia president William Powers Hapgood. “Why should they? Their own experiences, as well as those of their forefathers, told them it was all a lie.” Hapgood, part of a trio of remarkable brothers that included Norman, journalist and editor at Collier’s National Weekly and Harper’s Weekly, and Hutchins, author and bohemian, struggled mightily over the next few years to convince the company’s workers of his sincerity and to inspire confidence in their own abilities. His efforts, including lending a hand on the shop floor by assisting the head cook, produced dividends; by 1930 the company’s approximately 150 employees collectively controlled most of the the firm’s voting stock.

Although the workplace democracy ultimately collapsed from within, due in part to forces unleashed by Hapgood’s own son, Powers, the Columbia experiment focused nationwide attention on Indiana as William Hapgood and his employees attempted, through trial and error, to develop “a new kind of association between workers and stockholders, technicians and the rank and file.”

Born in Chicago on February 26, 1872, William Powers Hapgood was the youngest of three sons (a fourth child, a daughter, died at age ten) raised by Charles H. and Fanny Louise (Powers) Hapgood. A successful plow manufacturer, Charles moved his family to Alton, Illinois, in 1875. An admirer of agnostic freethinker Robert G. Ingersoll, Charles attempted to instill in his offspring “an acute distaste for moral softness,” noted eldest son, Norman. Still, his father’s tenacity about principles was neither sour nor narrow, but a broad approach allowing his sons the freedom to experience life and decide for themselves on the need for such values as industry, frugality, and truth. Hutchins recalled that his father, the hard-working businessman, was the first person he ever heard “talk sympathetically about socialism, the ultimate advent of which he predicted and would have welcomed.”

Growing into a lively, athletic young man who termed sports as “the most interesting activity of my early life,” William, like his brothers, received his education at Harvard University. Unlike his brothers, who had worked on the editorial side of the Harvard Monthly while at the Boston university, Norman as editor and Hutchins as a writer, William served as the periodical’s business manager. His interest in the commercial realm continued after his graduation when he became an assistant shipping clerk in November 1894 at Franklin MacVeagh Wholesale Grocery in Chicago, a firm owned by a friend of Charles Hapgood.

Seeking new challenges William, who had married Eleanor Page in 1899 and whose son, Powers, was also born that year, convinced his now retired father to buy in 1903 the Mullen-Blackledge Canning Company, located on South Meridian Street in Indianapolis. The new Columbia Conserve Company, with brothers William, Norman, and Hutchins as stockholders, had an inauspicious start; by 1910 the firm had left Indianapolis because of financial difficulties and moved its operations to an abandoned factory purchased by Charles for $5,000 in Lebanon, Indiana. Reincorporated with $125,000 in capital stock, the company returned to Indianapolis in 1912 and set up shop at 1735 Churchman Avenue.

By 1916 Columbia had “brought a great increase in our sales with quite as great an increase in the net profits,” said William Hapgood. Buoyed by this success, he decided that the time seemed favorable to unveil his plans for moving Columbia from “an autocratic to a democratic form of government.” For a number of years, Hapgood had discussed and debated with his brothers and friends the idea of installing democracy in the workplace. He had been troubled by the fact that complete control of the company had been vested in him “not by superior ability necessarily, but by property rights,” since the Hapgood family owned Columbia’s entire stock.

William Hapgood’s initial plan for Columbia’s employees involved creating a ten-person committee, three appointed by the firm’s owners and seven elected from the plant, to oversee such issues as wages, hours, hiring (including supervisory personnel like foremen), and other plant policies. Hapgood retained the authority, withdrawn a year later, to veto the committee’s decisions, but such an action could be overruled by a two-thirds vote by that body. One of the committee’s first acts, done without Hapgood’s presence, reduced working hours from fifty-five to fifty hours per week—an action that caused some local businessmen, astonished that employees could set their own hours, to dub Columbia the “rocking chair cannery.”

  

In 1924 the committee and another workers’ group elected to act as advisers to the committee were merged into what came to be known as the Council. Any full-time worker who attended a Council As Columbia employees gained more confidence in their new work situation, the Council became more daring in its actions. One of the factory workers questioned Hapgood about why only a few employees at the firm were paid by the week and retained by the year, while others were paid by the hour and kept employed only as long as their time could be fully occupied (regularity of employment was always a problem in the seasonal canning industry). “He asked if I had more concern for the needs of my family than he had for his,” Hapgood recalled, “and what the reason was for the present system of special privileges for a few and ruthlessness to the majority.” Acting on the worker’s concern, the Council did away with the time clock and placed most of the wage force at the Indianapolis company on a salary.

  

Columbia’s employees received no overtime pay under the salary arrangement, but did receive paid vacations and time off for sickness and other necessary absences. Other fringe benefits included: a pension plan; medical, dental, and hospital care; accident insurance; free meals in the company’s cafeteria; free classes in various subjects at the plant; and reimbursement to workers hired from out of town for their traveling expenses to move to Indianapolis.    

    

Realizing that the Columbia experiment could be checked or destroyed as long as control by the workers was only given to them voluntarily, and not by a definite contract, Hapgood, in 1925, set about to create a way whereby the employees could eventually own the business. Approved by the workforce, the plan called for net profits, after dividends had been paid, to be distributed to the employees in order to buy common stock in the company at $150 per share. Stock was not held on an individual basis, but owned collectively by the workers and overseen by three trustees elected by the Council.

With the Great Depression making itself felt on business, Columbia began to experience problems. Pledged to keep employees on the job even if there were no orders to fill, the firm attempted to stem the flow of red ink by cutting salaries. At the end of May 1931, with sales shrinking, salaries were reduced by 50 percent. As the depression’s effects worsened, that figure grew to reach 75 percent.

Trying to stem the tide of red ink, the company, in late 1932, embarked on a far-ranging plan to market its product under its own label. Workers, who in some instances had endured paydays without pay, balked at the expense of such a program, including the $2,000 a year paid to Norman for publicity and advertising work. Among the most vocal critics were former union leaders brought into the firm by Hapgood’s son, Powers, who had spent his life fighting for the rights of working men and women as a union organizer.

Powers joined his father’s company late in 1929, bringing with him his brother-in-law Dan Donovan, Leo Tearney, and John Brophy. Norman, who was not “enthusiastic” about the hires, claimed that the men were all dedicated to the belief that while employed at Columbia they “could carry out ideas for which they had become accustomed to doing political combat either in the Socialist party or in left-wing labor factions.” Although Powers Hapgood himself supported the publicity campaign, Brophy and Donovan attacked the plan, blaming it for the reduction in workers’ salaries, and wondered why the savings could not come from administrative expenses.

Matters came to a head at the end of January 1933 when the company’s board of directors acted against the Columbia Council’s wishes and summarily fired Brophy, Donovan, and Tearney. Believing that the men had been unfairly dismissed, Powers, still recuperating from being wounded in an accidental shooting at the family’s farm, quit his job at Columbia. “Poor Powers was terribly torn,” Brophy said, “having to choose between his friend and his father, and able to see some right on both sides.”

  

Hoping to bring some kind of order to a chaotic situation, William Hapgood agreed to place the matter before an impartial outside committee that included professors Douglas and Jerome Davis and liberal churchmen Sherwood Eddy and James Myers. The Committee of Four, as it came to be known, ruled that the three employees should be reinstated with back pay “on the condition that they agree to a common loyalty to the policies of Columbia and to do everything they can to promote its prosperity.”

  

For Hapgood, however, there existed in his mind no room for such a compromise. He threatened to resign from the company if the Council did not agree to get rid of Brophy and Donovan. The Council acquiesced to Hapgood’s wishes. Defending his actions, Hapgood said that in a democracy, either industrial or political, charges of bad faith are often made during times of “stress and confusion.”

  

Although Hapgood received sharp criticism from liberal publications for his seemingly capricious actions, Columbia eventually regained its footing following what he later called the “disheartening and disintegrating conflict,” even making a profit for a time. The experiment in workplace democracy survived until 1942, when workers, who still controlled approximately 60 percent of the company’s stock, went on strike over wage issues. In 1953 Hapgood, who had become blind from trachoma, sold Columbia to John Sexton and Company, a Chicago wholesale grocery chain.

  

Tragedy plagued the Hapgood family in later years. Powers, who had continued to work for the union’s cause as a regional organizer for the Congress of Industrial Organizations, died in 1949 due to a coronary blockage as he was driving to the family’s farm. He was forty-nine years old.

  

A few years before, William Hapgood reflected about the Columbia experiment to reporter and author John Bartlow Martin, saying: “I don’t know that we convinced anybody that a producers’ cooperative would work, don’t even know that we convinced ourselves.” Hapgood, who died in 1960, lived long enough to see the fringe benefits enjoyed by his Columbia employees become a common fact of life for workers in other industries. As his private secretary Dorothea Nord Hold once told him, the experiment at the central Indiana canning factory “did not just happen, but due to your background, education and philosophy of life, you had to do it. You had no other choice.”