The Great A&P and the Struggle for Small Business in America (30 page)

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Byoir and Schiff assessed the political situation and quickly determined that A&P needed friends. They found them first in a most improbable place: the labor movement.

Unions in the grocery trade dated to the turn of the century, when clerks at the era’s tiny stores banded together to seek community-wide agreements limiting opening hours. Since the typical grocery store had only two or three workers, the decision to join the union was typically made by the store manager, who worked at least as long and hard as his clerks. As extremely paternalistic employers, George and John Hartford paid their store managers well, avoided layoffs, and did not welcome unions. The rules of the A&P Managers’ Benefit Association, created in 1916, barred members from joining unions, and the Hartfords had introduced a pension plan for store managers during the 1920s in part to deter unionization. Various groups of A&P workers had won union contracts from time to time, but with no federal law structuring labor-management relations, those contracts were perpetually at risk of lapsing; when employees at the Jersey City warehouse went on strike in 1922, the Hartfords threatened to close the warehouse and then made good on their threat, moving the operation to Brooklyn. As A&P installed meat counters in the late 1920s, the Amalgamated Meat Cutters’ union tried to persuade the company to hire union butchers, but A&P refused. Only a handful of A&P workers were unionized in the early 1930s.
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The unions in the grocery sector had correspondingly little love for the chains. “Low Wage Chains Pile Up Profits,”
The Retail Clerks International Advocate
headlined, explaining: “The story from the inside of these stores reveals underpaid unjustly treated personnel.” The Amalgamated Meat Cutters put A&P on the union’s “unfair” list in 1930. When state legislatures and city councils took up chain-store taxes in the late 1920s and early 1930s, the unions were often on the pro-tax side, because the taxes aided the independent grocery stores and butcher shops where most of their members worked.
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The Food and Grocery Code adopted under the National Industrial Recovery Act late in 1933 required grocers to recognize unions, and labor leaders decided to make A&P a test case. In October 1934, eight unions demanded that A&P agree to employ only union members in Cleveland, one of the country’s biggest industrial centers. When the company refused, the unions of retail clerks, meat cutters, and bakery workers declared strikes. Union “flying squads” went from one store to another, demanding that the stores close. The Teamsters Union stopped deliveries by independent truckers so effectively that even armed escorts could not get merchandise delivered to the stores. On Saturday evening, October 27, A&P shocked the city with newspaper ads announcing that it had closed all 293 of its Cleveland stores and discharged twenty-two hundred workers. Rumors that George Hartford had made an extraordinary visit to the city were false, but John Hartford was there, and he abandoned his normal aloofness to blast the mayor and the president of the local labor federation for condoning violence and failing to protect the trucks, leaving A&P the choice of hiring armed guards or leaving town. “We chose the latter course to avoid bloodshed and disorder,” he asserted, adding, “The whole thing is the most ghastly situation I have ever encountered. The wreckage of our entire Cleveland business in the short space of a few days is difficult to understand.” Thanks to George Hartford’s foresight, all the stores were on short-term leases, limiting the cost of A&P’s departure.
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The conflict made headlines nationwide, and the Roosevelt administration, which had previously declined John Hartford’s requests to intervene, summoned the parties to Washington. After an all-night bargaining session with John Hartford himself, the unions called off the strike, and A&P agreed to reopen its stores and reinstate the fired workers. The company made a public statement that it had no objection to its workers joining a union, but the unions’ victory proved empty. The agreement was not a labor contract, and it did not require the parties to reach a contract. Instead of bargaining with the Teamsters, the Amalgamated Meat Cutters, and other national unions, A&P signed a contract with an independent union that claimed to speak for all of its Cleveland employees. Only with the passage of the National Labor Relations Act in July 1935, establishing an election process for unions to win employer recognition, did the national unions make headway at A&P, and even then progress was spotty. In most of the country, as officials of the Amalgamated Meat Cutters’ union complained, a “bitter anti-union policy” dominated at A&P.
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The Hartfords still imagined that their paternalistic approach might inspire their employees, many of whom had purchased nonvoting shares since 1926. “My brother and I often look back longingly to the days when the Company was small enough for us to know almost every person in it,” John Hartford wrote to his store managers at the end of 1936. “Then we could take a man by the arm, as our father used to do, and talk things over with him.” When they wanted to make important changes, the Hartfords invariably sought approval from their division presidents, whose endorsement was never in question. In October 1936, the division presidents voted to give paid vacations to full-time clerks and managers, to provide company-paid disability insurance, and to give clerks overtime pay when they worked extra hours. The workweek was shortened to five and a half days from six. But one thing the Hartfords refused to do: negotiate with the unions that claimed to represent their nearly ninety thousand employees.
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Byoir, the fixer, called another fixer. Chester Wright was a public relations man in Washington who managed to work simultaneously for the American Federation of Labor (AFL) and its archenemy, the National Association of Manufacturers. Among other things, he published
Chester Wright’s Labor Letter
, designed to help employers navigate through the crosswinds of intense organizing activity, widespread worker unrest, and conflict between the two large labor confederations, the American Federation of Labor, whose member unions each covered a single craft, and the Congress of Industrial Organizations (CIO), which tried to bring each industry’s workers into a single union across craft lines. Wright and Byoir had known each other since their days as propagandists during the world war, and Wright had lent a hand with the President’s Birthday Balls.
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Almost immediately, the involvement of Byoir and Wright led to a new tone at the Graybar Building. “After twenty-five years of bitter opposition our International has sufficiently sold itself to the A&P Tea Company to the extent that they are treating with us and signing our contracts,” Patrick Gorman, leader of the Amalgamated Meat Cutters and Butcher Workmen, told his executive board in March 1938. Around the same time, William Green, president of the AFL, met with A&P executives, probably including John Hartford. The makings of a deal were obvious: if A&P would sign contracts with the AFL unions, the unions would oppose the Patman bill. As Byoir undoubtedly pointed out, this was by no means the worst possible outcome for the Hartfords. Much as they disliked unions, the deal with the American Federation of Labor reduced the risk that A&P would have to deal with more confrontational CIO unions, such as the United Grocery Workers Union and the United Warehouse Workers Union in Chicago and some of the radical chapters of the Retail, Wholesale, and Department Store Union in New York.
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The new relationship blossomed. In August 1938, Wright worked out a tentative agreement allowing unionization of all A&P employees in Washington and Baltimore, including bakery workers and bread-truck drivers. Byoir met with Gorman in September. “I got along splendidly with him and believe we agreed upon a program that will establish for us a more general, friendly relationship with the Company,” Gorman reported. Among Gorman’s suggestions was that A&P appoint a single person to be in charge of labor relations. At its annual convention in October 1938, the AFL backed away from its normal condemnation of A&P’s anti-labor attitude. Although enough of its member unions remained suspicious of the company that a resolution condemning the Patman tax bill could not win approval, the federation voted to undertake a study of “taxes of discriminatory and punitive character,” such as chain-store taxes.

The Hartfords reciprocated, abandoning their long-held opposition to unions among their workers. Following Byoir’s guidance, in November they made Charles Schimmat, a regional executive from Chicago, responsible for all union contracts nationwide. Almost immediately, A&P and five unions signed contracts covering employees in Washington and Chicago. Union contracts followed quickly in Milwaukee, St. Louis, and Toledo. “The past few weeks has witnessed one of the largest increases in membership in the Association that has been experienced for some time,”
The Retail Clerks International Advocate
proclaimed. The company agreed to have all its printing done in union shops (although it took boycott threats from the Teamsters before the company moved the printing of
Woman’s Day
to a union plant). A&P also hired one of Chester Wright’s businesses, the International Labor News Service, to include chain-friendly articles in its twice-weekly news bulletins to union newspapers around the country. The fact that Byoir paid Wright $80,000 for one year of pro-chain propaganda was not disclosed.
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Building bridges to labor was only part of Byoir’s effort to change the political environment. In the spring of 1938, an opportunity arose to cultivate the consumer movement. Ada Taylor Sackett, a writer and hotel convention manager in Atlantic City and an officer of a local women’s club, had become involved in efforts to repeal the municipal chain-store tax enacted in 1935. In the spring of 1938, Business Organization Inc. offered to help her establish similar groups in other towns. The Emergency Consumers Tax Council of New Jersey was not entirely A&P’s creation, but Business Organization Inc. financed the venture and provided manpower to aid Sackett in organizing 150 local councils around the state. Byoir announced the company’s gift publicly, and with it A&P’s new policy of supporting groups to study “hidden taxes” such as those levied on retailers.
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Byoir took the concept nationwide, creating the National Consumers Tax Commission in June 1938. Unlike its New Jersey precursor, the National Consumers Tax Commission was no grassroots organization. Housewives constituted the nominal leadership: Byoir recruited the head of a consumer group in Texas, Mrs. Kenneth C. Frazier, to be the president. The national secretary was Milton M. Sittenfield, a Byoir employee, and Business Organization Inc. paid the bills. With a staff of seventy-two based in downtown Chicago, the National Consumers Tax Commission sent out organizers to create discussion groups on women’s issues. For local leaders, it tapped affiliates of the General Federation of Women’s Clubs, one of the largest civic organizations in the country. Each discussion group developed its own locally oriented program, but “hidden taxes” were invariably among the topics. Business Organization’s “research department” helpfully furnished discussion guides.
Why Pay Taxes in the Dark?
was the title of one of the commission’s pamphlets, which contended that the price of a $5.60 pair of shoes included $1.60 in taxes. Another publication offered a colloquy:

Q.   Is the primary purpose of the chain store taxes to produce revenue?

A.   No. Of the 22 states which impose chain store taxes, 18 derive less than 1 percent from this source.

The effort burgeoned: by September 1939, the National Consumers Tax Commission claimed to have six thousand study groups with more than 650,000 members. Among them were the wives of many A&P employees, who signed up at John Hartford’s request.
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Bringing consumer groups to A&P’s defense was an easy feat for Byoir to accomplish. Studies confirmed that chain-owned grocery stores underpriced independent stores by 10 to 15 percent, in good part because the chains did not provide credit or delivery. A 1938 survey found chains’ prices below independent grocers’ prices on 96 percent of the items examined. Consumer groups thus had every reason to oppose taxes on chain stores. The government, which later made Byoir a defendant in antitrust suits against A&P, alleged that he tried to keep the company’s involvement in the National Consumers Tax Commission secret, but that assertion was incorrect. Although the commission’s description of itself as a nonpolitical organization of “average American housewives” was far-fetched, its member newsletter publicly thanked John Hartford for A&P’s financial support. Byoir constructed a masterful narrative, planting newspaper stories that described John A. Hartford as an “angel” generously supporting women who wanted to delve into civic affairs.
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On Thursday, September 15, 1938, Byoir’s carefully constructed campaign against the Patman tax bill burst into full public view. Readers across the country opened their newspapers to find a five-column advertisement headlined, simply, “A Statement of Public Policy by The Great Atlantic & Pacific Tea Company.” Over the signatures of George L. and John A. Hartford, the dense text outlined why the Patman bill was against the interests of A&P employees, consumers, farmers, and labor. The bill, it said, would “wipe out” 30 percent of the distribution machinery of U.S. farmers and raise living costs for wage earners. “We have arrived at the decision that we would be doing less than our full duty if we failed to oppose, by every fair means, legislation proposed by the Honorable Wright Patman,” the advertisement announced. “We will not go into politics, nor will we establish a lobby in Washington for the purpose of attempting to influence the vote of any member of the Congress. We expect only a full and fair opportunity to present the case for the chain stores.” The advertisement ran in sixteen hundred publications, and Byoir then sent a press release to thousands of other newspapers calling attention to it.
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