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The National Association of Manufacturers and Public Relations during the New Deal

Published online by Cambridge University Press:  11 June 2012

Richard S. Tedlow
Richard S. Tedlow
Affiliation:
Doctoral Candidate, American History, Columbia University
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Abstract

The National Association of Manufacturers was influential in establishing public relations as a permanent fixture in American corporate life. The Association took up the use of public relations in the depths of the depression, promoted its use strongly, and increased its stature.

Type
Research Article
Information
Business History Review , Volume 50 , Issue 1 , Spring 1976 , pp. 25 - 45
Copyright
Copyright © The President and Fellows of Harvard College 1976

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References

1 Mowry, George E., The Era of Theodore Roosevelt (New York, 1962), 134–140. The phrase quoted is Roosevelt's.Google Scholar

2 Sutton, Francis X. et al. , The American Business Creed (New York, 1962) 275.Google Scholar

3 See Hiebert, Ray E., Courtier to the Crowd (Ames, Iowa, 1966)Google Scholar; Raucher, Alan, Public Relations and Business, 1900–1929 (Baltimore, 1968)Google Scholar; Goldman, Eric F., Two-Way Street (Boston, 1948).Google Scholar

4 See Bernays, Edward L., Crystallizing Public Opinion (New York, 1923)Google Scholar, and Biography of an Idea (New York, 1965).

5 See Page, Arthur W., The Bell Telephone System (New York, 1941 ).Google Scholar

6 Perkins, Milo, “Grab the Torch, Men of Means, Grab the Torch!” Nation, vol. 139 (November 28, 1934), 619.Google Scholar Donaldson Brown, vice chairman of the board of General Motors, was disturbed about the stridency of the NAM and worked within the Association to moderate it. Heald, Morrell, The Social Responsibilities of Business (Cleveland, 1970), 196–197.Google Scholar

7 See D'Emilio, John, “The Committee for Economic Development” (Master's Thesis, Columbia, 1972).Google Scholar

8 Despite the fact that other companies have always looked to Bell as the prime example of what good public relations could do, Page, even during the twenties, sought to differentiate AT&T from other big businesses so it would be able to withstand a tide of antibusiness sentiment. AT&T therefore did not directly participate in the NAM's campaign to save free enterprise. However a subsidiary, Western Electric, did belong to the Association. Page, Arthur W., “Public Relations”, General Operating Conference, May, 1930, vol. 5, 1Google Scholar, Arthur W. Page papers, State Historical Society of Wisconsin, Madison, and see Barton, Roger, “What Should a Business Do about Public Relations?” Advertising and Selling (October, 1946).Google Scholar

9 Steigerwalt, Albert K., The National Association of Manufacturers, 1895–1914 (Grand Rapids, Mich., 1964), 42Google Scholar; Circular of Information # 23, February 10, 1898, 1–2, papers of the National Association of Manufacturers, Eleutherian Mills Historical Library, Greenville, Wilmington, Del. (cited hereinafter as NAM papers).

10 It should be noted that even before this change in leadership, the Association recognized “the value of printers' ink” and conducted “general propaganda.” It is not correct to call the early NAM, as Wiebe, Robert H. did, a “relatively quiet organization.” Businessmen and Reform (Chicago, 1962), 25.Google Scholar

11 Proceedings of the 19th annual convention of the NAM, 1914, 167–168; Proceedings of 16th NAM, 1911, 87; Bonnett, Clarence, Employers Associations in the United States (New York, 1922), 340–342.Google Scholar In addition to the helpful discussions of early Association propaganda by Wiebe, Steigerwalt, and Bonnett, see Taylor, Albion G., Labor Policies of the National Association of Manufacturers (Urbana, Ill., 1928)Google Scholar and Wakstein, Allen M., “The National Association of Manufacturers and Labor Relations in the 1920s,” Labor History, vol. 10 (Spring, 1969), 163–176.Google Scholar Considering the amount of research on NAM publicity from 1895 to 1930, it is surprising that so little has appeared about it during the New Deal.

12 The NAM and Its Leaders (Privately printed, 1947), 7, Drawer #11, File Cabinet #6, NAM papers; “Renovation in NAM: Industry's Intransigent Spokesman Now Says ‘Yes’ as well as ‘No,’” Fortune (July, 1948), 75.

13 Letter from Board of Directors to NAM membership, December 18, 1931; Executive Committee Meeting of Board of Directors, vol. 19, 83–85, Minute Books of the Board of Directors of the NAM, office of the NAM, New York City (cited hereinafter as BOD). Edgerton, however, was to enjoy his new position for a mere six months. Minutes of Executive Committee Meeting of BOD, June 23, 1932, vol. 19, 159. These minute books were made available to me with the help of Dr. Richmond D.Williams of the Eleutherian Mills Historical Library and through the kindness of Mr. John R.McGraw of the NAM.

14 Minutes of BOD meeting, December 18, 1931, vol. 19, 73–75.

15 The report of the LaFollette Civil Liberties Committee stated that the Brass Hats organized themselves after the 1932 election. They then chose the NAM as the proper vehicle for “business salvation” and restructured it in 1933, making Lund president. Actually, Lund became president at the end of 1931, and the restructuring took place soon thereafter. The logic of events and my reading of the minutes of the meetings of the Board of Directors from 1931 to 1934 suggest that the Brass Hats were born in 1931 and became involved with the NAM not to “save” business but rather to fill the leadership void in the collapsing organization. Not till September 1933 did they recognize the necessity of having a public relations spokesman for industry or the potential of the NAM for that role. See U.S.Senate, Committee on Education and Labor, Labor Policies of Employers Associations, Report No. 6, Part 7, 76th Cong., 1st Sess., 1939, 211 (cited hereinafter as Labor Policies).

16 Ibid., 211–212; Stalker, John N., “The National Association of Manufacturers” (Ph.D. Dissertation, University of Wisconsin, 1950), 3.Google Scholar

17 BOD minutes, November 15, 1932. The question of a “program of industrial education” was given lengthy consideration at the February 12, 1932 meeting, when a staff member submitted a five page memorandum inspired by the “dissemination of economic errors.”

18 “CONFIDENTIAL. A Consideration of the Policies and Programs of the National Association of Manufacturers by Robert L. Lund, President, Sept. 7, 1933.” BOD, vol. 20, 119.

19 This refrain has been sung throughout this century. As early as 1916, an official of the NAM called a “campaign of education” a “hackneyed phrase,” yet in 1974, M. A. Wright, chairman of the board of Exxon, rued the fact that “Business has failed to do an effective job in communicating its point of view to the general public.” This explanation of business unpopularity has the obvious advantage of not requiring businessmen to change their actions. It assumes that there exists a harmony of interests in an economy characterized by free enterprise (an important concept to which we will return) and that the only cause for dissatisfaction is an inability to see this harmony, or as some of the more direct public relations men put it, “economic illiteracy.” Proceedings of 21st NAM, 1916, 160; Wright is quoted in J. K. Galbraith's review of The Assault on Free Enterprise, New York Times Book Review, September 15, 1974, 7; Hill, John W., The Making of a Public Relations Man (New York, 1963), 169–170, 174–178, 220–222.Google Scholar

20 Schlesinger, Arthur M. Jr., The Coming of the New Deal (Boston, 1958), 423–425Google Scholar; Brown, Linda Keller, “Challenge and Response” (Ph.D. Dissertation, University of Pennsylvania, 1972), 174–179.Google Scholar

21 An NAM in-house historian gave great emphasis to the immediacy of the Association's opposition to F.D.R.: “At 1:08 p.m. on March 4, 1933 the New Deal began. Business overnight came under attack, and, as president of the NAM, Robert L. Lund became one of the leaders of the defense.” The NAM and Its Leaders, 8. The activities of the Brass Hats suggest that the New Deal “honeymoon” was not quite as ardent an affair as some have supposed.

22 When Selvage was first hired, the titles “Publicity Director” and “Director of Public Relations” were apparently used interchangeably. “Report of the Secretary,” December 7, 1933, BOD, vol. 20, 139.

23 Labor Policies, Report No. 6, Pt. 5, 154–155.

24 Proceedings of 39th NAM, 1934, 359–360, 370–372.

25 NAM Expenditures on Public Information (Public Relations):

Source: Labor Policies, Report No. 6, Pt. 5, 168.

Figures for the succeeding years are not completely reliable, but the budget for publicrelations did continue to increase. Nor do these expenditures tell the whole story. The NAM was receiving space in publications, outdoor billboards, and radio time at eithergreatly reduced rates or free. It was given over $1,250,000 worth of outdoor advertising space, $1,000,000 in newspaper space, and over $1,000,000 in radio time free in 1937. U.S. Senate, Subcommittee of the Committee on Education and Labor, Hearings Pursuant to S. Res. 266, Violations of Free Speech and Rights af Labor, 74th-76th Congs., 1936–1940, Pt. 17, 7761–7762 (cited hereinafter as Hearings).

26 Proceedings of 43rd NAM, 1938, 10.

27 Bernays, Idea, 241; “Brief Outline of Purpose and Operation of the Industrial Mobilization,” February, 1940, Drawer #1110, NAM papers.

28 Prothro, James W., The Dollar Decade (Baton Rouge, La., 1954), 34.Google Scholar

29 In 1940, the NAM launched the “Tripod of Freedom” public relations symbol designed to illustrate graphically that “individual freedom in this country rests on a tripartite foundation…. One leg of that tripod is representative democracy, the second is civil and religious liberty, and the third is free private enterprise.” Remove one leg and the whole structure collapses. NAM and Leaders, 26.

30 Students of business opposition to the New Deal have made various attempts to divide it into periods. Two contemporary journalists, Strother H. Walker and Paul Sklar, saw the election of 1936 as a turning point. Businessmen had “relied too heavily on … persuasive material” prior to the election, but Roosevelt's overwhelming electoral endorsement made them turn inward. Public relations, they now decided, must begin with the corporation itself. The product, in other words, must be improved and emphasis placed not on slick advertisements but on down-to-earth community relations. Business Finds Its Voice (New York, 1938), 59–63.

Two historians have also seen 1936–1937 as a turning point, but in different ways. Longin, Thomas C. (“The Search for Security” [Ph.D. dissertation, University of Nebraska, 1970], 17–18)Google Scholar believed that business propaganda was more emotional and extreme before the election than it was afterwards, Longin contradicted himself on this point on 299–300. Lloyd M. Wells has asserted that big business based its soft-defense on constitutional law during F.D.R.'s first term and turned to public relations during his second. “The Defense of ‘Big Business’” (Ph.D. dissertation, Princeton University, 1955), 48.

31 Business Week headlined an article on the 1935 NAM convention “The NAM Declares War” (December 14, 1935), 9–10. The headline for the 1938 convention read, “We're Ready to Talk It Over” (December 17, 1938), 20. Frances Perkins is said to have “rubbed her eyes with astonishment” at the liberality of the 1939 resolutions. Tillman, Lee R., “The American Business Community and the Death of the New Deal” (Ph.D. Dissertation, University of Arizona, 1966), 28–29.Google Scholar

32 Press Release, September 23, 1939, 1, Drawer #1110, NAM papers.

33 “Industry's Own Radio Program,” Drawer #1110, NAM papers.

34 “Synopsis of Succeeding Broadcasts of ‘The American Family Robinson,’” Drawer #1110, NAM papers.

35 Walker and Sklar, 18–19; Hearings, Pt. 18, 7766–7778.

36 Drawer #1110, NAM papers.

37 Auerbach, Jerold S., Labor and Liberty (Indianapolis, Ind., 1966), 143.Google Scholar

38 Hearings Pt. 18, 7766.

39 Cleveland, Alfred S., “NAM: Spokesman for Industry?” Harvard Business Review, vol. 26 (May, 1948), 360.Google Scholar

40 Memo, Parkes to R. S. Smethurst, February 12, 1946, Drawer #1134, NAM papers. Smethurst, an NAM lawyer, scribbled “My deepest sympathy!” on the memo.

41 Brady, Robert A., Business as a System of Power (New York, 1943), 274–276.Google Scholar

42 Henry C. Carey, the foremost American economist of the Middle Period, was a leading exponent of the tariff as an agent of harmony. After a brief flirtation with an advocacy of an ill-defined free trade, Carey came to believe that the tariff would do more than just advance the interests of entrepreneur and laborer alike. According to his biographer, he believed that it would “find husbands for old maids and free the entire sex from an age-old bondage …, make Southern planters rich but … also ultimately free the slave …, [and] lower the bastardy rate, improve morals, eliminate crime and war.” Green, Arnold W., Henry Charles Carey (Philadelphia, 1951), 134–143Google Scholar; Dorfman, Joseph, The Economic Mind in American Civilization, II (New York, 1946), 789–805.Google Scholar See also an appropriately entitled book that Carey published shortly before the Civil War: The Harmony of Interests, Agricultural, Manufacturing, and Commercial (New York, 1856).

43 Cochran, Thomas C., Railroad Leaders (Cambridge, Mass., 1953), 78.Google Scholar

44 Kirkland, Edward C., Dream and Thought in the Business Community (Ithaca, N.Y., 1956), 71.Google Scholar

45 Haber, Samuel, Efficiency and Uplift (Chicago, 1964), 27.Google Scholar

46 Heald, Morrell, “Management's Responsibility to Society: The Growth of an Idea,” Business History Review, XXXI (Winter, 1957), 375–384.CrossRefGoogle Scholar

47 Quoted in Heald, Morrell, “Business Thought in the Twenties: Social Responsibility,” American Quarterly, vol. 13 (Summer, 1961), 127.CrossRefGoogle Scholar

48 There is a good collection of the NAM's “Service for Plant Publications” from July, 1935 to December, 1940 in Drawer #1111, NAM papers.

49 The “managerial” influence in the NAM was evidenced by the remark of its president, Colby M. Chester, following the 1936 election that “Industry must accept its responsibility for the national welfare as being an even higher duty than the successful operation of private business.” Quoted in Heald, Social Responsibilities of Business, 194.

50 “Your City's Stake in Industry,” Drawer #1111, NAM papers; Proceedings of 43rd NAM, 1938, 8–10; “Certain Recommendations in Connection with NAM's Public Information Program for 1941,” 1–2, Drawer #1111, NAM papers.

Further indication of the NAM's confidence in the future of public relations was its sponsorship of over a dozen national and regional public relations forums in the 1940s, where independent counsellors, corporate public relations officers, and other executives could discuss and refine the function. These meetings were the most important of their kind up to that time, marking, it has been claimed, the “coming of age” of the vocation. The Association also continued its own public relations program, which gained the support of an increasing number of businesses. See “Industry's Public Relations” (New York, 1942), Drawer #1110, NAM papers.

51 Wells, 71–72; Hearings, Pt. 18, 7824; Hearings, Pt. 17, 7411.

52 Ibid., 7761–7762.

53 It is also possible, of course, that Weir gave this answer in order to avoid responding to a difficult line of questioning. Ibid., 7468, 7478.

54 Hearings, Pt. 18, 7779–7800.

55 Those few historians who have given careful consideration to public relations have been skeptical about the extent to which the activities of public relations men have liberalized corporations or made them more responsive to society's needs. Alan Raucher acknowledged that some public relations counsellors, such as Lee, Page, and Page's predecessor at AT&T, James D. Ellsworth, did attain high staff positions, but that did not necessarily mean they were influential in policy formation. Even if they did have some say, he doubted that their voices were significant. If they had little or no influence over policy, they obviously could not act as ombudsmen. “One of the basic flaws in the exaggerated claims of social significance,” he concluded, “was simply that practitioners were not able to carry out those functions.” The exaggeration of the power of public relations men was an important theme in Raucher's book. He believed that their abilities to persuade the public had also been greatly overestimated. He discounted Lee's claims to knowledge of social psychology and labelled Bernays' description of his methodology “jabberwocky.” Raucher, Public Relations, 148, 101, 154, 125–126, 134.

Thomas Cochran agreed with Raucher that pre-depression public relations was primarily a matter of corporate persuasion of the public with very little feedback involved. He disagreed, however, with Raucher's belief in the ineffectiveness of this persuasion, giving it part of the credit for the increase in good will toward business in the twenties. “[T]his older style of public relations was in the realm of words and pious exhortation” and utterly inadequate to meet the problems of the thirties. Only in the late thirties did a genuine two-way street approach begin to appear. Cochran, , The American Business System (New York, 1962), 154–157Google Scholar; Business in American Life (New York, 1972), 152, 254.

In Morrell Heald's view, attempts to use publicity to broaden social approval during the New Era “were undoubtedly directed more toward public persuasion than toward self-examination. Nevertheless, a new sensitivity to community opinion had begun to take form.” Heald saw the thirties as a retreat from even this modest beginning. Overall, he was extremely circumspect about the reforming impulse of public relations. Counsellors have so often flagrantly exploited the tools of mass persuasion that questions have been, and continue to be, raised “regarding the morality and the social utility of the public relations function.” Heald, “Management's Responsibility to Society,” 378; Social Responsibilities of Business, 86.

56 Labor Policies, 175, 178.

57 Bernstein, Irving, Turbulent Years (Boston, 1969), 482–483.Google Scholar

58 Labor Policies, 178.

59 In the Freuhauf case of 1935, the NLRB held that nothing “is more calculated to interfere with, restrain, and coerce employees in the right to self organization” than espionage – an impressive testimony to its effectiveness. The Board thus rated it more potent than advertising or public relations. On March 28, 1939, LaFollette introduced a bill designed to prohibit espionage, strikebreaking, use of gas and automatic weapons, and use of armed guards beyond an employer's premises. He contemplated no regulation or prohibition of public relations or advertising. Auerbach, Labor and Liberty, 57, 198.

60 Millis, Harry A. and Brown, Emily Clark, From the Wagner Act to Taft-Hartley (Chicago, 1950), 252–268Google Scholar; Rayback, Joseph G., A History of American Labor (New York, 1968), 341–436.Google Scholar

61 Meyers, , The Jacksonian Persuasion (Stanford, 1960), ix.Google Scholar “Quite simply,” according to Robert Heilbroner, “business has sold itself the bill of goods it originally intended to sell the public.” “Public Relations – The Invisible Sell,” Harper's (June, 1957), 31.

62 Economic Forum (Winter, 1936), insert following 324.

63 Bernard Lichtenburg to Bruce Barton, February 13, 1936, vol. 14, Bernard Lichtenburg papers, State Historical Society of Wisconsin, Madison.