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The National Recovery Administration Reconsidered, or Why the Corrugated and Solid Fiber Shipping Container Code Succeeded

Published online by Cambridge University Press:  28 March 2011

Gerald Berk
Gerald Berk*
Affiliation:
University of Oregon
*
[email protected]
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Abstract

The Corrugated and Solid Fiber Shipping Container Industry Code was one of the only successful codes in the National Recovery Administration (NRA). Compliance was high. It increased production, wages, employment, and product diversity. NRA administrators marveled at its success. Why? And why have historical and rational-choice institutionalists, studying the NRA, overlooked the container code? This paper provides two answers: one microbehavioral, the other macrohistorical. At a micro level, it is impossible to understand the container code with rational-choice theory. It was successful not because it coordinated and enforced collective action, but because it organized “collaborative learning.” The code showed manufacturers how to compete over productivity and product diversity instead of volume. At a macro level, historical institutionalists miss the movement that spawned the container code, because they search in vain for liberal corporatism and state autonomy. Instead, this paper shows how the Federal Trade Commission (FTC) led a movement of cost accountants, trade associations, and peak business associations in an effort to channel competition from predation into improvement in products and production processes through “developmental trade associations.” The container code drew its personnel and practices from this project. In order to make sense of the container code, I introduce a novel theory of institutions, called “creative syncretism.”

Type
Research Article
Information
Studies in American Political Development , Volume 25 , Issue 1 , April 2011 , pp. 56 - 85
Copyright
Copyright © Cambridge University Press 2011

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33. This paragraph and the following three are based on ibid., 150–84.

34. Berk and Schneiberg, “Varieties in Capitalism, Varieties of Association,” 46–87.

35. Berk and Schneiberg, “Varieties in Capitalism, Varieties of Association.”

36. Browder, 1–2.

37. Corrugated and Solid Fiber Shipping Container Industry, Code History, pp. 1–2 RG 9, E. 25, Box 1686, File 13.

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66. Corrugated and Solid Fiber Shipping Container Industry, Code History, RG 9, E. 25, Box 1686, File 13, p. 2.

67. Hawley, The New Deal and the Problem of Monopoly, 39–43; Brand, Corporatism and the Rule of Law; Bellush, The Failure of the NRA, 3–5; Eisner, Regulatory Politics in Transition, 77, 83–85; Lyon et al., The National Recovery Administration, 3–7; Schlesinger, The Age of Roosevelt, 87–98, 100–102; Blyth, Marc, Great Transformations: Economic Ideas and Institutional Change in the Twentieth Century (Cambridge: Cambridge University Press, 2002), 55–56CrossRefGoogle Scholar; Fligstein, Transformation of Corporate Control, 121; Lyon et al., The National Recovery Administration, 756–75.

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70. Alexander and Liebcap, “The Effect of Cost Heterogeneity”; Alexander and Liebcap, “Public Choice and the Success of Government-Sponsored Cartels.”

71. Brand, Corporatism and the Rule of Law, 207–26.

72. Daly, The Corrugated Container Industry, 66.

73. See Enid Baird, Price Filing under NRA Codes, Work Materials No. 76. Vols. I and II, Trade Practice Studies Section, Division of Review, Mar. 1936. For a catalog of NRA codes with open-pricing provisions, see Vol. I, Exhibit II, pp. 785–91. On the open-pricing provisions of the codes, see also Hawley, The New Deal and the Problem of Monopoly, 55–62; Brand, Corporatism and the Rule of Law, 110–12; and Lyon et al., The National Recovery Administration, 224–25.

74. The president of the corrugated and solid fiber shipping container code, W.W. Pickard, is quoted at length in Enid Baird, Price Filing Under NRA Codes, “ARGUMENTS PRESENTED AT HEARINGS OF APPLICATION FOR CODE OF FAIR COMPETITION, CORRUGATED AND SOLID FIBRE SHPPING CONTAINER INDUSTRY,” Article VII - Equitable Distribution Plan, Work Materials No. 76. Vol. I, Trade Practice Studies Section, Division of Review, Mar. 1936, pp. 317–18.

75. Ibid.

76. Corrugated and Solid Fiber Shipping Container Industry, Code History, RG 69, E. 25, Box 1686, File 13, p. 3.

77. Daly, The Corrugated Container Industry, 68–70.

78. Corrugated and Solid Fiber Shipping Container Industry, Code History, RG 9, E. 25, Box 1686, File 13. p. 4–5, 17

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80. Code of Fair Competition for the Corrugated and Solid Fiber Shipping Container Industry, Code History, 12–14.

81. Code of Fair Competition for the Corrugated and Solid Fiber Shipping Container Industry, Code History, 12–14.

82. Container News Digest l(2) (Apr. 1935)Google Scholar: 1. See also that the trade-practice complaint rules included uniform cost accounting.

83. Memo From Code Authority of Corrugated and Solid Fiber Shipping Container Industry to R&P Division, re: Information Requested by John T. Lynch of R&P Division, 22 Feb. 1935, RG 9, E 25, Box 1689, file 24. On production control provisions in the codes, see Lyon et al., The National Recovery Administration, 623–50.

84. Fibre Box Industry Statistics, 1958 (Chicago: Fiber Box Association, 1959)Google Scholar, 5.

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91. Howell, A History of The Corrugated Shipping Container Industry, 35–36, 49.

92. Daly, The Corrugated Container Industry, 46–48.

93. Daly, The Corrugated Container Industry, 48.

94. Howell, A History of The Corrugated Shipping Container Industry, 35–36, 48–49.

95. Malcomson, J.D., “Opportunities and Problems in Packing and Shipping,” in Problems in Packing and Shipping (New York: American Management Association, 1935)Google Scholar, 8.

96. Ibid., 3.

97. Howell, A History of The Corrugated Shipping Container Industry, 35.

98. These figures are calculated from Fiber Box Industry Statistics, 5; U.S. Department of Commerce, Census of Manufactures, 1931 (Washington, D.C.: Government Printing Office, 1935)Google Scholar, 394; U.S. Department of Commerce, Biennial Census of Manufactures, 1935 (Washington, D.C.: Government Printing Office, 1938)Google Scholar, 432; U.S. Department of Commerce, Census of Manufactures, 1937, Part I (Washington, D.C.: Government Printing Office, 1939)Google Scholar, 467; Historical Statistics of the United States, Millennial Edition Online (Cambridge: Cambridge University Press, 2006)Google Scholar, Table Ca 20-27, “National Income by Type of Income, 1929–2002,” and Table Ca 208-212, “Gross National Product, 1869–1929.”

99. Daly, The Corrugated Container Industry, “Table 5: Number of Sheet Plants and Converters, 1915–1970,” 94.

100. Lyon et al., The National Recovery Administration, 117–140; Hawley, The New Deal and the Problem of Monopoly, 72–90.

101. Hawley, The New Deal and the Problem of Monopoly, 85–86. For Marshall's Brookings credentials, see his co-authorship of Lyon et al., The National Recovery Administration; Baird, , Price Filing Under NRA Codes, Work Materials No. 76. Vol. I, Trade Practice Studies Section, Division of Review, Mar. 1936Google Scholar; Baird, Price Filing Under NRA Codes, Work Materials No. 76. Vol. II, Trade Practice Studies Section, Division of Review, Mar. 1936.

102. Baird, Price Filing Under NRA Codes, Vol. 1, 316–20; Baird, Price Filing Under NRA Codes, Vol. II, 472–73. For a good example of the influence of the economist's concept of “perfect competition” in this report, see Baird, Price Filing Under NRA Codes, Vol. I, 121–22.

103. “ARGUMENTS PRESENTED AT HEARINGS OF APPLICATION FOR CODE OF FAIR COMPETITION, CORRUGATED AND SOLID FIBRE SHPPING CONTAINER INDUSTRY,” Article VII - Equitable Distribution Plan, 3–4. On the economists' criticisms of the price-fixing provisions in the codes more generally, see Brand, Corporatism and the Rule of Law, 112–16; and Hawley, The New Deal and the Problem of Monopoly, 72–90.

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105. Pickard is quoted at length in Baird, Price Filing Under NRA Codes, Work Materials No. 76. Vol. I, Trade Practice Studies Section, Division of Review, Mar. 1936, 318. See also “ARGUMENTS PRESENTED AT HEARINGS OF APPLICATION FOR CODE OF FAIR COMPETITION, CORRUGATED AND SOLID FIBRE SHPPING CONTAINER INDUSTRY,” Article VII - Equitable Distribution Plan.

106. See Jacques B. Fenton, Chairman Code Committee, National Container Association to Ward W. Pickard, Deputy Administrator, National Recovery Administration, 11 Dec. 1933, with “New State Ice Co. v. Liebmann, Dissenting Opinion of Justice Brandeis,” NARA, RG 9, E 25, Box 1689, Folder 25.

107. Daly, The Corrugated Shipping Container Industry, 68–71.

108. Howell, A History of the Corrugated Shipping Container Industry, 47–4; Daly, The Corrugated Shipping Container Industry, 42, 51–54, 60–63.

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113. Although I draw from Gerring, who defines “crucial” cases as “cases most- or least-likely to exhibit a given outcome,” I do not see this case as an example of Popper's “black swan,” that is, a single well-chosen case, which disproves a theory. For one thing, the institutionalist assumptions, which inform the conventional historical interpretation of the NRA, are not a tightly predictive theory. For another, as I indicate in the text, the pragmatist approach to theory to which I am committed in this article insists that social science is inescapably populated by multiple, partial theories, which are better for some uses than others. On the concept of a “crucial case,” see Gerring, John, Case Study Research: Principles and Practices (Cambridge: Cambridge University Press, 2007), 115–22Google Scholar. For a view of case-study research closer to the one taken here, see Bent Flyvberg, “Five Misunderstandings in Case Study Research,” Qualitative Inquiry 12(2) (Apr. 2006): 219–45Google Scholar.

114. See Berk and Schneiberg, “Varieties in Capitalism, Varieties of Association,” for a catalog of potential cases.

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116. Hawley, The New Deal and the Problem of Monopoly.