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Customer Stock Ownership as Monopoly Utility Political Strategy in the 1910s and 1920s

Published online by Cambridge University Press:  07 March 2017

DANIEL ROBERT
DANIEL ROBERT*
Affiliation:
Daniel Robert is a lecturer at the University of California, Berkeley. His book manuscript, which is under contract with Johns Hopkins University Press, is tentatively entitled, “Courteous Capitalism: Customer Relations and Monopoly Utilities, 1900–1930.” Department of History, University of California, Berkeley, 3229 Dwinelle Hall, Berkeley, CA 94720-2550. E-mail: daniel.m.robert@berkeley.edu
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Abstract

In the beginning of the twentieth century, as Americans erupted in righteous indignation over the flagrant abuses of monopoly utilities, utility executives responded by developing several strategies to improve public opinion, rein in regulation, and thwart public ownership. One of the most widely used and successful of these strategies was selling gas, electricity, and telephone company stock directly to customers. To reach these local customers, utility managers required their employees to peddle stock directly to their friends, family, and customers. Using this method, utilities reached a large number of Americans who would not normally have set up a brokerage account or been solicited by a securities sales agent. By farming these interstitial regions of America’s financial landscape, utility executives harvested millions of dollars in capital, but as executives explicitly made clear, the goal of customer stock ownership was not to raise capital but to raise political support. By the crash of 1929, utilities directly sold stock to 20 percent of the total number of stockholding Americans directly through customer stock ownership programs and not through traditional brokerage firms. This article situates the development of customer stock ownership in the political economic context from which it emerged as an organizational response, reveals the social and organizational processes by which utility monopolies sold stock, and appraises the effect of customer stock ownership on antimonopoly sentiment in America.

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Type
Articles
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Enterprise & Society , Volume 18 , Issue 4 , December 2017 , pp. 893 - 920
Copyright
Copyright © The Author 2017. Published by Cambridge University Press on behalf of the Business History Conference. All rights reserved. 

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References

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Bell Telephone Quarterly Google Scholar
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NELA Bulletin Google Scholar
Pacific Service Magazine Google Scholar
Pacific Telephone Magazine Google Scholar
PG&E Progress Google Scholar
San Francisco Chronicle Google Scholar
Southern Telephone News Google Scholar
Wall Street Journal Google Scholar
AT&T Archives and History Center, San Antonio, TX.Google Scholar
The Bancroft Library, University of California, Berkeley.Google Scholar
California Public Utilities Commission Collection, California State Archives, Sacramento, CA.Google Scholar
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Southern California Edison Records, The Huntington Library, San Marino, CA.Google Scholar
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American Gas Association Google Scholar
National Electric Light Association Google Scholar
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Bell Telephone Securities Company. Bell Telephone Securities Reference Tables and Descriptions for the Use of Investors, Investment Houses, and Bankers, with a Brief Introductory Statement of the Organization and Financing of the American Telephone and Telegraph Company and Associated Companies. New York: 1935.Google Scholar
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Letter from the Chairman of the Federal Trade Commission Transmitting in Response to Senate Resolution No . 83 a Monthly Report on the Electric Power and Gas Utilities Inquiry, Nos. 1, 3-5, 18-19, 22, Filed with the Secretary of the Senate, 1928, 1930. Washington, DC: Government Printing Office.Google Scholar
Southern California Edison Photographs and Negatives, Huntington Library, San Marino, CA.Google Scholar
“Purchasing Power Calculator,” www.measuringworth.com/uscompare/relativevalue.phpwww.faqs.org/people-search/thomas-l-taylor/ Google Scholar
“Dividend and Stock Split History,” www.pgecorp.com/investors/shareholders/dividend_history.shtml Google Scholar