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.
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.”
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