Such inwardness was not toxic so long as John A. Hartford was on hand to steer the ship. He remained vigorous until the day of his death at seventy-nine, constantly challenging his managers to keep up with the demands of a fast-changing country. But with John’s death in 1951, the dynamism went out of A&P. He and his brother had failed to cultivate a successor generation of executives who had the broad experience, imagination, and acute cultural antennae to go along with their financial acumen. They left behind a corporate structure under which the new chief executive reported to a board of directors that never challenged his decisions because its members all reported to him. A company that desperately needed new blood and new thinking was put in the charge of leaders more concerned with conserving the past than with shaping the future. From that point on, A&P’s downfall was assured. What the anti-chain broadcasters, New Deal code authorities, populist politicians, and ardent trustbusters failed to accomplish in decades of trying, creative destruction took care of quickly.
NOTES
ABBREVIATIONS
AG: American Grocer
CHS: Chicago Historical Society
Danville Trial Documents:
Dx: Defense exhibit
Gx: Government exhibit
Tr: Transcript
FDR: Franklin Delano Roosevelt Presidential Library, Hyde Park, N.Y.
OF: Office Files
PPF: President’s Personal Files
FTC: U.S. Federal Trade Commission
HFF: Hartford Family Foundation Archive
JHSGW: Jewish Historical Society of Greater Washington, Washington, D.C.
JOC: Journal of Commerce
JPMC: J. P. Morgan Chase Archives, New York
KSHS: Kansas State Historical Society, Topeka
LSUS: Louisiana State University at Shreveport Archive
NARA-C: National Archives and Records Administration, Great Lakes Region, Chicago
NARA-CP: National Archives and Records Administration, College Park, Md.
NARA-LA: National Archives and Records Administration, Legislative Archives, Washington, D.C.
NARA-NY: National Archives and Records Administration, Northeast Region, New York
N-YHS: New-York Historical Society
NYMA: New York Municipal Archives
NYPL: New York Public Library
NYT: New York Times
SRP: Sam Rayburn Papers, Dolph Briscoe Center, University of Texas, Austin
TSL: Texas State Library and Archives, Austin
WPP: Wright Patman Papers, Lyndon B. Johnson Presidential Library, Austin, Tex.
WSJ: Wall Street Journal
1: THE VERDICT
1. “Walter Lindley, U.S. Judge, 77, Dies,” NYT, January 4, 1958; “Cannon Leaves $500,000 Estate to 2 Daughters,” Chicago Tribune, January 16, 1927; “16 Candy Jobbers Are Found Guilty,” NYT, April 12, 1929; “Landis Is Upheld in Fight on Rule,” NYT, April 22, 1931; “Impeachment Action Against 2 Judges Fails,” Chicago Tribune, May 30, 1934; “Proposed for High Court,” NYT, March 21, 1930; “Judge in G.M. Case Chides High Court,” NYT, October 26, 1939.
2. “3 Concerns, 3 Persons Assessed as Some Others Are Cleared,” NYT, December 13, 1940; “Judge in G.M. Case Chides High Court.” The case was formally styled United States v. New York Great Atlantic & Pacific Tea Co., 67 F. Supp. 626 (E.D. Ill., September 21, 1946). It is referred to hereafter in these notes as “Danville trial.”
3. “Crowd Fills Court to See John Hartford,” Chicago Tribune, October 24, 1945.
4. Rentz, “Death of ‘Grandma,’” MS, 2; John Updike, “A&P,” in Pigeon Feathers and Other Stories (New York, 1962), 187–96; Davis, Don’t Make A&P Mad.
5. Opinion, Danville trial, 67 F. Supp. 676, 636.
6. J. C. Furnas, “Mr. George & Mr. John,” Saturday Evening Post, December 31, 1938; “Red Circle and Gold Leaf,” Time, November 13, 1950.
7. See, for example, Merle Crowell, “You Don’t Have to Be Brilliant,” American Magazine, February 1931, 20.
8. U.S. Department of Commerce, Census of Distribution: Kansas City, Missouri, mimeo, October 25, 1927. The 1930 Census of Retail Distribution counted 481,891 food stores and another 104,089 general stores that sold groceries in 1929, for a total of 585,980 stores whose main business was selling food. On wholesalers, see U.S. Bureau of the Census, Fifteenth Census: Census of Distribution. Wholesale Distribution (Trade Series): Groceries and Food Specialties (Washington, D.C., 1933), 16, 38, 42–44. That census shows 47,132 establishments “producing goods sold through grocery trade channels,” but the tabulation does not include the 2,443 meat and poultry plants and numerous plants making such items as candles, patent medicines, toiletries, and tobacco products shown in U.S. Bureau of the Census, Statistical Abstract, 1933 (Washington, D.C.: 1933), 697–716. The United States had 29.9 million families in 1930; Statistical Abstract, 1933, 48.
9. Total employment in food retailing in 1929, including employees and proprietors in food stores and general stores selling food, was 1.2 million. Employment in food wholesaling was 187,766 and in manufacturing 753,247, yielding a total of more than 2.1 million workers out of a nonfarm workforce of 38 million. Industry employment from 1930 Retail Census, 45, and the 1930 Census of Distribution.
10. Food accounted for $17.9 billion of the $71.8 billion of consumer spending in 1925, or 25 percent. Based on patterns a few years later, for which more detailed information is available, approximately 80 percent of all food spending was for at-home consumption, with purchased meals and alcoholic beverages accounting for the rest. The food component alone thus accounted for roughly twenty cents of every dollar of consumer spending. U.S. Bureau of the Census, Historical Statistics of the United States, 319, ser. 419–22; 320, ser. 470–71; 323, ser. 844–45; and 326, ser. 773–74. With the 1967 level set equal to 100, food consumption per capita in 1925 was 86; not until 1940 did the index reach 90. Although diets had plenty of calories, they were short on nutrients such as calcium and thiamine. See Historical Statistics of the United States, 328, ser. 849–65.
11. Schumpeter, Capitalism, Socialism, and Democracy, 83.
12. Karl Marx and Friedrich Engels, Das Kapital, vol. 3 (Hamburg, 1894), 303; William Graham Sumner, “The Forgotten Man” (1883), in The Forgotten Man, and Other Essays, ed. Albert Galloway Keller (Manchester, N.H., 1969), 491.
13. Ian Melville, Marketing in Japan (Oxford, 1999), 195; Journal Officiel de la République Française, December 30, 1973, 14142.
14. “Retailers Protest Controversial Law,” Prague Post, December 16, 2009.
2: THE FOUNDER
1. Great Atlantic & Pacific Tea Co., Three Score Years and Ten, 5. This official company version of history was accepted in the most widely cited work on U.S. chain retailing, Godfrey Lebhar’s Chain Stores in America, 21, and propagated in such prominent places as a front-page article in The Wall Street Journal, “A&P’s Saga Includes a Pagoda, Price Wars, and Buying Brigades,” WSJ, December 19, 1958, and Barron’s, February 20, 1922, 10. The official story was reiterated in the announcements that accompanied the opening of new stores, prompting further embellishment. For example, the Hartford Courant, October 25, 1924, reported that the store George H. Hartford opened on Vesey Street in 1859 was “the first grocery store to operate on a strictly cash basis. The front of the store was painted a brilliant red and this was the origin of the red-front chain-store idea.” In fact, both the sale of groceries and the red color scheme developed many years after 1859, and many other firms sold groceries on a cash-only basis much earlier. Peter Coclanis wrote in The Encyclopedia of New York History, ed. Kenneth T. Jackson (New Haven, Conn., 1995), that Great Atlantic & Pacific “was formed as a partnership in 1859. It initially had one tea shop on Vesey Street.” No available evidence supports the date, the address, or the existence of a partnership. The company contributed to the confusion surrounding its origins by changing its foundation myth several times. An 1867 advertisement stated that the Great American Tea Company, indisputably the predece
ssor of Great Atlantic & Pacific Tea Company, was “established 1861”; Commercial Enterprise, Great American Tea Company, HFF. When Great Atlantic & Pacific issued bonds for the first time in 1916, it told investors, “The present business was started in 1858”; WSJ, June 15, 1916. In advertising a dozen years later, it described the Great American Tea Company, progenitor of A&P, as “Roasters of Good Coffee Since 1856.” See “The Great American News,” folder 431, HFF. The story of George H. Hartford buying an entire cargo of tea in 1859 was presented in court in 1945 by an attorney for the company; Tr 84.
2. As one example of the legends and misstatements of fact that developed over time, a website of the Harvard Business School library offered the following history: “The Great Atlantic & Pacific Tea Company arose from the partnership created in 1859 between George Huntington Hartford and George Francis Gilman. Using Gilman’s connections as a grocer and son of a wealthy ship owner, Hartford purchased coffee and tea from clipper ships on the docks of New York City. By eliminating middlemen, the partners were able to sell their wares at ‘cargo prices.’ This venture was so successful that in 1869 Hartford and Gilman opened a series of stores under the name Great American Tea Company”; www.library.hbs.edu/hc/lehman/chrono.html?company=the_great_atlantic_pacific_tea_company_inc, accessed May 10, 2009. There is no evidence that Gilman was ever a grocer or that he and Hartford were partners in 1859. The earliest known use of the Great American Tea Company name was in 1863.
3. Norcross, History of the New York Swamp, 124–25. The New York Business Directory for 1840 and 1841 (New York, 1840), 55, confirms that Nathaniel Gilman was running Gilman, Smull & Company at 11 Ferry Street in Manhattan in 1840. The description of Nathaniel Gilman is from “Long Fight Presaged over Gilman Millions,” NYT, March 24, 1901. For background on the leather trade in New York, see Scoville, Old Merchants of New York City, 252–62, and Ellsworth, “Craft to National Industry in the Nineteenth Century” (Ph.D. diss.), 100–29.
4. Rode’s New York City Directory, 1851–52, compiled in the spring of 1851, showed George F. Gilman with a hides business at 35 Spruce Street and his older brother, Nathaniel Gilman Jr., with a leather business at 72 Gold Street, which was also the location of Nathaniel Gilman & Son, leather dealers. The following year, Rode’s listed George’s hides business at 17 Ferry Street, just down the block from the leather business of his brother Winthrop W. Gilman at 7 Ferry Street, while the 35 Spruce Street location was occupied by Nathaniel Gilman Jr. and Nathaniel Gilman & Son. Winthrop was still at 7 Ferry, where he would remain for many years. Winthrop, born in 1808, had moved to Sullivan County, New York, in 1846, where he bought forests and built tanneries at a place that became known as Gilman’s Station. That area, in the town of Forestburgh, is said to have had thirty-nine tanneries producing 100,000 sides of leather annually in the 1850s. “A Millionaire’s Lonely Death,” NYT, December 8, 1885; en.wikipedia.org/wiki/Forestburgh,_New_York, accessed May 1, 2009.
Nathaniel senior also was known for lending money; Trow’s New York City Directory for 1856–57, 316, gives George Gilman’s business as “exchange,” suggesting that he may have collected debts for his father.
5. The 1850 census has a leather dealer named Nathaniel Gillman, age thirty-five, born in Maine, living in Ward 2, Brooklyn, with his wife, two children, and three servants. On construction of the Gold Street building, see Norcross, History of the New York Swamp, 38; the 1857 William Perris map of New York, sheet 5, shows 98 Gold to be a frame building with a store attached. New York City tax records show that the two buildings on the site were replaced in 1858 with a five-story structure containing about seven thousand square feet of space; see Record of Assessments, 4th Ward, 1858, 26, and 1859, 24, NYMA. Trow’s for 1859 lists George F. Gilman, hides, at 98 Gold Street and at 55 Frankfort Street, just around the corner. Many newspaper reports have the wrong date of death for Nathaniel Gilman, and some confuse him with his eldest son, also Nathaniel, who predeceased him.
6. Trow’s New York City Directory for 1860–61, which was compiled prior to June 2, 1860, shows both a John S. Hartford and a George W. Gilman in “Teas” at 98 Gold Street.
7. This version of George Hartford’s life appears in Whittemore, Founders and Builders, 209, which was probably checked with George H. Hartford. Avis H. Anderson, A&P, 9, states that George Hartford met Gilman in St. Louis and began working for him there; their common roots in central Maine would have provided a natural link. According to an alternative explanation of the Gilman-Hartford relationship, John S. Hartford is said to have known George Gilman from living in the same town in Maine and supposedly asked Gilman to allow him to store tea in the Gold Street warehouse and finance him to peddle tea across the country. John S. Hartford’s health then supposedly worsened, and George H. Hartford came from St. Louis to take over the tea wagon. “O.W.S. Biography—Initial Notes (1700 through 1874),” HFF. This story is not credible for a variety of reasons: the Hartfords and Gilman did not live in the same town in Maine; John Hartford is listed in a directory as an “agent” for Gilman’s leather business in St. Louis; and the brothers appear to have moved to New York around the same time. The 1850 census, Boston Ward 9, Suffolk, Massachusetts, roll M432_337, 192, image 39, shows a George W. Hartford, aged eighteen, and a John S. Hartford, fifteen, boarding in the house of Ignatius Sargent and his wife, Sarah. It is not certain that these are the correct Hartfords; George’s correct middle initial was H, not W, and both ages given are one year older than the brothers’ actual ages in June 1850. However, the age spread between the two is correct, both are listed as having been born in Maine, and neither appears in the 1850 census record for Maine, indicating that they were living in another state. John S. Hartford filed a passport application in Boston in January 1855, giving his age as nineteen and his birthplace as Maine. It is uncertain where he traveled. Kennedy’s St. Louis Directory, 1859 confirms that Gilman had an office in St. Louis and that both Hartfords were working for him there in 1859 while living at 75 North Fifth Street.
8. The Hartfords’ presence in Maine in June 1860 is confirmed in U.S. Bureau of the Census, United States Federal Census, 1860, Augusta, Kennebec County, Maine, M653_441, 121–22. Despite the lack of evidence that either Gilman or Hartford was selling tea or coffee in 1859, the Great Atlantic & Pacific Tea Company, long since free from the Hartford family’s control, held fast to the story; in September 2008 it received a U.S. trademark for the slogan “America’s Coffee Provider Since 1859,” U.S. Patent and Trademark Office, registration number 3,522,886. Wilson’s New York City Business Directory for 1860 listed George F. Gilman as “Hide and Leather Dealer” and Gilman & Company as “Importers of Tea” at 98 Gold Street. Gilman is also shown as being in the leather business in an 1860 credit-agency book. See Roy J. Bullock, “The Early History of the Great Atlantic & Pacific Tea Company,” Harvard Business Review 11 (1933), 290.
9. Gilman had sufficient wealth and income to be liable for the wartime income excise tax imposed in 1863. The carriages, watches, and piano, along with an income of $4,959, appear on the 1866 tax report, series M603, roll 82, frame 507, NARA-NY. On the increasing separation between firm owners and workers, see Wilentz, Chants Democratic, and Beckert, The Monied Metropolis.
10. Albion, Rise of New York Port, 189, 203, 401. JOC, February 4, 1859, as one example, carried seven advertisements from hide dealers, although Gilman & Company appears not to have advertised in the newspaper either before or after it began to sell tea. While packet ships had made the trip from China in less than three months since around 1840, the clippers were typically larger and could carry much more cargo. John H. Morrison, History of New York Ship Yards (New York, 1909), contains detailed information on many of the American-built clippers. On the new fashion for tea, see, among other articles, “Tea,” Atlantic Monthly, February 1858, 446; “Tea Culture in the United States,” Harper’s New Monthly Magazine, November 1859, 762; “Tea for the Ladies, and Where It Comes From,” Godey’s Lady’s Book, May 1860, 301; “Tea
-Growing in India,” NYT, March 23, 1862.
11. Bullock, “Early History,” 290, and “History of the Chain Grocery Store” (Ph.D. diss.), 18–21; Albion, Rise of New York Port, 187, 283–84; Carhart, “New York Produce Exchange,” 214. A tea chest did not have a standard weight, and could contain anywhere from 80 to 110 pounds of tea, depending upon the origin; “half-chest” was a euphemism for a small chest, which typically held more than half the weight of a full chest. Coffee and tea auctions were held several times a week at merchants’ rooms in lower Manhattan around 1860; on February 2, 1859, for example, L. M. Hoffman & Company, auctioneer, sold 150 packages of undamaged teas arriving on the vessels Argonaut, Horace, and Eagle Wing, and 5,000 packets and bags of Java coffee damaged on the voyage. The auction was conducted at its premises in Hanover Square; JOC, February 2, 1859. Albion, Rise of New York Port, 283, states that coffee was auctioned at the New York Produce Exchange in the 1850s, but this could not have been true, as the exchange was organized only in 1860 and opened its building in 1861; exchange records for the 1860s make no mention of tea or coffee being traded there.
12. NYT, April 23, 1858, reported poor prices at an auction sale of tea and said that the announcement of a coffee auction the following day had depressed private coffee trading. The weekly United States Economist, November 12, 1853, 69, said many tea merchants “have closed their places of business until such time as there is any chance when they can dispose of their goods at a paying price.” Although some of the price and quantity information was obtained from public auctions, the vast majority concerned private sales and was derived from sources that were rarely disclosed. Quotation is from D. Stoddard, Boston, to Solomon Townsend, New York, October 9, 1847, in Townsend Family Papers, box 4, N-YHS.
13. On conditions in the Swamp during this period, see Norcross, History of the New York Swamp, 126; and Ezra R. Pulling, M.D., “Report of the Fourth Sanitary Inspection District,” in Report of the Council of Hygiene and Public Health of the Citizens’ Association of New York upon the Sanitary Condition of the City, 2nd ed. (New York, 1866). The Gold Street location appears in Trow’s New York City Directory, 1860–1861, 326, the Front Street location in Trow’s New York City Directory, 1861–1862, 323. The 1861 date for the establishment of the Great American Tea Company was used in the company’s advertising not long after; see, for example, the notice in New York Teacher and American Educational Monthly 5 (January 1868), back cover. The New York Record of Assessments, 1st Ward, shows that a Jno. Lecount, variously identified as Jona Lecount, purchased 129 Front Street in 1860 and owned it for years thereafter.
The Great A&P and the Struggle for Small Business in America Page 33