American Empire: Armour Meatpacking

July 14, 2011 at 12:59 pm (Alice's Childhood, Chapin Family, Chicago, Faurot Family, PD Armour and Family, Silverthorne Family, Uncategorized) (, , , , , , , , , , )

The civil war had also been pivotal in the meteoric success of Alice’s maternal family, the Armours. Armour Felt Works was part of the Armour Company empire, a series of industries based around the Armour Meatpacking Company. The company had been founded by brothers Herman Ossian Armour and Phillip Danforth Armour, who had profited – and profiteered – during the American Civil War. Hungry Union Armies drove up the price of meat and PD Armour sold short pork futures in the New York Market, gambling on the end of the Civil War to drop prices. He was right. He made nearly $2 million in 90 days. The brothers were multi-millionaires by their early 30’s and Chicago replaced Cincinnati as the leading meat processing city in the US.

In 1915 poet Carl Sandburg was inspired to write a poem on the dual nature of the boom-town, with big industrial enterprises spawning a boom in desperate, crippling poverty for many and feeding a secondary boom in criminal activity. He identified the cut-throat business practices of the meat-packing barons as largely to blame when he called Chicago “Hog Butcher for the World”.

CHICAGO
HOG Butcher for the World,
Tool Maker, Stacker of Wheat,
Player with Railroads and the Nation’s Freight Handler;
Stormy, husky, brawling,
City of the Big Shoulders:
They tell me you are wicked and I believe them, for I
have seen your painted women under the gas lamps
luring the farm boys.

And they tell me you are crooked and I answer: Yes, it
is true I have seen the gunman kill and go free to
kill again.

And they tell me you are brutal and my reply is: On the
faces of women and children I have seen the marks
of wanton hunger.

And having answered so I turn once more to those who
sneer at this my city, and I give them back the sneer
and say to them:

Come and show me another city with lifted head singing
so proud to be alive and coarse and strong and cunning.
Flinging magnetic curses amid the toil of piling job on
job, here is a tall bold slugger set vivid against the
little soft cities;
(excerpt) Carl Sandburg

The Armour brothers’ drive and ambition in pursuing the American Dream wrought social change in the lives of ordinary Americans. Their talent was to put together quite disparate resources and see the opportunity to change a production and delivery system, an opportunity that nobody else could see. The result was meat as a staple on every dinner-plate in America.

After the war, the Armours turned their attention to expanding their meat empire using the rail network to deliver meat far and wide. Previously meat had been a luxury enjoyed only by the wealthy due to the costs involved in small-scale slaughterhouse and delivery operations. Livestock tended to lose weight being herded cross-country to market restricting the markets livestock producers could access, and the animals that slaughterhouses could purchase. Preservation methods were limited to smoking and salting and meant that the meat could not be kept for long or transported far after the kill. By using the railways to buy cattle in Iowa, Nebraska, Kansas and Texas, then bringing them in by rail to central points for slaughter without the loss incurred in driving the cattle on foot, the Armours could buy cheap and minimise their slaughterhouse costs. Again using the railways, the Armour Company could establish a large market share for cheap almost-fresh meat wherever the railroad tracks went. In 1872 they installed the world’s largest cool room and began using natural ice as their preserving method, expanding the territory into which they could sell their meat. The American householder developed a taste for the luxury of meat.

Very much in keeping with the times, the Armours turned butchery from a small scale process into a production line. PD Armour’s great great grandson Jeff Armour Nelson describes the process thus: ” Hogs and steers were herded off trains and into pens, and from there into narrow chutes which led to the slaughterhouses. They were stunned by a hammer-blow to the head and quickly slung up by the hind legs to an overhead moving belt. Then they moved past long lines of men working at top speed – cutting their throats, removing their vital organs, peeling off hides and bristles, and sawing the carcases into chops, steaks and hams.” They could slaughter and process a thousand animals a day. A promotional postcard of the time shows workers standing on a floor awash with blood surrounded by carcases suspended from a conveyer belt.

The Armour empire expanded further. Refrigerated ships expanded their reach across the oceans and soon they established frozen meat works in Buenos Aires , taking advantage of the excellent fatted cattle and cheap local labour.

Armour and Company were also ruthless in selling their products, flooding new markets with below-cost products until the “mom and pop” competitors were put out of business. Then they could raise the prices to make a handsome profit.

Production line techniques had cut costs and delivered a product to many whom previously could not afford the luxury of meat. These same production line techniques later inspired Henry Ford and engineer Clarence Avery to streamline car production so that in 1913 a car could be built in 1.5 hours, reversing the process of stripping a carcase so that the car was built from the chasse up.

Armour’s other secret also revolutionised the meat-packing industry. PD Armour once wrote “waste is criminal” and he applied this principle to his meatpacking empire. He hired chemists to make sure no part of the animal went to waste, no product required another manufacturer, no profits went elsewhere. Armour and Company produced a huge range of goods ranging from prime steaks through to leather-products, glycerin, gelatine and Neat’s-foot oil made from the hooves and horns, fertiliser from the blood, felt from the fur, soap, candles and tallow from the fats, glue from the sinews and bones. PD was quoted saying “We use every part of the pig except the squeal.” No doubt if he could have found out how to harness that, he would have sold it at a profit as well.

The Armour meat-packing empire was a huge industry in Chicago and northern US, and as a large-scale employer wrought significant social and financial influence. PD Armour died in 1900, leaving what was then a massive fortune of $15 million* with rumours that he had given away $25 million. By 1918 PD Armour’s son J Ogden Armour featured in the Forbes first rich list, listed in the $125 million category. The company had a turnover listed at $600 million in 1918 and profit at $20 million per annum. At its peak its annual turnover was $961 million, and the family holdings also included bank and railroad stocks . (Armour Meats is now part of the Dial company.)

There were some problems with the Armour system. The relentless focus on profits overlooked important ethical principals such as worker safety. There was huge turn-over of staff in the slaughterhouse as workers could not cope with the screaming of the animals. Workers were constantly covered in blood and pressured to kill faster and faster. Staff turn-over was not a problem to Armour; in the poverty of Chicago’s immigrant ghettos there were always more workers to take their place in this lowest of occupations.

Even more catastrophically, food hygiene standards were ignored. The importance of food safety and hygiene was perhaps not as scientifically established as it is now but the public was aware that spoiled food could be fatal. Sawdust, rats, faeces and animals parts not usually considered for human consumption made their way into the Armour meat supply. When soldiers in the Spanish-American War died after eating the meat Armours had supplied to the War Department, the public outcry finally reached the American Congress and food safety was discussed at a legislative level. Armour finally acted to clean up the industry. By WWII Armour and Co had a Government contract to supply meat to the army again.

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The American Dream

July 14, 2011 at 12:52 pm (Alice's Childhood, Chapin Family, Chicago, Faurot Family, PD Armour and Family, Silverthorne Family, Uncategorized) (, , , , , , , , , , , , , , , )

The American dream attracted immigrants seeking their fortune in the New World away from the poverty and class system entrenched in European society. It proved elusive for many, but the six Silverthorne brothers and one sister were lucky enough to become the step-grandchildren of lumbar merchant Asa P Kelley. Taking advantage of one of the abundant natural resources in the mid-west, Kelley had established wholesale and retail lumbar yards in Chicago, Illinois and North Tonawanda, New York. He was looking for some cheap labour – and as it turned out, heirs – for his self-built company.

From 1861 to 1865 the American Civil War wrought wide-scale catastrophic damage to the burgeoning nation. Buildings, homes, businesses and infrastructure were decimated in cities and states across America. Whole families were forced to flee, homeless and with few possessions left, and desperately seeking shelter, new homes and new lives. With the ratification of the Thirteenth Amendment in December 1865, four million slaves were freed. Many stayed in the south, the only life they had known, but many more moved to the northern cities to experience the freedom and opportunity they had heard so much about.

The Civil War was a disaster for many, but Kelley and his Silverthorne step-grandsons saw opportunity. The free-market economy had delivered unprecedented demand for their products, and they rode the crest of the post-Civil War rebuilding boom to a new life of wealth. Lumbar was not a glamour industry but building materials were in high demand and priced at a premium. Alice’s father, William Edward Silverthorne and his brother Asa K Silverthorne were young men, strong and hard-working, and they learnt their trade apprenticing for minimal wages. Their Scottish thrift had held them in good stead and they had accumulated much of the profit from the post-war boom. By 1891 Kelley was ready to retire and his heirs were ready to spread their wings.

Bringing in another brother, Albert E Silverthorne, they bought out Kelley and set up their own company, AE Silverthorne and Company. Despite the glory of becoming entrepreneurs in their own right, they were canny enough not to let their pride get in the way of their profits and carefully maintained customer and family loyalty by including in their advertising and signage “incorporating AE Kelley Lumbar”.

The Silverthornes learned quickly what other families took generations to understand – the importance of keeping money in the family. Over the ensuing decades they set up companies with each other, each building on the success and experience of the last. Continued rapid growth at the end of the 19th century meant huge demand for timber for building, and the Silverthorne brothers were well-placed to capitalise.

The fourth partner in Silverthorne and Co Lumbar was the husband of their sister Catherine, Henry Faurot. As well as being family, he brought in some important contacts, expanding the horizons of the Silverthorne business and social aspirations. It was he who brought ambitious nouveau riches William Silverthorne into the sphere of the socially prominent Armours, playing matchmaker between William and Julia Belle, beautiful cloistered youngest daughter of tycoon PD Armour’s beloved only daughter.

Henry was an astute businessman with a head for numbers, a fine addition to the family. When his father had died in 1868 in Michigan of malaria acquired during the Civil War Peninsular Campaign, his mother had been forced to take four year old Henry with her back to her father’s farm in Stockbridge Valley, New York. Three generations living on the farm income was a tough beginning for the little boy. Mrs Faurot started a small store to provide food and clothes for her growing son and from the age of 10, Henry kept the accounts. The bright little boy learned all he needed to know to succeed in life at the same time.

Faurot’s mother had been a childhood friend of millionaire businessman Philip Danforth Armour and she wrote a letter of introduction for young Henry after his graduation from Friends Seminary in 1882. He was taken on as a clerical officer, his first job paying the lowly wage of a dollar a day (and the occasional suit of clothes). His talents were soon recognised by his new mentor and he rose quickly through the ranks at Armours. As an only child he remained close to his mother and consulted her on all major decisions in his life, including his 1891 marriage to Catherine Silverthorne.

Joining the ambitious Silverthorne family was a life-changing commitment that opened up new opportunities and horizons for Henry. Soon after the wedding he resigned from Armour and Co and borrowed against his life insurance as part of the start-up capital for AE Silverthorne and Co. It was an uncharacteristic gamble that paid off handsomely, as well as sealing his commitment to his wife’s family.

Faurot had a one third interest in the company, and in 1892 his share of the profit was $9,201.75. The year old company was already worth $55,515.26. He only stayed with the company three years before returning to the welcoming bosom of the Armour Company, selling his shares back to his brothers in law. His new position was as the general manager of Armour Curled Hair Works Division, where he was well-regarded. It had been a long journey from the small shop at Stockbridge Mills.

Meanwhile, the Silverthorne brothers moved from strength to strength, expanding their lumbar empire into the southern states as the building boom continued and the demand for infrastructure increased. In 1895 they set up the Summit Lumbar Company in Arkansas and Louisiana and the Anchor Saw Mill Company in Mississippi. They also owned several other smaller mills dotted around the countryside.

The lumbar industry of the American free-market frontier was not completely without regulation though. In 1896 Albert E Silverthorne was arrested in Chicago and charged with deceit against creditors. He was bailed for the amount of $34,000, a huge amount at the time. Nonetheless the Silverthornes’ continued to profit and grow, and they wound their immigrant roots into the fabric of American society.

Brother-in-law and partner Henry Faurot continued his meteoric rise in the Armour Company. He was now the Vice President and General Manager of Armour Felt Works. In 1898 when the felt-works buildings were destroyed in a catastrophic blaze, Henry saw the opportunity he had waited for all his life. Owner PD Armour was too unwell to turn his energies to rebuilding and reluctant to hand the company reins over to this son Jonathon Ogden Armour whom he thought not serious or entrepreneurial enough to manage the Armour empire.

The Silverthornes were ready to spread their wings from the lumbar industry and expand their ambitions to new markets. Opportunity was knocking.

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