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A Community Creates Real JobsCarol and Carlisle Shafer
HUGE TRUCKS RUMBLED UP TO THE DOORSOF THE ALLEN-A hosiery factory in Kenosha, Wis. The company was moving to Vermont and it was taking part of its machinery with it. Eight hundred employee were laid off. It was March 1938, when business indices were falling all over the country, and Kenosha, an industrial community of 50,000, was hard hit. The Allen-A mill still had fine buildings, intricate hosiery machinery, willing and skilled workers, but there was no capital to run the enterprise, no sales force, no market outlet and no one willing to take the risk of opening the plant. The workers were jobless and worried. Business men and property owners gloomily anticipated a sharp fall in community purchasing power, and a drop in real estate values. Then a few business and laboring men caught fresh hope. Why not open the plant through community effort? Why not get a government loan, sell stock to citizens, and set Kenosha men and women to work making full-fashioned hosiery in the vacant mill? Business and labor cooperated. Today the plant hums with activity. Over 550 hosiery workers are back at their jobs and every two weeks their pay checks amount to $22,000. This is the story of how one community, facing economic disaster, saved itself by putting skilled and eager hands back to work at waiting machines. If a threat to American democracy lies in the eleven million unemployed, then Kenosha has won a battle for democracy. A hundred years ago there were seven adventurous travelers who took a chance on the swamp land where Pike Creek runs into Lake Michigan, fifty-five miles north of the little town of Chicago. They marked off their claims, and established a first settlement. Today Kenosha is known as the home of Simmons beds, Nash cars and Kelvinators, Cooper's underwear, Macwhyte wire rope, Pirsch fire engines, American Brass, and the former Allen-A hosiery. Almost entirely industrial, Kenosha, with its sixty-three manufacturing plants, reacts more quickly to the fluctuations of the industrial market than its neighboring cities of more diversified economy. The closing of any one of its larger factories strikes the community a heavy blow. KENOSHA HAS SOME ADVANTAGES OVER THE AVERAGE CITY IN planning and putting through a major community effort. The first city in Wisconsin to adopt the city manager-council form of government, Kenosha in the early 1920s made a civic plan. Today, unlike most cities in which scattered public buildings are a hodge-podge of Victorian and streamlined architecture, Kenosha has a conveniently located civic center designed for beauty as well as efficiency. A city hall, a $1,500,000 high school, the new post office, Simmons Memorial Library, the Historical and Art Museum, a new $1,125,000 court house "Erected by the People of Kenosha County to the Cause of Just and Capable Government," the large Youth Foundation, and several club houses are all harmoniously planned and situated near or around a central plaza. "Our city plan is 90 percent completed," Mr. Laughlin, the city manager pointed out to us when we visited Kenosha, in the spring of 1939. "Through our zoning regulations we have acquired over 500 acres or about eighty-eight parcels of parks and playgrounds. We also have five miles of improved lake front. And 84 percent of it is all paid for." With plans already on paper when PWA and WPA came into existence, Kenosha was able to take quick advantage of federal aid and finish many projects which otherwise would have remained in the files. This planning, these buildings, the vocational and orthopedic schools, the well equipped police and fire departments, and the many other services cost money. Kenosha residents know how their money is spent. Every year the city council sends taxpayers with their tax bills a letter explaining the activities and expenditures of the city government, what it has accomplished and what it hopes to do. Here was a solid experience in community planning, accomplishment and understanding. When the Allen-A Company formally announced the closing of the Kenosha mill in March 1938, put its plant up for sale, and moved its offices to its other factory in Bennington, Vt., over eight hundred people were thrown out of work. There were no other jobs; there was no chance for reemployment in Kenosha. The big plants like Nash and Simmons were already working part time. The WPA quotas were filled. Relief costs would inevitably mount, straining an overburdened county treasury. Already 1500 families were receiving relief in Keno. she County and 3400 workers were employed on WPA. The county board estimated that the tax burden would rise $35,000 a month for relief, while at the same time the number of taxpayers would of course decrease. If only the factory could be kept in operation the community would be saved this strain on morale and resources. THERE WERE HURRIED MEETINGS OF THE MEMBERS OF THE local branch of the American Federation of Hosiery Workers, a CIO affiliate, and unofficial conferences of the town's leading business and professional men. The Allen-A Company could not be persuaded to continue operations in Kenosha. No individual or company could be found willing to buy and reopen the plant. Would it, however, be possible for citizens and workers to open it themselves with a loan from the Reconstruction Finance Corporation, or some other governmental agency? The interested business men and the leaders of the union got together and formed a voluntary citizens committee to explore ways and means of reopening the mill. This citizens committee had seven members: the newspaper editor, a leading attorney, the president of the chamber of commerce, and the four officers of the hosiery union. The chairman of the committee and the man who publicized and organized its efforts is Ralph Kingsley. For thirty years the editor of the Kenosha Evening News (Kenosha's only daily) Mr. Kingsley knows everybody and everybody's business. His comfortable modern office is decorated with cups and plaques given him in appreciation of his various community services. R. P. Cavanagh was the group's technical expert. A slim taciturn attorney, very much a part of Kenosha, having lived there all of his fifty-two years and followed his father in the practice of law, Mr. Cavanagh gave weeks of skilled effort to the legal complexities of securing the loan and forming the new corporation. The president of the local Full-Fashion Hosiery Workers Union; James Willingham, and Walter Morzfeld, John Manson, and Herbert Morzfeld, members of the union's executive committee, represented labor in the campaign. The seventh member was Elmer Pedley, president of the chamber of commerce. Although the Allen-A Company could not produce hose at a profit the committee members believed that it could be done. They hired an experienced hosiery engineer who, after a five weeks' study of the plant, presented production estimates, cost analyses, and other data encouraging the reopening of the mill. Representatives of the manufacturers of the machinery appraised and checked the equipment. Sales representatives from Chicago and New York were confident that the product would have a ready market and presented bids for handling the new line of hosiery. The next steps were to determine the cost of purchasing the plant and the amount of capital necessary for operation. The buildings and equipment were carried on the Allen-A books at $1,300,000 and appraised now by real estate men and engineers at $1,000,000. The Allen-A Company offered to sell the plant for $500,000. The workers offered two weeks of free labor to eliminate the first payroll and, further, to work at reduced wages for the length of time necessary to prove the venture could meet its obligations and make a profit. A Business Proposition ARMED WITH FACTS AND ESTIMATES THE COMMITTEE DROVE down to the district Reconstruction Finance Corporation office in Chicago to present an application for a loan of $700,000: $500,000 for the purchase of the plant and $200,000 for operating expenses. The proposition was flatly rejected: RFC could not loan money for the purchase of buildings or equipment. The new corporation was not even a "going concern," the customary RFC requirement before the granting of a loan. "We were not discouraged," said Mr. Kingsley in a public address, "we were just plain mad. All the talk we had heard as to how the President wanted to help the working man get back to work—how the President wanted Congress to appropriate so many billions for the relief of business, and they turn down a plain business proposition where for $700,000 we could put 800 people in productive work who otherwise would have to apply for relief, swelling the relief rolls of Kenosha County with between 4500 and 5000 persons, which would cost almost that much within two years time. We were about ready to fight." The next day the committee talked with Governor Philip La Follette, and through him and his brother, Senator Robert M. La Follette, Jr. obtained an appointment with the national heads of RFC. On April 5, Mr. Kingsley and Mr. Cavanagh left for Washington. "We do not know whether we are going on a wild goose chase or not," said Mr. Kingsley before boarding the train. They succeeded, however, in arousing the interest of Jesse Jones, chairman of the RFC, and of Sam Husbands, chief engineer, who promised an investigation by RFC experts. The engineers substantiated the committee's facts. Ten days later the eagerly awaited telegram from RFC arrived, but it threw the committee into abject gloom. RFC would loan money for operation if the committee could buy the plant, in other words, raise $500,000. Kenoshans were back where they started. Members of the Full-Fashion Hosiery Workers Union journeyed to Chicago to renew the appeal. They obtained a half promise from the district chairman of RFC that if the community would pledge a certain sum of money, perhaps 5250,000, and again present its case in Washington, it might receive further consideration. "We came home all excited," Mr. Willingham said, looking back on those worried times, "we thought $250,000 would be a cinch, but we soon found out it was a lot of money." Up to this point the committee had acted on its own initiative and its own financial resources. The time had come to call for community backing. The campaign opened with a mass meeting in the high school auditorium on April 28, 1938. From that night on, the reorganization of the hosiery plant was not the project of a voluntary committee, but of all Kenosha. Kenosha Chooses OVER A THOUSAND PEOPLE ATTENDED THE FIRST MASS MEETING. Mr. Kingsley gave a day by day, almost an hour by hour account of all that had so far been transacted and then appealed for contributions to a fund for the opening of the plant. Every giver was to receive stock in the new corporation, soon to be formed. But Mr. Kingsley added,—"I do not want any person to sign one of these pledge blanks unless he is willing to pledge the amount as a gift to the community." He warned the meeting that the corporation would not be able to discharge its debt or pay dividends for a long time, but argued that if the plant was not reopened Kenosha and the government would be the losers. Over 800 people would remain jobless, $20,000 to $25,000 was being lost weekly to the cash registers of town merchants, $30,000 to $35,000 per month would be added to relief costs, and the federal government would lose $104,000 in HOLC loans to former Allen-A employee as well as part of its total $7,344,181 loaned in Kenosha. If the plant were reopened there would be "a boom for Kenosha instead of a 'black eye.'" The pledges received a great send-off when Mr. Willingham rose to report $29,635 contributed by 330 of the 400 workers present at a union meeting that afternoon. Subscription blanks were distributed, headquarters announced, and the drive for $250,000 in three days was under way. As in most campaigns the three-day time limit was extended. At the end of the three days, $76,500 had been pledged-$43,000 by the workers, $33,000 by others. The deadline was stretched to eight days. Another mass meeting was held at the Elks Club and business men volunteered to solicit every business place in town. Two union men were assigned by Mr. Willingham to accompany each solicitor. The county board of supervisors passed and published a resolution augmented by pertinent relief facts urging support of the campaign. "At first we thought we might even be able to appropriate money directly," explained County Board Chairman Tillman, "but we found it legally impossible. Yet the $400,000 extra a year it would cost us to support these unemployed on relief would be enough to start the plant, if we could only use it for that project." The most effective argument used in the drive for funds was stated in an Evening News editorial: "Kenoshans are going to pay one way or the other. Either they can help in raising this fund and . . . have chances to secure a return of this money several fold in increased business or they can refuse to help and pay in decreased business, increased taxes or depreciation of their property in Kenosha." The community as a whole looked at its budget and saw it could not afford not to contribute. "It is a cold business proposition, which thus far many have failed to realize," stated the editor. The solicitors were diligent. They asked so forcefully for funds that a few school teachers objected to the pressure put upon them. "We've got every cent that's loose," asserted one former Allen-A employee. "Wouldn't you get out and hustle up dough to save your job?" Clerks gave a dollar, factory workers even borrowed money to add to their subscriptions. The workers had voluntarily made real sacrifices—pledges that meant meatless days, making old clothes "do," keeping the old car in the garage, skipping the weekly movie, putting off Johnny's visit to the dentist. But except for two $5000 contributions no substantial amounts came from prosperous factory owners. Only $100,000 was pledged by the second deadline. Everyone was disappointed. The four union officials now set off for Washington with their tabulations and arguments to have one more try at an RFC loan. They came back rejoicing, for prospects now seemed brighter. A new offer had been made by RFC. The community only needed to raise $50,000 more. The RFC had offered to loan $400,000 secured by a first mortgage on the enterprise. The corporation, however, must first be organized and $150,000 must be subscribed by Kenosha for stock. The committee was then able to persuade the Allen-A Company to readjust its first conditions of sale. It agreed to take $300,000 cash and a 5200,000 second mortgage for the plant and equipment. So a fresh campaign was launched. Over one hundred business men met in the First National Bank building and pledged themselves to carry the new appeal to all Kenosha. They had a two-fold task: to replace all the former pledges with new cash subscriptions for stock and to secure an additional $50,000. Solicitors soon discovered that pledging is always easier than producing the dollar bills. The first day $13,000 came in. The second day the total reached $32,000. "The committee is not discouraged entirely," declared Chairman Kingsley. The third day, $57,000 was on hand. By Friday (and the third deadline was Monday) only $86,887.50 had been raised. On that day $2500 had been subscribed by teachers, janitors and officials of Kenosha schools. The final report was held off on May 23 because the fund was still insufficient. "Unless some new developments materialize within the next few days," stated the committee, "the deal is entirely off.' "Bluntly the entire project will go by default," warned an editorial, "unless more Kenoshans become awakened to a realization of their responsibility and of their opportunity to help themselves within a very few days." Then the Allen-A Company and the RFC granted a two weeks extension of time and the citizens committee once more pulled themselves together and with less fanfare and a new set to their jaws renewed the campaign. The final collection reached $103,500, which represented over 2000 subscriptions ranging from $1 to one of $7500 which came in at the end. It was the workers, not the business interests that made the final effort; the Hosiery Union borrowed without collateral $10,000 from the First National Bank, arranging to pay it back through a 5 percent wage assignment. Further, the union offered to buy the remaining $36,500 of the preferred stock by an additional 10 percent wage assessment. With the $113,500 in cash and the $36,500 promised by the union (making the required $150,000) the committee again presented their case. Their proposal was accepted. On June 7 they announced, "The opening of the plant is assured." The Working Agreement FROM THE END OF THE CAMPAIGN IN JUNE TO THE ACTUAL opening on November 15 the committee was busy with negotiations, legal transactions and preliminary plans. Mr. Cavanagh spent weeks in this complex drudgery. "Once I got started I had to see it through," he remarked. "It was worthwhile in spite of all the hard work, but I wouldn't do it over again for less than 125,000." A corporation was set up called the Kenosha Full-Fashion Mill, the three community representatives and the four union leaders of the citizens committee elected themselves the common stockholders and the board of directors. All the contributors to the fund were given 6 percent non-cumulative preferred stock. Richard Edge, an experienced man from a hosiery mill in Charleston, Tenn., was hired as general manager and the Roy Bartels Company took over the sales outlet. The RFC granted an extension of time from three to eighteen months for the first required payment of $20,000. The Allen-A Company agreed to give the committee an option to pay off the second mortgage of $200,000 for $100,000 cash any time within the next two and a half years. The union agreed to still further wage concessions when it offered to take more stock after its first pledges were paid in order to pay for the second mortgage within that time. On September 1 the final papers of incorporation were filed in Madison and Kenosha. The capital stock was to consist of 52,500 shares as follows:
The night before the final transfer of the loan from RFC the Register of Deeds office force in Kenosha worked all night copying and filing the legal papers connected with this transaction A last minute snag had also been found in the title to the property and that involved a feverish tracing of hitherto unknown descendants of a possible claimant At the last hour it was discovered in Kenosha that some of the papers had been left in Milwaukee nearly forty miles away There was only an hour to secure them and leave for Chicago. But the impossible was accomplished. The papers were signed and Kenosha had its loan of $400,000. Eight months after the shutdown machines again rumbled and shook the big building. Workers were rehired with the consent of the union upon the basis of their past efficiency records, though seniority-rights and stock ownership were given some consideration. Most of the workers taken on owned stock in the new corporation; in any case each would begin to acquire it with his first pay check. A maximum output of 30,000 dozen pairs of hose a month is expected, and at present the plant has orders for several months ahead. "Kencrest" is the trade name used, but most of the hose is sold under the special names of the various jobbers and chain stores taking the product. In April 1939, 546 workers were employed at the new mill. They work forty hours a week earning from $16 to 545 a week minus their wage assessments. The "laggers," those who knit the legs of the hose, running an eighteen to twenty-four unit machine, are earning $30 to $40. The footers, considered the most highly skilled, get as much as $45 for their forty-hour week. Maintenance men, sorters, and others who have a minimum of 40 cents an hour get $24 or less. Yet with the voluntary reductions of 10 percent for the $36,500 of preferred stock and the 5 percent for the bank loan, their wages are only slightly lower than piece rates of hosiery workers in nearby cities, and are above the national average for the industry. Two weeks of free labor meant genuine sacrifice on the part of the workers. The mill has a closed shop, all its workers belonging to the American Federation of Hosiery Workers. The company recently signed a three-year wage agreement with the national union. The relationship between union and management seems very cooperative. "The union doesn't contest the ownership of the plant," said the union president. "We wish only to own enough stock to be on the board of directors." Some of the rank-and-file workers, it is true, are not completely satisfied. They did not like the original wage reduction, and they think the wage assignments will continue "too long." One unskilled low paid worker informed us with a shrug of his shoulders, "They say we won't have so much taken off after July first, but who knows? I hope not; I ain't getting too much now." Nearly all of the Kenosha people and workers to whom we talked, however, were enthusiastic about the new company. The superintendent of the plant, Mr. Fitzmaurice, said, "It's a wonderful thing! The employee have a double reason to work now and the outlook is excellent." The union president was confident of the plant's success. "We have really accomplished something unique. Naturally everyone is happy. Nearly 300 were on relief or WPA, and now we're working." The Kenosha story is in heartening contrast to the forced wage assignment racket in irresponsible "runaway shops" set up in communities advertising "low wages" and "docile labor." WITH THE KENOSHA FULL-FASHION MILE A GOING CONCERN the whole town takes pride in the achievement. It seems to have revived and unified community spirit. Kenosha celebrated the opening of the plant with a festive Victory Dance. Everyone came; the east wing of the mill's main building rang with music and gaiety, a prelude to the clatter and roar of the knitting machines that would be heard in the morning. The same evening, radio station WOR of Newark, New Jersey, granted Kenosha a scroll of award and broadcast the story of its achievement. The workers of Kenosha had schemed and sacrificed to maintain. their jobs, business men too gave time and money to help protect the purchasing power of the workers and hence their own income, citizens united to maintain industry and production in their city, and the federal government invested in a plan to promote economic prosperity. This community met unemployment with the only lasting solution—real jobs.
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