On March,1923, just seven months before he wore out, GE's most valuable machine met with his new boss. GE's new president Gerard Swope was known for doling out his time in 5 minute portions and insisting that all communications to him fit on a single page. Yet Swope's March 23, 1923 visit to Charles Proteus Steinmetz's summer camp just off the Mohawk River lasted over an hour. Steinmetz followed up on that meeting by sending Swope not a one page letter, but a 13 page "confidential" memorandum. It contained no company secrets. Instead it focused on a word: cooperation. Swope was not converted to cooperation by Steinmetz. The purpose of the visit was probably more for image than for information. Swope had, however, come independently to the view that cooperation was the way of the future. (246)
Historians have categorized Swope and a minority of U.S. corporate executives of the 1920s as practicing a new variety of capitalism. That new variety has been given various names by those historians. Martin Sklar and Kim McQuaid called it "Corporate Liberalism". Stuart Brandes termed it "Welfare Capitalism." Ronald Schatz chose "Corporatism." Swope did not use any of those labels. "A corporation, in many respects" he said "is a matter of coordinated cooperation." Do not be too quick to dismiss this as a corporate cliche. It captures the essence of the 1920s Old GE. (247)
What was the GE version of coordinated cooperation? That is the question this chapter answers. Coordinated Cooperation emerged at GE from 1900 to 1930 not as a new idea but as an evolving policy. Inside GE, coordinated cooperation meant management coordinating and workers cooperating. Outside GE it meant less competition and conflict, and more coordination and cooperation, both among Giant Corporations, and between those corporations and the Federal government.
Regarding the inside part, GE had, before World War I begun a series of worker benefit programs aimed at cementing worker cooperation and loyalty. This included personal insurance and company support for housing by cosigning worker second mortgages. Starting in 1912, GE offered half-salary pensions to employees who reached 70 years of age with 20 or more years of service. In 1920, responding to a motion at a GE Stockholders meeting by induction motor salesman Sidney Paine, the company offered 50,000 shares of its stock for purchase by workers without broker fees and on a payroll deduction installment plan. (248)
That stock purchase program would soon expose what happened when coordination and cooperation came into conflict. After recovery from the brief 1921 depression, the price of GE stock went up sharply . Several worker-stockholders sold their small GE holdings to reap their capital gains. In other words, the workers weren't just cooperating with capitalism. They were acting like capitalists! Management immediately stepped in. It announced a modification of the employee investment program. Workers must be protected from the consequences of dangerous speculation. From now on, they could not buy GE stock, but only fixed-return bonds issued by a GE Securities Corporation, run by a board combining workers and management. When the change was announced, in 1924, the workers were invited to nominate, by write in ballot, their representative on the board of directors of this securities corporation. The winner at the Schenectady Works, and first holder or the new board seat, was Socialist Bill Turnbull. (249)
In its public image making, GE emphasized the cooperative elements. Coordination, however, was always lurking behind the curtain. Swope put it this way in an address to top company management on 1923:
If you could guarantee conditions of autocracy, there isn't any doubt it would be the best form of organization, for there isn't any doubt that the manager could run the business better than any democratic conclave. (250)
The best evidence for this elitist version of coordination can be found in Swope's papers. One of the largest portions documents the detailed system for identifying and rewarding the 1000 or so individuals whom Swope described as "the brains and leadership of the company." Identifying that brains and leadership elite began with the compiling of a PYM List. The initials stood for Promising Young Man. Selection each year began with 100-200 nominees, 20 or more from each big Works, fewer from each factory. The choice was made by sending the nominees list to the company's 20 top managers for evaluation. The chosen would replace those who that year had graduated from PYM to full member of the elite, or had fallen by the wayside. This let the number on the company elite list stay relatively constant at about 500-1000, the number in 1938 being 773. (251)
GE had installed in the 1920s a general plan under which employees of five years or more service got a 5% annual bonus. This did not apply to that thousand man elite, however. Their bonuses were much bigger. Their extra compensation began with an annual bonus exceeding the company's mean annual employee pay. On top of this was added various levels of stock grants. In a rare summing up of all this largesse, in the middle of the Great Depression, Swope said, regarding "Extra Compensation" that $1,000,000 had been divided up among 40,000 ordinary employees, while another $1,500,000 had been distributed among 851 elite employees. (252)
Even this however proved insufficient. Company legend depicts the management elite, at the peak of the Roaring Twenties boom, spending so much time on the phone with their personal stock brokers as to seriously interfere with corporate business. Whether for this reason, or just to add another perk, Swope created in 1928 a very exclusive mutual fund called GE Electrical Funds. Through it, the GE elite could entrust their money with the help of blue chip investment specialists previously available only to titans such as Swope and Young. Membership in this exclusive investment club, its name abbreviated to the Elfun Society became the mark of making it in GE. Initially only 900 of GE's 70,000 employees were tapped for membership. It remained a sort of secret society until the early 1950s when it would begin its evolution into a much less exclusive company-wide community service organization. (253)
So keep in mind, when considering coordinated cooperation inside GE, that it rested on a foundation of elitism and extreme pay inequality. This sense of antidemocratic elitism on the part of upper level management and a few lionized and privileged technical contributors persisted through the whole history of GE, old or new. This provides evidence against any claim that GE had a "corporate culture" shared by all company employees. Instead, it was a company of many clashing cultures. The principal dividing line was between two cultures, with the top 1000 or so self-identified brains and leaders on the favored side of the line, and all the other tens of thousands of employees on the other side. The gulf between those two groups, far from being most extreme in the 1920s, was actually less than typically extreme under the leadership of Gerard Swope, GE's all time most progressive president.
Outside GE, the company's coordinated cooperation with other giant corporations had also begun before 1920. A pioneer here had been a New York born and German trained engineer, Magnus W. Alexander.He was a design engineer at GE's Lynn, MA works when he became one of the company's first employee relations professionals. In that role, he demonstrated with data the high cost of employee turnover, especially in hiring semi-skilled machine operators. He went on to advise GE President Rice on labor matters, and to write and speak publicly on the topic of labor policy. In this role he combined pragmatism, progressivism, and a rigid personality that some GE colleagues described as "Prussian". (254)
His main motive was not progressivism but pragmatism. Commenting on a proposal for expanding employee benefits, he wrote to Rice that
while I recognize the spirit of altruism in the proposal, I assume that the primary motive is the desire to attract capable men and women into the employ of the company, make them efficient and contented workers,and as such keep them in the company's service for a long period of time. (255)
Nationally, the years of Alexander's main activity, 1910-1915 were years of labor disasters, turmoil and violence. Examples included the bombing of the Los Angeles Times, with 20 fatalities, the New York City Triangle Shirtwaist Fire that killed 145, and the "Ludlow Massacre", an attack by militia hired by the Colorado Coal and Iron Co. upon striking miners that left 45 dead. An early cooperative response to this perceived spiral toward labor relations chaos had been the National Civic Federation. It included corporate executives, labor union officers, and civic leaders. GE had been a corporate member, but not an active one.
In 1915 Alexander stepped up GE's cooperationist game. He led a small group of mid level industry professionals that organized a series of conferences for executives from several big companies, including GE. In the quiet setting of a resort called Yama Farms in New York's Catskill Mountains, they considered those rising labor tensions. Out of those "Yama Conferences" came a permanent organization, the National Industrial Conference Board (NICB). Depending on one's preconceptions, this could be viewed as a semi-secret corporate cabal aimed at union avoidance (the strongly anti union National Association of Manufacturers was a corporate member), or a liberal think tank (it claimed to be driven not by preconceived positions but by "pertinent economic facts"). (256)
Actually, the NICB stood firmly in the middle. It described itself as an "instrument for cooperative action", seeking "satisfactory relations between employees and employees". It rejected the robber baron rapacity of the past. It also, however, rejected what it perceived as the radicalism of the present. One NICB report, for example, objected to what it saw as left-leaning professors' efforts to brainwash students with "propaganda in favor of the eight hour day… minimum wage laws, factory inspection laws, provisions for social insurance," and "national health insurance." (257)
Unlike many efforts to address the labor crisis of the 1910s, the NICB persisted. Under the name The Conference Board, it continues in the 21st century to provide a middle of the road voice of corporate America. Another effort at inter-corporation cooperation was similarly named but separate and shorter lived. The Special Conference Committee was created in 1919 by a committee of corporate executives. George Emmons, now a GE vice president, was on that committee, along with executives from such companies as Du Pont, Standard Oil and General Motors.
The committee concluded that
Progress depends on cooperation, and in industry cooperation must be based on the acceptance by employers and employees of some practical application of the principle that capital and labor are interdependent.
That practical application included an acceptance of the need for "collective dealing" with employees on "wages, hours, working conditions and complaints." That acceptance was, however, hedged by proclamation of "the Open Shop… Each employee should be safeguarded in his right to join or not to join any union." (258)
For GE, coordinated cooperation also encompassed the Federal Government. After that 1911 Consent decree that saved its lighting business, Charles Coffin decided to adopt a more cooperative approach to corporate citizenship. This led, in 1912, to GE hiring an outside lawyer to serve as a Steinmetz-like "Supreme Court" to assure that GE would avoid future antitrust violations.
This newcomer was Owen D. Young. Born in 1874, he was the son of a moderately prosperous upstate New York farmer. He graduated from St. Lawrence College, then moved on to Boston and a career in law. He specialized in the legal issues of the new electric utility industry. Tall and lanky, folksy and friendly, yet also articulate and scholarly, he has been described as "Lincolnesque". Though never a candidate for political office, in 1926 he came close to running for the Senate as a Democrat. "I think Owen Young would make a wonderful candidate," said Eleanor Roosevelt. In 1932, he was mentioned as a dark horse presidential possibility. (259)
Young had come to GE Board Chairman Coffin's attention in 1912 while effectively representing Stone and Webster, a major electric utility holding company that competed with GE's Electric Bond and Share. Young accepted in 1912 a job in GE's Law Department. There in 1913 he got the responsibility to vet all GE business agreements to assure antitrust compliance. He served, however, as a toothless watchdog. Subsequent company violations of its 1911 consent decree, such as agreements with Corning Glass that effectively monopolized control over low cost bulb making, continued, with Young's knowledge and nonintervention. So did GE's use of its Electric Bond and Share subsidiary as a significant and likely illegal competitive advantage in selling electrical equipment.
Young quickly ascended to a Vice Presidency. He moved beyond anti trust to coordinating many aspects of GE's increasing cooperation with the Federal government. For example, In April 8, 1919, Young, Coffin and three other GE executives met with two U.S. Navy officers, Admiral William Bullard and Commander Sanford Hooper. The subject was GE's Alexanderson alternator for sending wireless messages. The Navy men did not want this crucial defense technology to fall into the hands of a foreign power, even a friendly one such as Great Britain.
Bullard, according to Young, "strongly urged the officers of the General [Electric] Company as patriotic Americans to decline to sell these machines to either Marconi Company [i.e, either the British parent company or its American subsidiary]". To achieve this. Bullard, again as quoted by Young, said that "the U.S. would be sympathetic to the formation by the General [Electric] Company and other clearly American interests of an American-owned radio-operating company that could deal with the Marconi Company worldwide on equal terms." Thus did GE receive, in Young's version of events, the authority to sidestep antitrust considerations and coordinate the cooperation of itself, AT&T, and later Westinghouse and United Fruit, to create a wireless communications monopoly, the Radio Corporation of America (RCA). (260)
The creation of this monopoly did not turn out to be necessary for national defense. The Alexanderson alternator would soon be replaced by vacuum tube electronics, a development independently achieved by all the major powers. Point to point or ship to ship wireless communication would from 1920 on be dwarfed in importance by radio broadcasting. The pioneer here would not be GE, AT&T, or RCA, but Westinghouse, led by engineer Charles Conrad. RCA would, despite its unnecessary creation, inherit by government fiat a business bonanza. RCA's new leader, a Russian born, New York City raised former telegraph operator named David Sarnoff, would manage rings around his company's corporate creators. He ended up in possession of the an unearned monopoly based on the GE and AT&T electronics patents, and ownership of the first national radio network, NBC.
Thus did GE, in 1919 the company with the world's best technology in radio and electronics, pass up its chance to become the world leader in those businesses. For a decade GE did manufacture radios to be sold by RCA. By the 1930s, however, RCA had also taken over that manufacturing role. Looking back on this experience in 1929, Wilbur Rice wrote to Young that
I am depressed by the surrender of our company of some $60 million of radio manufacturing business. Our research, manufacturing and engineering will be seriously handicapped… This is the first time in history that we have surrendered the right to manufacture an important electrical product to a company not under our control. I regard this as a serious step backward. (261)
Young also ascended to a coordinating role with the government on labor matters. In 1919 President Wilson called two Industrial Conferences in response to that year's labor strife. For the second, Wilson asked Young to serve as a representative of industry. To accept this post, Young had to threaten resignation from GE in order to overcome the unanimous objection of the GE Board of Directors' Executive Committee. (262)
At the Conference, he championed an effort to extend into peacetime the relatively progressive policies of the War Labor Board. This won the unanimous support of the committee. Its Final Report to that effect was, however, immediately rejected by organized labor as too paternalistic, and by most business leaders as too permissive. It was also immediately abandoned by otherwise beleaguered President Wilson. (263)
Back at GE, Young took charge of efforts to implement privately that publicly rejected approach. He had never run a business or managed labor. He did not turn for advice to people who had, such as GE's own George Emmons. Nor did he seek out the voice of the workers themselves. Instead, he consulted with a new kind of professional, the labor relations specialist.
In 1919, Young turned to two such consultants. Atherton Brownell was a magazine editor. Mackenzie King was a Canadian scholar and politician who would later become that country's Prime Minister. Both, after brief and shallow investigations, told GE management, especially newcomer Young, what it wanted to hear. GE, they said, had made a mistake of leaving labor relations for too long in the hands of old time Works Managers such as George Emmons. Those old timers may have had good rapport with the workers. They lacked, however, modern techniques. For example, instead of taking advantage of the powers of modern publicity techniques, that old guard had relied on "the rightness of its intentions." As a result, it had been outmaneuvered by wily union radicals, resulting in the Works being "largely in control of the socialists." The War had made matters worse, creating "well nigh irresistible" pressures to "invite outside intervention known to be sympathetic to labor's point of view." That "outside" intervention was, of course, the Federal Government's War Labor Board. (264)
Fortunately for GE, however, that War Labor Board was now defunct. Before expiring it had suggested a promising way forward. That new approach avoided the three previous, and to GE undesirable, choices: permanent government involvement in labor relations, return to Gilded Age labor-management warfare, or recognition of unions. The new approach followed labor troubles in 1918 at GE's Lynn, MA Works. There wartime pressures had been exacerbated by a Works Manager who had exerted an un-Emmons like brand of old fashioned autocracy. Worker resistance and the resulting production problems had prompted the War Labor Board to step in. This led not only to departure of the Works Manager and a pay raise for the workers, but also to application of a new idea, called a Works Council. This was a council at which representatives of the workers, chosen by a democratic process, met with management representatives on a regular basis to discuss workplace issues. A Works Coucil had earlier been implemented at the Colorado Coal and Iron Co. by Mackenzie King for owner John D. Rockefeller Jr. after the 1914 violence there. At Lynn, the Works Council not only helped restore peace and productivity, but, to GE's pleased surprise, preserved nearly intact the previous management prerogatives. So the company was receptive to the Brownell and King recommendations of installation of Works Councils throughout GE.
Young, however, was not the man to carry out this recommendation. He had no taste for, or skill at, day to day management. He was far better suited to be GE's "Mr. Outside". In the 1920s, GE would loan him to the government to help coordinate U.S. policy on the repayment by U.S. allies of their World War I debts. One major such plan would be named the Young Plan in his honor.
The company needed a "Mr. Inside". To find that person, Charles Coffin again looked beyond GE's internal ranks. The reason for this external search was literally accidental. Earlier in the Coffin regime, two GE executives had stood out as leading candiates for GE President. S. Dana Greene, an engineer and then a sales executive, had led GE into AC, and at following fast behind Westinghouse at Niagara. He helped put GE into the lead at supplying equipment for the Universal System of electricity. Hinsdill Parsons, a Vice President in charge of GE's Law Department, had proved himself an aggressive prober of the boundaries of antitrust, and an effective manager of GE subsidiaries.
The two had hobbies. Greene was an enthusiastic outdoorsman. In January, 1900, he was pursuing one such hobby, skate sailing, with his wife on the frozen Mohawk River. The two fell through a hole in the ice and drowned. Parsons' hobby was fast cars. Pursuing it, in 1907, he may have injured his reputation. Stopped for speeding by a pair of constables, he invited them into his car, then drove off. "Autoist steals constables" read a 1907 New York Times headline. Parsons would later confirm his unavailability for further promotion in 1912 when, back at the wheel, he died in a one car crash. (265)
It was the unavailability of these two leading candidates that led to Wilbur Rice's installation as GE President from 1912-1922, with Chairman of the Board Charles Coffin in actual charge. Ultimately that presidential post would go to an outsider. Gerard Swope was born in 1872, the son of a St. Louis watch case manufacturer. He earned an electrical engineering degree from MIT, then moved on to Chicago for a job with Western Electric. There he roomed and taught science at Jane Addams' Hull House. He formed relationships with such leaders as Addams herself, occupational health expert Alice Hamilton, labor relations expert Alzina Stevens, and Mary Hill, who became his wife. Meanwhile, he moved up the Western Electric hierarchy, from engineering to sales to a Vice Presidency. Along the way, not only his Hull House connections but also a focused and intent remoteness distinguished him from the stereotypical salesman or upwardly mobile manager. His hawklike facial features rarely displayed emotion. He kept fit by daily horseback riding, avoiding what he termed the pot bellied complacency of other executives. His disciplined formality and brusque manner kept him at arms length from colleagues. (266)
This aloofness was perhaps also related to his being a Jew, a rarity among chief executives in his industry. One of his few expressions on the topic in his surviving business papers is a response to a correspondent who had heard that Jewish students of engineering would find it "impossible" to get a job "with any worth while institution." Swope denied that this was the case, either at MIT (where he was an active alumnus) "and surely not in the General Electric Company." (267)
Like Young, Swope came to Coffin's attention by his effectiveness as a competitor. In 1914, as Western Electric vice president, he had ably negotiated the sale of that company's electric power equipment manufacturing business to GE. He would turn down two GE job offers before accepting a third in 1919. In between, he spent World War I as a dollar-a-year man in Washington, assisting U.S. Army officers George Goethals and Hugh Johnson at reorganizing the U.S. Army's purchasing system. This early experience at coordinated cooperation among government and industry leaders would later be echoed not only in Swope's 1920s coordinated cooperation efforts, but also in his 1931 moment in the national spotlight, his Depression-fighting "Swope Plan".
He was hired in 1919 to run GE international business. He accepted on the condition that the business be reorganized as a separate company, International GE, with him given the title of President. His brand new six story office building was deliberately and conspicuously located just outside and in front of the Schenectady Works. Like Young, he continued Coffin era tactics. For example, under Coffin, GE had created or purchased major shares in electrical manufacturing companies around the world. This enabled GE to use tactics such as price-stabilizing cartels that were illegal in the U.S. but legal elsewhere. In May, 1919, Swope hosted a meeting at Briarcliff Manor, NY of 23 presidents of GE's international affiliates in countries ranging from France and Italy to the Phillipines and Japan. A U.S. Senator gave the keynote address. He reminded the attendees that in April, 1918, Congress had passed legislation aimed at boosting U.S. exports. This law, the Webb-Pomerene Act, granted antitrust exemption to associations of U.S.companies formed for the purpose of trading overseas. Swope urged full GE participation in this export initiative. U.S. antitrust law, he said, "does not affect our business, as we understand it, from Belgium to Argentina, or from France to Greece." To exploit this opportunity, GE should "establish a much closer and more intimate connection among associated companies,in Europe and throughout the world… to get each company to adopt the methods of all the others." The aim was "to have in each country the best company, and have throughout the world a group of the best companies." In pursuit of this goal in the 1920s, GE would buy up 19% of France's CFTH, 32% of Germany's AEG, 50% of Italy's Cognel, and 51% of Tokyo Electric and 21% of Shibaru Electric (the two companies that would later merge to form Toshiba). In other words, organizing a profitable GE-dominated world cartel, not boosting exports to create jobs at home, was the aim of of Swope's International GE. This effort to outflank U.S. antitrust laws would continue throughout Swope's presidency. Only later would it be found in court to be illegal. (268)
Like RCA, however, this effort did not have its intended effect. Europe's best electrical manufacturing companies, such as Siemens, Phillips, ASEA, and Brown Boveri, stayed out of, or shook loose from, GE's clutches. They remained dominant in Europe. The only area where GE was able to extend its product domination overseas was in light bulbs. There a market-dominating cartel called Phoebus reaped high profits while keeping foreign made light bulbs out of the U.S. until the Japanese entered in the 1930s. This cartel was a profitable exception to GE's otherwise lackluster international performance. As Swope's son, a GE lawyer put it in 1973: "GE's attempt to extend its interest outside the historic 'family" [the original overseas extensions of Edison and TH] ran into trouble and were liquidated." (269)
Global light bulb monopolizing proved more successful, Nine of the world's light bulb leaders met at the International GE office in Paris in 1930 to sign the International Notification and Control Agreement (INCA). They agreed not to invade each others' home territories. This helped maintain GE's high light bulb profits of up to 40% of sales until after World ar II. (270)
In 1922, with the post-war political and social controversies settling down, and the nation recovering from a sharp but short depression, Swope and Young officially assumed the presidency and board chairmanship of General Electric. GE annual sales had climbed back in 1922 to the World War I peak of $250 million. This kept the company on a track of doubling in sales every decade or so. That roughly matched the growth rate of U.S. electricity production, and far exceeded the growth rate of the U.S. GDP. Total company employment, about 70,000 in 1922, had also roughly doubled every six years since GE's founding. A deceleration had, however, already begun. Employment would peak at 87,000 in 1929, then fall in the depressed 1930s. Recovering to about 90,000 early in World ar II, GE's U.S. employment would double only twice more in the remaining 80 years of the Old and New GE. Schenectady's share of total company employment had fallen from one half in 1892 to one third in 1922. The number of manufacturing locations had grown to 40. Besides Schenectady, six others were big and diverse enough to be considered Works. These were Lynn and Pittsfield, MA, Bridgeport, CT, Erie and Philadelphia. PA, and Fort Wayne, IN.
At the Schenectady Works by 1922, the failure of the post-war strike and the following selective layoffs had resulted in a sharp decline in unions. Membership in the once powerful Dorpian Lodge of the IAM had fallen from over 1000 In 1913 to 125 in 1923. Total union membership was estimated at only 5% of the Schenectady Works' 20,000 enployees. GE's young radical workers of earlier decades had, by the 1920s, either departed, or toned down their radicalism. More characteristic in the twenties was an organization GE had created in 1916. The Quarter Century Club recognized workers who had put in 25 years of company service. A company newspaper begun in 1919, the Schenectady Works News promoted this image of satisfied and loyal employees.
That cooperative image of smiling job satisfaction was, of course, a selective exaggeration. More objective statistics did, however, support a picture of decreased exit and increased loyalty. The fraction of workers departing a typical large U.S. manufacturing works each year, the "labor turnover rate" had typically been, before 1910, 100% or more. GE's pre-World War I turnover met this average. By 1920, at the GE Schenectady Works, turnover had fallen to 50%. During the next decade it would fall further, to 22%. For workers with five years or more of service in the 1920s only about 10% would leave in a given year. A 1919 account asserted that three fourths of the employees at the Schenectady Works had been there five years or more, and one fifth ten years or more. (271)
The ethnic composition of the work force also stabilized. Schenectady had experienced four main waves of immigration. The Irish had begun arriving in the 1830s, then Germans in the late 1840s, and finally Eastern Europeans (often generalized as "Polish") and Italians at the turn of the 20th century. The fraction of Schenectady residents born outside the U.S. reached its all time peak of 25% in 1910. With the passage of national immigration restriction in the 1920s, there would be no more immigration waves for decades.
Schenectady's population had grown since the Edison Works' arrival from 15,000 in 1886 to 88,000 in 1920. At least one billboard in the 1920s optimistically proclaimed it a city of 100,000. In fact, it never would reach that figure. Instead, over the rest of the 20th century its population reached a plateau below that 100,000 figure, then declined to 61,000. In the 1920s about 40% of employed Schenectady residents worked for GE. The majority of people who tried out a job at GE Schenectady, however, left within a year. The Works was mainly staffed not by itinerant loners, but by people who already had a family in Schenectady, or arrived at Schenectady with a relative.
This led to extended families of two or more nuclear branches, each often with two or more family members working at GE. Over time this often enabled those GE families to achieve unspectacular but cumulative upward mobility. It was not unusual to see the sequence within those families from common or unskilled labor to highly skilled labor or a foreman's job in a generation, and on to college education and professional employment in the succeeding generations.
For the "Yorkers", families with two or more generations born in New York State by the 1890s, such mobility had already begun. Consider again Jacob Weller. He had moved from laborer to highly skilled tool and die maker in the 1890s. His son would graduate from GE's Apprentice Program. So would his grandson and eventually great-grandchildren. The great-grandchildren would go on to college and professional careers.
The main 19th century immigrant groups, the Irish and the Germans, were by the early 20th century also well established at GE, and in some cases launched on that trajectory of upward mobility. Among the previously noted working class families, for example, the Irish Clunes, were, despite the loss of Martin and Donald, represented in the 1920s Works by Dudley in the insulation department, Thomas, a crane operator, Thomas F. in the Engineering Department, Dorothy, a motor winder, Sarah, a shop worker, and Irene, who worked in the Stock and Order Department until her marriage in 1923. The German Schwenkers in the early 20th century included Charles, General Electric's chief drafting inspector at Schenectady, J. Edward, an engineering graduate of Union College working as aa contractor, and Fred, a Schenectady Alderman who was instrumental in setting up the city's park system. (272)
Among the newer immigrant groups, each making up about 8-10% of Schenectady's population, were the Poles (actually Polish speaking Russians, Germans or Austrians), and Italians. For example, Vincent Sarnacki, of Polish ethnicity, had served in the Russian Army before emigrating to the U.S. He came to Schenectady by way of New Jersey and a Vermont stone quarry before getting a job running a punch press at the Schenectady Works. Frank Nigriny of Hungary had also travelled widely across Europe before coming to Schenectady. He arrived there in 1890, followed in 1896 by his brother Jacob. Frank's first job was in that hot and dangerous tube works. There he would establish close ties with foreman Chris Rach. When Rach moved on to the still dangerous but less exhausting Punch Press Department Frank went along. Along the way he fathered seven sons. By 1924 six were working at GE, in departments ranging from punch press to radio to publicity. The seventh son was in that year 1924 attending high school. A third generation Nigriny would graduate from college, a fourth generation would add Medical School. (273)
The wave of Italian immigration and its impact on GE can be traced by the examples of two relatively common family names, Gabriele and Mangino. Neither can be found in Schenectady censuses or organization directories before 1900. The brothers Tobia and Leo Gabriele came to Schenectady from Italy in 1905. From a beginning as laborers, they moved up to semiskilled shop work at GE Schenectady. That they may have had some doubts about permanent U.S., however, is suggested by the fact that, in contrast to those early Irish and Germans, the Gabrieles did not seek naturalization papers until the 1920s. They did so through the Americanization Program that GE had set up at the Works. It provided courses ranging from English language and literacy to help in filing for those first papers. Tobia got his in 1925, alongside some 45 Polish and Italian classmates. In 1934, a next generation Gabriele, Leo J. was among the graduates of the Apprentice Training Program. (274)
The first Manginos in the Schenectady area appear to have arrived in 1905-1906. They were Raffeale, a grocer in the city, and brothers Joseph and Pasquale, railroad workers in the suburb of Rotterdam. They were joined by 1910 by Frank, a barber, and Carlo a saloonkeeper. Italians initially mainly worked on the railroad as laborers or freight handlers, or in city jobs such as barber or shoemaker. Those who took industrial jobs went first to the Locomotive Works, mostly as laborers. By the 1920s, however, there were half a dozen Manginos at the GE Schenectady Works, including foormer saloonkeeper Carlo, for whom Prohibition might have caused a career change. There were still many Manginos at the Locomotive Works including Desiderio, who had come to Schenectady from New York City in about 1920. His son Joe would begin his working career at the Locomotive Works, but after World ar II would move over to GE. There, after passing up an opportunity to be a foreman, he became a union activist. (275)
Another of the Eastern European emigrants, Frank Emspak, came to the U.S. from Austria-Hungary and joined GE in 1905. He had trained as a blacksmith, but became a GE machinist, practicing his old trade only during layoffs when he traveled the nearby countryside shoeing horses. A son recalls his being a 1911 Socialist, though in the 1911 registration book he left his party affiliation blank. As a husband and father of three sons he was moving the family goods to a new residence in suburban Mt. Pleasant in 1913 when, at a not yet raised railroad level crossing, he was fatally struck by a train. His widow Theresa kept the family together. She went to work for GE as a cleaning woman, alongside Abbie Richmond. She also sued the New York Central Railroad over her husband's accident and won a cash settlement. Two of her three sons, Frank Jr. and Victor, both under 16, were already working at GE as messenger boys. They went on to skilled positions at the Works. The youngest brother, Julius, took on jobs ranging from paperboy to pinspotter at a bowling alley. Soon he too was able to take the jobs of first messenger boy, then machinist, at the works. By the mid 1920s, the family, all still living together, had the very respectable income of $100 a week and owned a house and car. (276)
Finally, the Jandreau family had come from Quebec to New England in the 19th century to work in the textile industry. The first to move to Schenectady was Camille, not as a factory worker but as a skilled confectioner. He ran a confectionery shop in Schenectady,and his sons Elmer, Everett, and Eugene went to work at GE. At least one, Eugene, became a 1911 Socialist. Eugene's son Leo would in the early 1920s complete the GE Apprentice Program. By 1925 he was one of six members of the Jandreau family working for GE at the Schenectady Works. (277)
An exception to this ethnic diversity, GE family opportunity, and mobility was Schenectady's Black families. Schenectady appears not to have been a destination for the World War I era Black migration from the South. There were in the 1920s still probably about 200 Black employees at the Schenectady Works. They still almost all worked in the Transportation Department unloading materials and loading products, or in "the yard" maintaining the buildings and grounds, or at such tasks as elevator operator or janitor. They faded to even greater invisibility than before by 1920. Looking over the hundreds of workers' photos in the 1920s GE Schenectady Works News has not yet turned up a single Black face. No more photographs appeared of even Black ragtime performers or Black GE League baseball players.
The low level of Black workers at GE in the 1920s was not a characteristic of U.S. manfacturing as a whole. Nor was it necessarily an indicator or management prejudices. Labor historian David Montgomery notes that Black employment varied widely among 1920s U.S. manufacturing companies. Blacks made up one-fifth or more of the labor force in such Giant Corporations as Armour and U.S. Steel, while being near zero in others, such as GE and Remington Rand. Those company identities suggest that geography and technological maturity may have influenced the levels. (278)
A Schenectady legal battle highlighted the complexities of race at GE in the 1920s. Shankar Laxman Gokhale was 42 years old and the holder of master's degrees in physics and chemistry when he arrived in Schenectady from India in 1911 to work at the GE General Engineering Lab. He obtained his U.S. citizenship in 1920. Then, in 1925, under a racially restrictive new U.S. citizenship law, he was classified as a "Hindu" from Asia, and therefore, for legal purposes, non-White. His citizenship was revoked. "I am neither an American citizen nor a British subject, but a man without a country," he said in 1926, "an outlaw of the world, having been punished in this way for my unpardonable crime of pledging my allegiance to the only flag which at one time had offered to treat me as a 'free white person'." He then fought that decision all the way to the Supreme Court. He regained U.S. citizenship in 1928, continued a successful technical career at GE, while making lifelong contributions to Schenectady civic and progressive causes. (279)
In contrast to race, the area of gender, saw slight, highly selective, but genuine progress. There were about 2500 women at the works in 1924, about 15% of the work force. About 600 were secretaries or clerks, and 1400 were operatives. Some 500 did more skilled shop or laboratory jobs, ranging from operating drill presses to analytical chemistry. The operatives worked in areas ranging from radio assembly to coil winding to shaping porcelain insulators. They were almost all paid by the hour at significantly lower rates than men. They had no chance of entering the Apprentice Program, and little chance for even moving to a new craft. Dora Weaver, for example, had wound cable for the world's first electric chair in 1888, and was still winding cable in 1924. (In between, however, she had been a member of one of the Works's first all woman labor union locals.)
Women did work on some new technologies. "In the Works," began a Works News story, "radio means hundreds, yes thousands of girls, and girls mean radio." The women in the radio shop were, however, mainly doing the same sorts of things that women had been always doing at the works, such as winding coils or doing simple tests with gauges. "Testing with gauges is such monotonous work that men will not do it," explained Works Manager Charles Eveleth. "Women do not object to it… Women's ability to endure monotonous tasks is due to their having taken care of children on earth for thousands of years." (280)
Yet at the same time as most stereotypes were being reinforced, others were being challenged. Margaret O'Hara, for example, was a college graduate who got one of those analytical chemistry jobs. She recalled being treated like "one of the boys" in the lab, whether at putting together a radio from spare parts, or becoming one of the Works' most capable spectroscopists. After 1930, when both she and her husband were laid off, she was the one who was first called back. The GE Research Lab hired a succession of women researchers, beginning with that earlier mentioned MIT grad Edna May Best in 1905. The list came to include in 1920 GE's first female Ph.D., chemical engineer Margaret Brophy.
The most accomplished GE female scientist was Research Lab physicist Katharine Blodgett. She also had an intriguing personal story. Shortly before she was born in Schenectady in 1899, her father, a GE patent attorney, was shot and killed inside the family home. It remains Schenectady's most notorious unsolved murder. Effects of that event on Katharine Blodgett herself are unclear. In the 1980s, Elfrieda Underhill, daughter of a Schenectady psychic, told a friend that one participant in her father's seances was "that famous lady scientist from GE". (281)
Company memory of the 1899 tragedy may have contributed to Katharine Blodgett's welcome on visiting the GE Schenectady Works in 1917, as a recent Bryn Mawr graduate. She got special attention from chemist Irving Langmuir who recommended she take graduate studies. Returning to GE two years later with an M.S. in chemistry from the University of Chicago, she became one of Langmuir's research assistants. At his suggestion she went on in the early 1920s to the Cavendish Lab of the University of Cambridge, England. There she earned the first Ph.D. in physics awarded to a woman by that institution. Returning to GE, she became Langmuir's colleague at pioneering the field later to be called nanotechnology. That field involves understanding and manipulating matter on the scale of atoms or molecules. Among Blodgett's major contributions was the invention of layers one or a few molecules thick that could be coated on glass to reduce glare. This may have been the first nanotechnology product to be based on modern scientific understanding of atoms and molecules. (282)
Blodgett's GE engineering counterpart was Edith Clarke. After a 1909 degree in mathematics from Vassar she did two years of private tutoring and a year studying engineering at Wisconsin. She wanted to be hired as an engineer, but settled for a job as calculator at AT&T. Despite working with prominent AT&T theorist George Campbell, earning in an M.S. in electrical engineering from MIT, and then joining GE in 1919, she found herself, at age 36, still stuck with that calculator designation. So she left. Moving all the way to Turkey, she spent 1921-22 as Professor of Physics at the Constantinople Women's College. When GE invited her back in 1922, it was, at last, with the title of Engineer. Clarke proceeded to make major contributions to calculation of the performance of electrical transmission lines and other complex electrical systems. In the same manner as Steinmetz, the methods she developed greatly simplified the laborious calculations needed to design electric power systems. For this work, she became the first woman admitted to full membership in the American Institute of Electrical Engineers (AIEE). (283)
Slowly in the 1920s Clarke was joined by other women hired more directly as engineers. For example, Florence Folger, an MIT graduate, worked for the Turbine Engineering Department applying the laws of thermodynamics to improve the process of steam extractions from turbines. Susan Diehle, daughter of a GE Foreman, came to the Schenectady Works in 1923 with a B.A. in languages from Cornell. She then did postgraduate studies in electrical engineering at Union College and got a position in the Requisition Supply Engineering Department. (284)
Another small GE step toward gender equality occurred in 1922. After the Schenectady Works management chose 250 male workers to put in place that labor relations innovation called a Works Council, the men voted to add 18 female workers to the 84 men assigned with drawing up a constitution. That Work Council idea had been mandated by Swope. GE Vice President George Emmons explained that it "gives the employees a voice in matters pertaining to their employment and working conditions" and sets up a "procedure for adjustment" of disagreements between workers and management."
The constitution emerging from this management coordinated process was then submitted in 1922 to the entire Works labor force for a ratification vote. The workers decisively rejected it, with only 3549 for versus 5704 against. (285)
Swope reacted to this rejection by replacing the Works manager with one of GE's rising stars, Worcester Poly trained engineer Charles Eveleth. Eveleth had worked in the Railway Department, then successfully managed GE participation in the World War I Nahant antisubmarine project. He combined the personal touch and pragmatism of Emmons with outstanding engineering credentials. Extending that Emmons approach, he set out in 1923 to conduct informal group sessions with as many workers as possible, about 50 at a time. He would achieve, within a year, at least one goal of that constant presence on the factory floor. He noted that when he came in sight, workers would no longer either speed up to impress him, or slow down to show that they were not afraid of him. (286)
Reporting on these sessions, Eveleth tended to tell Swope what the President wanted to hear. The work force, Eveleth reported had fully bought in to the program of coordinated cooperation. They were ready for a Works Council. In 1924, a notice appeared in the Schenectady Works News. A Works Council would be put in place at Schenectady. This time no ratification vote was deemed necessary. The workers were invited to go directly to the nomination of council members. Caught off guard, opponents could only recommend writing on the nomination form "not acceptable". The company claimed to have counted only 13 who did so. Many, however, did not vote. While more than 90% of Lynn, MA employees voted in Works Council elections, only about 60% of Schenectady workers did.
By this time, Works Councils had became common in U.S. industry, with some 500 in place. Some, such as the GE Lynn works council, were highly successful meeting places where significant issues surfaced. Others were mere tokens. Where did GE Schenectady rank? A later student of non union employee representation, Bruce Kaufman, dismissed GE's works councils as "little more than window dressing or a stopgap device to keep out a trade union." He based this verdict on a study carried on at Schenectady in 1927 by a Cornell graduate student Margaret Meyer. She reported that the council lacked a grievance procedure. "Questions concerning wage rates were ruled out of order," she wrote, while "a complaint of "discriminatory layoffs of older workers was met by a pledge of 'we'll investigate it', after which nothing more was heard." (287)
Even more scathing was the evaluation of the Schenectady Works Council by the Schenectady Socialist newspaper The Citizen. It dismissed this "GE Company Union" as a "large sized joke" and the "Mussolini brand of industrial control." Imposed on the workers from above, the Council, said the Citizen, dealt only with trivial matters, while "nothing that will increase wages or cost the company any money is tolerated."
Another investigation of the Schenectady Works Council was carried out in 1929 by the Conference Board. One might expect a more favorable verdict from an organization of corporations to which GE belonged. The verdict was, however, at best lukewarm. It reported the worker response as mixed. Some approved of the Council, some "thought the Council was a management device, and were suspicious." One district showed its contempt by electing a representative of alleged "low intelligence" who did not speak English. The most general evidence of a lack of worker enthusiasm was continuing relatively low voter turnout, staying at about 60%. On the subject of wages, the Council still in 1929 had no formal role. The most that was offered was a "theory of management" that any changes in wage policy would be "discussed in advance" with the Council.
The Council had by 1929, however, established a grievance procedure. A Council representative played a role not altogether different from the one later played by a union shop steward. If the representative's constituent had a grievance about workplace policy, the councilman could represent that constituent at hearings starting with the foreman, and if necessary proceeding up the line all the way to works manager. Most such grievances concerned piecework. For example
In one department employing a large number of female workers, a woman [Council] representative, when she receives a complaint about an alleged "tight" rate tries the job herself or gets another woman of admitted ability to try it. If these experiments indicate that the rate is fair, she tells the complainant that she has no case. On the other hand, if she is convinced that the rate is too low, she goes to the foreman and seldom or never fails to secure review…
Other successes of the Council included improvements in the vacation plan, and the modification of the pension plan to include voluntary worker contributions. (288)
Swope occasionally appeared before the Schenectady Works Council in person to explain company policy, and to answer questions. He did not, however, rely on face-to-face exchanges with shop workers for inputs into employee relations policy. Instead, his main source on labor matters was a consultant with labor union credentials. John Leary had been fired from GE's Lynn plant for union organizing. That, however had been back in the 1890s. He had since become labor reporter for the New York World, under editor Herbert Swope, Gerard's then more famous brother. Leary's ties with the union movement remained strong, but they were with the old time AFL leaders, not with the younger generation. Leary's inputs to Swope ranged from the superficial to the comforting. Especially superficial was Leary's 1923 placement of company spies on factory floors. They mainly reported trivial violations of company policy. Swope expressed his dissatisfaction, and the espionage effort was short-lived. (289)
One of the spies, identified only as X, found in the shops more than he had bargained for. His undercover job, as a molder's helper at the Lynn Works, involved repeatedly filling a ladle with molten iron, carrying it 300 feet at a run, and then pouring it into a mold. "It required every inch of energy that I could expend" he wrote. "A molder (Italian) across from my machine, in very broken English, told me I wouldn't last over a week." Actually, he lasted one day. The next morning "I was so sore and stiff that every time I took a step I thought my back would break." He spent the day first sleeping late in his hotel room, then taking a Turkish bath. He never returned to that factory floor. (290)
More consequential and comforting were Leary's reports to Swope from annual meetings of the American Federation of Labor. AFL organizers there repeatedly told him how little progress they were making at GE. James Murray, chief IAM organizer at GE, for example, told Leary that "nobody can do anything in Schenectady now." Leary may have also played a part in an initiative involving the AFL and GE. In 1926 Swope and Young met privately with recently chosen AFL President William Green. Swope's biographer David Loth quotes Swope as saying that he proposed an initiative that "if successful, would have led to a single union of workers not only in the General Electric Company but in the plants of all electrical manufacturers." He adds that "Swope and Young had been trying to get union organizers into their plants." (291)
This claim, presented without supporting evidence, has led to some exaggerated interpretations. Historian Colin Gordon, for example depicts Swope and Young as using the Green meeting "to accomplish sponsorship of an industrial union." Gordon admits that the Loth version of the meeting might be taken "with a grain of salt". So it is worth presenting a first hand version by Swope himself. Here is an account from a memo written by him shortly after he, Young and Green met at 9:30 AM on 8 Dec 1926 at the Metropolitan Club of New York. Swope begins:
I suggested to Mr. Green, for his consideration, that now at a number of our works, comprising thousands of workers, the workers had an organization and a committee for collective bargaining [the world councils] and that he might try to have those organizations as auxiliary bodies, as it were, of the American Federation of Labor, to which they would pay maybe not the regular dues but partial dues, and these funds then could be used to further the movement in the shops where no organization existed at that time, and of course, to improve working conditions, hours, and wages in those shops.
That Swope proposal appears far from a call for a new industrial union. Rather, it seems to offer a role to the A. F. of L. in consulting with and supporting the Works Councils that GE had already established. "Such plans of representation," Swope went on to say, "were really industrial organizations." Swope and Green continued to meet, but apparently without progress. "I had a long talk with Mr. Green yesterday," Leary wrote to Swope in June 1928. "He will be glad to see you when he returns to New York." Leary added, however, that "on the matter of works councils he [Green] did not seem to be much interested." Nor was Swope then interested in welcoming a fully independent union into GE. It would take a Great Depression to change his mind. (292)
Higher on Swope's priority list than amplifying the worker's voice was burnishing the GE image. Again, this was an acceleration of initiatives already underway. The company had created a publicity bureau at Schenectady in 1896. In 1899 it had chosen a corporate logo, an art nouveau depiction of the letters GE. That distinctive monogram persists into the 21st century, even on products GE no longer itself produces. In 1918 GE launched its first corporate image advertising campaign, though only on the small scale of $100,000. (293)
That gradual adoption and tentative early corporate public voice met with the opposition of many managers. They feared that the name "General Electric" still connoted a giant octopus strangling its industry, much as the original Standard Oil had done, and U.S. Steel was still doing. That fear of being permanently branded with the words "electric trust" had supported a two part marketing strategy. Apparatus such as turbines and motors were sold to public utility and industrial manufacturing customers under the name General Electric. To those elite, knowledgeable, managerial customers, the name connoted technological excellence. To the ordinary consumers who bought lower tech GE products such as irons and stoves another marketing method was used. For these customers, perhaps lingering believers in that electrical trust accusation, GE's identity was hidden behind the name of a purchased company. These included Hotpoint irons, a company created by a California utility executive Earl Richardson, and Edison electric stoves, a venture unconnected with the Wizard but created by by a Chicago entrepreneur George Hughes. (294)
In 1922 Swope called a company conference, ostensibly to seek the opinion of the company's sales professionals on publicity and advertising matters. Actually, it was to inform them that GE image making was being taken out of their hands and put into those of an outsider. New York City advertising executive Bruce Barton was already a pioneer in image advertising, He would also soon write a best-selling business-themed biography of Jesus. He had earlier worked with GE Lighting on image ads illustrated by a young Norman Rockwell. First, however the GE participants were permitted to voice their fears. "I do not believe we ought to do anything so far as the GE Company is concerned to convey to the public, the ultimate consumer, that a great octopus is absorbing all the [appliance] lines,"said one. "You are attacked by the Federal and State courts and are apparently very unpopular and monopolistic," added another. "Institutional advertising at the present time would be a great mistake." Then Barton, speaking last on the program, banished those fears. "You have a great idea to sell," he said. "the electrical idea." To sell it "reputation is repetition". Repeat the message that electricity enables better lives — from "the flashlight that saved General Pershing's life on the fields of France" to "Jane Addams sitting in the cool breeze of one of your electric fans." Barton's proposal was accepted. Throughout the 1920's that "initials of a friend campaign" was repeated in numerous full page illustrated examples. They did not so much push specific GE products as tell how, thanks to GE and that electric idea, life was becoming easier, brighter and more productive. (295)
Meanwhile, at the apparatus end of the business, that electric friend was still using an unfair, likely illegal, advantage to gain an edge over competitors. Through the company's financial arm, Electric Bond and Share, GE had significant stockholdings in about one sixth of the electric utility industry. Those utilities bought 90% of their turbines from GE, compared to 60% purchased by other private utilities, and 35% purchased by municipally owned companies. "Attempting to sell to the Electric Bond and Share companies," complained a competitor, "is like selling to the General Electric itself." In the U.S. Senate, progressive Republican Senators led by George W. Norris of Nebraska were attacking GE both for its Electric Bond and Share advantage, and as "the water power trust". They accused the company, of conspiring to monopolize the so far undeveloped water power resources of the nation, especially the abundant resources on the St. Lawrence River and at Muscle Shoals, Alabama. Norris and the other critics favored the public development of water power, a preference that would ultimately be realized in the 1930s when Muscle Shoals became part of the Tennessee Valley Authority (TVA).
GE's response to that Senate criticism surprised the critics. In 1923, Owen D. Young had warned in an internal company letter that "the more powerful the Electric Bond and Share Company becomes… the more dangerous the situation becomes for the General Electric Company." Just as Norris's attacks were peaking, in December, 1924, the company announced that it was spinning off that Electric Bond and Share business. Ownership of that company was passed on to GE stockholders in proportion to their GE holdings. This represented a substantial sacrifice of profit by GE. Changes in the way the company reported its income from 1924 to 1926 makes the amount of sacrifice difficult to determine exactly, but it appears to have been in the range of from one to three million dollars per year. (296)
As a public image move, however, the tactic paid off. George Norris did successfully pass a Senate motion that the Federal Trade Commission investigate GE dominance over the electric power industry. That investigation, however, coincided with a changing of the guard at that hitherto antitrust watchdog. The Coolidge administration put in place a new FTC chairman friendly to big business. In 1927, the FTC report that Norris had requested found GE innocent of any monopolistic or other illegal actions in its electric utility related businesses. (297)
The "initials of a friend" campaign and the Electric Bond and Share divestiture show that Swope clearly had a public relations goal: to replace the harsh "electric trust" image with a softer, gentler one. Did he also have a product strategy?
Assertions that he did have been presented by GE itself, by Swope's biographer David Loth, and by business historian Alfred Chandler. They credit Swope with a 1922 strategic decision that GE would enter the large consumer appliance business (e.g, washers and refrigerators) in a major way under that corporate monogram. None of them presents any evidence of such a strategic decision. Not can any such evidence be found in Swope's voluminous business papers. Instead, the evidence supports the story given by Ted Quinn, who would later run the GE refrigerator business. "Gerard Swope started his administration by continuing the path of his predecessor," Quinn wrote. "He did not believe in long chances or quick changes." (298)
Swope began his regime not by imposing a new strategy, but by confirming and continuing the old one. GE's major products would continue to be turbine generators, electric motors, and light bulbs. These would be supplemented by everything else it took — transformers, switches, cables, controls, and the rest of what was labeled "supply" — needed to help electricity unleash the protean possibilities of energy conversion. Rather than launch a new GE-named business in major consumer appliances, Swope initially continued the process of not making refrigerators or washing machines. Instead, GE would sell electric motors to the companies that made those major appliances. The consumer products GE did sell would be less complex, mostly involved with converting electricity into light or heat, and continuing to bear such names as Edison, and Hotpoint.
To set a standard for GE sales, Swope had in 1922 asked the company's Accounting Department to determine GE's share of the U.S. electrical manufacturing business. The answer was that the share had increased from 18% in 1915 to 24% in 1920. Swope would in 1923 publicly depict GE as content to serve 25% of the existing electrical manufacturing industry. "It is much more important that you have a fair proportion of the available business yielding a fair and reasonable profit," he said, "than to get a little more business and have misunderstanding throughout the industry". (299)
In a 1926 speech, Swope further distanced himself from the idea that the goal of a corporation is profit maximization. "A business," he said, "is an institution for service". Its responsibilities are not just to its stockholders. As he put it:
I want to look at the Responsibilities of Modern Industry — first from the standpoint of the public; second from the standpoint of the employees, third from the standpoint of the shareholders; and fourth from the standpoint of the industry itself.
In that order, which implicitly if not explicitly seems to be a priority order, the responsibilities were as follows. For the public, the responsibility was "for service, for the quality of products, and the continual progressive reduction in product prices." For the employee
It comes down to adequate consistent and reliable wages, life insurance to remove uncertainty in death, proper housing and opportunities for saving, investments to provide pensions for old age. Those who put their lives in the business deserve this much
For the shareholder
the responsibility is for a fair, regular, uniform return so that when capital is needed for the extension of the business it will be forthcoming
And finally, for the electrical industry, the responsibility was mutual benefit, and fair competition. (300)
To get GE's fair and uniform return in an electrical manufacturing industry that was doubling in market size every decade, all GE had to was to keep its 25% share. Indeed, that is roughly what GE did. Between the short, sharp depression of 1921 and the Great Depression of 1929, GE sales doubled from about $250 million a year to about $500 million a year. This 100% increase far exceeded the 30% increase in the U.S. GDP.
The main product of the Schenectady Works remained large Steam Turbine Generators. Here GE's market share stayed above 50% as these giant, technologically complex machines grew steadily bigger and more efficient. The main challenge that business met was not competition. It was a dislocation of scale that appeared in 1919 and put the business in danger. Suddenly, rotating disks on some of the latest and largest turbines (20 MW) began breaking apart, sometimes in hazardous explosions. In 1924, such an explosion at the Schenectady Works killed one worker and injured others. At one time around 1920, GE turbine expert Glenn Warren later said, every one of the largest GE turbines in the hands of utilities had either broken down or been shut down in fear of such an accident.
The effort to meet this challenge showed the giant works of a giant corporation at its best. GE quickly assembled, under the leadership of Charles Eveleth, a team of experts with a wide range of skills. The work of one team member best captures the effort's spirit and strengths. (301)
Wilfrid Campbell was born in Wales and served a seven year apprenticeship on a British railroad, emerging as a draftsman. He came to the U.S. in 1904 and to the Schenectady Works in 1907. There he was recalled as a man of both "ready ingenuity", "genial good nature and unfailing optimism", and an open mind. For example, he was willing to entertain the possibility that he could communicate with his brother in South America by mental telepathy. He advanced in GE not by eccentricity, credentials, ambition or aggressiveness but by demonstrated ability at solving problems. His self taught expertise at analyzing vibration led to his choice as principal investigator of the turbine crisis. His efforts ranged widely. He visited the sites of failures. He studied broken disks and the fragments of disk explosions. He launched an experimental program, making rubber models of the turbine disks, spinning them, and recording their deformation with oscilloscope readings and spark photography. He verified results from these model tests with tests on actual disks. (302)
In this way, the team tracked down the source of the problem. It stemmed from an effort to increase turbine efficiency. To do so, disks had been made larger in radius, thinner, and lighter. This had introduced two sources of vibration, one related to air resistance, the other to material structure. Neither by itself caused a problem. But when they combined, a standing wave formed. It grew bigger and bigger until the strain on the disk became unsustainable. Once the failure process was understood, it became possible to predict what sets of disk dimensions caused the vibrations to combine dangerously, and to avoid those sets of dimensions. By 1923, Campbell was able to write that
examination and verification of predicted properties is at the basis of the remarkable freedom from vibrational troubles exhibited in the behavior of recently built turbines. (303)
He would not see this conclusion in print. Perhaps showing more concern for the turbines' internal health than for his own, he suffered in July, 1924, an attack of appendicitis, and died on the operating table. His memorial is a graphical method he developed for analyzing mechanical vibrations. It proved valuable far beyond its original turbine application. It lives on in mechanical engineering under the name Campbell Diagram.
This problem solving potential of the deep and diverse human skills of a large manufacturing works also showed up in 1922 in consideration of a more general issue. GE leaders were aware that some other companies, such as Du Pont and General Motors, were abandoning what historian Chandler later called the "Unitary" or "U-form" structure. This was that organization structure consisting of a single hierarchy, operating out of one or a few giant works. In its place was being put a decentralized structure, called by Chandler the "M-form". In the M-form, each separate business got its own work force at its own location with its own manager in full control. The top executives confined their efforts to decisions affecting the corporation as a whole such as allocating capital and strategizing.
The M-form established clearly defined lines of management authority, pushed day to day decisions down from corporate headquarters to the local manager, and avoided the threat of the whole company being shut down by natural disaster or a labor uprising at its biggest works. A GE study in 1926 weighed the advantages of these two forms of organization. A central focus was the Works, a central feature of the U-form. At issue was on one hand "the opportunity to become a specialist in a certain line" by entrusting every aspect of that line to an M-form factory. On the other hand,the U-form offered, at its giant works, "a more diversified line of production". Weighing the advantages, the experienced manufacturing managers leading the study recommended that the company stick to the U-form and the Works. They concluded that Works based diversity of the U-form outweighed in value the scattered specialization of the M-form Factories. (304)
While sticking with the U-form, Swope and his team did not shape it into a Chandler style pyramidal hierarchy. Indeed, Swope retained the Coffin-Rice dependence on committees, consensus and cooperation. Management responsibilities were loosely defined and often overlapping. "The best way of guaranteeing a succession of good managers" said Swope in 1923, "is to have them grow in the open." (305)
Organization charts were rare and sketchy. Olaf Vea, who became General Manager of GE's electric motor businesses, described Swope's management system this way:
Let the individual expand his responsibility to the extent he would even though he took over from others. We never saw an organization chart in those days. Expansion was restrained only by the similar expansion of responsibility by others. Those others would pick up if someone made a mistake and keep them from turning that little mistake into a big one. (306)
The U-form and Works also offered more stable employment. Workers could be shifted from products facing lower demand to those facing higher demand, rather than being laid off. In addition, as that 1926 report concluded. diversified manufacture would give the opportunity for the employment of both male and female labor which often would result in more than one member of a family being employed and give to such families a more satisfactory economic condition, and, by reason of better condition, a lesser demand on the company for wage increases.
A works personnel specialist put it more colloquially. "We could take the top guy in the family into turbine, and we could take the women who wanted work into the controls department." (307)
Rather than a single works, however, there would be a giant one at Schenectady, and lesser ones at Lynn and Pittsfield, MA, Bridgeport, CT, Erie and Philadelphia, PA, and Ft. Wayne, IN. This not only avoided the threat of a company shutdown by a accident or strike, but also offered the capability for competition between Works, such as one that had recently improved the performance of GE's induction motors. These manufacturing centers had works councils, benefit programs, and a new generation of managers. In 1922, a company study urged replacement of the "old, hard boiled drivers of men" with lower key, more professional college graduates. By the mid 1920's this new corps of what was sometimes derisively called "velvet glove" managers were in place. They included Eveleth at Schenectady, Nelson Darling (son of GE's corporate treasurer) at Lynn, and Harold Emmett (nephew of turbine pioneer W. L .R. Emmett) at Erie. (308)
They carried out a labor policy based on a model called "the Plan." The company, it proclaimed, wanted minimum cost per unit of goods produced. The worker wanted maximum pay per hour worked. The way to satisfy both was more piecework, more worker cooperation, and strengthened management coordination. "Labor relations," Swope said, "is only a question of management." He described "a machinist, a man who, to my mind is not adequately paid, a man of great skill… who cannot make any wrong operation without spoiling thousands of dollars worth of property." The problem, Swope went on to explain, was not only to get him to work error free, but also faster. To do this, get him to believe that he will earn substantially more money. Not merely $6 a day in place of $5, but $10 or $15 or more. The efficient and ambitious worker will thrive. The slackers and troublemakers will be weeded out.
The details of the Plan survive in the Swope Papers beginning with a statement that "the underlying principle of the plan is that each participant is a member of a group which is working to improve the Company's business," and moving on to a long descripton.The Plan was, however, summed up more informally succinctly in a letter from Swope to an engineering manager.
I notice that there is an increase in men, and an even greater increase in payroll. This means, of course, that we are paying our men more, which is good and of course the effect we look for as a result of employing better men is to have fewer of them. (309)
Swope had already in 1923 heard from his agent Leary that piecework was achieving one of its purposes. A Machinists' Union organizer told Leary that organizing Schenectady remained hopeless: "Why in GE they have machinists who are making $75-$80 a week. Anyone who is any good at all can knock down $50. They have piecework there you know." That new piecework Plan began in 1924 with a foreman rating all men in four classes. Class A, the most efficient and ambitious, immediately got a significant wage increase. Class B got a smaller increase. Class C got no increase, and was marked as first to be laid off during the next business downturn. Class D, the slackers and troublemakers, were to be laid off immediately. (310)
Meanwhile more rate setters were hired, and the piecework system was both expanded and overhauled. Eveleth claimed that in the year 1924 more than 15,213 piecework prices were changed. Use of detailed time studies had become common throughout the shop, which was, he wrote, "a change in conditions which is very desirable in order to set fair prices". Fairness was the key. "The danger is," Swope told an audience of foremen in 1927, "that on the piecework basis the piece rate hasn't been very well set, so that when the men have become more skilled and their earnings increased, the rates have been cut. There isn't anything more disastrous." Swope decreed that, once an initial rate has been established, a rate change could only increase pay, not cut it. This solved the problem in theory, but not in practice. Parts were constantly being redesigned, justifying a new rate setting session that could result in a de facto rate cut. Company piecework plans of the 1920s have often described as "scientific management", the application of plans designed by the new breed of management consultants. GE did indeed in some places adapt its own version of one of those plans, the Bedaux System. It did indeed occasionally contract with professional time and motion study consultants, such as Lillian Gilbreath. At Schenectady, however, instituting piecework was a more often improvisation than science. (311)
For example, piecework at the Schenectady Works iron foundry was instigated not by a scientific study, but by worker complaints about low pay. Louis Male, a former blacksmith, and 1911 Socialist who had been recently promoted to rate setter, was assigned to deal with the trouble. He called the foundry workers together, and, working with them on the spot, convinced them to accept piecework in place of the unsatisfactory day wage rate. Only then did Male take this agreement back to his department and develop a piecework plan. (312)
The end result was indeed more output from the foundry at lower unit cost. It was achieved by fewer, and better paid, workers. The excess employees were, however, not fired. Those who had performed well under the new piecework program were transferred to other areas of the Works to spread the piecework gospel. Those workers who resisted the program, "soldiering" just fast enough to get by, were transferred to dead end jobs and marked for layoff at the next business downturn. Schenectady employment was thus somewhat stabilized, fluctuating in the 20,000-25,000 range through the 1920s. In that decade total GE employment rose from 50,000 to 70,000.
How did this emphasis on productivity impact the ability to innovate? GE almost never itself invented what it helped innovate. The Works system instead strengthened two parts of the innovation process where giant corporations excelled. These were overcoming dislocations of scale, and absorbing without adverse consequences the cost of failed innovation attempts.
Most GE innovation efforts in the 1920s did fail. For example, GE had been prepared to make millions equipping Navy battleships with turbine-electric drives. Then, in 1922 the U.S. signed a naval disarmament treaty and the battleships were cancelled. Two GE powered electric drive cruisers were converted into the U.S. aircraft carriers, Lexington and Saratoga, and later saw action in World War II. Overall, however, the cancelled electric drive warship effort was a 1920s disappointment, only partly compensated for by sales of electric drives for peaceful vessels. Alexanderson's alternator also never became a major product. Vacuum tubes (also partly pioneered by GE) quickly took over in radio broadcasting. GE did put in place profitable vacuum tube transmitter and radio receiver assembly lines at Schenectady and other works. Profits were limited however, since the equipment was sold wholesale to RCA, rather than retail to consumers.
A third opportunity, electrifying main line railroads, also refused to take off. The railroads would be too short of capital to embark on electrification. Between the electrification of the Milwaukee, St. Paul and Pacific Railroad before 1920, and the electrification of large stretches of the Pennsylvania Railroad in the 1930s, no big railroad electrified a main line. When electric drive did later come in, it was via less capital intensive diesel electric locomotives, not fully electrified main lines. GE would later profitably enter this diesel-electric locomotive business, but not until General Motors had shown the way. Other delayed or failed innovation attempts included the effort to make a business of the turbosupercharger developed by Sanford Moss, which drew only minor defense department interest before the development of improved aircraft in the 1930s, the attempt to put sound into movies, where AT&T's system won out over GE's, and an eventually abandoned decades long effort to build a combined cycle turbine generator system using mercury vapor as a working fluid. (313)
The crop of good-growing-weather World War I innovations did result in one winner: the GE X-Ray business. Coolidge's patent on the pure electron discharge X Ray tube, and government suppression of the competing German patent, gave GE a legal monopoly for over a decade. This led to acquisition of the Victor X Ray Company, and a rapidly growing and profitable GE X Ray systems business.
It would be another GE innovation of the 1920s, however, that would bring in by far the biggest profits. This was mechanical refrigeration using electric motors. The independent inventor who brought the idea to GE was Marcel Audiffren. He was a French Roman Catholic clergyman and physics teacher. His new idea for refrigeration, patented in the 1890s, was called a "hermetically sealed" system. The entire electric motor driven cooling mechanism was sealed within a metal shell. This offered high reliability. It was, however, so expensive to produce as to be suitable only for large commercial uses such as wineries and restaurants. It was far too bulky and costly for the family kitchen. In 1912 GE bought the American rights to Audiffren's patents. The initiative here did not come from corporate strategy, but from the enthusiasm of James J. Wood, the manager of GE's Fort Wayne Works, a self trained "practical electrician" dating back to Thomson-Houston days. He personally led the building of GE's first version of the Audiffren refrigerator, then launched manufacture of it at Fort Wayne. This small and not very profitable business produced large and expensive refrigerators that were sold to commercial customers.
By 1920, a few other companies had developed home refrigerators. Guardian Refrigerator, for example, was started in 1916 by two former GE engineers from the Fort Wayne Works. They tried to adapt the Audiffren idea to home use, failed, and sold out to the young General Motors company. Dropping the Audiffren idea, GM marketed by 1920, with success, a simpler, less efficient, and less reliable model named the Frigidaire. Like the product of its main rival, Kelvinator, its cooling components were not sealed in an airtight shell. The system also had to be hooked up by a plumber to the house's water pipes. (314)
At Fort Wayne, a GE team led by chief engineer Clark Orr, stuck with the Audiffren concept. They did this on their own initiative, not by corporate directive. They came up by 1919 with a promising design. Twenty of these refrigerators were successfully tested in the homes of GE executives. The Fort Wayne team was unable, however, to lower production cost enough to offer a a competitive product. There matters stood in 1923. What brought this small Fort Wayne project to top level corporate attention was not corporate strategic planning. It was an offer by General Motors Frigidaire to buy the GE design. This offer went up the management chain to Vice President of Engineering Francis Pratt. When he conveyed the offer to Swope at a meeting of the GE Advisory Committee, Pratt urged rejection. GE had a uniquely promising technology on its hands and ought not to give it up. Owen D. Young agreed. (315)
Swope did not decide on the spot. He commissioned a study. It was carried out by engineer Alexander R. Stevenson. In great detail, Stevenson analyzed the technical challenges, investment requirements, and business opportunities presented by turning the Audiffren-Orr refrigerator into a product. His main conclusion was positive. If GE was willing to make the multi-million dollar, five year investment needed to perfect and mass produce this technically challenging design, it would have a refrigerator greatly superior to anything currently on the market. It would be a product that competitors could not soon match. At a sales price of $600, higher than current models yet affordable to many customers, GE could make big profits before others caught up. Swope accepted this conclusion. In 1925, two rival GE development projects were launched, one at Fort Wayne, the other at Schenectady. (316)
Here, as in the story of solving the 1919-1923 turbine crisis, what proved crucial was the presence in each Works of a wide range of skills that could be instantly applied. This was exemplified by a skilled craftsman who had turned himself into a problem-solving engineer. Chris Steenstrup was born in Denmark into a moderately prosperous family, Steenstrup chose shop apprenticeship over a high school school education. He moved to the U.S. at 16. Working as a machinist at an arms factory in Bridgeport CT, he quickly demonstrated his initiative as a problem solver. Then, idled by a strike, he moved on to GE at Schenectady. He moved up the management chain, to foreman and then supervisor, by inventing improvements in both the speed and the safety of machines. He did not forget his shop origins. He became known as a strong advocate for craftsmen who found their ideas appropriated by credit-hogging foremen. This role was formalized when Steenstrup was made chairman of the Schenectady Works Suggestion System. He also extracted special privileges from his valued status. He set up his own private machinery business in Schenectady while still a full time GE employee. Another Works craftsman followed Steenstrup's example, but was rebuked by management. When he asked why, the answer came back "you're not Chris Steenstrup." (317)
Steenstrup was the supervisor of a machinery design department in 1925 when the refrigerator opportunity arrived.He brought to that opportunity an unplanned advantage. A keen observer as well as an inventor, he had learned of a technological advance made at the GE Research Laboratory. It was the use of a welding torch fueled by pure hydrogen to produce a hot, clean flame ideal for brazing airtight seals in the manufacture of vacuum and X-Ray tubes. Against current assumptions, Steenstrup showed that this laboratory process could be scaled up for factory use. It proved effective on turbine parts. When used to make boiler tubes for GE's experimental mercury turbine it helped prevent leaks of hazardous mercury vapor. The hermetically sealed cooling unit of the new GE refrigerator provided a similar opportunity.
Steenstrup, however, went beyond merely providing his hydrogen brazing technique to both the Schenectady and Fort Wayne competitors. He also developed a third competing design, a higher performance, lower cost, modification of Orr's Fort Wayne design. In a three way cool-off competition, Steenstrup's model emerged victorious. Complaints that he had secretly employed a hidden container of liquid air were dismissed as sour grapes. It was Steenstrup's version of Clark Orr's version of Marcel Audiffren's original idea that became GE's "Monitor Top" refrigerator (so named because the cylindrical cooling unit on top resembled the turret atop the famed Civil War ironclad "Monitor"). (318)
Emphasis on Steenstrup's contribution illustrates, but also exaggerates. A crusty throwback with not only the demeanor but even the appearance of a snapping turtle, Steenstrup was a natural for the attention of GE publicists and later historians. A more balanced approach recognizes again the collective nature of innovation. Audiffren had an original idea, combining the thermodynamics of refrigeration with the possibility of hermetically sealing into a metal shell the then new AC induction motor. James J. Wood seized the opportunity for GE to license the invention. Clark Orr, similar to Steenstrup in background and contribution but less colorful and therefore less publicized, contributed the key design. The competitors at Kelvinator and Frigidare perceived in the 1910s that the time for the electric home refrigerator had arrived. When Frigidaire's representatives asked to buy GE's technology, GE Vice President of Engineering Francis Pratt intuited that GE should hang on. Engineer A. R. Stevenson supported Pratt's intuitions with data and arguments. Where does visible hand strategy come into this? It doesn't. Far from strategizing GE's entry into refrigerators, Gerard Swope's main contribution was not strategizing, but accepting the good advice of Pratt and Stevenson. While the GE Monitor Top was far from the first home refrigerator, it was the one from which today's refrigerators descend. The hermetically sealed idea was a giant step forward in convenience and reliability. "All you have to do is plug it in to an electric outlet and you can forget it," read a GE ad. "It hasn't any belts, drains, fans or stuffing boxes." (319)
Swope's next contribution was to pick the refrigerator department's top manager, Ted Quinn. He occupied, in one turbulent and unconventional career, first the role of one of GE's most effective and energetic leaders, then the role of one of its most angry and articulate critics. He was also the only GE employee to be fictionally portrayed as a major character in a drama by a major playwright (Arthur Miller's "An American Clock").
In some ways, Quinn was an obvious choice to run a new consumer business. GE had on 1925 one major consumer business, light bulbs. The most promising of the 1925 Lighting Department's Promising Young Men was Ted Quinn. In other ways, however choice of Quinn for a coveted management slot was less obvious. His father had been a union organizer. In an era when GE increasingly recruited its new professionals from colleges and universities, Quinn went to work after high school, learned accounting on the job, and then earned a night school degree. (320)
His practical experience helped him build on Stevenson's analysis. Quinn recognized that the key to success was a high volume of sales that would justify investing millions of dollars in assembly line production facilities. This also required confidence that human assets such as Steenstrup and the GE Research Laboratory would overcome the dislocations of scale likely to emerge. That scaling up took four years. There were many hiccups along the way. For example, when a first 1000 were tried out in 1927 with actual customers, Research Director Willis Whitney suggested to Quinn that he keep them close to Schenectady "to admire them." This good suggestion assured that the subsequent unexpectedly large number that failed were conveniently near the Works, to which they were returned for analysis and improvement. (321)
It was not until 1929 that the GE monitor top refrigerator became a reliable and profitable GE product. It did so just in time. It was the profits from refrigerators and light bulbs that would enable GE to pay dividends throughout the Great Depression. Following up on this success, GE would enter the home laundry field in 1930. Initially it sold machines purchased from the Hurley Machine Co. It followed up with machines of its own design, an electric washer in 1933 and an electric drier in 1934. (322)
Refrigerator success rode in part on business innovations previously unseen in GE. Quinn assembled a nationwide network of dealers, including some of whom, such as New York City promoter Rex Cole, were disdained by other GE managers as shallow flashy showmen. In action, they proved instead effective salesmen. To support their efforts Quinn put in place a warranty of unprecedented duration and comprehensiveness. To expand the share of consumers who could meet the falling but still steep price tag, Quinn recommending following the precedent of General Motors, which was using its automobile financing unit, GMAC, to finance purchase of Frigidaire refrigerators. In response, the GE Board of Directors approved in 1932 the creation of a "GE Financing Company" with an initial appropriation of $5 million. This was the origin of GE Financial Services, the business that would by the year 2000 earn half of GE's profits. (323)
Even in the the anachronistic, feudal organization of the Old GE, the refrigerator business was ramshackle. From an office building in Cleveland, OH, Quinn managed his national dealer network, his technology team in Schenectady and Fort Wayne, and assembly lines first within the Schenectady Works, then in Bridgeport, CT and Erie, PA. It would not be until the 1950s that this important consumer business got its own dedicated production site, Appliance Park in Louisville, KY.
The Schenectady assembly line was far from a model of safety conscious scientific management. John Lake was 16 years old in 1927 when he went to work on the Schenectady Refrigerator assembly line. "It was hell", he recalled later. "I put together the evaporator… We made 1250 evaporators every day. If you didn't make your 1250 evaporators in your eight hours, you stayed until you finished the 1250. You were working 50 or 60 hours a week. You didn't step away from your machine… the machines were jammed in. You could hardly move." He he recalls how the copper tubing and pickling solution turned his skin a green color "that didn't come off very well". In the summer, the temperature on the assembly line climbed to 120 degrees. Among the accidents Lake witnessed were a man next to him having his eye put out by a rivet, and another being "scalped" by a falling fan." It was tough to work in Refrigerator", Lake concluded. "But refrigerators put us through the Depression." (324)
Despite such manufacturing problems, a company safety program achieved a steady decline in significant accidents in the 1920s . At Schenectady this fall was from 170 in 1924 to 106 in 1926. Deaths also fell, to a low of only six in 1928. They would subsequently turn upward, if only mildly, until the depression. Regarding particular health and safety issues, GE typically did no worse than other giant companies. Like many, it failed to respond adequately to some major perils to workers' health, such as asbestos, silicosis from inhaling airborne particles, or the dangers to workers from the mercury used in vacuum tube technology and that experimental turbine. (325)
Sometimes, however, GE did better than average. For example, to complement GE's internal safety efforts, Swope hired as a consultant in 1925 an old friend from Hull House, Alice Hamilton, then at the Harvard School of Public Health. She undertook at Swope's request an inspection of GE works and factories. This was no token effort. Two very thick notebooks in the Swope Papers hold the many suggestions Hamilton made. "It was gratifying to find in every plant that I visited for the second time" Hamilton reported to Swope, "that all of almost all of the suggestions I had made on my first visit had been carried out." (326)
Swope pioneered not only in employee health and safety, but also in employee income security. In 1925, after extended study, he proposed an unemployment insurance plan funded by a deduction of 1% of each employee's weekly wage and a matching company contribution. This entitled the worker, if laid off, to collect half pay (up to $20/week) for up to 10 weeks. The plan was tried in the Schenectady Works in 1926. It was to go into effect company wide if approved by 75% of all workers. In 1926 that level of approval was not attained. In 1930 Swope would try again and this time get approval. (327)
By 1929, Owen D. Young was arguing that such progressive programs showed that giant corporations had already evolved into vehicles for community service. Fears of an electrical trust could now be buried. From the pulpit of an upper crust New York City church, Young proclaimed in 1929 that
Big Business has not justified the fears of our people. Exploiters no longer own the big concerns. Bankers no longer own them. Their shares, like motor cars, are spread from one end of the country to the other in every city and village. (328)
In Schenectady, that conclusion remained contested. Wages at the company already sarcastically labeled "Generous Electric" were, on a national basis, only average. Employment, as elsewhere, was precarious. Benefits, though generous by 1920s industrial standards, were minuscule by later 20th century standards. In the 1920s GE, the company's vision of a model worker was male, middle aged and paid by piecework. He had family members also at GE, typically in less skilled roles. Other units of this extended family, also GE employed, lived nearby. That ideal worker owned a house (perhaps with a second mortgage cosigned by GE), a car, a radio and perhaps even a refrigerator. He held GE life insurance, and had savings invested in GE's bond purchase plan. He could look ahead to membership in GE's Quarter Century Club, and, if he made it to 70, retirement with a half salary pension.
He also enjoyed the possibility of his children continuing through high school instead of going to work at 15. Daughters could then work in a GE office or shop until marriage. Sons might enter the GE Apprentice Program, or even go to college. Beyond that white male householder, GE's employment vision was narrow. Most female workers saw continued stereotyping of "women's work" and low wages. This overshadowed the slight but real progress by the outstanding few. For Black workers in the 1920s there were no opportunities even for an outstanding few. Restricted to outside cleanup and maintenance in "the yard," dangerous lifting and carrying in "transportation", and jobs as janitors or elevator operators, Black workers faded into deeper invisibility.
What, then, was Coordinated Cooperation? The cooperation part had three levels: cooperation by workers with their foremen and managers; cooperation by giant corporations with other corporations, including competitors; and cooperation by business with government, especially on the national level. The coordinator of all this would be the corporation itself, not the government or the public. Coordinated Cooperation was not consensus, but elitism. It was not philosophy but practicality. It was a way for GE to avoid three dangers: first, the public's "electrical trust" opprobrium, second the work force's unionization, and third the government's intervention.
Yet coordinated cooperation was also adaptatable. Later historians such as Daniel Nelson, Andrea Tone, Gerald Zahavi and Stephen Meyer have seen such efforts as more than merely paternalism or union busting. Management sometimes sought the workers' cooperation by genuine efforts at creating a better workplace. This was seen at GE, for example, in Swope's not only hiring Alice Hamilton as a consultant but also taking her advice. It was also seen in the Schenectady Works Council first lacking, but then adopting a grievance procedure. (329)
One can only speculate how coordinated cooperation might have evolved if the calm economic seas of the 1920s had continued. A possibility is suggested by the later experience of Europe. A 2011 study reported that in Europe Works Councils are in place. In some places, such as Germany, they are mandated by Government. They coexist with labor unions, which in turn are major constituents of labor or left wing political parties. Researcher Edward Lazear concluded that these European Works Councils "involve real information sharing by companies, and real engagement in cooperative solutions." (330)
In conclusion, perhaps coordinated cooperation was, and would have continued to be, mere hypocrisy. Perhaps, however, from pretending to take the workers' interests to heart, management might have evolved toward actually doing so, especially if the economic calm of the 1920s had continued. The calm did not, however, continue. In the difficult 1930s, coordinated cooperation would have different, but not entirely negative, consequences. It would be a way station, from which a few constructive corporate minds could glimpse prospects for more genuine cooperation, and methods of more democratic coordination.
Gerard Swope would become one of those constructive minds. Two others emerged on the factory floor, members of two of those earlier mentioned GE-employed extended families. Leo Jandreau, followed a conventional path in the 1920s. His few mentions in the Works News were for such things as his effective recitation of "The Boy Stood on the Burning Deck" at a Turbine Department Christmas Party. Meanwhile, he graduated from the Apprentice Program, worked skillfully as a toolmaker, and received, and may have briefly tried out, a promotion to foreman before returning to the bench.
Julius "Joe" Emsback, the youngest son of Hungarian immigrants Frank and Theresa, had a less conventional story. He was also an Apprentice graduate, but, as he admitted later, a machinist of only average skill. His attention was captured instead by his sub foreman, a longtime member of the Socialist Labor Party who, Joe said, "thought Daniel De Leon was the fount of all knowledge." In 1927, at the age of 23, Joe, who had left school early to help support his family after his father's death, obtained a leave of absence from GE to attend Schenectady High School. He completed the four year course in just two years, with a 90 average. In 1929, GE initiated a set of education financial aid programs for workers and their children. This included a Charles Steinmetz Scholarship Program, and a Gerard Swope Loan Fund. Joe became a recipient of a Swope Fund college tuition loan. (331)
In September of 1930, just as GE's era of coordinated cooperation was coming to an end, the GE Schenectady Works News carried the following item by its reporter in the Tool Design Section.
We are pleased to welcome in our midst for a short period Joe Emspak. Joe is returning to Union [College] for the fall semester.
Before long, his Swope loan paid back in full and his education completed in ways that his employer had not anticipated, Joe would be back. (332)
Notes
- Memo from C. P. Steinmetz to Gerard Swope, attached to Swope to C. P. Steinmetz 28 Mar 1923. Swope Papers. MiSci. See also Remscheid, Emil. 1977. Recollections of Steinmetz. GE R&D Center, p. 22.
- Sklar, Martin. 1960. Woodrow Wilson and the Political Economy of United States Liberalism. Studies on the Left. 1960. McQuaid, Kim. 2002. A Response to Industrialism. Beard Books. Brandes, Stuart. 1984. American Welfare Capitalism, 1880-1940. Chicago. Schatz, Ronald. 1983. The Electrical Workers. Illinois. The Swope quote is from "Excerpts from talks to employees." Young, Owen D. and Swope, Gerard. 1930. Selected Addresses. Swope, Gerard and Owen D. Young. GE. p. 97.
- Works News 22 Oct 1920. p. 3. Charles G. Marcy, Interview General Electric Hall of Electrical History, MiSci 23 Oct 1975.
- Works News 1 Feb 1924. The entire story is summarized in Works News 15 Feb 1929. pp. 4-5.
- Swope, Gerard. 1923. Speech to Camp Emmons, Association Island. Collected Speeches of Gerard Swope.
- See, e.g. Box 3 and Box 36. Swope Papers. MiSci. Quote is from The First 50 Years of the Elfun Society. 1978. GE. Copy in Schenectady County Historical Society. L. D. Defevre to Swope 6 Nov 1938, Swope to Managers List 2 Dec 1938 and other items in Swope Papers. Box 3, Folder 102.4. MiSci.
- Swope, Gerard. Speech to Camp Inca 8 July 1936. Swope Papers, Box 7, F2F 112, 2AB. MiSci.
- Details of these perks are on Electrical Fund #1, Nov 1925. Swope Papers. Box 36. Folder 420.9.1 #1. MiSci. The First 50 Years of the Elfun Society. 1978. GE. Copy in Schenectady County Historical Society.
- Gitelman, H. M. 1984. Management's Crisis of Confidence and the Origin of the National Industrial Conference Board, 1914-1916. Business History Review. 58. 153-177.
- Magnus W. Alexander to Edwin W. Rice, Jr. 19 May 1919. Rice Papers. MiSci.
- Dawley, Alan. 2003. Changing the World. Princeton. p. 203.
- National Industrial Conference Board. 1919. A Case of Federal Propaganda in Our Public Schools. NICB.
- Report of the Special Conference Committee. July 24, 1919; Dec. 15, 1922. Dec. 6, 1923.
- Details of Young's early career are taken from the most thorough biography, Case, Josephine Young and Case, Everett. 1982. Owen D. Young. Godine. The Eleanor Roosevelt quote is on p. 343.
- Aitken, Hugh G. J. 1984. The Continuous Wave. [free PDF viewer required] Princeton. esp. pp. 339-342. Case, Josephine and Everett. 1982. Owen D. Young. Godine. esp. pp. 177 -185. Beilby, Kenneth. 1996. The General: David Sarnoff and the Rise of the Communications Industry. [free PDF viewer required] pp. 45-58.
- Memorandum E. W. Rice to O. D. Young. 30 Oct 1929. Young Papers 1-17. MiSci.
- Case, Josephine Young and Case, Everett. 1982. Owen D. Young. Godine. p. 195.
- Wickersham, George. 1920. Industrial Stability and the President's Second Industrial Conference. Annals American Academy of Political and Social Sciences. 90. 134-137. New York Times. 2 Dec 1919.
- Brownell, Atherton. 1919. General Electric Industrial Relations. Owen D. Young Papers. Van Horne House, Van Hornesville, NY. King, MacKenzie. 1919. Confidential Memorandum Respecting Employees' Committees in the Works of the General Electric Co. Item C26857. HG 26.34. File 196. MacKenzie King Papers. Public Record Office of Canada. Ottawa, Canada.
- Schenectady Gazette 2 Jan 1900, p. 1. New York Times. 24 Sept 1907.
- Loth, David. 1958. Swope of GE. Simon & Schuster.
- Robert D. Kobin to Gerard Swope 13 June 1939; Swope to Kobin 15 June 1939. Box 3 Folder 102.4 Swope Papers. MiSci.
- Swope, Gerard. Speech to International Affiliates Conference, May 1919. Owen D. Young Papers 1-10. Van Horne House, Van Hornesville, NY.
- Swope, Gerard Jr. Summary of GE international Business. GE. 1973. p. 3. MiSci.
- Supply of Electrical Equipment and Competitive Conditions. FTC, U.S. Senate Doc. #46. 1927. Epstein, Barbara and Newfarmer, Richard. International Electric Association: a Continuing Cartel. Report for the Use of the Committee on Interstate Commerce. House of Representatives. June 1980 96th Congress, 2nd Session. Committee Print 96-IFC-49.
- Employees Leaving Service During 1924. Folder 113.3 C. Swope Papers. MiSci. Ripley, Charles. 1919. Life in a Large Manufacturing Plant. G.E.
- Information in 1920-1930 Schenectady Occupational Directories, Schenectady County Historical Society. Directories, and Family File, SCHS. Warrensburg, NY News Thurs Nov 29 1956; Schwenker Family File, SCHS, Schenectady Gazette, 10 May 2013.
- Sarnacki, Ray. 2020. A Brief History of My Grandparents. Project to Discover Schenectady County's Eastern European Roots Newsletter, Vol. 7, No. 3. (On line). Nigriny Family File, Schenectady County Historical Society. Works News 2 May 1924.
- Gabriele Family File, Schenectady County Historical Society. Works News 20 Nov 1931, p. 14, 7 Apr 1927 p. 15, 4 June 1934 p. 4.
- Much of the information on Manginos came from the History Forge Project and Mangino Family File at the Schenectady County Historical Society, plus information from Census records, Schenectady Occupational Directories and Works News 20 Nov 1931, p. 14, 7 Apr 1927 p. 15. 4 June 1934 p. 4
- Julius Emspak Oral History. Columbia University.
- The early history of the Jandreau family in the U.S. has been pieced together from U.S. Census records and Schenectady Occupational Directories.
- Montgomery, David. 2024. A David Montgomery Reader. U. Illinois. p. 188.
- Shifting Definitions of Race and Citizenship: The Case of Shankar Gokhale. Grems-Doolittle Library Collections Blog. 7 Jan 2013. SCHS.
- Works News 4 July 1924.
- Interview with Alice O'Hara 10/25/77. Evening Star 14 Feb 1898. The psychic story was told to the author by Mrs. Underhill's friend, Bonnie Wise.
- Interview with Blodgett by Leonard Reich 21 June 1977. Interview by the author with Katharine Blodgett's nieces, Katharine Gebbe and Katharine Alkena.
- Brittain, James E. 1985. From Computor to Electrical Engineer. IEEE Trans. Education 28. 184-189.
- Works News 16 Feb 1923 p. 11.2., 18 May 1923. p. 12.
- Works News 6 Jan 1922 p. 1, 3 Mar 1922, 6 April 1922.
- Works News 19 Jan 1923. Edmund Eveleth of Dothan, AL generously shared with me family papers and his memories of his father. Eveleth to Swope 27 Dec 1923; contents of Swope Papers Box 17 Folder 113.22. MiSci.
- Kaufman, Bruce. Nonunion Employee Representation. 2000. Sharpe. p. 49.
- Citizen 20 May 1927. Special Conference Committee. Representation in the GE Company. 6 Sept 1929. Swope Papers Box 20. Folder 113.4 MiSci.
- The program, labeled a "Survey of Labor Conditions" is in Swope Papers Box 17 Folder 113.2 J. and Swope to Miss A. A. Marratt 12 May 1923. Swope Papers. MiSci.
- "X" to Leary, forwarded by Leary to Swope, 14 May 1923 Swope Papers. MiSci.
- Leary to Swope 18 Oct 1923, 19 Aug 1925. Swope Papers. MiSci. Loth, David. 1958. Swope of GE. Simon & Schuster. p. 171-172.
- Loth, David. 1958. Swope of GE. Simon & Schuster. p. 171-172. Gordon, Colin. 1994. New Deals. Cambridge. p. 119-120. Swope's account of the 1926 meeting is included in Labor Relations in the General Electric Company 9-25-35. Box 17. Folder 113.2-I. Swope Papers. MiSci.
- Those early efforts are described in Neil Reynolds Collection, Box 1, Folder 8, Series 1. Extracts from Sales Committee Minutes. esp. p. 5.
- GE Appliance Specialist's Sales Manual. (Und.) Section #1: The History of the Edison Electric Appliance Co. MiSci.
- Meeting of Gen Elec Co its associated interests and distributing jobbers held at the Mohawk Golf Club July 25 26 1922; G. Swope to Bruce Barton 28 Feb 1923. Swope Papers. Folder 201.2 B. MiSci. See also Marchand, Roland. 1998. Creating the Corporate Soul. California, esp. pp. 123-153.
- O. D. Young to E. W. Rice. 14 Mar 1923. Young Papers. 1-97. MiSci. Board Minutes 30 Dec 1924. p. 302.
- MiSci. Senate Resolution 329 (68th Cong., 2nd Session) adopted 9 Feb 1925, summarized in New York Times 4 Feb 1925. p. 34. Annual Reports of The Federal Trade Commission for the Fiscal Year Ended 30 June 1926, 1927, 1928. New York Times 13 June 1926, p. 38, 3 Apr 1927. Federal Trade Commission Report 12 Jan 1928. Davis, G. Cullom. 1962. The Transformation of the Federal Trade Commission, 1914-1929. Mississippi Valley Historical Review. 49. 437-455.
- Loth, David. 1958. Swope of GE. Simon & Schuster. p. 117. Chandler's claim, based on vague references to Fortune Magazine, GE Annual Reports and Loth's biography of Swope, of Swope's "explicitly defined" strategy of entering the appliance business is Chandler, Alfred D. 1962. Strategy and Structure. p. 365. Loth's claim that Swope, from the first wanted to convert GE from simply a producer of heavy equipment to mainly a consumer products company are presented, also without evidence, in Loth, David. 1958. Swope of GE. Simon & Schuster. pp. 126 and 117. GE's statement is in Oakes, Eric. 2017. GE's History of Innovation. GE, online. Quinn, T. K. 1953. I Quit Monster Business. Exposition Press, pp. 77-79.
- Swope to Charles Neave 19 June 1922. Swope Papers Box 32. Folder 422B. MiSci. Swope, Gerard. 1923 Speech to Electrical Manufacturers Club, Hot Springs, AR 15 Nov 1923 in Young, Owen D. and Swope, Gerard. 1930. Selected Addresses. GE.
- Swope, Gerard. 1926. Speech to Associated Business Papers Convention in Young, Owen D. and Swope, Gerard. 1930. Selected Addresses. GE. p. 35.
- Doran, John B. "Recollections of My Career in the Turbine Department at the GE Company" 25 Oct 1971.
- Campbell's biography accompanied his article Campbell, Wilfred and Heckman, W. C. 1924. Protection of Steam Turbine Disk Wheels from Axial Vibration. Trans. ASME. pp. 31-60.
- Campbell, Wilfred and Heckman, W.C. 1924. Protection of Steam Turbine Disk Wheels from Axial Vibration. Trans. ASME. p. 62.
- Erben, H. F. T., Dalton, William, Maxwell, G. S. 1926. Report on the Mfrg Situation 2 Aug 1926. MiSci. Simmons to F. C. Pratt 2 Aug 1926. Swope Papers. MiSci.
- Swope, Gerard. 1923. Speech to Camp Emmons, Association Island. Collected Speeches of Gerard Swope.
- Vea, Olaf F. Oral History 24 Oct 1978. General Electric Hall of Electrical History Collection, MiSci.
- Louis Male, Interview 2 Sept 1979. General Electric Hall of Electrical History Collection, MiSci.
- Labor Report 30 April 1922. Swope Papers. MiSci.
- Swope to H. W. Allen 29 July 1926. Swope Papers Box 10 File Folder 110.1 #1. MiSci. That folder, and many more in Boxes 9-11 spell out the Plan in greater detail.
- Eveleth to F. C. Pratt. Schenectady Works Annual Report for 1924. Swope Papers. B. L. Delack to Swope 13 Nov 1928 and 6 Mar 1930. Box 17. Folder 113.23 Swope Papers. MiSci.
- Swope, Gerard. 1923. Speech to Camp Emmons, and 1922. Notes from Talks to Foremen. Both in 1930. Collected Speeches of Gerard Swope and Owen D. Young. C. Eveleth to F. C. Pratt. Schenectady Works Annual Report for 1924, 27 Feb 1924, Swope Papers. MiSci.
- Louis Male, Interview 2 September 1979. General Electric Hall of Electrical History Collection, MiSci.
- W. L. R. Emmet to F. C. Pratt. 30 Dec 1922. Swope Papers. Folder 422 A. MiSci.
- Donaldson, Barry and Nagengast, Bernard. 1994. Home Refrigerators. American Society of Heating, Refrigerating & Air Conditioning.
- Linkous, Clovis E. 1941. General Electric at Fort Wayne Indiana. Gateway, especially pp. 176-180, 195. Francis Pratt to Gerard Swope 17 Aug 1923. Included in Stevenson, A. R. 1923. Report on Domestic Refrigerating Apparatus. GE Technical Information Exchange. MiSci.
- Stevenson, A. R. 1923. Report on Domestic Refrigerating Apparatus. GE Technical Information Exchange. Holliday, William L. 1994. The GE Monitor Top Refrigerator. [free PDF viewer required] ASHRAE Journal. Sept. 1994, pp. 49-55.
- Interview with Carl Steenstrup (son of Chris). 1986. 16A Steenstrup File. MiSci. Harry Hillis Oral History. 11 July 1975. General Electric Hall of Electrical History Collection, MiSci. Steenstrup, Christian. 1941. The Importance of Effective Leadership. Talk to Association of Suggestion Systems.
- Truman S. Fuller, Interview 22 Mar 1978. General Electric Hall of Electrical History Collection, MiSci. The cool off competition is described in Whitsel, H. A. 1926. Domestic Refrigerator. GE Technical Information Exchange. The liquid air story is in James F. Young Oral History. 1 July 1977. General Electric Hall of Electrical History Collection, MiSci.
- An excellent treatment placing GE's refrigerator in the context of a technical path not taken, the gas-powered refrigerator, is Cowan, Ruth. 1985. How the Refrigerator Got its Hum. [free PDF viewer required] In MacKenzie, Donald and Wajcman, Judy. 1985. The Social Shaping of Technology. Open University Press. pp. 202-219. See also Rees, Jonathan. Refrigeration Nation. Johns Hopkins. especially pp. 150-153. Advertisement reproduced in Blackford, Mansel and Kerr, Austin. 1986. Business Enterprise in American History. Houghton Mifflin. p. 268.
- Quinn, T. K. 1953. I Quit Monster Business. Exposition Press. Quinn obituary, New York Times 29 August 1961.
- Quinn, T. K. 1953. I Quit Monster Business. Exposition Press. p. 93.
- Elfun Historical Society. 1987. A Walk Through the Park. Elfun, p. 20.
- GE Corporate Administrative Collection. Series Minutes. 23 Sept 1932. MiSci.
- Lake, John. Interview 11 May 1976. General Electric Hall of Electrical History Collection, MiSci.
- E. Z. Steever to H. F. T. Erben. 10 May and 9 June 1926. C. C. Conover to Gerard Swope. 2 May 1929. Swope Papers. Box 25.A. Folder 118.14. MiSci. GE and the silicosis issue is in Rosner, David and Merkowitz, Gerald. 1991. Deadly Dust. Princeton. p. 76. In her interview, Alice O'Hara describes taking part in a company wide test of mercury in employees's bodies, and the company alarm at the high levels measured. Interview with Alice O'Hara 10/25/77.
- Alice Hamilton to Swope 1 June 1925. Swope Papers. Box 20. Folder 113.81 B. MiSci.
- The Unemployment Plan's progress is described in Folder 113.3C, Swope Papers, MiSci. The 1930 GE Annual Report, p.20 describes how the Unemployment Plan was offered company wide but "at that time unemployment was considered remote, and the plan was not accepted". Its 1930 acceptance is described in Works News 15 Aug 1930 p. 3.
- Owen D. Young to Dr. Frederick Church in New York. 20 Jan 1929 in Young, Owen D. and Swope, Gerard. 1930. Selected Addresses. GE. p. 35.
- Nelson, Daniel. 1987. The Company Union Movement, 1900-1937. A Reexamination. [free PDF viewer required] Business History Review. 56. 335-357. Tone, Andrea. 1997. The Business of Benevolence. Cornell. Zahavi, Gerald. 1988. Workers, Managers and Welfare Capitalism. Illinois. Meyer, Stephen. 1981. The Five Dollar Day. Albany: State University of New York Press.
- Lazear, Edward. 2011. Inside the Firm. Oxford. pp. 120-127.
- Works News 18 Oct 1929.
- Works News 5 Sept 1930.