The Great A&P and the Struggle for Small Business in America (19 page)

Victories only fueled anti-chain agitation. “The chain store menace is growing, and unless an intelligent population can be made to see and understand, the independent merchant will soon be only a memory,” a rabble-rousing pamphlet warned in 1928. The anti-chain forces, however, understood the need for subtle changes to their message. Hundreds of independent merchants had created their own tiny chains, operating five or ten stores under common ownership; of 386 grocery and meat chains responding to a Federal Trade Commission survey, only 6 operated more than 1,000 stores in December 1928, and the vast majority owned just a few. Many other merchants had joined “voluntary” chains, in which a single wholesaler handled all distribution for stores that operated under a common banner but remained independently owned: the Federal Trade Commission counted 395 voluntary grocery chains with 53,400 stores in 1929. New terminology was needed to distinguish good chains from bad. Now the enemy was the “foreign” chain, based in a distant city, rather than the homegrown variety. In Springfield, Missouri, the chamber of commerce mounted an advertising campaign accusing chain-store managers of being “‘mechanical operators,’ controlled entirely by a set formula.” As the advertisements explained, “Their duties, boiled down, are to ‘get Springfield’s money’ and send it to the Home Office.”
8

*   *   *

Independent merchants were a notoriously anarchic group. Only a tiny percentage of them belonged to state or national trade organizations; the largest of these, the National Association of Retail Grocers, claimed a scant fifteen thousand members nationwide. Political influence required leadership. It arrived in 1929 in the unlikely person of a middle-aged businessman named William Kennon Henderson.

Born in the northeast Louisiana town of Bastrop in 1880, Henderson grew up in a prosperous family that owned an ironworks, a lumber company, and a garage. After graduating from St. Edward’s, a Catholic college in Austin, Texas, he went to work in the Henderson Iron Works in Shreveport, the biggest city in northern Louisiana. He took charge of the family businesses upon his father’s death in 1919 and added others, including a taxicab company and a printing company. Henderson became an influential civic leader. He acquired a thirty-five-hundred-acre estate eighteen miles north of Shreveport and called it, after his middle name, Kennonwood. Despite his subsequent reputation, Henderson was in no way an outcast or a crank. He was an educated man and a successful executive, a pillar of the local business establishment. In 1925, he was elected president of the Shreveport Chamber of Commerce.
9

Among Henderson’s acquaintances was an auto dealer named W. G. Patterson, who had established a 10-watt radio station in Shreveport in May 1922. Early radio equipment, often jerry-rigged, did a poor job of transmitting on a steady frequency, and Patterson’s tiny station was being drowned out as other broadcasters occupied nearby wavelengths. Needing money for a more powerful transmitter and a better antenna location, Patterson asked Henderson to invest in the station. Henderson discovered radio, and he liked it so much that he bought control of the station at the end of 1924 and moved the transmitter to Kennonwood. Henderson sought to rename the station WKH in honor of himself; when he was informed that call signs for stations west of the Mississippi River had to start with
K
, he chose KWKH instead. He built a studio at Kennonwood, from which he handled much of the broadcasting himself, and another at a downtown hotel. The government allowed him to increase his power from 50 to 250 watts on a frequency of 1100 kilohertz, which gave a clear signal in Shreveport. KWKH dominated the local airwaves with the slogan “KWKH on the air, Shreveport everywhere.”
10

Henderson’s ambitions ran well beyond dominating the airwaves in Shreveport. In 1927, KWKH shifted to a less congested frequency, 760 kilohertz, and was authorized to boost its power to 1,000 watts. The station was strong enough to be heard at night all over the region, especially when, as frequently occurred, Henderson directed his engineers to use more signal strength than authorized by the Federal Radio Commission. Henderson attacked his regulator on the air as a tool of the big-business interests behind the nascent broadcast networks. Nonetheless, the commission allowed KWKH to increase its power to 5,000 watts in early 1929. That June, KWKH was assigned a new frequency, 850 kilohertz, which was designated as a “clear channel.” KWKH had to share with the station WWL in New Orleans, which broadcast in the daytime, but no other stations in the United States could use the frequency. With a clear channel, KWKH, now beamed out with 10,000 watts of power every evening, could be heard by millions of new radio listeners, who carefully tuned their sets to enjoy the exotic experience of receiving broadcasts from afar. There was no reliable audience measurement in the late 1920s, but “Old Man Henderson,” booming out his familiar greeting, “Hello, World!” and playing blues and country recordings, was among the best-known radio personalities in the United States.
11

Henderson learned quickly that colorful language and outrageous stunts would draw an audience. In between records, he read real and invented letters and telegrams, issued retorts, and commented sarcastically on events of the day. “People don’t care about gentle modest talk,” he said in 1929. “They want it strong. They want to hear you ride somebody. If not, why do they spend their good money for telegrams?” During the 1928 presidential campaign, Henderson assailed Herbert Hoover, the Republican candidate, as “a harebrained ninny-com-poop,” “a Quaker skunk,” and “a cross between a jackass and a bulldog bitch.” When the Federal Radio Commission considered whether to renew his broadcast license, he presented 163,000 affidavits of support—evidence, admitted the commission’s chairman, “that KWKH is a station of considerable popularity.”
12

Radio advertising was scant in the early days, and KWKH carried none. But as more advertisers took to the airwaves, Henderson decided to get in on the action. One of his routine stunts at the microphone was to ask for a cup of coffee and then comment that it was “doggone good coffee.” Inevitably, listeners asked about the coffee. In 1928, he ordered some tins bearing his image, filled them with coffee beans, and sold them over the air for $1 per pound. At a time when a pound of coffee cost ten cents at the store, Hello World coffee was no bargain for consumers, but it made a profitable business. KWKH soon began touting Bibles, insurance policies, patent medicines, and whatever else Henderson felt like selling. In 1930, readers of
Radio Digest
would vote him “most popular broadcaster in the South.”

Stations such as KWKH had considerable airtime to fill, and speeches were standard fare. One of the speakers in October 1929 was Philip Lieber. Like Henderson, Lieber was no dirt-poor Louisiana sharecropper; he was an important local businessman, president of the Shreveport Mutual Building Association, which provided home mortgages. Lieber was concerned that store owners among his borrowers were having trouble paying their mortgages because chain competition was hurting their businesses. He delivered a speech titled “The Menace of the Chain Store System” to the Shreveport Chamber of Commerce. Henderson was in attendance, and invited him to repeat the speech that night on KWKH. In a florid half-hour address, Lieber praised hometown merchants and warned of “a couple of hundred over-lords and all the rest of us eternally consigned to a condition of peasantry.” The retail chains, he asserted, “are taking everything out and putting nothing back.”
13

Henderson’s prior interest in chains had been limited to the hated radio networks; he had never spoken about retail chains. Indeed, selling Hello World coffee by mail undercut local grocers everywhere. But Lieber’s talk inspired him. When the banker finished, Henderson returned to the microphone. “I am going to tell you what that address means,” he told his listeners. “It means that these dirty, sneaking chain stores are coming into your home town and taking your money and sending it out to a bunch of crooked, no-account loafers in Wall Street.” Letters and telegrams flooded into Kennonwood, and Henderson adopted the issue as his own. The wealthy, college-educated businessman made himself the spokesman for the mass of downtrodden commoners oppressed by forces beyond their control. “American people, wake up!” he proclaimed. “We can whip these chain stores … I’ll be your leader. I’ll whip the hell out of ’em if you will support me.”
14

Evening after evening, Henderson returned to the theme. He read out anguished letters from shopkeepers. His extended monologues found targets in Wall Street, “thieving chain-store scoundrels,” and “gold-bellied Hartford.” For variety, Henderson turned his microphone over to populist politicians such as Louisiana’s governor, Huey Long, and the Alabama attorney general, Charlie McCall, who also took after the chains. “There are 3,000 convicts in Alabama who contribute more to the upbuilding of the state than all the foreign chains in America,” McCall told KWKH listeners. Shopkeepers and their wives sent letters or came by for a tour of the station, and Henderson put them on the air, too. One was R. K. Calloway, owner of a corner grocery in Taylorville, Illinois, who spoke passionately about chains sucking the money out of his economically troubled coal-mining town. “What good is an education going to do your children, if the chain store method of distribution is to endure?” he asked the radio audience. “If all the thinking, planning, etc., is to be done in New York or Chicago, and all they need is a yes mam yes sir, wouldn’t it be cheaper to buy a phonograph and be done with it?”
15

The anti-chain feeling was sincere, but Henderson knew how to turn it to profit. In the winter of 1929–30, he appealed to his listeners to support the anti-chain campaign by joining the Merchants’ Minute Men. For annual dues of $12—two or three days’ pay for a grocery clerk—members could help alert the public that chain stores were selling short weights and avoiding local taxes. Within a year, Henderson had signed up thirty-five thousand Minute Men in four thousand communities. The operation was less a mass movement than a fund-raising venture. Of $373,500 paid in dues for 1930, $151,800 went to pay the debts of the Henderson Iron Works, as the Federal Radio Commission subsequently revealed.
16

Henderson’s entrepreneurial approach quickly inspired imitators. Broadcasters such as Winfield Caslow, “the Main Street Crusader,” in Grand Rapids, Michigan, and Robert Duncan, “the Oregon Wildcat,” in Portland, launched profitable anti-chain crusades of their own. In 1930, Montaville Flowers, a lecturer best known for warning that granting citizenship to Japanese immigrants would be “the first step toward a rapid dissolution of our nationality and the loss of the soul of our civilization,” took up anti-chain activities. He offered himself as a consultant to local business groups and made thirty-six half-hour radio speeches in Washington and Oregon, inviting listeners to send money for a book of his talks. When Flowers’s radio attack on A&P fell short because parts of the West had no A&P stores, he simply trained his sights on the regional MacMarr chain instead. So outrageous were the anti-chain orators that in February 1930, the National Association of Retail Grocers, the independent grocers’ lobby, warned its members against giving them money, explaining, “At the present time, there are in the United States literally thousands of individuals interesting themselves in anti-chain-store campaigns purely for the money they can make out of it for themselves.”
17

The Merchants’ Minute Men was never an organized political force. It held but a single national convention and a few local meetings. It did not lobby at state capitols or endorse political candidates, and it had no relationship with the radio-based crusade of Father Charles Coughlin, the Michigan Catholic priest who first supported and then became a bitter critic of the New Deal. So far as is known, there were no formally organized local chapters or state-level leaders of the Minute Men, only the voice of Henderson warning against the “menace of the chain system, now seeking to fasten its fangs into the life of every community.” But the loud anti-chain agitation of Henderson and his imitators transformed the political environment. The fight against chain retailers was no longer a rearguard action by inefficient shopkeepers standing in the way of progress. Now it took on elements of class struggle, with the impersonal “foreign” chains, backed by the faceless and heartless finance capital of Wall Street, accused of undermining the vitality of small-town America and destroying opportunities for the common man.
18

*   *   *

The chain retailers were unprepared to do battle with a mass movement, even a poorly organized one. Two chain-store associations had been formed in the early 1920s, but both included only grocers. Neither was particularly effectual in the political realm. Amid the increasing anti-chain agitation, the two groups merged in late 1928 to create a new organization that would be open to chain retailers in all fields. The National Chain Store Association united every major retail chain in the country, with one notable exception. The Great Atlantic & Pacific, the largest chain retailer by far, stood aloof.
19

The new association had two main orders of business. One was a public relations campaign. Speakers from the National Chain Store Association fanned out to radio stations and Rotary Clubs around the country, explaining how chains made distribution more efficient and brought lower prices to consumers. A monthly newsletter went out to selected opinion leaders, and educational materials were distributed to teachers, editors, and librarians. The association’s other main undertaking was a legal effort to lobby against anti-chain legislation and fight it in the courts.
20

Some 142 bills to tax chain stores were introduced in twenty-nine state legislatures during 1929 and 1930 as the battle raged in every part of the country but the Northeast. In Wisconsin, independent merchants’ associations organized pickets of chain stores, and chain-store managers were socially ostracized. Chain-store boycotts were organized from Oregon to Florida. Legislatures in Indiana, Georgia, and North Carolina adopted tax schemes designed to overcome courts’ objections to the 1927 anti-chain laws. South Carolina imposed a chain-store tax in 1930, Florida and Alabama in 1931. Portland, Oregon, enacted the first municipal chain-store tax, with a fee rising from $6 on a single store to $50 for each store over nineteen run by the same company. When the Kentucky legislature debated a chain-store tax in February 1930, six hundred people packed a state senate hearing to support it, and as the house of representatives prepared to pass the bill, one legislator took up Henderson’s signature cry, “Hello, World!”
21