SHIFTING ELITES: PROFESSIONALIZATION AND REMAKING OF CHAMBERS
At precisely 12:01am on January 1, 1900 the Gilded Age ended, the Progressive Age began and ED paradigms shifted. It was quite dramatic, except no one noticed at the time—hangovers, inertia, myopia and all that. But “things” did shift around. Over the next few years America entered into one of its most spectacular periods of change— change that we live with today. The twig got bent yet again. Whatever else it was, America had entered the modern age, and we are now stepping across the threshold of modern, but not yet contemporary, sub-state economic development. For us this “Progressive Age” lasts through World War I (1919 or so). We cannot discuss “everything” at once, so the first Progressive Age topic addressed is the shifting of business elites and its consequences to sub-state economic development.
Thus far this history has presented a picture of sub-state economic development disproportionately shaped by various categories of business elites operating within municipal policy systems to confront changes unleashed from our three drivers. During the Progressive Age, municipal policy systems radically change, in large measure due to the activities and values of these business elites, as well as the digestion or incorporation of new “classes” of voters and workers into policy-making. The shifting of business elites came early in the Progressive Age, and it left in its wake a dramatically different set of municipal economic development players—leading to a municipal government “capacity” revolution—that will set the stage for a new burst of change.
New York City Chamber of Commerce
New York City is home base to turn-of-the-century American chamber evolution. The nationally prestigious New York City Chamber, led by the upper crust of America’s corporate capitalism (with some old money tossed in for good measure), thought of itself as the national chamber of commerce. It therefore figured prominently in national issues, federal and state government, as well as continuing to check Tammany and, to the degree possible, shape municipal policy and key economic development initiatives (such as the subway). Despite its importance, it would be a mistake to think of the New York City Chamber as a bureaucratic powerhouse. Mead describes George Wilson, whose tenure as secretary lasted 40 years (1868–1908), as “a skilled butler, more than a master of the house. Although Wilson produced excellent transcripts and summaries of chamber meetings, his name rarely appeared in the annual report” (Mead, 2014, p. 167). New York City Chamber’s power rested on its board of “one percenters”—not a powerful staff.
During the 1890s the city’s chamber raised membership to 1250 firms (raising it again to 1500 in 1900): “The problem with this chamber, for all its glittering history and achievements, was that it was too exclusive.” The chamber, in no way, could be considered as representative of the city’s overall business community: “John D. Rockefeller might be happily ensconced in his chamber of commerce, but what organization could the average businessman join so as to make contacts and to make New York a better place? (Mead, 2014, p. 174). By 1900 other elements of the business community wanted to play ball—but they had no place to do so.
The NYC Chamber shared turf with several boards of trade, the Harlem, Staten Island, Italian and Spanish chambers, and the Booker T. Washington Negro Business League. Despite these alternatives, in 1897 a new organization was formed: the New York City Merchants Association. The rise of a new structure repeated itself across the nation. The Merchants Association developed alongside the brand new (1898), consolidated five-borough New York City; its motto was to “to foster the trade and welfare of New York [City].” At its founding, the Association hired S. Cristy Mead as its first secretary. Mead, taking advantage of the NYC Chamber’s fixation with its national role, grew the Merchants Association into the city’s premier business organization. In one form or other, a new-style chamber of commerce had abruptly emerged, and blossomed across the nation. The turn of the century “was a time in which a new vigor seemed to animate business organizations, with business men’s leagues … coming to such communities as St. Louis, Sacramento, Birmingham, Atlanta and Houston” (Mead, 2014, p. 154).
Old-Style Chambers Shift to New Style
Not only did new-style “Merchant Association” chambers form, but an even more unsettling phenomenon slammed the old-style corporate elite chambers. The community’s “biggest of the big” corporate leaders pulled away, becoming less involved personally and financially in local chambers. A significant change in the composition of chamber membership resulted from reduced involvement of the jurisdiction’s top echelon corporate elite. Possibly increased industry concentration and nationalization of corporate market areas prompted large firm CEOs to withdraw from local chambers? Perhaps they shifted attention to national issues and towards forming a national, Washington DC-based chamber? Theodore Roosevelt (TR)—the trust-buster—was President, and the Progressive Movement had seized hold of national policy-making. Politics, policy and the economy were more national than ever, and top corporate leadership arguably moved with the new geography of power.
Big Cities, as well as second-/third-tier city chambers, reeled. Seeking revenues to replace lost corporate dollars, chambers conducted membership campaigns aimed at the general business community. Financial stress and the desire to attract small business compelled rival business organizations to consolidate into the chamber. During the Progressive Era, boards of trade, trade exchanges, businessmen leagues and commercial clubs merged with chambers. Consolidation enhanced chamber social and networking functions, and required a new set of programs reflecting new ideas, demands and goals.
The business community ED landscape changed radically during the first two decades of the twentieth century, dramatically altering nineteenth-century jurisdictional policy priorities. While still dominant, the chamber was “not your father’s chamber.” The business community wanted to remake city hall in its image, focus intensely on local concerns and professionalize the chamber. Professionalization encouraged chamber bureaucratization, establishing a structure to formally administer ED programs (industrial bureaus) and “spin off” tourist bureaus and chamber-owned industrial sites into subsidiaries. New-style chamber governance took heed of the competitive urban hierarchy, and economic development, as a policy area, garnered a more robust commitment. What’s more, in many cities across all regions chambers became primary local operatives for the community’s Progressive Movement.
Change required an increased reliance on a chamber secretary-CEO.13 The shift from control by board to a CEO-led staff was fundamental to the chamber’s evolution. The career of Ryerson Ritchie describes the rise and role of the new chamber secretary during these years; it will also expose the dramatic changes chamber secretaries made. Ritchie’s career played out between 1893 and 1912, during which time he served as chamber secretary in Cleveland, Detroit, Boston and San Francisco. If anybody personified Big City chambers in this era, it was Ritchie.
Ryerson Ritchie: New-Style Chamber Leadership
Ritchie hated boosterism.14 He argued that: “instead of talking about being the best [American chambers should strive to] become the best. They should organize and make their communities so advanced, so well run, that people and business would naturally flock to them” (Mead, 2014, p. 170). Ritchie advocated Progressive initiatives, including municipal structural reform (commission and city manager forms of government). In each city Ritchie served, he aggressively consolidated other business organizations into the chamber:
Cleveland in 1893 the Committee on the Promotion of Industry coming together with the Board of Trade, in Detroit in 1903 five different groups coalesced into the Detroit Board of Commerce; in Boston 1909 the Merchants Association and the Chamber of Commerce joined, and in San Francisco in 1911, the Merchants Association, the Merchants Exchange, the Downtown Association, and the Chamber of Commerce combined. Along with consolidation came an explosion in chamber membership. In Boston, for example, he merged the Chamber (1,000) with the Merchants Association (1,800) and then campaigned to increase the combined entity’s membership to 4,500—by 1911 only two years later. (Mead, 2014, p. 171)
Internal chamber structure changed radically. In Cleveland, Ritchie set up 82 committees with 450 members—signaling non-elite, broadening of chamber involvement in local policy-making. In Boston, he organized 62 committees with volunteers the like of Louis Brandeis, Edward Filene (department store owner), James Storrow (a founder of General Motors) and Olmsted (who led a committee fighting railroad freight discrimination). The program changed as well. Embracing big local issues such as municipal reform (city manager, budgeting and planning), Ritchie put the chamber foursquare behind the City Efficient and City Reform movements. Even smoke abatement (pollution reduction), workplace safety (in line with Roosevelt’s Progressive agenda) and corporate philanthropy were aggressively advocated. Ritchie’s Big City chambers became instruments of the Progressive agenda and locally directed Progressive change.
What was new about Ryerson Ritchie? The great New York Chamber had pioneered the idea of a few committees, each with a few good men, working on a few civic projects. Ritchie democratized that vision and made everyone in business a potential reformer. Thousands of eager business people could pool their energy and turn their cities … into Utopia. (Mead, 2014, pp. 171–2)
In the eyes of Kenneth Sturges, Ritchie established the first “modern chamber of commerce” in Cleveland. The Cleveland Board of Trade reorganized in 1898 to become the Cleveland Chamber of Commerce, whose purpose was to engage in “civic work.” Ritchie, its first secretary, developed a solid phalanx of committed, socially responsible businessmen on his board of directors. Many previously served on the old board of trade’s Committee on the Promotion of Industry, during which time they advocated involvement in behalf of the business community. A statewide Conference of Chambers (Ohio State Board of Chambers of Commerce) resulted in 1893. Ritchie then consolidated Cleveland’s various business organizations into the chamber (Sturges, 1915, pp. 137–47).
Working with social reform mayor Tom Johnson (1901–09), the chamber and its secretary attacked the problem of Cleveland’s slums, forming a committee on housing conditions in 1902. State and local approval of the city’s first building code resulted. Subsequent state approvals, also with key chamber involvement, expanded city powers to condemn and raze non-conforming structures. A special committee was formed to approve bond referenda to develop three bathhouses; another chamber committee led to a citywide system of playgrounds and recreation centers. In 1904 the chamber led, unsuccessfully, comprehensive school reform. Yet another chamber committee aggressively pursued river and harbor improvements. In 1906 the chamber formed a committee to work with the city on the troublesome streetcar system (Sturges, 1915, pp. 137–47). In the next chapter, the reader will see this agenda very closely mirrored community development’s agenda of that period. In Cleveland, at least, Progressivist CD had taken over a chamber.
The New York City Merchants Association (as well as other Big Cities) copied Ritchie’s innovations in management, membership and structure. NYC’s Merchants Association membership recruitment relied on civic pride and a commitment to give back to the community as a centerpiece experience in being a chamber member: “Are you doing your share? … Hundreds of recruits to fight for New York” (Mead, 2014, p. 174). The Merchants Association’s first president, S. Cristy Mead, described the “modern” chamber of commerce as the “expression in commercial community affairs of the operation of the law of cooperation, and coordination of effort on the part of individual units for greater efficiency in the accomplishment of results of benefit to the community.”15
Professionalization of Chamber Leadership
Chamber professionalization did not confine itself to eastern and midwestern Big Cites.16 It was national, across cities of all sizes. Perhaps, the most widespread expression of professionalization was the establishment of state associations of chamber secretaries. Texas was one of the very first (1906), followed in the same year by the Inter-State Association of Chamber Executives (New York, Pennsylvania and New Jersey); the Southern Commercial Secretaries Association (1907); the Central Association of Commerce Secretaries (1909); and the Associated Chambers of Commerce of the Pacific Coast, Oklahoma (1909) and Michigan (1912).
The next step in chamber professionalization was the founding of the US Chamber of
Commerce in 1912. Previous to 1912, the New York City Chamber had served as the de facto national chamber. The catalyst for establishing a national chamber came from Presidents Roosevelt and Taft. Having established a cabinet agency, the Department of Commerce and Labor (1903), both Presidents and their Commerce and Labor Secretaries believed the department needed a private national counter-party to formulate and implement policy. Taft took special interest, and his Commerce and Labor Secretary, Charles Nagel, pursued it aggressively. In December 1911 Taft addressed Congress and argued that the nation needed a national chamber; shortly after, Taft sent 2000 invitations to chambers to establish a national chamber at an April 1912 meeting. Some 600 showed up, elected Harry A. Wheeler (former president of the Chicago Association of Commerce) as its temporary chair and approved the formal establishment of the US Chamber of Commerce. Within 18 months, the US Chamber attracted 500 organizational members, and by 1920 a budget of $ 1.3 million (Mead, 2014, pp. 191–6).
The US Chamber was a top-down, policy-focused organization. Local chamber secretaries required their own professional entity geared to their needs of managing sub-state chambers. Given the intense state-level organization that had occurred over less than a decade, they were inspired to create a national professional entity as well. Working with the US Chamber, two large multi-state entities (East Coast American Association of Commercial Executives and Midwestern Central Association of Commercial Secretaries) met in 1914 and consolidated into one entity, the National Association of Commercial Organization Secretaries (NACOS).17 Its first president was S. Christy Mead, former secretary of the New York City Merchants Association. In 1915 the US Chamber created its Organization Service Bureau to work with and jointly coordinate the two organizations and share US Chamber resources (Mead, 2014, p. 196).
Finally, the chamber movement developed its own Policy World. Several chamber histories were produced in this period,18 the most significant of which was Kenneth Sturges’s American Chambers of Commerce (1915), and in 1920 NACOS published the 467-page Commercial Organizations: Their Functions, Operation and Service. In 1913 Paul Cherington, a Harvard University professor, announced the Harvard Business School Project, whose purpose was to train chamber secretaries to “give them a practical knowledge of how they can do what they are organized to do.”19 Other colleges such as Dartmouth, the University of Michigan and the University of Chicago followed suit. The US Chamber introduced its publication, Nation’s Business, and several popular monthlies linked to chambers and chamber activities followed (for example National Municipal Review, Town Development and The American City). The American City in 1917 presented a two-week course for chamber executives which 90 individuals attended (Mead, 2014, p. 198). Also, Junior Chambers of Commerce were first created during this decade.
Ron W. Coan 