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Service and Style
How the American Department Store Fashioned the Middle Class
By Jan Whitaker St. Martin's Press
Copyright © 2006 Jan Whitaker
All rights reserved.
ISBN: 978-1-4299-0991-4
CHAPTER 1
BEHEMOTH TD DINOSAUR
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Few modern marvels surpass in interest the great department store.
— Harlow N. Higginbotham, 1906
A Ckicago matron, on first hearing of Pearl Harbor, exclaimed: "nothing is left any more — except, thank god, Wlarshall field's."
— "Marshall Field, the Store," Fortune, December 1945
Only 4 Big Stores Built "Downtown" in Last Ten Years
— Headline, The New York Times, November 3, 1957
Around 1900, almost everyone agreed that the department store was a new force to reckon with, but not everyone agreed it was a force for good. "In many respects retail selling has been turned entirely topsy-turvy by the department store," wrote the author of a story in Scribner's Magazine. They are "the wonder of modern merchandising," declared another author. But, he added, "Whether they promote and build up the best interests of the people and country at large, or are detrimental to them, is a question on which intelligent opinion is largely divided." The big new stores had not yet earned the goodwill that was to become one of their most valuable assets. By the time they did, ironically, they were on the path to extinction. An overview of the American department store from the 1890s to its gradual decline beginning after World War I and accelerating in the 1950s and 1960s shows how it grew more influential even as its economic power waned.
The beginnings were rocky. Even the upstanding John Wanamaker made plenty of enemies in the early decades. Small merchants felt that he was trying to steal away their business. They hated how Wanamaker sold merchandise lines outside his expertise (men's clothing) and far cheaper than they could, all the while accusing them of dishonest practices. In the 1870s, he withstood newspaper attacks and threats from competitors to interfere with his business and even to do him bodily harm. One of his detractors was Samuel L. Clemens (Mark Twain), who took an intense dislike to him in the 1880s after Wanamaker began selling the autobiography of Ulysses S. Grant that had been published in part by Clemens and was to be sold only by subscription. Revealing the depths of his antipathy, Clemens referred to Wanamaker privately as "that uncopious butter-mouthed Sunday school-slobbering sneak-thief." Clemens, like others, found Wanamaker's pontifical moralizing hard to stomach, all the more so because of his aggressive business dealings.
As more department stores came on the scene, they got their share of criticism as well, particularly during the depression of the 1890s. Some in the press depicted the department store as an octopus whose tentacles choked the life out of single-line stores as it added their wares to its bazaar. Small merchants watched helplessly as the big stores began dealing in books, stationery, hats, boots and shoes, earthenware, and confectionery, sometimes annexing entire small shops they had forced out of business. Next department stores began to install savings banks, photography studios, travel bureaus, and restaurants. There seemed no limit to their attempts to dominate retail goods and services. "At the present rate of progress," said an editorial in an 1890 issue of Dry Goods Economist, "it would not surprise anybody if these big bazaars advertised next that they took in washing, or sold real estate, painted original Corots and Millets in quantities to suit, or personally conducted parties to the Holy Land." The writer thought that these ventures were absurd to contemplate, but in one version or another they would all come to pass.
All the more infuriating to small merchants was how department stores conducted business, frequently slashing prices on one line of goods while making up the losses in other marked-up lines. In Brooklyn, aggrieved grocers fought back by alleging that department stores had no standards and would sell absolutely anything to make a dollar. In the 1890s, a time when the middle class abhorred the idea of public drunkenness, grocers circulated rumors that the big stores intoxicated women customers with liquor by the glass. They tried to create negative associations by claiming that department stores had entered the undertaking business. They also alleged that department stores repackaged stale groceries under their own labels. A newspaper reporter trooped around to New York City stores in 1894 looking into the claims. Department store managers freely admitted they dealt in liquor but sold it only in bottles. Their groceries were fresh, they insisted, and as for undertaking, Lyman G. Bloomingdale could not resist a witticism. "Coffins are the last thing we expect to get into," he said.
But small merchants continued to protest and for a time gained a circle of supporters. Furniture retailers pressured wholesalers not to do business with department stores. Grocers pressed for legislation to prevent them from selling liquor. Women in the temperance movement vowed they would not shop at department stores that sold it. Other women criticized the stores for hiring children and making employees work long hours for little pay. Citizen vice squads investigated the morals of underpaid store clerks. In response to the public uproar, legislatures held hearings concerning store working hours, child labor, and the sale of alcohol, and in some states attempts were made to regulate the stores through taxation. By 1900, however, the punitive legislation had been overturned.
Sentiment against department stores was strong in the 1890s but far from universal. Outweighing all the department store negatives was one huge positive fact: millions of people shopped in them. They were the first mass retailers of a growing urban society and they brought more goods at lower prices to a wider range of customers than any other type of store. By the turn of the century, eight State Street department stores in Chicago were doing 90 percent of the city's retailing business in most lines of merchandise. Who could argue with that? By 1900, almost everyone agreed that, like them or not, department stores were here to stay.
There was still some distance to traverse, though, before department store founders such as Wanamaker would be hailed as merchant princes and their stores recognized as community institutions.
UPSETTING THE APPLE CART
Why did so many people dislike department stores? It's not hard to see why small merchants had negative reactions. Many did suffer financial loss due to department stores. The economist Paul Nystrom attributed the decline in the number of dealers in books, carpets and rugs, coffee and tea, and crockery and glassware in the early twentieth century as probably due to department store competition in these lines. Also, department stores could be very aggressive. Even the lofty Marshall Field store, some said, deliberately employed bargain sales to drive neighboring businesses to the breaking point.
There was also a feeling among single-line merchants, and some of the public, that department stores often dabbled in things they knew nothing about simply because they were profitable. The opinion presented in a Scribner's Magazine story of 1897 summed up how many felt about much of the merchandise department stores sold: "It is the aggregation of stock and prices which attract the customers, and not the quality and selection of goods displayed." Bicycles and books were often cited as examples of goods about which department stores knew little and cared less. Apart from a few stores that had well-stocked book departments, a typical book section consisted of jumbled bargain tables of cheap reprints or remainders. Critics charged that book clerks were unhelpful and usually illiterate. For many years a story circulated about the customer who was referred to the fur department when she asked for Lamb's Tales.
Department store owners and managers were aware of these judgments, and some tried to steer a course between satisfying the masses who wanted good, but not necessarily the best, quality at low prices and the customers who demanded high quality and cared less about price. Stores that had grown from prestige dry goods businesses or that aimed for wealthier customers tried to maintain their reputation for quality even as they expanded their wares. Management of the Marshall Field corporation sparred with store manager Harry Selfridge (who would one day open his own department store in London) when he brought in bargain tables like those found in the cheap stores along State Street. Field's and Wanamaker's shied away from the loaded word "department." Wanamaker's rejected it as part of its name, while Field's referred to its departments as sections. Strawbridge & Clothier declared in 1892, at a time when many old dry goods houses were making the transition, that it would not become a general merchandiser — a department store. However, by 1898 it had rescinded the resolution.
But there were also those who distrusted department stores because they represented a new culture, one of fads and free spending and instant gratification that was starkly at odds with the old Protestant-American culture of hard work, thrift, and careful maintenance of material possessions. Bicycles were an example of a fad item. As soon as they showed signs of popularity, department stores whooshed great quantities of them into their stores, offered free riding lessons, and found cheaper makers to produce low-priced models, stoking the craze to a high fever. When it ended, they turned to pianos, the must-have heart of the family entertainment center, and then onto other things. Always stressing bargains, sales, and low prices, department stores seemed to remove all barriers to gratification through the accumulation of material goods.
The Chicago department stores, with the possible exception of Marshall Field, represented what people disliked about new kinds of selling and buying. Although New York had more stores and did a larger business overall, Chicago's stores were the largest and most aggressive in the country around the turn of the century. Their style of business was poised to take over much of the country (as New Yorkers discovered when the Siegel-Cooper store came to town in 1896). Chicago stores ran pages of large newspaper advertisements, boldly proclaiming the arrival of new merchandise, rock-bottom prices, and never-ending "special sales." Often the quality of goods they advertised was misrepresented. The stores were mobbed much of the time, with people scrambling for goods on bargain tables, a scene that was not attractive to old-line Americans. Without doubt, the old-fashioned values of rural America were under siege as raw cities like Chicago sprang up — and cities like this were the nurturing environment of the department store.
THE YOUTHFUL BEHEMOTH
The growth of cities leads the list of changes in the last quarter of the nineteenth century that favored the development of the department store, as do advances in urban transportation that allowed masses of people to travel to city centers. As cities grew, existing businesses changed, not only in size but also in type. Wholesaling, which had once been dominant in distributing consumer goods through small-town dealers serving rural populations, lost many of its customers as people moved to cities. Then, wholesalers' urban retail arms, once a minor part of their business, grew and overshadowed the parent business.
Although a handful of stores were organized as full-scale department stores in the 1870s, among them Macy's and Wanamaker's, the term "department store" first appeared in a New York Times story in July of 1888 in reference to a store about to be opened in Los Angeles. The late 1880s furnished all the ingredients the stores needed to prosper. Technological advances spurred the development of downtown shopping districts. Electric lights on streets and in stores helped attract shoppers, but public transportation was of greater importance. The golden age of the department store neatly overlaps that of the electric streetcar, as well as the elevated railroad and the beginning of subways. New York's Sixth Avenue elevated begun in 1878 made it possible for the shopping districts on Fourteenth Street and that known as Ladies' Mile, from Sixth Avenue to Broadway between Eighteenth and Twenty-third Streets, to flourish. Chicago had a cable car by 1882 and an elevated railroad that made a downtown loop in the 1890s, with clusters of department stores at both ends of the loop. The electric streetcar was a commercial reality by 1887, and by 1890 the eight hundred street railway companies of the nation's largest cities carried more than two billion passengers a year. In Detroit, horse-drawn streetcars had been supplanted by electric trolleys by 1891, the year that J. L. Hudson opened his new eight-story store. Boston's subway was in operation by 1897, stimulating the retail district. So furiously did business districts grow that by the end of the century, a new word referring to a city's retail hub would appear in dictionaries: downtown.
As rural Americans and immigrants packed into cities, department stores developed rapidly in the 1890s. By 1900, thirty-eight American cities had populations exceeding one hundred thousand, most of them having at least doubled in the twenty preceding years. The announcement that Chicago would host the World's Columbian Exposition was a great stimulus to the expansion of large-scale retailing and led to a building boom on State Street. New stores were established in many other cities as well. Bamberger's in Newark, Stix, Baer & Fuller in St. Louis, and William Block in Indianapolis were founded and grew rapidly. In Baltimore, two important stores opened: Hochschild Kohn and the Hub. In New York, the Straus brothers, Isidor and Nathan, took over Macy's and gained part interest in Abraham & Wechsler, renaming it Abraham & Straus. Strawbridge & Clothier in Philadelphia opened its grand new store in 1898, the same year that a popular department store board game made its debut.
It was around this time that department stores began to make an impression on the public's imagination. During the 1890s, people began to refer for the first time to "the big stores," always with awe, frequently with distaste, and sometimes with admiration. These were the stores that would really shake up retailing and prove that a new era had begun. Unlike earlier departmentalized dry goods stores, the big stores sold just about everything, even fresh meat. The expansion into nontraditional — some said unseemly — lines of merchandise was stimulated by fierce competition in the rocky economy of the last decade of the nineteenth century. But once the economy improved, there was no turning back. Department stores grew bigger and spread like crazy.
FEEDING THE HUNGRY BEAST
Big capital was critically necessary for the creation and expansion of department stores. Despite all the rags-to-riches tales about store founders who accumulated capital as ribbon clerks or itinerant peddlers, few, if any, made it to the megastore stage without the infusion of outside financial backing. Many stores were established by nonmerchants de novo from large-scale investments. The A. M. Rothschild store on State Street, Chicago's third largest store at the turn of the last century, was begun as a financial investment in 1894. Though run by its namesake, Abram Rothschild, the store was principally owned by his father-in-law, Nelson Morris, a meatpacking giant and investor in the so-called Whisky Trust. Another Whisky Trust magnate, J.B. Greenhut, also went into the department store business, as operator of the Greenhut store on Sixth Avenue in New York City and as a major investor, then owner, of the Siegel-Cooper Big Store opened in 1896 by Henry Siegel.
The turn-of-the-century department store was very much caught up in real estate deals as land values shot up. In some cases, urban real estate speculators, frequently with a related interest in a streetcar line, would build a store, then look for an occupant. The Siegel-Cooper Big Store, Henry Siegel's first department store, moved onto State Street in 1891, occupying the Second Leiter Building, which had been built with Boston's Jordan Marsh in mind, a deal that fell through. Leiter had formerly been a partner of Marshall Field in the predecessor business, Field & Leiter. When the partnership broke up, he took away a share of State Street real estate that the firm had acquired and also became an investor in the new elevated railroad. The building Siegel moved into was intended as a destination for elevated railroad riders, creating a synergistic relationship between railroad and store. The Emporium, in San Francisco, was also the outgrowth of a late 1890s real estate speculation, as were stores in Ohio and other states.
Expansion in the 1890s and early 1900s was financed by incorporating and selling stock either privately or publicly, or by joining chains that bought department stores outright or acquired a controlling interest. The country's leading wholesale dry goods company, H.B. Claflin, seeing its wholesale business on the decline and hoping to offset this with profits from retailing, led the merger movement with financing by J. Pierpont Morgan in 1901. Starting with the James McCreery store and the Adams Dry Goods Company in New York, Claflin owned a number of major stores around the country by 1910, including the prize, Lord & Taylor. Often, when a department store's founder died, Claflin bought the business. Such was the fate of Roots's in Terre Haute, Joslins in Denver, the Jones Store in Kansas City, and many others acquired before 1914 when the Claflin empire fell. The Gimbels, financed by Guggenheim money, also had early chain ambitions, though in their case they envisioned a string of stores across the land all bearing the Gimbel name. In 1910, they added Gotham City to their existing Milwaukee and Philadelphia locations. After New York they would enter Pittsburgh, but the national chain never materialized. The May Company chain of department stores surged ahead when it got the backing of Goldman, Sachs and Lehman Brothers in 1910. But whatever chain formation activity took place up to the war, it was only a start compared to what would come later.
(Continues...)
Excerpted from Service and Style by Jan Whitaker. Copyright © 2006 Jan Whitaker. Excerpted by permission of St. Martin's Press.
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