Monday, April 29, 2013

Hendrickson: Two Company Towns

Melissa Hendrickson
April 17, 2013

Two Company Towns - Two Distinct Owners
Two company towns that left an indelible mark upon American history were the Pullman Company town and the town of Hershey. Although both of these company towns share many similarities, only one will emerge as having been a success and the other a failure. The fate of these company towns ultimately resided within the leadership of their owners, Milton S. Hershey, of the Hershey Company and George Pullman of the Pullman Company.
George Pullman was a great industrialist amassing an enormous fortune in the development of luxurious railroad cars.1 George Pullman created his company town, named Pullman, in 1880 and it lasted until 1893. During that time the town of Pullman was described as a utopia, but hidden under the beauty of the town laid discontentment and resentment.2 George Pullman made sure the buildings that were constructed in his town were functional as well as aesthetically pleasing; he applied the importance of aesthetics to the town’s landscaping as well, believing beauty led to happiness.3 So important was it to Pullman that the homes in his town be maintained to his standards of beauty, that he instructed his managers to enter the homes and inspect them.4 If these homes were found to be unsatisfactory the renters, who were also Pullman’s employees, were told to clean up the homes or be forced to move out and subsequently lose their jobs.5 Pullman owned and rented out all of the houses in his town and refused to sell any of them, therefore home ownership was not an option for the residents of Pullman.6 The fact that Pullman owned everything in his town imposed an enormous imbalance of power upon his residents and employees. Pullman created his town first and foremost to make money and all of the investments in his town were to yield him a six percent profit.7 Pullman charged his residents for everything, there were no free public facilities. For example, his library charged an annual fee of three dollars, which most residents could not afford, but Pullman insisted that if people truly had a passion for books and wanted to learn then they would pay the annual fee.8 Pullman’s rental charges were so high that even the church in town was forced to remain vacant.9 All the profits of the town funneled back to Pullman, his employees worked in his factory, shopped in his stores, went to his theater; paying for all these things with the wages they earned working in his factory. For Pullman there was nothing immoral about this system he saw himself as a father figure to his employees and residents, so when his paternalism was criticized as feudalism he was hurt and disillusioned.10
Milton Hershey saw his role as paternalistic as well, he, like Pullman believed that he knew what was best for his employees, even better than they themselves knew.11 Ironically, Hershey’s paternalism was not interpreted by his employees and residents as feudalistic because he was able to integrate his drive for profit with a humanistic approach. Hershey portrayed himself as seemingly accessible to his employees, he walked through his chocolate factory speaking to his “Taylor Principle” trained assembly line employees, he drove around his town to various construction sites and spoke without condescension to his builders.12
In 1904, the construction of Milton Hershey’s first homes was complete and the town of Hershey was well on its way to becoming the model utopian town.13 Hershey promoted homeownership selling the homes he built to his employees.14 Hershey believed that if a person owned his own home he would have a personal investment in the community and would be diligent in its upkeep.15 This did not mean, however, that Milton Hershey had no say in how the homeowners kept their property, in fact, there were strict rules about keeping the homes of Hershey aesthetically pleasing.16 Hershey created many free public facilities for his residents, including a library, recreation areas, a zoo and an amusement park, to name just a few.17
Milton Hershey was driven by profit, the very trolley system he built in town served his personal fascination with trains, but first and foremost it was to ensure the timely arrival of his employees to his chocolate factory.18 Hershey was said to have told the story of giving a man in need a nickel to ride the trolley knowing full well that the nickel would come right back to him.19 Hershey in 1912 paid all of his employees a twenty percent bonus and continued that practice for years after ensuring the loyalty and support of his employees, but also realizing a percentage of that money would come right back to him in the form of down payments for the purchase of homes in his town or through patronage at the various businesses in town.20
In 1909 Hershey created a school for orphan boys, later named the Milton Hershey School. This was not a school for just any orphan boys; it was for boys who met the standards set by Milton Hershey. Boys who disobeyed too often were not fit to stay in his school and were dismissed.21 The school quickly became a success and Hershey’s accomplishments and generosity were recounted continuously in his company produced newspapers the, Hershey’s Weekly and Hershey Press.22 Over the years the Hershey school would acquire billions of dollars in trust.23 The knowledge that a percentage of Hershey’s profits went to the school for orphans gave the work Hershey’s employees were performing a purpose and helped to further Hershey’s reputation for benevolence.
Milton Hershey controlled every aspect of his town, there were no elected officials, no mayor, whatever decisions, changes or projects that were needed he took take care of.24 Like in Pullman, the welfare of the whole town rested upon one man, but unlike in Pullman the residents of Hershey expressed no resentment over this arrangement. In 1937, however, this would change, just as it had for George Pullman in 1894. The Pullman Strike of 1894, ended George Pullman’s dream of a utopian city, in which all of his employees lived happily and whose work reflected that happiness in the form of profits for him. Pullman’s, “workmen being driven to desperation,” were fighting for better wages and working conditions, but along with that was their desire to live their lives as independent citizens, free from Pullman’s high rents, town rules and fear, fear over losing their jobs if they moved out of Pullman town to acquire cheaper rent in Chicago.25 While George Pullman retreated to his mansion in New Jersey, the Pullman Strike was violently put down through government intervention, resulting in no reparations for the workmen.26
The Hershey Strike of 1937 began in protest over workplace favoritism, low overtime pay, reduced hours and low wages; low wages that were still being paid even though Milton Hershey had financed, between 1930 and 1936, ten million dollars of new construction projects. Also in protest was the stoppage of annual bonuses even though the company “made more than $37 million in after-tax profits….ten times the total annual payroll of the chocolate factory.27 There was also growing dissatisfaction over the feeling of fascism growing in the Hershey community, wherein Hershey’s managers began monitoring the drinking habits and living practices of its residents and employees.28 Italian immigrants were particularly diligent in initiating the strike believing they were the most mistreated at the chocolate factory.29 Hundreds of workers participated in the sit-down strike which lasted five days, culminating in a riotous, brutal end wherein Hershey loyalists and farmers, whose livelihood depended on Hershey and his factory and who were angry and confused by the strikers, finding them ungrateful for all that Milton Hershey had done for them, stormed the factory violently evicting the strikers.30 Throughout the strike proceedings Milton Hershey, disillusioned, remained silent and out of sight.31 Two years after the strike in 1939 the Bakery and Confectionary union was established, an affiliate of the American Federation of Labor, and negotiations provided workers with the overtime pay they were seeking along with paid vacation and holidays.32
After the strike at Pullman, George Pullman’s reputation would forever be tainted and his town destroyed. That was not the case for Milton Hershey. The majority of Hershey’s employees, including former strikers who remained at the factory, believed that it was Hershey’s management who was the cause of the violent end to the strike not Hershey himself. Many believed that Hershey’s management failed to effectively communicate the wants and needs of the strikers to him, but no managers were ever fired after the strike.33
Milton S. Hershey and George Pullman both created a place for themselves in American history by, not only creating enormously successful businesses, but by erecting the company town. Hershey was so successful at integrating benevolence with profit that his company town became a success. The continual economic growth of Hershey’s chocolate factory, as opposed to the economic downturn George Pullman’s company took, undoubtedly aided Hershey in the acquisition and maintenance of loyal employees and residents.
Town of Hershey, Circa 1912-1913
Credit: Photo courtesy of Explore PA

The town of Pullman – Greenstone Church and Arcade Park, circa 1880’s
Credit: Photo courtesy of Chicago History Museum
1 Anthony Arthur, John Broesamle, Twelve Great Clashes That Shaped Modern America (United States: Pearson Education, Inc., 2006), 31

2 Anthony Arthur, John Broesamle, Twelve Great Clashes That Shaped Modern America (United States: Pearson Education, Inc., 2006), 33

3 Ibid

4 Arthur, Twelve Great Clashes, 34

5 Ibid

6 Arthur, Twelve Great Clashes, 35

7 Ibid

8 Rosemary Laughlin, The Pullman Strike of 1894: American Labor Comes of Age (Greensboro: Morgan Reynolds, Inc., 2000), 26

9 Laughlin, The Pullman Strike of 1894, 28

10 Rosemary Laughlin, The Pullman Strike of 1894: American Labor Comes of Age (Greensboro: Morgan Reynolds, Inc., 2000), 28

11 Michael D’Antonio, Hershey (New York: Simon & Schuster, 2006), 222

12 D’Antonio, Hershey, 118

13 Ibid, 116

14 Ibid, 120

15 Ibid

16 Michael D’Antonio, Hershey (New York: Simon & Schuster, 2006), 117

17 D’Antonio, Hershey, 131, 159

18 Ibid, 117, 120

19 Ibid

20 Ibid, 138

21 Ibid, 130

22 Ibid, 132

23 Ibid, 3

24 Michael D’Antonio, Hershey (New York: Simon & Schuster, 2006), 205

25 Samuel Gompers, et al., “The Lesson of the Recent Strikes” (The North American Review, 1894), 202

26 Anthony Arthur, John Broesamle, Twelve Great Clashes That Shaped Modern America (United States: Pearson Education, Inc., 2006), 46

27 D’Antonio, Hershey (New York: Simon & Schuster, 2006), 209-10

28 Michael D’Antonio, Hershey (New York: Simon & Schuster, 2006), 210

29 D’Antonio, Hershey, 211

30 Ibid, 213,215

31 Ibid, 214

32 Ibid, 219

33 Ibid, 221-22

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