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Corporate Liberalism and Electric Power System Planning in the 1920s

Published online by Cambridge University Press:  13 December 2011

Leonard DeGraaf
Leonard DeGraaf
Affiliation:
Leonard DeGraaf is a doctoral candidate in history atRutgers University, New Brunswick, and a graduate assistant at the Thomas A. Edison Papers.
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Extract

Examining the efforts to restructure the electric power industry during the early 1920s, this article challenges the view that proponents of corporate liberalism shared a belief in the legitimacy of corporate capitalism and that conflicts among them involved only technical and managerial issues. It argues, rather, that corporate liberals could disagree about the goals of economic planning as well as about tactics and strategy and that they often held conflicting perceptions of the nature of corporate capitalism in American society.

Type
Articles
Information
Business History Review , Volume 64 , Issue 1: Government and Business , Spring 1990 , pp. 1 - 31
Copyright
Copyright © The President and Fellows of Harvard College 1990

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References

1 Murray, William S., A Super Power System for the Region between Boston and Washington, D.C., Dept. of the Interior, U.S. Geological Survey, Professional Paper #123 (Washington, D.C., 1921)Google Scholar [hereafter cited as Murray, Super Power Report]; Cooke, Morris L., “The Long Look Ahead,” Survey 51 (1 March 1924): 604.Google Scholar Throughout this paper the phrase “utility industry” refers to the electric utility industry in the Northeast, unless otherwise indicated.

2 Hawley, Ellis W., “The Discovery and Study of a Corporate Liberalism,” Business History Review 52 (Autumn 1978): 309–11.CrossRefGoogle Scholar See also Kim McQuaid, “Corporate Liberalism in the American Business Community, 1920–1940,” ibid.: 342–68; Louis Galambos, “Technology, Political Economy, and Professionalization: Central Themes of the Organizational Synthesis,” ibid. 57 (Winter 1970): 471–93; and Larry C. Gerber, “Corporatism in Comparative Perspective: The Impact of the First World War on American and British Labor Relations,” ibid. 62 (Spring 1988): 93–96.

3 Gerber, “Corporatism in Comparative Perspective.” Gerber cited three pluralist studies: Bentley, Arthur F., The Process of Government (Cambridge, Mass., 1967)CrossRefGoogle Scholar; Truman, David B., The Governmental Process: Political Interests and Public Opinion (New York, 1971)Google Scholar; and Dahl, Robert A., Pluralist Democracy in the United States: Conflict and Consent (Chicago, Ill., 1967).Google Scholar

4 See Israel, Jerry, ed., Building the Organizational Society: Essays on Associational Activities in Modern America (New York, 1972)Google Scholar, particularly the introduction by Samuel P. Hays.

5 Cuff, Robert D., The War Industries Board: Business-Government Relations During World War I (Baltimore, Md., 1973)Google Scholar; McQuaid, “Corporate Liberalism in the American Business Community,” 344–45.

6 Thomas P. Hughes has written extensively on Super Power and Giant Power, particularly in Networks of Power: Electrification in Western Society, 1880–1930 (Baltimore, Md., 1983).Google Scholar Hughes has not, however, written about these plans within the context of corporate liberalism, nor has he studied Herbert Hoover's role in the promotion of Super Power.

7 Carlson, W. Bernard, “The Cultural Construction of Communications Technology: The Case of Edison and the Motion Picture,” unpublished paper presented at the TeCH 88 Conference, Edinburgh, Scotland, 18–21 August 1988Google Scholar; quoted with permission of the author. See also Bijker, Wiebe E., et al. , eds, The Social Construction of Technological Systems: New Directions in the Sociology and History of Technology (Cambridge, Mass., 1987)Google Scholar, and Collins, H. M. and Pinch, T. J., Frames of Meaning: The Social Construction of Extraordinary Science (Boston, Mass., 1982).Google Scholar

8 Historical Statistics of the United States, Colonial Times to 1970 (Washington, D.C., 1975)Google Scholar, part 2, Table S 120–132, 828; Table S 32–43, 820. See Ruggles, C. O., “Problems in the Development of a Super-Power System,” Harvard Business Review 2 (Jan. 1924): 160–73Google Scholar for a general discussion of the development of the electric utility industry.

9 Hughes, Networks of Power, 285–97. The War Industries Board and the U.S. Geological Survey conducted surveys to determine where power shortages were likely to occur and where power supplies could be pooled. The federal government ordered the construction of large-capacity power plants and ordered small groups of utilities to pool power resources.

10 Murray, , Superpower: Its Genesis and Future (New York, 1925), vGoogle Scholar; “William S. Murray,” National Cyclopedia of American Biography, vol. E (New York, 1938) 402–3.Google Scholar

11 Murray, Super Power Report; Interior Secretary John B. Payne to Warren G. Harding, 24 Feb. 1921, Central Classified File, Dept. of Interior, Office of the Secretary, File 7–49, Record Group 48, National Archives.

12 Murray, Super Power Report, 14.

13 Minutes of the Super Power Advisory Board, 1st Meeting, 24 Sept. 1920, 4, File 59A–158, Water Resources Division—Super Power Survey, Record Group 57, National Archives [hereafter cited as Super Power Minutes].

14 Super Power Minutes, 1st Meeting, 24 Sept. 1920, 6.

15 Super Power Minutes, 2d Meeting, 1 Dec. 1920, 5.

16 Ibid., 9; 3d Meeting, 5 Jan. 1921, 7.

17 Super Power Minutes, 2d Meeting, 8.

18 Super Power Minutes, 4th Meeting, 18 Feb. 1921, 3.

19 Super Power Minutes, 6th Meeting, 13 May 1921, 17.

20 Super Power Minutes, 7th Meeting, 20 May 1921, 4, 9.

21 Ibid., 12.

22 Ibid., 23.

23 Hughes, Networks of Power, 286.

24 Bonbright, James C. and Means, Gardiner C., The Holding Company: Its Public Significance and Its Regulation (New York, 1932)Google Scholar; Hughes, Networks of Power, 391; Buchanan, Norman S., “The Origin and Development of the Public Utility Holding Company” Journal of Political Economy 44 (1936): 31–53.CrossRefGoogle Scholar

25 Hughes, Networks of Power, 395. See Mitchell, Sidney A., S. Z. Mitchell and the Electrical Industry (New York, 1960)Google Scholar, for a discussion of Mitchell's role in the development of utility holding companies.

26 Bayla Singer, “Power Politics,” IEEE Technology and Society Magazine, Dec. 1988, 25. This company was a holding company and did not create a Super Power system.

27 Mitchell, Broadus, Depression Decade: From New Era through New Deal, 1929–1941 (New York, 1947), 346.Google Scholar

28 Cooke to Henry Stimson, 28 Jan. 1925, box 195; Cooke to Pinchot, 29 May 1924, box 36, Morris L. Cooke Papers, Franklin D. Roosevelt Library, Hyde Park, New York.

29 For a discussion of this vision see Hughes, Thomas P., American Genesis: A Century of Invention and Technological Enthusiasm, 1870–1970 (New York, 1989), 303–5.Google Scholar

30 Penick, James Jr, “Gifford Pinchot,” Dictionary of American Biography, Supplement 4 (New York, 1974), 664Google Scholar; Hays, Samuel, “Gifford Pinchot and the American Conservation Movement,” in Technology in America: A History of Individuals and Ideas, ed. Purcell, Carroll W. (Cambridge, Mass., 1981), 151–62.Google Scholar

31 McGeary, M. Nelson, Gifford Pinchot: Forester-Politician (Princeton, N.J., 1960), 99Google Scholar; Pinchot, Gifford, Breaking New Ground (New York, 1947), 355–60.Google Scholar

32 Pinchot, Breaking New Ground, 506.

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35 Christie, Morris L. Cooke: Progressive Engineer, 23–42; Haber, Efficiency and Uplift, 108–9. Cooke discussed the Philadelphia Electric Company rate case in his pamphlet, Snapping Cords: Comments on the Changing Attitude of American Cities Toward the Utility Problem (privately printed, 1915), copy in box 229, Cooke Papers.

36 Cooke to J. G. Glasso, 6 March 1918, box 209, Cooke Papers; Christie, Morris L. Cooke: Progressive Engineer, 36–37.

37 Memorandum, Morris Cooke, 21 Nov. 1921, box 60, Cooke Papers; Singer, Bayla, “Power to the People: The Pennsylvania-New Jersey-Maryland Interconnection, 1925–1970” (Ph.D. diss., University of Pennsylvania, 1983), 33–34.Google Scholar

38 Christie, Morris L. Cooke: Progressive Engineer, 58.

39 Murray to Cooke, 26 May 1922, box 60, Cooke Papers; Murray, William S., Government Owned and Controlled Compared with Privately Owned and Regulated Utilities in Canada and the U.S. (New York, 1922)Google Scholar; Christie, Morris L. Cooke: Progressive Engineer, 58.

40 Murray, Superpower: Its Genesis and Future, 3.

41 Cooke to Murray, 1 June 1922, box 60; Cooke to Pinchot, 11 April 1924, box 36, Cooke Papers.

42 Morris Cooke, “Ontario Hydro-Electric,” New Republic, 21 June 1922, 103; Cooke to Murray, 1 June 1922, box 60, Cooke Papers. NELA, the trade organization of the utility industry, conducted a vigorous campaign in the 1920s to refute the contention of industry opponents that it was a monopoly.

43 Christie, Jean, “Giant Power: A Progressive Proposal of the Nineteen Twenties,” Pennsylvania Magazine of History and Biography 96 (Oct. 1972): 482–83.Google Scholar

44 Cooke to Pinchot, 25 Oct. 1923, box 36, Cooke Papers; Hughes, Thomas P., “Technology and Public Policy: The Failure of Giant Power,” Proceedings of the IEEE 64 (Sept. 1976): 1364–65.CrossRefGoogle Scholar

45 Hughes, “Technology and Public Policy,” 1365.

46 For a discussion of rural electrification and Giant Power see Cooke, Morris, “The Early Days of the Rural Electrification Idea, 1914–1936,” American Political Science Review 42 (June 1948): 431–47CrossRefGoogle Scholar; Hughes, “Technology and Public Policy“, 1368; Cooke to Herbert Hoover, 22 Nov. 1923, box 36, Cooke Papers.

47 Memorandum, Morris Cooke, “While the level of rates charged …,” c. 1927, box 35, Cooke Papers. See ako Cooke, “What Price Electricity For Our Homes,” 1928, box 229, Cooke Papers; and Cooke, , “Quaint Electric Kates,” National Municipal Review 19 (Nov. 1930): 3–7.CrossRefGoogle Scholar

48 Cooke to Pinchot, 9 Feb. 1925, box 188, Cooke Papers.

49 Cooke, Morris, et al. , Report of the Giant Power Survey Board (Harrisburg, Pa., 1925), 15.Google Scholar

50 Pinchot to Alvah J. Rucker, 15 Oct. 1927, box 35, Cooke Papers. The minutes of the Giant Power Survey Board are in box 191, Cooke Papers.

51 Cooke to George Record, 26 March 1924, box 36, Cooke Papers.

52 Cooke to Philip P. Wells, 24 Dec. 1924, box 39, Cooke Papers.

53 George Silzer to Pinchot, 19 Jan. 1925, box 39, Cooke Papers.

54 George Silzer to Pinchot, 30 Sept. 1925; Cooke to Philip P. Wells, 7 Oct. 1925, box 39, Cooke Papers.

55 Hedley Cooke quoted in Christie, Morris L. Cooke: Progressive Engineer, 79; Hughes, “Technology and Public Policy,” 1370.

56 Cooke's views on the cooling tower issue are discussed in Cooke to William Crozier, 2 Dec. 1924, box 265, Cooke Papers, where Cooke noted that “ … some of the largest stations abroad are now placed at the mines where there is no water, and where even in our own country and our own state stations larger than the average are now operating with only enough water to make up for evaporation.”

57 Memorandum, ’Giant Power Bills,” 14 Jan. 1926, container 2882, Gifford Pinchot Papers, Library of Congress.

58 For a more detailed discussion of Giant Power technology see Hughes, Networks Power, 312–13; and Hughes, “Technology and Public Policy,” 1370.

59 John Lathrop, “Secretary Hoover's Super Power Project Now Before the Cabinet is Work of Far Seeing Engineer,” The World, 16 April 1922 (clipping); William Murray to Hoover, 19 April 1922, both in box 590, Herbert Hoover Commerce Papers, Herbert Hoover Library, West Branch, Iowa [hereafter cited as Hoover Papers].

60 Hoover to Murray, 22 Aug. 1923, box 422; Hoover to Guy Tripp, chairman, Westinghouse Electric Co., 27 Aug. 1923, box 590, Hoover Papers.

61 Hawley, Ellis W., “Herbert Hoover, the Commerce Secretariat and the Vision of an Associative State, 1921–1928,” Journal of American History 61 (June 1974): 116–40.CrossRefGoogle Scholar

62 Hundley, Morris Jr, Water and the West: The Colorado River Compact and the Politics of Water in the American West (Berkeley, Calif., 1975)Google Scholar; William Hard, “Giant Negotiations for Giant Power: An Interview with Herbert Hoover,” Survey, 1 March 1924, 577–79; Hoover to Paul Harvey, 20 Feb. 1924, box 590, Hoover Papers; O. H. Blackman to Gifford Pinchot, 27 Oct. 1923, box 39, Cooke Papers. For assessments of Hoover as commerce secretary, see the essays in Herbert Hoover as Secretary of Commerce: Studies in New Era Thought and Practice, ed. Hawley, Ellis W. (Iowa City, Iowa, 1981).Google Scholar

63 Guy Tripp to Hoover, 1 Sept. 1923, box 590, Hoover Papers.

64 Hoover to O. C. Merrill, Executive Secretary, Federal Power Commission, 10 Oct. 1923, box 162, Hoover Papers. Hoover invited Pennsylvania, Massachusetts, Rhode Island, New Hampshire, Maine, Connecticut, New York, Vermont, Maryland, and New Jersey. Hoover to Cooke, 13 Dec. 1923, box 162, Hoover Papers.

65 “Super Power Studies: Northeast Section of the United States,” May 1924, and “Engineering Sub-Committee Report, Northeast Superpower Commission,” 26 July 1924, both in box 590, Hoover Papers.

66 Summary of Statement of Secretary Hoover to the Super Power Conference, New York, 13 Oct. 1923, box 162, Hoover Papers.

67 Henry Stimson to Hoover, 13 Jan. 1925, box 590, Hoover Papers. Stimson told Hoover “Pinchot's people … are not as wild or visionary on this subject [interconnection] as you seem to fear.”

68 Cooke to Pinchot, 19 Oct. 1923, box 36, Cooke Papers.

69 Cooke to Philip Wells, 16 Nov. 1923, container 1536, Pinchot Papers; New York Times, 8 Oct. 1923, 19.

70 Cooke to Pinchot, 19 Oct. 1923; Cooke to Philip Wells, 16 Nov. 1923.

71 Cooke to Pinchot, 25 Oct. 1923, box 36, Cooke Papers.

72 Pinchot to Hoover, 22 Nov. 1923, container 1536, Pinchot Papers.

73 Cooke to Pinchot, 25 Oct. 1923.

74 Memorandum, “Pinchot,” 20 July 1925, box 591, Hoover Papers. Pinehot's letter to Congress quoted in New York Times, 20 July 1925.

75 Hoover to Norman Hapgood, 12 Nov. 1927, box 591, Hoover Papers.

76 For a discussion of the differences between Cooke and Hoover see Layton, Revolt of the Engineers, chap. 8.

77 Gaddis, John Lewis, “The Corporatist Synthesis: A Skeptical View,” Diplomatic History 10 (Fall 1986): 359.CrossRefGoogle Scholar For a defense of the use of corporatism in diplomatic history see Hogan, Michael J., “Corporatism,” Journal of American History 77 (June 1990): 153–60.CrossRefGoogle Scholar Studies in diplomatic history that embrace corporatism include McCormick, Thomas J., “Drift or Mastery? A Corporatist Synthesis for American Diplomatic History,” Reviews in American History 10 (Dec. 1982): 321–28CrossRefGoogle Scholar; Wilson, Joan Hoff, Ideology and Economics: U.S. Relations with the Soviet Union, 1918–1933 (Columbia, Mo., 1974)Google Scholar; Hogan, Michael J., Informal Entente: The Private Structure of Cooperation in Anglo-American Economic Diplomacy, 1918–1928 (Columbia, Mo., 1977)Google Scholar; and Leffler, Melvyn P., The Elusive Quest: America's Pursuit of European Stability and French Security, 1919–1933 (Chapel Hill, N.C., 1979).Google Scholar