Joseph Schaffner

Introduction

Jewish immigrants from Central Europe[1] reinvented the garment industry in the United States during the second half of the nineteenth century. The founders of the clothing firm Hart Schaffner & Marx (HSM) belonged to a small network of Jewish migrants from a few villages just outside of Worms. Soon after establishing the business in 1887, the lead partners Joseph Schaffner and Harry Hart turned HSM into a top brand for stylish, high quality men’s suits. On the eve of the 1910/11 Chicago garment workers’ strike, the firm employed over 8,000 immigrant workers and had sales of over $15 million (over $355 million in 2010).[2] During the 1920s, HSM became the largest men’s clothing company in the United States. The firm weathered the Great Depression and outlived many of its erstwhile competitors, defending its position as a top brand for men’s suits into the 1980s. HSM’s success and longevity resulted in part from the firm’s astute management decisions and its emphasis on labor relations.

Migration and Social Mobility

Three of HSM’s founding partners were Jewish immigrants from Central Europe; the fourth was born shortly after his parents settled in the United States. In numerical terms, the approximately 100,000 Jews who left Central Europe for the United States between 1820 and 1880 were hardly significant. Yet a leading American immigration historian has presented the “German Jews” as the most successful immigrant group in American history.[3] The economic and social history of American Jews before 1900 has not been sufficiently researched to date. Still, there can be little doubt that, though few in number, Jewish immigrant entrepreneurs had an extraordinary impact on American business history. During the second half of the nineteenth century, Jewish immigrants established some of America’s foremost retail, clothing, and financial businesses. Several of these firms (and brands) remain industry leaders today: the investment bank Goldman Sachs, the clothing company Levi’s, and the department store Bloomingdale’s all trace their roots to Jewish immigrant peddlers who came to the United States from small Bavarian villages in the 1840s. Why did these men move to America? And more importantly, why did so many embark on successful careers as entrepreneurs?

The available sources do not hint at anti-Jewish violence or persecution as causes of the migration. But for the younger generation, especially, the economic situation in the Central European countryside was discouraging. Bans on land ownership and exclusion from most occupations had forced Jews across Central Europe into the marginal niches of the rural economy. The overwhelming majority was poor. Peddling was a major source of income for many Jewish families in German-speaking Central Europe, even after the manifold restrictions that Jews faced in their daily lives were lifted during the Napoleonic Wars. Jewish itinerant merchants usually worked in the larger vicinity of their home villages. They were providers of dry goods, food, tools, cattle, and used clothes, at a time when only a few very wealthy persons and aristocrats could afford hand-tailored new clothes. While state governments promoted the reintegration of Jews into the rural economy, low-level bureaucrats obstructed such attempts, and newly trained Jewish farmers and artisans faced considerable discrimination at the local level.[4]

After the end of the Napoleonic Wars, Jews were also affected by the decline and transformation of the rural economy. The rising migration of Christian farmers and artisans to nearby cities and to North America deprived Jewish peddlers and traders of their customers. Repeated downturns, especially the disastrous hunger crises of 1846/47, forced Christians and Jews alike to look for greener pastures. Throughout the nineteenth century, Jews moved to German cities in much higher numbers (proportionally speaking) than Christians, but also to America in search of better economic opportunities. Most migrants were young men and women who left with their siblings, and sometimes with young children.

Jews and Christians arrived in the United States with different economic profiles, which is why they opted for different destinations and occupations once they landed. A significant number of Christian immigrants were small farmers or artisans with some (albeit limited) means. They had left Central Europe partly to maintain their economic status, usually after selling small landholdings or obtaining their share of an inheritance. In the United States, many went into farming. Only a minority of German-speaking Christian immigrants settled in cities and worked in their old professions, for instance, as butchers, shoemakers, and tailors. Jewish migrants, in contrast, tended to have hardly any capital. But in the United States they displayed remarkably high social mobility as a group, a phenomenon that is indeed comparable to the broad embourgeoisement of Jews in the German states in the same period. Most Jewish immigrants settled in the largest and fastest-growing American cities, albeit often not immediately upon arrival.[5]

A majority of the migrants took up peddling as their first job. Jews who settled in New York sold fruits and other food items, which they bought from farms in the vicinity and sold on the streets. Others used the city as a base for expeditions to Pennsylvania, upstate New York, or rural New England. By the 1840s, Jews had also joined the growing ranks of German-speaking immigrants who were heading to the Ohio Valley, the Great Lakes region, and, in smaller numbers, to the South. In these regions, Jewish male immigrants worked as peddlers for a few years, often selling clothes but also smaller items such as tools, before establishing or joining small retail businesses in towns and cities, usually with their immediate or distant relatives. Some later branched out into wholesale and even industrial manufacturing of various goods, especially in the garment sector, while others went into banking.

How can the affinity of Jewish immigrants to entrepreneurship and the striking success of Jewish immigrant entrepreneurs after 1840 be explained? The high social mobility of Jews resulted from a long legacy of economic marginalization in the proto-capitalist niches of feudal societies, an intimate experience with markets (and risks), and a deeply rooted experience of cultivating and maintaining business networks built on family ties. Moreover, as a group, Jewish immigrants from the German states of Central Europe were probably the best educated immigrants to settle in the United States before 1914. Based on a thorough study of Jewish social mobility in Central Europe, Simone Lässig has argued that the high social mobility of Jews in the mid-nineteenth-century German states was a corollary of Bildung (loosely translated as education, with a strong emphasis on cultural knowledge). Nineteenth-century women and men with Bildung knew how to (or aspired to) play a musical instrument, were well versed in literature and philosophy, and joined associations devoted to the arts and refined sociability. Most Jewish migrants were materially poor and had grown up in small rural communities, but, in addition to entrepreneurial skills and family networks, most possessed cultural capital that could be invested in the rapidly transforming economies of Berlin, and indeed Chicago and New York in the decades after 1840.[6]

Family Background

The four partners of HSM, Joseph Schaffner, the brothers Harry and Max Hart, and Marcus Marx, were part of a small Jewish migration network from the vicinity of Eppelsheim, a village a few miles northwest of Worms, on the border between the Palatinate and Hesse-Darmstadt. Between 1840 and 1860, several dozen (mostly young) men and women belonging to a network of extended families joined together through marriage moved to Chicago, then a small but rapidly growing city still close to the frontier. While most members of the network came from Eppelsheim and the villages and towns in its immediate vicinity, such as Alzey, Abenheim, Kerzenheim, and Kirchheimbolanden, some came from towns in the larger area, such as Haßloch, Kaiserslautern, and Münchweiler in the Palatinate, and even from the Saar region. The “pioneer” of the network, Marx L. Mayer from Abenheim, reached Chicago in 1843, six years after the city had been incorporated. Some Jews from Eppelsheim and neighboring villages only moved to Chicago in the late 1880s when the city’s population had swelled to almost one million. Longstanding family ties explain why the members of this network trusted each other in both private and business matters. In 1900, the authors of the first comprehensive history of the Jewish community in Chicago emphasized, “The Chicago Jewish community is indeed deeply indebted to Eppelsheim. [ . . . ] Many of its best and noblest members hail from that distant German place.”[7]

Harry Hart and Joseph Schaffner, HSM’s leading partners, were born only two years apart, in 1850 and 1848, respectively, but at different stages of the migration from Eppelsheim to Chicago, and on different sides of the Atlantic. Harry Hart was born in Eppelsheim on February 17, 1850. Together with his parents, Jacob and Minnie Hart, his brother (and future partner) Max, who was born in 1853, and eight other siblings, he came to Chicago as a boy in 1858. Two of Harry’s cousins from Eppelsheim, Abraham and Henry Hart, had already settled in Chicago in 1854. They were the founders of Hart Brothers, a flourishing clothing retail business. After arriving in Chicago, Jacob Hart opened a modest butcher shop and sent Harry and Max to public school. Relatively little is known about the third partner of HSM, Marcus Marx. He was born in Ottweiler in the Saar region on November 22, 1840. In 1851, his parents settled in Hastings, Minnesota, a river town just south of St. Paul, where Marx set up his own grocery store during the 1860s. In 1869, he married Jenny Hart, Harry and Max’s sister.[8]

Joseph Schaffner was two years older than his distant cousin and later partner Harry Hart. He was born in the United States, but not in Chicago. Although the overwhelming majority of Jewish immigrants from Central Europe settled in larger American cities, many spent several years, sometimes even decades, in the rural Midwest and South between 1840 and 1870. There, they generally worked as peddlers or operated small dry goods stores. Indeed, not all of Eppelsheim’s migrants headed straight to Chicago like the Harts. Some members of the network stopped over in La Porte, a town in northern Indiana; others, including Marcus Marx’s parents, moved to central Minnesota, and a few settled in the Ohio Valley or northeast Ohio. Solomon Schaffner (1817-1883), the father of Joseph Schaffner and one of the first migrants to leave Eppelsheim in the mid-1840s, was among those who headed to Ohio. After arriving in the United States, Solomon got married in Cleveland. His wife Henrietta (Hecht) Schaffner was not connected to the Eppelsheim network. According to the 1880 census for Cleveland she was born in the Thuringian state of Saxony Weimar. Solomon and Henrietta’s son Joseph Schaffner was born on March 23, 1848, in Reedsburg, a tiny hamlet midway between Cleveland and Columbus. Since there was no Jewish community in or near Reedsburg, Joseph’s birthplace suggests that Solomon initially worked as a peddler. It seems likely that Solomon took his pregnant wife on an extended business trip (probably even several trips). Soon after Joseph’s birth, the couple settled permanently in Cleveland. The 1850 census for Cleveland lists the Schaffners as inhabitants of the second ward. Cleveland had approximately 17,000 inhabitants and a small Jewish immigrant community in 1850.Like many peddlers who had accumulated some capital, Solomon opened a dry goods store.[9]

In 1871, Solomon moved his family to Chicago, a much bigger and promising city, and the new home of many close relatives and friends from Eppelsheim. Indeed, by 1870 most members of the Eppelsheim network had clustered there. Harry Hart and Joseph Schaffner both attended public schools in Chicago and Cleveland, respectively. Even as a teenager Joseph Schaffner showed a deep interest in literature and the fine arts.

Peddling: The Path to Entrepreneurship

The majority of male Jewish immigrants who came to America between 1820 and 1880 from Central and Eastern Europe worked as peddlers. One scholar has described peddling as a “universal-male Jewish experience” in mid-nineteenth-century America.[10] Detailed research on the migration routes and business history of the early Jewish community in Chicago and other cities corroborates this thesis, but a larger study on Jewish immigrants’ path from rural peddlers to urban business founders remains a desideratum.[11] Two micro-studies on Jewish and Gentile textile entrepreneurs in the Netherlands show a straight path from peddling to retail and industrial textile production in the middle of the nineteenth century. The Dutch-German textile retailer C&A (Clemens und August Brenninkmeijer), for instance, can trace its origins to a peddling network based in the small town of Mettingen in northern Westphalia.[12]

Taking up peddling was a logical step for recently arrived immigrants who wanted to launch their own businesses and needed to accumulate modest capital. As increasing numbers of internal and European migrants began to pour into the American interior after 1815, the demand for tools, dry goods, clothes, and even luxury items increased. Across the Northeast, the middle Atlantic, the South, and the Midwest, Jewish peddlers sold goods in the vicinity of urban areas. They also moved west with other settlers, using towns and cities along the newly developed settlement pathways as bases for peddling. Knowledge of German was certainly no disadvantage in rural Ohio, central Minnesota, Iowa, or any of the other areas being settled by tens of thousands of German-speaking farmers in the mid-nineteenth century. Immigrants from the southern German states were familiar with Jewish peddlers and trusted them in the new American setting. Like Marcus Marx, some peddlers established small dry goods stores in small towns, and almost all of them networked with family members and friends. After a few years, most peddlers settled in bigger cities, where, like Solomon Schaffer, they often opened small retail businesses, frequently with close relatives as partners.

Native-born Americans, however, often associated Jewish peddlers and entrepreneurs with traditional social stereotypes. For example, the reports of the credit-rating firm R.G. Dun & Co. from the 1840s and 1850s reflect the widespread image of Jews as greedy and treacherous Shylocks. Therefore, in antebellum America, Jewish immigrants had to rely on kinship networks to get credit. Jews initially formed, as Stephen G. Mostov has put it, a “distinct economic subcommunity.” In Chicago, anti-Jewish discrimination was not as prevalent as on the East Coast. Discriminatory comments in the R.G. Dun reports became less frequent after the Civil War and disappeared altogether in the 1870s. Indeed, leading Gentile businessmen openly condemned anti-Semitic prejudice in 1869. And yet, even after 1870 Jewish entrepreneurs in Chicago (and elsewhere) partnered almost exclusively with other Jews, very often relatives and close acquaintances belonging to the same migration network.[13]

Obstacles to credit were offset by advantages from which Jewish immigrants benefitted, such as cultural capital and family networks. Additionally, America’s rapidly growing and industrializing cities offered favorable conditions for immigrant entrepreneurs. Members of the Eppelsheim network founded dozens of businesses, several became well-known beyond Chicago: Mandel Brothers (department store, Solomon, Leon, and Emanuel Mandel, Kerzenheim), Spiegel’s House Furnishing / Spiegel Inc. (retail and mail order, Joseph Spiegel, Abenheim), German National Bank (Henry Greenebaum, Eppelsheim), Greenebaum Sons Bank and Trust Company (Elias Greenebaum, Eppelsheim), Foreman Bank (Gerhard Foreman, Dirmstein), Hart Brothers (clothing, Abraham and Henry Hart, Eppelsheim), Herman Schaffner & Co. (bank, Eppelsheim?), A.G. Becker & Co. (bank in commercial papers, Abraham G. Becker, Alzey/Warsaw, Ohio), and, of course, HSM.

Business Development

Budding Jewish entrepreneurs who settled in America’s cities after 1840 were drawn to the garment sector because they could build on a long tradition of selling clothes and a basic knowledge of changing styles and fashions. Equally important, however, was the rising demand for ready-to-wear clothes in the 1850s, a period of rapid urbanization and mass immigration. At first, clothing retailers and wholesalers could rely on a widespread network of domestic garment producers to meet this demand.[14] But during the Civil War, the huge demand for uniforms transformed the production of men’s suits. In the 1870s, several leading German-Jewish wholesalers responded by bringing the industrial production of garments under the roof of their established retail businesses. These micro-producers operated “inside shops” with several hundred employees who worked in different production units to increase efficiency. Just as the largely “German-Jewish” inside shops began to dominate the rapidly expanding ready-to-wear market around 1880, they were joined by hundreds of micro-producers who were predominantly of Eastern European Jewish origin.[15]

Not all Jewish immigrants from Eastern Europe who identified themselves as “tailors” had actual work experience. Even those who did were unfamiliar with the primitive machinery used in small sweatshops and needed on-the-job training. Immigrant micro-producers quickly cornered a large market share by providing contract work for larger garment manufacturers. They concentrated especially on the expanding mass-market for cheap clothing. Micro-producers who employed a limited number of workers (usually between five and forty) could respond much more quickly to changing market conditions and seasonal trends. The bar to entering the business was not very high. Dozens of small sweatshops existed only for a few months before they went out of business, spawning new shops the following season. Most of the workers, especially in New York, were Jewish immigrants from Eastern Europe. The working conditions in these small sweatshops were challenging, protection against abuse was nonexistent, and the pay was low. Workers did not receive hourly wages; rather, their pay depended on the number of garments they finished. Workers began to organize early on, but the high turnover rate in the garment sector was a big challenge for labor organizers.[16]

HSM was established in 1887 when Joseph Schaffner became a partner of Harry Hart, Max Hart, and Marcus Marx.[17] At the time of HSM’s founding, the Chicago economy was experiencing massive growth, which was fueled by strong immigration from Europe and the American northeast. Between 1880 and 1890, Chicago’s population doubled from 500,000 to over one million. In 1890, more than 80% of all Chicagoans were European immigrants and their American-born children. By 1887, Chicago had become the uncontested hub of the American railway network, having successfully secured the lucrative middle position between the vast resources of the western plains and the northern forests, on the one hand, and the markets of the East Coast and Europe, on the other. Grain, meat, and lumber were taken to and processed in Chicago, usually twice – for instance, at the notorious stockyards and again as commodities at the Board of Trade – and marketed and sold around the world. Chicago also attracted much of the nation’s wholesale business. After 1880, Chicago also became a center of modern advertising, a change that was partly driven by the mail order businesses Montgomery Ward and its younger rival Sears & Roebuck and their illustrated catalogs.[18]

In last third of the nineteenth century, New York and Chicago emerged as production and wholesale centers for men’s suits and women’s clothing. In New York, hundreds of small outside producers from Eastern Europe dominated the market. Most of their workers were young Jewish women and men from Eastern Europe. In Chicago, most garment workers were employed by large inside producers and retailers such as HSM. The workforce in Chicago was more diverse but Jewish women and men still constituted the largest immigrant group, followed by Italians and other Eastern Europeans. Chicago was the undisputed center of ready-to-wear men’s suit production and wholesale retail. In 1911, garment-making was the third largest industry in the city. Approximately 34,000 mostly immigrant workers toiled in around 600 shops. Half of all production occurred in large inside shops such as HSM.[19]

The roots of HSM can be traced back to the year 1872, when Harry and Max Hart borrowed $2,700 from their father and opened their own store for “tailoring men’s suits and coats.” The borrowed sum was quite considerable, an indication of the relative success of the older Hart. Taking the rise of the average consumer price into account, it translates into more than $50,000 today. “Harry Hart & Bro.” was not affiliated with “Hart Brothers,” the large wholesale clothing firm owned by Harry and Max’s cousins Abraham and Henry Hart.[20] “Harry Hart & Bro.” was a much smaller player but quickly established a visible presence. The firm produced and sold ready-made work clothes throughout the Midwest and the South but also focused on the developing market for high quality, ready-to-wear men’s suits. By 1880, one of its advertisements already boasted, “We Lead on Styles! We Lead on Fits! … Our Cheap $6.50, $8, and $10 Suits are still taking THE LEAD!” The motto, “They’re the Cheapest. They’re the Best,” already hints at the combination of high quality and (relatively) low price that would eventually come to define HSM. Soon after 1880, the firm gave up its store on South Clark Street, concentrating on production and wholesaling.[21]

In 1879, Marcus Marx and Levi Abt (1836-1922) joined Harry and Max Hart as partners, and the firm was renamed Hart, Abt & Marx. Both Marx and Abt were born in Ottweiler in the Saar region, and both were married to sisters of Harry and Max. Hart, Abt & Marx was an “inside shop.” It produced its own clothes, which it retailed through other stores in Chicago and sold wholesale across the nation. Its sales exceeded $1 million in 1887 (approximately $23.7 million in 2010), the year in which Abt gave up his stake. At the time, Joseph Schaffner, who had been working as a bookkeeper for a dry goods company, was looking for greener pastures and joined his cousins as a full partner. Like so many other garment businesses established by Jewish immigrants, the newly renamed HSM was a family-owned firm.[22]

The four partners were not equally involved in the business. Max Hart and Marcus Marx kept lower profiles in the partnership. Marx may have spent more time at home as a result of an accident. In 1890, he fell six floors into an unsecured elevator shaft at the HSM factory building in downtown Chicago. He lived another thirty-one years but decided to leave important management decisions to his partners.[23] Harry Hart emerged as one of the leading representatives of the Jewish community during the 1890s. He served as president of Sinai Congregation, Chicago’s first Jewish Reform congregation, from 1903 to 1906, and as vice president of Chicago’s Associated Jewish Charities.[24]

It was Joseph Schaffner who was the driving force behind reinventing the business. In 1897, he invested $5,000 (approximately $136,000 in 2010) into a pioneering national advertising campaign and concentrated on turning HSM into a national brand for top quality, ready-to-wear men’s suits. In 1915, Schaffner described his advertising philosophy: “Advertising increased our volume; volume has enabled us to increase our value-giving, both by lower prices and by putting more quality into the goods. Advertising has been, and is, an economy.” It was Schaffner’s idea to use illustrations in advertisements, and he was personally involved in working with commercial artists on the design. HSM designed the advertisements used by the retailers that stocked its suits. The goal of their advertising campaigns was not just to position HSM as a high quality brand but also to improve the reputation of ready-to-wear clothes among consumers. An advertisement from 1899, for instance, stressed that HSM’s suits could be compared “only with fine merchant tailoring at three times their cost.”[25]

Schaffner devised new avenues for reaching customers through, as he called it, “advertising that does not advertise.” HSM sold through established retailers across the United States, capturing a national market for its quality suits. In addition to innovative newspapers advertisements, Schaffner invented the famous “style books” that HSM distributed after 1900 through its retailers. The style books were fancier versions of their mail order catalogs and were beautifully illustrated and aesthetically appealing booklets. They were devoted to themes such as “enthusiasm,” historic events, or distinctively American cities such as New York, San Francisco, New Orleans, or Washington D.C. The artists placed men dressed in HSM suits in the midst of recognizable events, often against the backdrop of well-known places.[26]

Apart from branding and its pioneering marketing tactics, HSM concentrated on the quality market, producing all-wool suits and paying attention to “body-fitting” styles. In 1906, after thorough research, HSM defined fourteen distinct male body types. These translated into more than 250 special sizes. In 1910, HSM had sales of $15 million (approximately $355 million in 2010), and its Chicago sweatshops employed over 8,000 workers, two thirds of whom were immigrants. Jews constituted the largest single group among HSM’s immigrant workers, but they were not as dominant as in the New York industry.[27]

HSM’s shift to the quality market in the 1890s helps to explain why the rise of Eastern European Jewish micro-producers did not constitute a serious threat to large inside producers. The quality market developed around of the turn of the century with the rise of the mass consumption society. The making of high quality suits, coats, and other men’s fashion items required a high level of skills and a complex workforce management system, and micro-producers with limited capital could not manage this. At HSM, for instance, the production of an overcoat could involve up to eighty workers who completed different steps in the production process. The rise of the micro-producers and the expansion of the quality market reflect the diversification of the ready-to-wear men’s clothing market. HSM emerged as one of the leading American inside producers in the last decade of the nineteenth century largely because it cornered a significant part of the high quality ready-to-wear men’s clothing market early on. HSM differed from other inside shops because it did not outsource production to small outside shops. Outsourcing to micro-producers enabled inside shops to respond to quickly changing market conditions. While micro-producers still relied on hand-pedaled machines and workers with limited skills, large producers increasingly used bigger machines powered by electricity and operated by skilled workers. However, inside shops such as HSM also relied on low-skilled workers whose work conditions were only marginally better than those in the outside sweatshops.[28]

The Impact of the 1910/11 Garment Workers’ Strike

The growth of Chicago’s economy, and that of the clothing industry, depended largely on immigrant labor. Rapid boom and bust cycles caused increasingly violent labor conflicts during the 1870s, and thousands of workers were laid off. The Haymarket riot of 1886 occurred only a few months before HSM’s founding. Haymarket and the Pullman strike of 1894 helped solidify Chicago’s diverse workforce, but the repression, especially after Haymarket, was brutal. Moreover, the distrust between big business and organized labor was deep. Most employers in Chicago refused to recognize unions, and the garment sector was no exception.[29] Initially, HSM was not affected by these conflicts. Rather, Harry Hart and Joseph Schaffner strove to avoid the unfavorable practices common in the industry. Instead of outsourcing (“contracting”) labor to unregulated sweatshops where abuse was rife, HSM produced largely “inside.” The workers in the inside sweatshops were HSM employees. Still, HSM did not offer above-average pay, and its management did not hesitate to lay off hundreds of less skilled workers when demand lagged.

In 1909/10, two huge strikes transformed the New York garment industry. In November 1909, 20,000 shirtwaist (i.e., blouse) workers went on strike. Most were young women and Jewish immigrants. In February 1910, the employers, themselves overwhelmingly Jewish immigrants from Eastern Europe, and the strikers agreed on better working conditions, but the workers failed to attain formal recognition of their union. In July 1910, the “Great Revolt” of the mostly male cloakmakers of New York engulfed more than 70,000 workers. Again, the employers and the workers were overwhelmingly Jewish. Therefore, both sides accepted leading representatives of the American Jewish community – investment banker Jacob Schiff, and attorneys Louis Marshall and Louis D. Brandeis – as mediators. In early September 1910, they produced the “Protocol of Peace.” In addition to a fifty-hour work week and better pay, this settlement also gave workers the “preferential union shop,” which meant de facto recognition of their right to organize. The successful outcome of the strike, which ended in early September 1910, was not lost on workers in Chicago.[30]

On September 22, 1910, two weeks after the Protocol of Peace was ratified in New York, Hannah Shapiro, a young Jewish HSM worker from Eastern Europe, walked out with a dozen other unorganized women. They triggered one of the biggest strikes in Chicago history. The cause of Shapiro’s walkout was a pay cut from 4 to 3.75 cents for a pair of pants. Variable pay was a common practice in the garment trade. Working ninety to one hundred hours a week, Shapiro took home less than ten dollars. Several years later, in 1914, Joseph Schaffner candidly admitted in his testimony to the Federal Commission on Industrial Relations that the strike should have “occurred much sooner.”[31] Unlike other well-known Chicago entrepreneurs, Schaffner and Hart can hardly be described as cold-blooded capitalists. Both men had long supported charitable causes within and beyond the Jewish community. The New York Times later stressed that Schaffner’s name “was on the list of membership of every national charitable organization in Chicago.”[32] But Schaffner and Hart also employed thousands of immigrant workers who worked long hours under demanding conditions and who made barely enough to feed their families.

Initially, Schaffner and his partners rebuffed their workers. In late October 1910, HSM claimed that it already paid the best wages in the city. It would not talk with “agitators” who supposedly represented its employees. This statement contained a kernel of truth. The existing unions, the United Garment Workers (UGW), the Chicago Federation of Labor, and the Women’s Trade Union League represented only a fraction of the city’s garment workers. UGW attracted mostly native-born workers, and its leaders had specifically attacked Jewish immigrants because they undercut wages. The rapidly spreading strike caught the UGW leadership by surprise, and the union struggled to secure a mandate from the unorganized workers.[33]

In October, more workers joined the protest, and before the end of the month most HSM workers were on strike. Eventually, more than 40,000 workers were participating across the city. Members of the Chicago Citizens’ Committee urged Schaffner and Hart to accept the unionization of the workers. Among the committee’s leading members were Jane Addams (1860-1935), the famous Progressive reformer, and Emil Gustav Hirsch (1851-1923), the rabbi of Sinai Congregation, to which all of HSM’s partners and several other leading Chicago clothing manufacturers belonged. Hirsch, a prominent national figure, was widely known as a critic of unrestrained capitalism. As part of his social justice theology, Hirsch advocated more rights for workers. He regularly named and shamed prominent business owners in his own congregation. Joseph Schaffner and Harry Hart, however, took Hirsch’s sermons to heart – in their businesses and as philanthropists.[34]

The HSM management had been in touch with union representatives early on, but had reached no agreement. In early December, violent clashes between striking workers and the police claimed the first victim. The death deeply unsettled Schaffner and Hart. On the day after the death was reported, the Chicago Tribune announced that a deal was in the making. The paper also claimed that HSM would “recognize the Union.” In the following weeks, two men with strikingly different backgrounds, Joseph Schaffner and one of his employees, Sidney Hillman, helped resolve the strike without outside mediation.[35] Schaffner’s willingness, as a leader of Chicago’s largest garment firm, to accept organized labor as a legitimate partner was a blow to employers’ interests beyond the garment sector. The UGW leaders immediately realized the implications of Schaffner’s offer. Ironically, the strikers refused to deal with the union. Instead of giving the UGW leaders a mandate, the workers continued their strike. During December 1910, several HSM workers emerged as unofficial leaders of the strike: three Jewish immigrants from Eastern Europe, Sidney Hillman, Samuel Levin, and Bessie Abramovitz, and Italian immigrant Anzuino Mariempietri. When the police killed another worker in mid-December – in front of an HSM workshop – Schaffner sat down with Hillman and several other workers; the UGW was not involved. Apart from a few minor concessions, Schaffner agreed to recognize organized labor as a legitimate partner. The settlement went into effect on January 14, 1911, but it only covered HSM. The workers at the other firms ended their walkout in February, empty-handed.

In hindsight, Schaffner’s recognition of organized labor represents a crucial turning point. During his 1914 testimony, Schaffner stressed that the “fundamental cause of the strike” was the absence of a “channel” through which the workers could discuss “grievances” with the management. The January 1911 agreement created this channel. Schaffner’s openness to change, his acknowledgement of intolerable working conditions, and Hillman’s communication skills were indispensable in putting the agreement on a firm footing, preventing further strikes, and reaching mutually acceptable agreements. The Amalgamated Clothing Workers of America, which formed in 1914 with Hillman as its first president, traced its roots to the January 1911 agreement. Indeed, HSM and its workers produced a series of agreements that deepened trust and prevented conflicts between labor and management. In 1916, for instance, Hillman praised HSM’s adoption of a minimum wage for its female workers. “Few concerns in this country,” he claimed, offered their workers similarly favorable “conditions of labor.” The other Chicago clothing firms refused to bow to the principles of the January 1911 agreement, however. Their leading managers and partners, some members of Sinai Congregation, ostracized Schaffner socially. Two major strikes in 1915 and 1919 eventually forced the firms belonging to the Chicago Wholesale Clothiers’ Association to accept the unionization of their workforce, based on the principles of the agreements reached by HSM and its workers in 1911.[36]

Hillman became one of the key players in the American union movement during the first half of the twentieth century. On HSM’s fiftieth anniversary in 1937 he stressed: “For fully 25 years … the Amalgamated Clothing Workers of America and HSM cooperated in a labor-management relationship that was not only steady, unbroken and progressive, but also mutually beneficial. … Let us remember that these 25 years abounded in major disturbances, depressions, war and prosperity.’” HSM’s public admission of common industry abuses and its recognition of organized labor opened an alternative path for improving working conditions and labor relations in and beyond Chicago. The settlements between management and the Amalgamated Clothing Workers produced a Labor Arbitration Board at HSM that decided dozens of grievances. In hindsight, peaceful labor relations were a key factor in HSM’s rise as the largest men’s clothing production and retail firm in the United States after World War I.[37]

Philanthropy

All of HSM’s partners devoted a significant portion of their income and time to philanthropy. Like almost all American businessmen affiliated with a Jewish congregation, they gave generously to the Jewish community and supported various civic projects. In Chicago, Jewish businessmen were especially active in supporting education-related institutions, notably the Chicago Public Library, the University of Chicago, and Jane Addams’ Hull House settlement. Harry Hart even served as vice president of the Associated Jewish Charities of Chicago, an indication of the extent of his involvement in the Jewish community. The Associated Jewish Charities spent most of its funds on destitute Jewish immigrants, providing them with medical services through the Jewish hospital, an employment office, English classes, and various job-training programs.[38]

Joseph Schaffner devoted more time to philanthropy after the turn of the century. While his fellow Sinai congregants, notably Julius Rosenwald (Sears & Roebuck) and Leon Mandel (Mandel Brothers Department Store), made huge gifts to the University of Chicago, Schaffner helped found the School of Commerce at Northwestern University in 1908. The school was renamed the Kellogg School of Management in 1979 and is one of America’s top-ranked business schools. From 1910 to his death, Schaffner also served as a Northwestern trustee. The original building of the School of Commerce in downtown Chicago was named after Schaffner in 1927. When Schaffner died on April 19, 1918, Sidney Hillman attended his funeral. At the memorial service, rabbi Hirsch, whose social justice theology had deeply influenced Schaffner, paid tribute to his congregant, describing him as “business man whose prosperity had not dulled or dwarfed his sense of justice and his devotion to public welfare.”[39]

The published assets of the four HSM partners testify to their success as entrepreneurs. Schaffner’s estate was valued at over $3 million in May 1918 (over $43 million in 2010). A trust fund of $450,000 was left to Northwestern University; $20,000 was left to the (Jewish) Michael Reese Hospital.[40] Schaffner’s partners Marcus Marx, Harry Hart, and Max Hart passed away during the 1920s.[41] Marcus Marx left $2.1 million (approximately $25.6 million in 2010) to his heirs and $27,000 to the Chicago Jewish Charities in 1921.[42] The assets of the two Hart brothers, who died in the late 1920s, exceeded those of Schaffner and Marx, reflecting the rising stock value and the expansion of the firm during the 1920s. Max Hart’s estate was estimated at $6.5 million in May 1929 (approximately $82.7 million in 2010); his stake in HSM was worth $3 million. His widow announced that she would give at least $100,000 to “philanthropic organizations.”[43] Harry Hart’s estate was valued at over $6 million (approximately $78.3 million in 2011) in the spring of 1930 after the 1929 stock market crash. Like his former partners, Harry Hart left considerable sums to charitable causes such as the Jewish Charities of Chicago ($50,000) and the Chicago Art Institute ($25,000).[44]

Twentieth Century Expansion

After 1918, HSM successfully transitioned from a family firm to a business run by professionally trained managers with no ties to the founding partners. Family members continued to own a majority of company shares well into the 1930s. Only one descendant, Max Hart’s son Abraham S. Hart (1895-1962), served in a managerial position in the firm (in his case, as vice president until his retirement in 1945). The key manager of the post-1920 era, and a successor of sorts to Joseph Schaffner, was an early graduate of a management school like the one Schaffner had helped to found in 1908. In 1921, Meyer Kestnbaum (1896-1960), a New York native, joined HSM after graduating from Harvard Business School. He quickly rose through the ranks, becoming head of the retail division in the late 1920s and president in 1941. Kestnbaum and his fellow managers honored the labor agreements. They also continued the innovative advertising and branding campaigns for which HSM was known. During the 1920s, famous artists such as Herbert Paus and John E. Sheridan illustrated HSM’s annual style books.[45]

The company expanded by acquiring or opening its own retail stores across the nation. In 1926, it bought Wallach’s, a prominent New York retail business which had sold HSM suits since at least the turn of the century. The Great Depression led to a massive drop in sales, forcing the management to expand into the lower quality suit market. This move saved the firm and yielded considerable profits at a time when many other firms in the garment sector were forced to fold. The expansion benefited from a huge contract for uniforms in the early days of World War II. After the war, HSM acquired several successful labels (and rivals) such as Society Brand and the Rochester-based Hickey and Freeman. In the 1960s, the firm pioneered product lines that were linked to prominent personalities such as golf player Jack Nicklaus and Tonight Show host Johnny Carson. This clever marketing strategy echoed Schaffner’s principle of indirect advertising. In 1970, HSM operated thirty-eight factories and owned 250 retail stores across the nation, employing over 5,000 people in the Chicago area alone. During the 1970s, its sales rose to over $630 million annually, even though the U.S. Department of Justice prohibited the company from taking over more retail stores. The expansion continued into the mid-1980s, at which point the company (renamed Hartmarx Corporation after the 1982 takeover of its longtime Chicago rival Kuppenheimer & Co.) became too large and entered a prolonged crisis.[46] In the early 21^st century, Hartmarx had sales of over $600 million but was struggling. As a testament to his Chicago ties and his brand loyalty, President Barack Obama wore an HSM suit to his inauguration ceremony on January 20, 2009, and an HSM tuxedo to the inaugural ball that night. A few days later, on January 23, 2009, Hartmarx filed for Chapter 11 protection in a federal bankruptcy court in Illinois.[47] In June 2009, the British firm Emerisque Brands and SKNL North America announced their plans to take over Hartmarx for only $128 million.[48]

Notes