Sold My Soul to the Company Store (2023)

Special Guests: Cutting Class podcast

You load Sixteen Tons and what do you get?

Another day older and deeper in debt

St Peter, don’t you call me ’cause I can’t go

I owe my soul to the company store…

That song “Sixteen Tons” was a smash hit in 1955, selling half a million copies in a month. Why did a song with such depressing lyrics resonate with people, and what did it mean? My name’s…

Tennessee Ernie Ford was singing about a company town. A company town was a community built by a business owner, typically in the steel, lumber, and coal industries, to house his employees. It was also an exercise in microcosmic facism were told how they could live. In their height, 3% of the US population, many of the immigrants, lived in one of the 2,500 company towns across the US. Workers lived in company-owned housing, the cost of which was docked from their wages. Many companies also paid their workers in “scrip” – basically funny money that could only be redeemed at the company-owned store. The unions who fought to eventually eradicate this system saw it as a form of bondage, designed to keep workers trapped in poverty without enough money in their pockets to even think about starting over somewhere else.

The West Virginia Historical Society, whose sparsely-populated state saw had half a dozen company towns, wrote:

Pricing in the company stores was often higher than in surrounding non-company establishments. It is true that in the mining families, coal operators had captive purchasers for their goods. However, the availability of rail transportation, mail order products, and the proximity of other local merchants gave miners more choice than has been portrayed. The quality of company store goods was equal to that which could be bought in town. When the miner weighed the price of shipping his purchases from a mail order catalog or local merchant against the price of what could be purchased at the company store, very often, the store ended up being the better bargain… For the companies, scrip provided an easy way to pay the miners without the necessity of keeping large amounts of cash available. However, according to Crandall Shifflett in his study of coal towns in Southern Appalachia, there is no evidence that miners were ‘forced to draw their pay in scrip.’ On payday a miner could draw scrip or cash or both, the choice was his…

Miners drew scrip advances for many purposes. Should he run short and need food before the next payday, scrip credit was available. If a miner needed a piece of furniture and did not have the cash, scrip credit would take care of it. if a miner was sick or injured, companies would advance scrip pending receipt of his Workman’s Compensation checks. For the operators, this was a no lose situation. Companies had the ability to ‘virtually garnishee a worker’s wages to collect on a debt.’ It would appear that with the availability of such easy credit, most miners would in fact ‘owe their souls’ to the company stores. However, studies cited by Shifflett seem to indicate that miners used this option judiciously.

To give us an example of one of the nation’s most famous, and infamous, company town are the hosts of one of my drop-everything podcasts, Cutting Class, which you can follow on your podcast player or at cuttingclasspodcast.com.

Cutting Class

The town featured more than 1,000 homes, public buildings and parks. Residences had yards, indoor plumbing, gas, and daily trash removal, rare amenities for industrial workers of that era. Pullman didn’t build his workers good houses to be kind to them. He thought the working class were barely better than animals and if he could surround them with good things, they would become more civilized. The houses couldn’t be purchased, only rented. Managers lived in single family homes, white workers of Pullman lived in rowhouses, and despite the Pullman company being one of the country’s largest employers of black Americans as sleeping car porters, no blacks were allowed to live in Pullman. Some white workers were allowed to live outside the city limits, but it would cost you your job security.

The city had a library, with books approved by George Pullman. A library card cost the equivalent of $100, so few people used it. It was the same with The Arcade, an impressive shopping center with a 1,000-seat theater, a barbershop, doctor’s offices, a U.S. post office, and a bank, along with its numerous overpriced shops and restaurants. A banner across the promenade boasted “the lowest prices in Chicago.” This was, of course, bullshit. Pullman also forbade alcohol in the town, except at the Hotel Florence, where industrialists and celebrities were entertained and the average worker was not welcome. Pullman would know if you were drinking in the privacy of your own, rented home because he had spies watching the employees.

After the stock market crash of 1893, Pullman cut jobs and wages, but he didn’t cut the rent or the various taxes his workers were forced to pay. Since these were automatically deducted from the worker’s wages, people began receiving paychecks for literally pennies. One man had worked as a mechanic for ten hours a day for twelve days and earned $9.07; his rent on the same two-week period was $9.00, leaving him with $.07, one hour’s reduced wage with which to try to buy food in over-priced stores. Needless to say, a system like that was unsustainable, but Pullman’s greed was steadfast. Joining a union was illegal in Pullman, but 4,000 workers went on strike anyway in May 1894, what’s called a wildcat strike. Eugene Debs of the American Railway Union, stepped in to lead them. The company refused to recognize and bargain with the ARU, so Debs called upon workers all across the country to stage a boycott of Pullman railroad cars. Around the country, hundreds of thousands of working-class people wore white ribbons to show their support for the strike. Meanwhile, at Debs’s command, railroad switchmen across the nation refused to hitch and unhitch Pullman cars at work, costing the company an enormous amount of money. Within weeks, 250,000 workers around the country were striking. Pullman hired thugs to bust striking workers’ heads, but those who lived in the company town felt they had nothing else to lose.

Contrary to what we might expect these days, the clergy of Chicago by and large denounced the strike. Pullman’s Reverend E. Christian Oggel declared that all strikes violated the Golden Rule and added, “If a man thinks he can better himself elsewhere, there is no law compelling him to stay here.” There was one notable exception, a Reverend Carwardine, who served a congregation that was too poor to have its own church. In a fiery sermon in May 1894, he didn’t hold back in his opinion on George Pullman. “When he reduced wages to the point of starvation, why did he not reduce the rents and water taxes? When he was reducing salaries, why did he not reduce his own salary and the salaries of the higher officials, the town authorities, and the straw bosses? Why did Mr. Pullman when a woman’s union, which was not called a relief committee for fear of hurting Mr. Pullman’s feelings, approached him did he refuse to contribute a dollar and also send a communication to the press denying there was any destitution in Pullman? Why did he extort such exorbitant rent from the churches? Why did he not establish an emergency hospital, which is so badly needed?”

Deb promised that if Pullman recognized the union and negotiated with them , the strike would end. Instead, Pullman asked for, and actually got, government assistance to break up the strike– 6,000 state and federal troops, 3,100 police officers, and 5,000 deputy marshals. The troops used bayonets, then moved on to live ammo. The unarmed strikers fought back, however. when trains carrying soldiers came to town, the strikers stopped them dead in their tracks and rocked the train cars back and forth to overturn them. More than a dozen people were killed in the clashes. Though sympathy strikes were called in other cities, the American Federation of Labor refused to call an official general strike and the Pullman strike was quashed. Workers who had striked were fired and those who remained were paid the same low wages and charged the same high rent. When the railway car magnate died in 1897, his coffin was buried under layers of concrete and steel so no one could desecrate his body. The following year, the Illinois Supreme Court ordered the Pullman Co. to sell all its non-industrial property, allowing workers to buy their homes. The neighborhood was annexed to Chicago, but went into decline over the years and the factory closed in 1957. There have been plans made throughout the years to demolish Pullman, Illinois, but protests from residents have always stopped it from going forward.

Company town life can even lead to unrest in the places where life is supposed to be the most sweet. In 1900, Milton Snavely Hershey sold the successful caramel candy business he’d founded in order to become a pioneer in the mass-production of milk chocolate. He built a factory complex in rural Derry township Pennsylvania, in part to be close to local dairy farms for the milk needed for his products. With the remote location of the factory, Hershey also built a town for his employees. Like Pullman, Hershey was creating a model town, or a tow intended to act as a shining example of civilized life, based on the CEO’s beliefs of course. Workers could rent or own a home on Cocoa avenue, take the trolley to schools, social clubs, or the amusement park and zoo. Unlike Pullman, Hershey established a boarding school for orphaned boys started public works projects to keep people employed during the Great Depression, building a hotel, sports arena and other buildings. Many of the workers were former farmers and the standard of living in Hershey, with indoor plumbing, central heating, lawn maintenance and other amenities, was alluring.

That’s not to say things have always been as smooth as properly-tempered chocolate.Despite Hershey’s altruism, life in “the sweetest place on Earth” had a bitter side. The Hershey company tried to police their employees’ behavior when they were off the clock, and there were accusations of unfair hiring practices and disparate wages. These conditions made employees receptive to the efforts of organizers from the Congress of Industrial Organization. In 1937, Hershey chocolate factory workers organized the company’s first labor union and went on strike.

Not everyone backed the workers. Great resistance came from thousands of dairy farmers in surrounding areas who relied on selling their milk to the Hershey factory. They were losing 800,000 pounds of milk per day—enough to supply a city of a million people. The farmers tried to negotiate directly with the strikers. The strikers agreed to operate the creamery so the milk could be processed, but no trucks were sent out to gather the milk the next day. After five days, more than three thousand Hershey supporters rallied to remove the strikers. Things started well, but insults from the strikers inside soon saw men charging into the factory with billy clubs and hammers. Dozens were injured. Although the strike was short-lived, it marred the community’s idyllic image. Though Hershey the man died in 1945, Hershey the town survived and chocolate is still made there today. You can actually smell it from the highway.

Bonus fact: The Milton S. Hershey Medical Center is the site of Pennsylvania State University’s College of Medicine. The Pennsylvania State Police Academy is also located in Hershey.

In the 1920s, cars were a booming industry and no one benefited more from that than Henry Ford, a man whose name was as synonymous with success through innovation as Steve Jobs is today. Or as synonymous with success through shady behavior as Mark Zuckerberg. Ford revolutionized car manufacturing with the assembly line, but he was equally proud of the personal side of industry, paying his employees well and treating them better than other companies. The Model T was the best-selling car by a wide margin, so much so that it’s still the 8th best-selling of all time, which meant that the Ford company needed a lot of rubber to make tires. Rubber manufacturers in East Asia held a virtual monopoly over the rubber trees, which drove up the price of raw materials. Ford decided to cut out the middle-man and start his own rubber plantation, the world’s largest, in the middle of the Amazon forest, complete with workforce. The location was the rubber trees’ natural habitat, but farming them couldn’t be standardised and if you tried to maximize your yield by planting more trees, their closeness made them susceptible to blight and parasites. East Asia monopoly began to crumble when enterprising, and sneaky, botanists started planting rubber trees in other tropical places without rubber tree natural parasites. The British began growing rubber in Sri Lanka, producing rubber that was superior to, and outsold, Brazil’s. The economy of the Amazon basin, which was largely based on rubber, was devastated.

Enter a rich American wanting to buy land. Ford’s company town got off to a bad start when he massively overpaid for the 5600 sq mi/14,500 sq km of land around the Tapajos river, a tributary of the Amazon. Prudent fears of river-flooding saw them choose a main building site at a higher elevation, but that meant that cargo ships couldn’t reach that far inland except during the rainy season. Bad enough when you’re moving equipment, worse when you’re trying to bring in food. And then there was the malaria. Fordlandia would eventually have a power plant, hospital, library, golf course, and hotel, as well as small shops and restaurants once it got established. Workers would be held to a mandatory “healthy lifestyle.” This included attending poetry readings, square dances, English-language-only singalongs, and of course, no booze. Construction began in 1928 in a segregated community, Vila Americana white clapboard houses with indoor plumbing for the American workers, while the native workers got *other housing. What workers there were. Even with Ford’s famously-high wages, it was difficult to find people willing to clear the Amazon jungle.

After going through several managers in the first few years, by 1930, it seemed like Fordlandia might actually work, until an argument between a brick mason and a supervisor in the workers’ cafe, in which skilled workers were separated from manual labourers, spilled into the streets and gathered a crowd. A full-scale riot broke out, with laborers, vandalising the city, destroying generators, and over-turning vehicles in the street. Fordlandia’s managerial staff fled by ship until the violence died down three days later. Even without the expense of riot damage to many buildings and pieces of equipment in the town, Fordlandia was still producing very little for all the millions that Ford was pouring into it. His plan had been to sell the lumber of the trees they were clearing as a revenue stream until rubber trees could grow, but the wood was unsaleable. Many of the rubber trees that were planted died immediately and many of the rest were hit with Blight. Fordlandia’s manager hired an expert botanist, who made extravagant demands, then walked off the job without telling anyone. In 1933, Ford purchased a new plot of land downriver and called it Belterra. It went about as well, financially, only producing 750 tons of rubber where Ford had projected for 38,000 tons.

Despite having outlived all realistic economic hope, Fordlandia and Belterra clung on for nearly a decade. As Ford’s car manufacturing operation became increasingly involved in the second world war effort, his holdings in Brazil filled with American military personnel. By the time the war ended, Henry Ford was in poor health, and grandson Henry Ford II took over the company. One of his first acts was to cut underperforming assets, chiefly the rubber plantations. Ford II sold the Tapajos basin land back to Brazil for a fraction of what his grandfather had originally over-paid. Once news of the land sale reached Fordlandia, the American workers made a swift exit for home. The Brazilian workers were left without jobs and the machinery was left to rust in the jungle heat. Ford motor company got out of the rubber industry in 1945 after losing over $20 million in the Amazon (over $285 million in today’s dollars).

And that’s where we run out… You can visit Fordlandia to this day and not just to ogle the ruins overly-ambitious industry. After the population languished at under 100 for several decades, it has grown to about 3,000 people in recent years. In addition to articles and documentaries on Fordlandia, Icelandic minimalist composer Johann Johannsson released an entire album based on this company town, which is easy to find on YouTube by searching Fordlandia, as I discovered when I was trying to do research the lazy way. Thanks…

Sources:

https://www.steynonline.com/4434/sixteen-tons

https://www.atlasobscura.com/places/fordlandia

https://www.theguardian.com/cities/2016/aug/19/lost-cities-10-fordlandia-failure-henry-ford-amazon

https://paleofuture.gizmodo.com/blood-on-the-tracks-in-pullman-chicagolands-failed-cap-1574508996

https://www.history.com/news/5-famous-company-towns

https://timeline.com/pullman-capitalist-failed-utopia-84ff69850309

https://www.smithsonianmag.com/travel/americas-company-towns-then-and-now

https://en.wikipedia.org/wiki/Pennsylvania_chocolate_workers%27_strike,_1937