The Company Town

The Industrial Eden's and Satanic Mills That Shaped the American Economy


By Hardy Green

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Company town: The very phrase sounds un-American. Yet company towns are the essence of America. Hershey bars, Corning glassware, Kohler bathroom fixtures, Maytag washers, Spam — each is the signature product of a company town in which one business, for better or worse, exercises a grip over the population. In The Company Town, Hardy Green, who has covered American business for over a decade, offers a compelling analysis of the emergence of these communities and their role in shaping the American economy, beginning in the country’s earliest years.From the textile mills of Lowell, Massachusetts, to the R&D labs of Corning, New York; from the coal mines of Ludlow, Colorado, to corporate campuses of today’s major tech companies: America has been uniquely open to the development of the single-company community. But rather than adhering to a uniform blueprint, American company towns represent two very different strands of capitalism. One is socially benign — a paternalistic, utopian ideal that fosters the development of schools, hospitals, parks, and desirable housing for its workers. The other, “Exploitationville,”; focuses only on profits, at the expense of employees”; well-being.Adeptly distinguishing between these two models, Green offers rich stories about town-builders and workers. He vividly describes the origins of America’s company towns, the living and working conditions that characterize them, and the violent, sometimes fatal labor confrontations that have punctuated their existence. And he chronicles the surprising transformation underway in many such communities today. With fascinating profiles of American moguls — from candyman Milton Hershey and steel man Elbert H. Gary to oil tycoon Frank Phillips and Manhattan Project czar General Leslie B. Groves — The Company Town is a sweeping tale of how the American economy has grown and changed, and how these urban centers have reflected the best and worst of American capitalism.


For Maruja

In 1917 the Pinkerton Detective Agency sent twenty-three-year-old Dashiell Hammett to help break a miners' strike against the Anaconda Copper Co. in Butte, Montana. Hammett—who would later gain fame for his hardboiled detective fiction, such as The Maltese Falcon—had worked for two years for Pinkerton, tracking stolen property, transporting prisoners, and shadowing suspects. He later said he'd had no political consciousness when he was sent to Butte. But he did discover that he didn't like strikebreaking.
The Butte strike was sparked by a mine fire that killed 178 miners. It was led by the radical, syndicalist union, the Industrial Workers of the World (IWW)—the romantic organizer of down-and-outs, miners, lumberjacks, oil-field roustabouts, and immigrant textile workers. The union's slogan was "One Big Union" in a day when most union "brotherhoods" defined themselves along craft lines and seemed more like fraternities than the embodiment of the cooperative commonwealth. The IWW's symbol was an arched-back black cat, yowling at the viewer—an image associated with sabotage and machine-breaking in the name of militancy and worker solidarity.
In Butte, the IWW's man was Frank Little, a one-eyed, part-Indian whirlwind of an organizer. Known as the "hobo agitator," he had been at the center of worker struggles in Fresno, San Diego, Duluth, and most of the major IWW conflicts. An Anaconda executive offered Hammett $5,000 to shoot Little—or so Hammett later said—but the young Pinkerton agent declined. No matter. In short order, vigilantes apprehended Little and lynched him at a railroad crossing along with three other perceived troublemakers.
Hammett decided he'd had enough, quit the detective agency, and joined the U.S. Army.1 But he never forgot Butte, which he later immortalized as "Personville" (nicknamed "Poisonville") in his first novel, Red Harvest, a crime fiction classic. "The city wasn't pretty," he wrote. "The smelters whose brick stacks stuck up tall against a gloomy mountain to the south had yellow-smoked everything into uniform dinginess. The result was an ugly city of forty thousand people, set in an ugly notch between two ugly mountains that had been all dirtied up by mining."2 But the biggest stain on Butte, in Hammett's eyes, may well have been the Anaconda Copper Co. itself.
Created at the turn of the twentieth century by a charismatic Irishman named Marcus Daly, Anaconda was soon involved in suspect dealings. Standard Oil directors James Stillman, William Rockefeller, and Henry H. Rogers bought the company with borrowed money, renamed it, and quickly resold it to gullible investors, pocketing a profit of $36 million.3 Another early owner was George Hearst, father of newspaper magnate William Randolph Hearst. The company passed through various corporate hands and by the 1920s held a virtual monopoly over the mines in and around Butte. The town, once known for gold and silver mining, grew prosperous thanks to the area's abundant copper, which was increasingly in demand for electrical wiring. Butte attracted workers from around the world—and became known as a wide-open Sin City. Its red-light district, "The Line," featured hundreds of saloons and houses of prostitution.
But contrary to this image of freedom and licentiousness, Butte was in fact locked down—totally under Anaconda's thumb. In Red Harvest, Hammett captures the spirit of the town: "For forty years old Elihu Willsson . . . had owned Personville, heart, soul, skin, and guts. He was president and majority stockholder of the Personville Mining Corporation, ditto of the First National Bank, owner of The Morning Herald and Evening Herald, the city's only newspapers, and at least part owner of nearly every other enterprise of any importance. Along with these pieces of property he owned a United States senator, a couple of representatives, the governor, the mayor, and most of the state legislature. Elihu Willsson was Personville, and he was almost the whole state."
Hammett's Willsson was likely a fictional amalgam of many rough-hewn executives of the day. But it's possible that the author had in mind John D. Ryan, a former department store clerk who succeeded Daly and ran Anaconda until his own death in 1933.
Anaconda remained hugely powerful not only in the town but across Montana, so much so that in 1946, when reporter John Gunther published his celebrated panorama of American life, Inside U.S.A., he observed, "For years the company dominated both parties, and controlled almost all elections, if necessary by dragging in the 'cemetery vote.'" Gunther painted a picture of Anaconda as greedy and stingy—keeping other industry out of the area so labor remained cheap, removing far more riches from Montana than it ever put in. "Aside from one threadbare little park . . . it has never given the city of Butte, from which it has extracted a roaring Golconda of wealth, anything," he wrote.4
It is companies like Anaconda and the experience of towns like Butte that have tainted a term familiar to us all: company town. To those who like to think of the United States as a sweet land of liberty, the very words sound un-American. A company town seems necessarily to be a place where one business exerts a Big Brother-like grip over the population—controlling or even taking the place of government, collecting rents on company-owned housing, dictating buying habits (possibly at the company store), even administering where people worship and how they may spend their leisure time.
It's true: Company towns are un-American—and they are the essence of America.
The United States has a unique experience with company towns. With its vast expanse of virgin land and a government that has generally taken a laissez-faire attitude toward business, the United States has provided a greater opportunity for developing such settlements than other countries. The United States also has a tradition of social experimentation: If the Pilgrims could construct their ideal City on a Hill, so too could American businessmen create their own communities, from Lowell, Massachusetts, to Pullman, Illinois; Morris Run, Pennsylvania; and Valsetz, Oregon. By one estimate, more than 2,500 single-enterprise towns once dotted the country.
Trace America's economic evolution, and you get a tour of company towns—from early textile sites such as Lawrence, Massachusetts, and Manchester, New Hampshire, to today's company campuses in New York state and California. Along the way, you'll have to take note of coal towns in Pennsylvania, Ohio, Colorado, and Appalachia; steel towns in the Monongahela River valley and Illinois; Texas and Oklahoma oil camps; shipbuilding centers in Connecticut and California; meatpacking burgs in Iowa, South Dakota, and Minnesota; and the government company town of Oak Ridge, Tennessee.
Some of America's seminal industries have faded from the scene—and along with them, the towns they were associated with have fallen into decrepitude or even disappeared. Hard times are irrevocably associated today with Lowell; Gary, Indiana; the former textile villages of North and South Carolina; and such once-proud meatpacking towns as Ottumwa, Iowa.
But company towns are not simply a phenomenon of the past: In an age of transnational corporations and exurban sprawl, company towns remain a basic part of American life. They are as near as Corning, New York, and Hershey, Pennsylvania, their products as familiar as Tabasco Sauce, Spam, and Kohler bathroom fixtures.
And maybe even as familiar as Google. For in a remote part of Oregon along the banks of the Columbia River, that company recently built a large industrial complex mostly in secret. The facility, known as Project 02, stretches over several acres, with electric-power equipment much in evidence. Given Google's business, it can hardly be surprising that the prime residents of the campus's three large buildings are computer servers—perhaps tens of thousands of inexpensive processors and disks—necessary to keep Google's search engines and Web services humming. But a few humans are needed, too, if the effort is to be completed and maintained. "The project has created hundreds of construction jobs, caused local real estate prices to jump 40 percent, and is expected to create 60 to 200 permanent jobs in a town of 12,000 people," wrote the New York Times in 2006.5 That means that fundamentally, what may be coming together in The Dalles, Oregon, is a contemporary—and lowemployment—version of the company town.
Such towns generally tend toward one of two models, although many fall in between. In this account, I will refer to the Butte model as "exploitationville." Perhaps the apotheosis of such towns may be found in Appalachian coal country, home of the likes of Lynch, Wheelwright, and Coal Run, Kentucky. The logic behind such places is simple and familiar. It rests on the thinking of every bean counter: Business exists to make a profit, not to coddle employees. Society as a whole benefits most when enterprises are cost-effective, productive, and profitable. The very ruthlessness that surfaced in these places seems less like an inevitable outgrowth of such logic than a willful expression of malicious personalities.
But another model regularly shows up in the United States, recurring across the decades: ideal communities backed by companies that promise to share their bounty with workers and their families. These utopian towns were and are characterized by modern public buildings, libraries and facilities for leisure, education, and cultural enrichment, and comfortable dwellings for managers and workers. A paternalistic attitude may be present as well—sometimes resulting in a watchfulness toward the citizenry on the part of the company overlords: Such guardians have tended to favor tidiness in housekeeping, sobriety, and oftentimes regular religious observance.
Although one might expect idealistic experiments to fade as industrial society matured, instead the utopian model has resurfaced again and again. For example, in Pullman, Illinois, the eponymous railroad-car maker in the 1880s erected a model town where "advanced secular Gothic buildings" lined tree-shaded streets. Scotia, California, founded by Pacific Lumber as a rustic forest camp in the 1880s, evolved into a pin-neat, saloon-free Shangri-La amid redwood forests; workers got low rent, full medical benefits, college scholarships for their kids, and more. Hershey, Pennsylvania, built by chocolate man Milton S. Hershey in the early 1900s, featured electrified, centrally heated homes, a free playground and zoo, and a model school for orphan boys supported by a foundation that held a majority of his company's stock.
At around the same time, companies began erecting such "industrial satellite towns" as Firestone Park, Ohio (Firestone Tire & Rubber Co.), Alcoa, Tennessee (aluminum producer Alcoa), and Kohler Village, Wisconsin (plumbing-fixture maker Kohler Co.). Such eminent figures as planner Frederick Law Olmsted Jr. and architect Irving Gill promoted modernist aesthetics in Torrance, California. But ultimately, the successful model would emulate Britain's carefully planned garden cities, with their wide, attractive boulevards and balance of space devoted to park-land, residences, and industry. Evoking preindustrial villages, such settlements were very different from the grimly functional early company towns with their strict gridiron of streets and rows of cookie-cutter housing. In general, corporations in this period made a major effort to house their employees: By 1916, a thousand companies were providing housing for 60,000 employees—roughly 3 percent of the U.S. population.6
In the 1930s, government began to play an ever greater role in housing development, and New Deal figures questioned the propriety of company towns, particularly in the southern textile belt, running from North Carolina down into Georgia. Nevertheless, company-built utopias continued to sprout—notably during the 1940s, when wartime demand led Henry J. Kaiser to transform the bayside village of Richmond, California, into a major shipbuilding area. Kaiser became a pioneer in providing inexpensive, universal health care to his workers with a program that was the forerunner of today's vast Kaiser Permanente health plan.
Today, the ideal lives on in such model communities as Columbus, Indiana—home of Cummins Engine and "a veritable museum of modern architecture," according to Smithsonian Magazine—and Corning, New York—home base of the global high-tech corporation Corning Inc. Such companies openly argue for doing well by doing good—and while a bit of this is intended as public relations and corporate branding, it's hard to deny that there is also an element of genuine good-spiritedness.
Most recently, the utopian company town has taken a new form—that of the corporate campus. Both Pepsico's Purchase, New York, campus and the Googleplex in Mountain View, California, are company town- like in that most all human needs are provided for: gourmet food, barber shops, laundry service, exercise facilities, and even nap rooms at Google. This velvet-glove approach is not without its downside, captured in Douglas Coupland's 1995 novel, Microserfs, in which snack-addicted, servile geeks willingly labor as twenty-four-hour-a-day vassals of Microsoft seigneur Bill Gates. (One worker rhapsodizes: "Bill is wise. Bill is kind. Bill is benevolent. Bill, Be My Friend . . . Please!") Employees need never leave such a cosseting environment—or ever truly end a working day.

A City on a Hill
Unfitted to some extent for the purposes of commerce by the sand-bar
at its mouth, see how this river was devoted from the first to the serv-
ice of manufactures. . . . It falls over a succession of natural dams,
where it has been offering its privileges in vain for ages, until at last
the Yankee race came to improve them. Standing here at its mouth,
look up its sparkling stream to its source . . . and behold a city on each
successive plateau, a busy colony of human beaver around every fall.
Not to mention Newburyport and Haverhill, see Lawrence, and Low-
ell, and Nashua, and Manchester, and Concord, gleaming one above
the other. When at length it has escaped from under the last of the fac-
tories it has a level and unmolested passage to the sea, a mere waste
water, as it were, bearing little with it but its fame.
—HENRY DAVID THOREAU, "A Week on the Concord and Merrimack Rivers"1
"Whoever says Industrial Revolution says cotton," observed British historian E. J. Hobsbawm.2 And in the United States, at least in the early going, whoever said cotton mills said water power.
Postrevolutionary America had no shortage of rivers ripe for industrial exploitation. The first to be utilized for textile production were in Rhode Island, beginning in the 1790s. One observer found: "The manufacturing operations of the United States are carried out in little hamlets, which often appear to spring up in the bosom of some forest, around the water fall which serves to turn the mill wheel."3
Americans were determined to go their own way in creating models for industry and society, just as they had created their own political system. But there were two powerful British influences.
First, the Rhode Island mills employed technology appropriated from the Brits by this country's most famous intellectual-property pirate, Samuel Slater. Apprenticed as a lad in England to the firm of Arkwright and Strutt and rising to the rank of overseer, Slater made a careful study of that company's innovative equipment. Then, in 1789, he boarded a ship for America—he concealed his textile experience from the ever-watchful British port officials and traveled in the guise of a simple country fellow. Once in the United States, Slater gained employment at the mercantile firm of Almy and Brown, where he and his assistant built a working water frame, similar to the one that spun yarn in the Arkwright factory. Establishing the template for Rhode Island mills, Slater's first operation was on a small scale, a factory in a rented building next to the Blackstone River at Pawtucket. His workforce: seven boys and two girls, ages seven to twelve.4
Another key British influence was negative. The creators of the U.S. industry repeatedly invoked images of the foreign city that embodied all they wished to avoid: Manchester, England.
Francis Cabot Lowell, a wealthy Boston merchant visiting Britain in 1811, wrote to a friend that "we found the manufacturing towns very dirty" and later remarked on "the great corruption of the highest and lowest classes, and the great number of beggars and thieves."5 Manchester drew numerous visitors, some perhaps seeking a squalor-induced frisson like what draws today's tourists to New York and Mumbai. Others, such as Friedrich Engels—whose descriptions written a few years after Lowell's still have the power to startle and repel—had reform in mind. To Engels, the city seemed to be "an outgrowth of accident" rather than the result of any plan. Amid the "knotted chaos of houses," he found himself repeatedly subjected to "filth, ruin, and uninhabitableness, the defiance of all considerations of cleanliness, ventilation, and health." Engels provides his readers with a tour of various working-class neighborhoods in the city. His conclusion: "In such dwellings, only a physically degenerate race, robbed of all humanity, degraded, reduced morally and physically to bestiality, could feel comfortable and at home."6
Manchester's size multiplied tenfold between 1760 and 1830, by which time it housed 180,000 citizens. Aside from the slums, few could help noting the "hundreds of five- and six-storied factories, each with a towering chimney by its side, which exhales black coal vapour."7 Another report described "an inky canopy which seemed to embrace and involve the whole place."8
None of this was right for the New World, concluded the founders of America's textile industry.
New England workers, its magnates decreed, would be youth drawn from rural soil—borrowed for a short time from their pastoral lives, not destined to become a permanent and degraded proletariat. By 1815 there were 170 small-scale factories in Providence alone. Hundreds more would sprout in the 1820s and '30s. The typical southern New England mill village—Slatersville (Rhode Island), Phoenixville (Connecticut), or Ware Village (Massachusetts), for example—contained only one mill employing one hundred or fewer workers, primarily children, and these hands and their managers probably supplemented their factory work with agricultural labor.9
But more ambitious capitalists saw that larger scale enterprise could mean greater profits—without requiring the immiseration of the worker. Unlike Manchester, larger developments could be bright and airy, marked by stately brick factories and dormitories built alongside sturdy and inspiring churches. Nor would the skies be dark—America, which had an ample supply of coal, as yet lacked the transportation network necessary to bring it to the East Coast. Of necessity, New England's mills would run on the ultimate renewable resource: kinetic energy from falling water.
Even a less-than-torrential river might do. The group of Boston capitalists who became known as the Boston Associates demonstrated this by building a fully integrated factory at Waltham, Massachusetts, its water wheel and machinery driven by the gently rolling Charles River. All steps of production, from "bale to bolt," could be carried out at the Boston Manufacturing Co.'s facility, avoiding the inefficiencies of the Rhode Island "putting out system," in which storekeepers arranged "outwork" on cottage industry handlooms. Waltham's labor force consisted of young women fresh from the farm, housed in company boardinghouses, and the superintendent's mansion was close by.
Despite these differences in scale and organization, the Waltham mill-works shared one striking similarity with Rhode Island: intellectual piracy. It was with an eye to constructing an American textile industry that Lowell made his pilgrimage to Manchester, where he studied the machinery. Britain prohibited the export of its manufacturing technology and kept a sharp lookout for any sketches or representations of it. Twice the authorities searched Lowell's luggage—but he had strong powers of memorization. By 1814, he and Massachusetts mechanic Paul Moody had produced a version of the Manchester power looms for Waltham.10
The three Boston capitalists behind the Waltham development were Lowell, Nathan Appleton, another wealthy merchant, and Appleton's brother-in-law, Patrick Tracy Jackson, who would become the on-site superintendent. In contrast to many other mills, which were owned by individuals, this and the later enterprises of the Boston Associates were structured as limited-liability corporations. Lowell and Jackson put up the greater part of the outfit's initial capitalization of $400,000. According to Appleton, Lowell (who died in 1817) was "the informing soul, which gave direction to the whole proceeding."11
Although U.S. textiles prospered during the War of 1812 embargo, the peace of 1815 saw the return of foreign products to the U.S. market, proving ruinous to many Rhode Island manufacturers. But the Waltham operation prospered, thanks to the productivity of its power looms. By 1820, three mills were operating at Waltham, producing a half-million yards of cloth. Within its first seven years—by 1819—the operation earned back its initial capitalization. Dividends averaged over 19 percent a year between 1817 and 1821 and rose to more than 27 percent in 1822.
The third mill exhausted the water power available at Waltham. In search of another place where a similar operation could be erected, Appleton traveled to New Hampshire, where he inspected a falls on the Souhegan River. Shortly thereafter, he learned through Moody of a site at East Chelmsford, Massachusetts, with a falls of thirty feet on the Merrimack River.
In November 1821, with a light snow covering the ground, Appleton, Jackson, Moody, and three others traveled to that sparsely settled location, where no more than a dozen houses stood. But there was some infrastructure development, particularly two canals: the Pawtucket, which circumvented the falls to make the river navigable, and the Middlesex, through which horse-drawn barges pulled freight down to the Mystic River and Boston beyond. The visitors "perambulated the grounds and scanned the capabilities of the place," as Appleton recalled. They quickly arranged for a quiet purchase of the available, surrounding lands and of the company that owned the canals, the Proprietors of the Locks and Canals. They also immediately petitioned the Massachusetts legislature for an act of incorporation in the name of the Merrimack Manufacturing Co., with shares held by Appleton, Jackson, Moody (rewarded for "his agency in the discovery" but also key to the enterprise due to his proven mechanical ability), and John Boott and his brother Kirk, who was appointed treasurer, the title the Associates gave those who functioned as chief executive officers, with an annual salary of $3,000. The company's initial capitalization of $600,000 eclipsed that of Waltham.12
Such was the beginning of America's first large-scale planned industrial community: Lowell, Massachusetts.
The America in which Appleton, Jackson, and the others lived was, of course, only a few decades removed from revolution and the invention of a new political culture and set of political institutions. Questions of economics and development were very much on the national agenda as Americans grappled with just what sort of society they hoped to construct.
As foreign as the idea of founding a town in addition to a business may sound today, to the generations of early Americans, such a notion did not seem so outlandish. In 1791, for example, the nation's first Treasury secretary, Alexander Hamilton, was among the founding members of what would now be called a startup backed by venture capital: the Society for Establishing Useful Manufactures (SEUM). Hamilton and his colleague Tench Coxe believed that a purely agrarian America, as championed by Thomas Jefferson and others, would always remain subordinate to Europe, easy prey for Continental bullying and manipulation. Spawning manufacturing in America, Hamilton believed, would require various tactics, including pilfering Britain's technological advances. Another key ingredient: the construction of a manufacturing hub—a town where goods from sailcloth to stockings, blankets, and beer might be produced. Investors in the town's enterprises would benefit from both the sale of such goods and the rising value of the town's real estate. Looking for a site that combined affordable land, water power, and proximity to existing urban centers, the Treasury secretary and his colleagues decided upon an area near the Great Falls of the Passaic River in New Jersey. It would be named Paterson, in honor of that state's governor.
In little over a year, Paterson had begun to take shape, with the SEUM's directors giving the go-ahead to construction of a textile mill and textile-printing plant, spinning and weaving operations, and worker housing. The founders retained Pierre Charles L'Enfant, the architect who had just laid out the plans for the nation's new capital, to compose a similar plan for Paterson. But the stars were not favorably aligned: The spinning, weaving, and printing operations commenced, but L'Enfant's plan proved both too ambitious and somewhat misguided, and soon he withdrew from the field. By 1796, the New Jersey project had been abandoned. But it was a workable idea—as the revival of the development in the 1840s would prove, after which Paterson became an industrious mill town.13
The period was also rife with technical and engineering marvels that seemed to encourage the most high-flown visions of what was possible. The stream of inventions ranged from Eli Whitney's cotton gin and weapons made with interchangeable parts to Oliver Evans's highpressure steam engine and Robert Fulton's steamboat. The Erie Canal, completed in 1825 and linking the Great Lakes with the Hudson River, seemed to demonstrate that no geographic hurdle was too great to defeat modern engineering prowess.


On Sale
Sep 7, 2010
Page Count
264 pages
Basic Books

Hardy Green

About the Author

Hardy Green is a former Associate Editor at BusinessWeek, where he was responsible for the magazine’s book review coverage. He still writes regularly about the book publishing industry, and has published features on travel, investing, business history, technology, and careers.

He is also the author of the academic history On Strike at Hormel: The Struggle for a Democratic Labor Movement. Green has taught history at New York’s School of Visual Arts and Stony Brook University, from which he holds a PhD in US History. He blogs at, and lives in New York City.

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