The Rise of "The Paper City" Part II of III
Submitted by Dr. Paul Loatman
The Duncan Company’s founding of a great industrial operation here in the 1880s and 1890s brought promises of stability and growth, not only for local paper makers, but also for the community at large. However, the final years of the 19th Century were marked by gigantic economic dislocations which led to mergers in many industries, paper making among them. Acting as if Darwin’s famous dictum about "survival of the fittest" applied to businesses as well as to the natural world, corporations like the Duncan Co. found themselves sought after by potential partners seeking strength in numbers as the economy began to revive itself from the trough of the depression of the 1890s. Rail and canal connections, a robust power plant, and proximity to the great Adirondack forests made the Duncan property an attractive corporate bride for business suitors. By the dawn of the 20th Century, the company was producing 1.5 million tons of paper and 800,000 tons of soda and sulphite pulp annually. More importantly, with one exception, each year’s annual revenues had increased in the six years since the end of the depression in 1897, an upward trend guaranteeing corporate prosperity for the future.
The paper industry witnessed a great merger movement in 1898 and 1899, leading to the creation of giants like International Paper. Following suit a few years later, the Duncan Co. decided on February 2, 1904, to sell its interests to the West Virginia Pulp and Paper Co. After paying $3 million to acquire the Mechanicville facilities, the new firm announced that large-scale expansion projects would begin as soon as possible. Yet, despite these rosy prospects, Mechanicville Mercury editor, Farrington Mead, noted that "many businessmen in the village would rather have had the Duncan Company remain independent."
The West Virginia Company was founded by William Luke, a Scottish paper maker who had, like Tom Duncan, emigrated to the U.S. in the 1850s. After working as superintendent of mills throughout the Northeast, he founded the Piedmont Paper Co. in 1888 in what is now Luke, Maryland. (Uncertainty over locating state boundary lines led to confusion on where Luke was located – Maryland or West Virginia.) Following the acquisition of additional mills in Pennsylvania and Maryland, the company was reincorporated as Westvaco in 1899. Through the forceful leadership of the founder and his three sons (one a chemist, another an investment banker, and the third a mill superintendent), the corporation became an immediate success. Following its purchase of the local mill in 1904, the Lukes outlined expansion projects costing $300,000 to be completed in 1905; but it was not until two years later that 150 construction laborers began enlarging the paper mill and the plant’s power house. Further changes (not necessarily viewed as improvements) were undertaken that same year when all former Duncan Co. managers who had been guaranteed positions with the new firm were dismissed. As time would tell, the managers would not be the only group adversely affected by the change in ownership, seemingly confirming editor Mead’s cautionary note regarding the coming of the new order of things in 1904.
The Westvaco mill here was not immune to the effects of the national business slump of 1907-08. Indeed, the local paper industry was hit especially hard because the recession’s impact was compounded by a strike by local paper makers which lasted from July until December 1907. The Duncan firm seems to have been immune to labor disputes, but difficulties arose under the new management when workers sought the institution of a three-shift rather than a two-shift workday. The two-shift system required the men to work six days a week, alternating 11-hour day shifts with 13-hour night shifts week to week. When the calendaring department workers brought matters to a head by striking, Westvaco simply fired them.
Obviously, the calendarers were not the only disgruntled employees. Hoping to circumvent problems with the rest of its workforce, the company "voluntarily" granted pay increases of 5 to 25 cents a day to all departments. Despite this move, local employees were reported to be flocking to recruitment meetings conducted by J.T. Carey of the International Papermakers Union; as editor Mead noted, "the labor unions are now cultivating Mechanicville with much energy."
Two months prior to the onset of the strike, Westvaco ordered a shutdown of all mill operations, ostensibly because of a lack of orders. However, Mead (consistently pro-business in outlook throughout his forty-year newspaper career here) suggested that psychology had more to do with the move than economics. He charged that Westvaco was attempting to bully its employees to drop their three-shift demands by cutting off their wages. However, shortly after the company restarted production, the entire 750-man production force supported their calendaring colleagues by going on strike. Their newly-created labor committee claimed that workers here were seeking nothing more than what Westvaco’s competitors had granted already to their fellow papermakers at the International plant in Corinth, the Champion Mill in Ontario, and the Mount Tom firm in Western Massachusetts. They added that, unlike their counterparts elsewhere, they would not seek any increase in their hourly wage rates.
As the strike dragged on through the summer of 1907, Westvaco refused to negotiate with its employees, charging that the walkout was nothing more than an attempt to create "idle hours" for lazy slackers to hang around in saloons. By the end of August, the company’s recalcitrance led those who could do so to take up employment in other industries, and "scabs" were being brought in to replace the strikers. The company found help in breaking the deadlock from a strange source: the American Federation of Labor. Rather than see the rival I.P.U., gain adherents, the AF of L imported enough "scabs" from New York City to enable Westvaco to restart all six of its paper machines within two months of the beginning of the strike. The company paid to have the "scabs" housed locally and, combined with the Af of L’s support, the strike was crushed when workers threw in the towel in December, 1907, earning neither increased wages nor reduced hours of labor.
The bitterness resulting from the dispute was long lasting, leading a large contingent of men (and families) to migrate to the greener pastures of Ontario, Canada where paper mill employment was steadier and the three-shift production schedule was in effect. Editor Mead also remarked ruefully at the end of the strike that many former Mechanicville residents were now living-and working- in Schenectady, another beneficiary of labor’s exodus from the community. Early in 1909, another sixty workers had their jobs abolished. However, general economic conditions began to improve and the Luke family undertook plans for the gradual expansion of their Mechanicville operations before the outbreak of war in Europe in 1914. Except for the imposition of a reduced work-week that year, employment remained steady in the pre-war period. By the end of World War I era, not only had the local plant become the largest facility of the Luke six-plant chain; the Census Bureau listed it as the largest paper mill in New York State, while some other commentators were calling it the largest book paper operation in the world.
In 1916, General Manager Thomas Stirling finally announced that the plant would schedule three shifts, a move expected to require the hiring of 200 additional workers. However, if such expansion ever took place, it escaped the notice of editor Mead who made no mention of it before he closed out publication of The Saturday Mercury in 1920. The federal government did erect an acetate plant on company grounds during World War I where thirty to forty hands produced some of the glues used to hold bi-plane wings together. However, this operation was shut down at the end of the war.
Over the course of the following decade, the Mechanicville facility grew to play an increasingly large role in the strategy of Westvaco; by mid-decade, employing 750 to 800 laborers, clerks, and professionals in Mechanicville. Unlike its early years when the labor force was dominated by Irish and Lithuanian immigrants and their children, Italian newcomers were an increasingly significant factor in the ranks. However, worker protocol and management practice relegated the latest immigrant group to "bull gang" unskilled positions, and the persistence of this practice would lead to resentment and controversy in later years.
The corporate bottom line remained strong throughout "the prosperity decade" of the 1920’s, but the crash of ’29 and subsequent Depression hit the company hard, with the book paper trade reaching bottom in 1932. The company was able to keep its head above water, unlike many of its competitors, and bounced back in a relatively short period even though its workers were put on "short hours" throughout much of the Depression. Westvaco was able to maintain its contracts with the Hearst company , Crowell-Collier, and other publishing giants, and by 1937, in the midst of the Depression, it had become the largest producer of white paper in the U.S. Net profits had declined from $4.7 million in 1929 to about $1.3 in 1935, but by the end of the 1930’s, they were approaching the $4 million mark again. Company President Thomas Luke noted in 1939 that "while the volume of business decreased somewhat during the latter part of the fiscal year, the profit was reasonably satisfactory as compared with that of the past several years." This upward trend would be accelerated by the spending boom during and after World War II, so that the 800 production employees on the payroll in 1945 were joined by another 300 within the next five years.
In the half century since the Lukes had bought out the Duncan interests, the Mechanicville mill had become an industrial colossus. Utilizing the latest technological advances to automate a large part of its production process, it employed a well-trained labor force here which helped to insure corporate profits by being the lowest-paid workers in the Luke six mill chain of operations. Water and rail connections to forests on the one hand and urban markets on the other provided great competitive advantages. Although its capital infrastructure was aging, the mill’s power plant, dam, and crucial water supply seemed sufficient for the foreseeable future. As The Saratogian noted in its 1954 Centennial Edition: "the company has spent tens of millions of dollars in expansion and modernization, assuring steady jobs and financial security for the mill’s many employees." At the time, there seemed little to disturb this picture of success.
The only constant in history is change, and the two decades following Westvaco’s half century of progress would shake the company’s – and the community’s – faith in its future. How Mechanicville and its major employer would deal with the challenges of technological innovation, declining supplies of raw materials, labor militancy, and growing environmental concerns will be dealt with in the final installment in this series.