Louisiana State University LSU Digital Commons LSU Historical Dissertations and Theses Graduate School 2000 Locally Owned and Operated: Opposition to Chain Stores, 1925--1940. Cory Lewis Sparks Louisiana State University and Agricultural & Mechanical College Follow this and additional works at: https://digitalcommons.lsu.edu/gradschool_disstheses Recommended Citation Sparks, Cory Lewis, "Locally Owned and Operated: Opposition to Chain Stores, 1925--1940." (2000). LSU Historical Dissertations and Theses. 7390. https://digitalcommons.lsu.edu/gradschool_disstheses/7390 This Dissertation is brought to you for free and open access by the Graduate School at LSU Digital Commons. It has been accepted for inclusion in LSU Historical Dissertations and Theses by an authorized administrator of LSU Digital Commons. For more information, please contact [email protected]. INFORMATION TO USERS This manuscript has been reproduced from the microfilm master. 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Higher quality 6” x 9” black and white photographic prints are available for any photographs or illustrations appearing in this copy for an additional charge. Contact UMI directly to order. Bell & Howell Information and Learning 300 North Zeeb Road, Ann Arbor, Ml 48106-1346 USA 800-521-0600 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. LOCALLY OWNED AND OPERATED: OPPOSITION TO CHAIN STORES, 1925-1940 Volume I A Dissertation Submitted to the Graduate Faculty o f the Louisiana State University and Agricultural and Mechanical College in partial fulfillment o f the requirements for the degree of Doctor o f Philosophy in The Department o f History by Cory Lewis Sparks A. B. Columbia University, 1992 M. A. Louisiana State University, 1994 December, 2000 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. UMI Number: 9998709 ___ ® UMI UMI Microform 9998709 Copyright 2001 by Bell & Howell Information and Learning Company. All rights reserved. This microform edition is protected against unauthorized copying under Title 17, United States C ode. Bell & Howell Information and Learning Company- 300 North Zeeb Road P.O. Box 1346 Ann Arbor, Ml 48106-1346 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Acknowledgments I want to thank my wife, Melissa Hopson, for her support during the writing of this dissertation. Her love, and the love o f my parents sustained me throughout the process. Other friends and family have played a vital role. I especially want to thank my mother-in-law, Dr. Carol Hopson, for her assistance and encouragement. Elaine Lankenau, Chad Cromer, and Hae-Rim Cho have also helped in incalculable ways. ii Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Table of Contents Volume I Acknowledgements ........................................................................... ii Abstract ........................................................................................... iv Introduction....................................................................................... 1 Chapter One: Evolution in Distribution.............................................. 9 Chapter Two: Radio and Retail.......................................................... 46 Chapter Three: The Capper-Kelly Bill .......................................... 97 Chapter Four: State Anti-Chain Taxes.......................................... 131 Chapter Five: The National Recovery Administration and the Chains 159 Volume II Chapter Six: The Robinson-Patman Act.......................................... 206 Chapter Seven: Referendums and Fair Trade Acts ........................... 265 Chapter Eight: Miller-Tydings and the Patman Death Tax .............. 293 Conclusion...................................................................................... 337 References.......................................................................................... 369 V ita .................A".............................................................................................. 381 Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Abstract During the 1920s, chain stores exploded in numbers throughout the country. Chains claimed to provide mass distribution for a mass production age. According to their executives, traditional retailing raised the cost of living and interfered with prosperity. Small retailers countered these claims by arguing that corporate retailing endangered prosperity because it concentrated ownership in the hands of a few and stripped wealth from the local community. In 1929 and 1930, anti-chain radio broadcasts sparked popular interest in the chains. Critics accused the chains of using their financial might to sell products below cost and drive competitors out o f business. They also alleged that chains bilked the public by selling shoddy or short weight products, evading taxes, and cutting services like credit and delivery. Encouraged by these attacks, trade associations throughout the nation sponsored boycotts of the chains. When these campaigns failed to close the chains, retailers shifted their focus to government action. The Capper-Kelly bill would have allowed manufacturers to set retail prices, but it failed to pass through Congress. On a state level, storeowners succeeded in passing special taxes against the chains in more than half of the states, but independent retailers continued to falter. Many storeowners hoped President Roosevelt’s recovery efforts would protect them against chain growth. Although the National Recovery Administration disappointed most storeowners, the experience encouraged them to push for other legislation. After the demise of the NRA, small retailers lobbied for the Robinson- iv Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Patman Act and the Miller-Tydings A ct These laws controlled chain buying and selling practices. As the 1930s progressed, however, small retailers realized that these laws would not stop the growth o f the chains. Because of concerns about consumer prices and the efficiency o f the economy, the Roosevelt administration resisted attempts to control the chains further. Independent retailers could no longer hope for government attacks on the chains. v Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. Introduction During the 1920s corporate chain stores grew at fantastic rates in America At the start of the decade, companies like A&P, Walgreen’s and Woolworth’s had 30,000 stores. At its close, they operated more than 150,000 units—a dramatic and visible change over a period of ten years.1 Even the Lil Rascals watched as a grocery chain bought out their favorite storekeeper.2 Chain officials, flushed with success, heralded this growth as natural evolution: mass distribution for a mass production age. They argued that their stores provided merchandise at the lowest possible price, enabling consumers to buy more products and generating unprecedented prosperity. For small retailers, worried about the survival of their businesses, the rapid growth was frightening. This dissertation examines their persistent campaign to slow chain growth. In their crusade small retailers and their supporters sought to convince America that chains endangered the nation and its standard of living. They claimed that chains threatened prosperity because they defrauded consumers and concentrated wealth in the hands of a few, 1 Godfrey Lebhar, Chain Stores in America, 1859-1952 (New York: Chain Store Publishing Corporation, 1952), 57-58. 2 See Helping Grandma, Volume 7 of the Cabin Fever Collection with Leonard Mai tin, videocassette. l Reproduced with permission of the copyright owner. Further reproduction prohibited without permission. stripping money from local communities and depositing it in Eastern metropolises. Local merchants groups, occasionalad hoc anti-chain organizations, and national trade associations argued that the chains did not offer true bargains. According to these retailers, chains pursued predatory pricing to drive competition from a market. Their absurdly low prices on some products showed that they sold them at a loss to drive out nearby stores. In part they could do this because they raised prices on other products. But