Chambers of Commerce
Chambers of Commerce had been around, in Europe as early as the 16th century[1]. They spread to America early in the colonial era[2], but colonial/Early Republic chambers crashed and burned on a regular basis. Most Early Republic chambers failed by the end of the Civil War; only a few remained in cities such as Boston, Chicago, Buffalo, Pittsburgh and New York. A new-style chamber[3] became commonplace after the Civil War. Old-style chambers (ignore Boston) stayed away from public affairs and served as mediators of business disputes and purely commercial/trade and production matters. New-style chambers, however, assumed a wider scope of action, a larger world view, and assumed responsibility and leadership for key municipal affairs. Most Northeast/ Midwest Big (and small) City chambers of commerce were established throughout the Gilded Age[4]. In 1868, in Philadelphia, thirty-three chambers and boards of exchange (including the New York City Chamber) established the National Board of Trade[5]. By 1890, a report prepared by Scranton Board to Trade to the National Board of Trade had uncovered 1,171 relevant chamber/boards of trade in existence at that time[6].
One reason the new-style chamber caught the attention of political folk is the business leadership that had coalesced behind them. Gilded Age chambers were restricted to the largest firms/old money in the jurisdictional economic base. Kenneth M. Sturges describes the new style chamber produced “a new organization conducted by the best type of citizens and businessmen, and interested not only in the upbuilding of commerce, but also in the betterment of community life.”[7] The example was set by the New York City Chamber, its membership limited to the top 1000 corporations. In 1896, for example, its Board of Directors held eleven millionaires out of twelve directors. Included as its Vice-President was J.P. Morgan: directors were John Jacob Astor, John D. Rockefeller, and Cornelius Vanderbilt.[8]
[Chambers/Boards of Trade] issued a growing body of resolutions to the city councils and mayors’ office and organized a string of committees to draft municipal legislation or lobby for change in municipal policy. Realizing superior municipal services and commercial prosperity were intrinsically linked, the chambers and boards applied their traditional booster spirit to the cause of good government and became potent forces ….[9]
Chamber after chamber, the jurisdiction’s “one per cent” formed the nucleus of the Chamber[10]. Chamber Secretaries, while very prestigious, were more facilitators for the Great Men of Business than independent powers. If staff were needed, the big boys would second staff from their own corporations. Campaigns, initiatives and budgets were consensually determined so sufficient resources to purposes required were available. The Gilded Age’s most prestigious chamber, which thought of itself as national in scope of interest and action, was the New York City Chamber. States formed state-level chambers, Utah may have been first in 1879 (it published a guide, “the Resources and Attractions of the State of Utah”), Louisiana had rudiments of a state organization in 1889, Maine in 1889, Massachusetts and Connecticut in 1890, New York in 1891, Virginia 1892 and Ohio in 1893[11]. By the turn of the century were the undisputed primary business organization in the nation—embedded in the largest, and many second third tier cities, they were equally conceded (by me) to be the undisputed primary actor in Big City economic development policy-making.
Gilded Age Chamber Initiatives
First, a thorough discussion of chamber economic development initiatives, strategies, and tools will be presented in Chapter 4. At this point, discussion will be limited to major “city-wide” initiatives relevant to city growth, the city’s economic base, and the physical expansion of the city conducted in several Big Cities during these years.
Chambers/Boards of Trade very early on became vociferous opponents of the railroad “robber barons”. It is not hard to understand why. Just about every sector of industry was the victim of freight discrimination, excessive rates, the need to pay bribes, rate pooling, and to complete the picture, stock manipulation. Cities, as we have already described paid enormous subsidies to attract railroads to their cities—but that doesn’t mean they enjoyed doing it. It was the cost of growth, pure and simple. In 1879 the National Board of Trade voted 42-3 for national regulation of railroads. The Chicago Board of Trade had harsh words for railroads, but when the New York City Chamber of Commerce formed a Committee on Railroad Transportation in 1878 and called its director Cornelius Vanderbilt to task (he admitted to the committee that “we [his railroad] have been actuated by selfish motives”) the worm had indeed turned[12].
The New York State legislature responding to the New York City Chamber, approved anti-railroad legislation and established the state railroad commission in 1882. Many states followed its example in i887, with active and public support from hundreds of chambers across the nation, Congress passed the Interstate Commerce Commission. No claim is made that the traditionally cited populist and farmer outcries were not also responsible for its passage—only that chambers played a vital, and powerful role in what easily was the most critical urban transportation issue of its day. The National Board of Trade also took “progressive” positions for regulation of food and drugs (responding to the Yellow Fever epidemic of 1878). Also as early as 1883, the New York Chamber advocated for state preservation of the Adirondack Forest and Niagara Falls.[13] Positions such as these are not traditionally associated with chambers today—and there may be a reason for these positions then, but not today. As was argued earlier, “the business community” is not monolithic. Chambers at this time are dominated by what will later be called “the corporate elite”—the largest and most powerful corporations in America. This will change. The corporate elite in the first decades of the twentieth century, will move on to “other climes”, leaving the chamber leadership to other business segments. Chambers in the Gilded Age are indeed private actors, but these chambers are different than other chamber leaderships to follow.
Another example drawn from the New York City Chamber further demonstrates its locally-applied power, vitality, and the commitment to city growth and prosperity: the role of that chamber in the 1890’s approval and installation of the New York City rapid transit system. London in 1890 opened its underground, electrically-powered subway. Abram Hewitt, former chamber president and former NYC mayor tacked the task of building this system in his city. He got nowhere for over three years. In 1894 the Chamber assumed leadership, formed a committee, and formulated a plan which required public financing (and private). Deciding that the city government would frustrate the project, the Chamber secured from it authorization to form an independent (self-perpetuating) Subway Commission with six of the eight members being chamber leaders (including the chamber president). The Tammany legislature attempted to gain control over the Commission, but the Chamber successfully resisted.
The Chamber Committee drafted and submitted a bill to the New York State legislature in 1894 and it was approved and signed by the governor in three months. The state legislature required approval by popular referendum, however. The referendum endorsed the chamber plan; the Subway Commission issued the public bonds and sub-contracted construction management and contract issuance to the Chamber itself. In October, 1897 the line opened for business[14]. We must be careful concerning the lessons drawn from this New York City example. The power and capacity of the 1890’s New York City Chamber of Commerce was not typical of Big City chambers in general. But chambers across the North and Midwest tackled, certainly provided advocacy, critical leadership, planning and resources for significant infrastructure projects and path-breaking initiatives.
The Philadelphia Board of Trade stopped dead its tracks a proposal for an elevated loop rail system through the CBD; it successfully pressed the city government to form a “Docks Department” to dredge the harbor and modernize its facilities to render it more competitive. The chamber campaigned to establish water and sewer lines into the CBD. In the 1890’s it arbitrated a solution on where to locate/build the Reading Rail terminal and lobbied to construct a beltline railway. In Newark, the Chamber successfully lobbied to construct a park system and opposed plans for a new reservoir, It secured approval of a Park Commission and the chamber president became its first president. pressed for construction of sewers, urged enhanced building codes on wooden residential structures, and continuously battled street railways over excessive charges and bad service.
The Cleveland Board of Trade reincorporated as the Cleveland Chamber, becoming in the process the city’s most powerful proponent for modernization, infrastructure and city growth. In 1897 in its annual report, Cleveland’s Chamber Secretary reported that “nearly all of the important propositions for [public] improvements were submitted to the Chamber for consideration and approval [and] with rare exceptions the legislative representatives, city officials, and members of the chamber labored unitedly”. Apparently Columbus followed Cleveland’s aggressive chamber lead, that the claim was “The Board of Trade is Columbus”. In Indianapolis, the Board of Trade under the presidency of Eli Lilly (pharmaceutical company) drafted and secured a new charter for the city, framed and secured passage for a park commission, and hired engineers to examine the city’s sewer system and develop proposals. The Minneapolis Board of Trade and the Chamber combined efforts to overturn an adverse city council decision not to establish a park commission by going directly to the state legislature for authorization.[15]
Leaving Chicago for another chapter, there are plenty more examples; it seems clear that chambers/boards of trade during the late Gilded Ages were aggressive promoters and developers of infrastructure and public improvements—and at least as far as economic development-related policy-making, arguably the dominant player. To provide one last confirmation and to bookend the New York City Chamber’s aggressive involvement in city policy-making, this section concludes with Boston. In 1896 Mayor Josiah Quincy set up a city hall “Merchants Municipal Committee”. Composed of the heads of the city’s six major business organizations, the Merchants Committee over the next four years submitted recommendations to the mayor, drafted legislation to the state legislature, drafted a tax reform, arbitrated differences between railroads and the city/track relocation and terminal location. In September 1897, the Tremont Street Subway (the first section of the “T”’s Green Line opened for business, one month before the New York City line—earning Boston’s bragging rights to house the nation’s first subway. Boston, anticipating the later Yankees-Red Sox rivalry, had been in a race with the New York City to build the first subway[16]. Henry Whitney, owner of Boston’s West End Street Railway Company had beaten his rival Abram Hewitt.
[1] Marseilles France claims it is the first–established in 1599–followed by a second in Bruges Belgium in 1664.
[2] America’s earliest chamber, New York City, was found in 1768–although that fact is contested by Boston Chamber of Commerce which claims to be America’s first, inspired by Daniel Webster in 1825. See Chris Mead, the Other Chambers of Commerce, New Geography, November 18, 2010. Selected Big City Chambers include: Chicago 1848, Buffalo NY 1844, Cleveland OH 1848, Toledo OH 1849, Baltimore 1820, Philadelphia 1801, Albany 1823, Pittsburgh 1835, St. Louis 1836, Cincinnati 1839, Hartford 1799, and Detroit 1856.
[3] We will refer generically to the Chamber of Commerce. In some communities they could be called the Committee of One Hundred, Businessman’s Association, Board of Trade or many other titles. Each title reflects a different historical tradition and economic function which, while interesting, is beyond the scope of this study. Boards of Trade, for instance, originated in colonial times, imported from the United Kingdom. Boards of Trade in New England were a hotbed of revolution. Ask Sam Adams, a Boston Board of Trade member; he’ll tell you some interesting stories about a tea party planned at a Board of Trade meeting.
[4] See Chris Mead, the Magicians of Main Street (Oakton, VA, the John Cruger Press, 2014). Mead’s Appendix 1 provides the founding dates of many chambers. This list goes way back to the seventeenth century. Selected cities and dates of Gilded Age founding: Salem MA, Scranton PA (1867); Dubuque IA , Newark NJ, Providence RI (1868); Madison WI, Knoxville TN (1869); Portland OR, San Diego CA (1870); Duluth MN, Lancaster PA, Burlington VT (1872); Minneapolis MN (1876); Rochester NY, Grand Rapids MI, Springfield OH, Muncie IN (1887). There are literally a hundred or more chambers listed in this period, pp. 392-397.
[5] Proceedings of the Second Annual Meeting National Board of Trade (Richmond), 1870 (Google Books)
[6] Chris Mead, the Magicians of Main Street, op. cit, p. 129.
[7] Kenneth Montague Sturges, American Chambers of Commerce, Printed for the Department of Political Science of Williams College, 1915, p. 43.
[8] Jon C. Teaford, the Unheralded City, op. cit., p. 189.
[9] Jon C. Teaford, the Unheralded City, op. cit., p. 189.
[10] Mead expands this list of notable business leaders in leadership position in various chambers. Chris Mead, the Magicians of Main Street, p130.
[11] Chris Mead, the Magicians of Main Street, op. cit., p. 132.
[12] We are indebted to Mead for most of this description and we borrow from him a rebuttal to the Committee made by William Vanderbilt: “The encouragement by such a body as the Chamber of Commerce to such [anti-railroad] ideas will not stop with railroad corporations, but will reach all kinds of associated capital, and will not be stopped before it reaches all property. This growing tendency to socialist principles is one of the most dangerous signs of the times…”; Chris Mead, the Magicians of Main Street, op. cit., p. 124.
[13] Chris Mead, the Magicians of Main Street, op. cit., p. 125.
[14] The case study was a composite constructed from Chris Mead, the Magicians of Main Street, op. cit., pp. 144- 145 and Jon C. Teaford, the Unheralded City, op. cit., pp. 190-191. The contemporary plaque detailing the line’s construction, a picture of which is included in Magicians of Main Street, includes the phrase “suggested by the Chamber of Commerce”.
[15] Jon C. Teaford, the Unheralded City, op. cit., pp. 190-192.
[16] Doug Most, the Race Underground: Boston, New York, the Incredible Rivalry that Built America’s First Subway (New York, St. Martin’s Press, 2014). P.S. The Green Line might be named for Dr. Samuel Green, former mayor, who issued an important report to the subway commission in 1895.
Ron W. Coan 