The Company Town (8 page)

In 1937, a whirlwind organizing campaign by a new union federation, the Congress of Industrial Organizations (CIO), resulted in recruitment of 80 percent of the company's 3,000-odd production workers. Initial talks between the CIO's United Chocolate Workers and management seemed to augur well, with the company agreeing to raise wages. But then came layoffs of several union militants and production speed-ups. The result was a sit-down strike that paralyzed the factory.

A startling outburst of violence followed. Four days after the strike began, several thousand local farmers who depended upon selling their milk to Hershey attended a parade in support of the company. They delivered an ultimatum to the strikers: Leave the plant or be forcibly ejected. After an exchange of taunts with the strikers, the army of farmers and pro-company employees armed with rocks and pitchforks stormed the facility. Outnumbered four to one, the strikers were bloodied—several were brutally beaten—and evicted.
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The incident left a suddenly divided town and a mark on Hershey's reputation. Within two years, federally conducted union elections resulted
in recognition of the conservative, craft-oriented Bakery and Confectionary Workers Union as a bargaining representative for the workers. Union contracts meant that, going forward, it would not be up to one man to make every decision about life in Hershey, Pennsylvania. The town was becoming a more mature—and more complicated—place to live.

Milton died in 1945, and his company drifted for several decades. Generations of his successors were punishingly slow to act, seemingly frozen by the question of “What would Milton do?” It was years before Hershey Chocolate Co. took on such modern corporate functions as marketing and research and development. There was no Hershey advertising until 1970.

But beginning in the late 1970s, the enterprise instituted many changes. Having become Hershey Foods Corp., with such noncandy products as pasta and Friendly Ice Cream, management placed all operations on more of a business footing. Most significant, Hershey was redefining its relations with the town.

Among the first changes was the appearance of a new Pennsylvania State University medical center, founded in 1963 with a $50 million donation from the company. As that institution matured, it brought a new element into the community: a large number of medical personnel.

The park, which began as a free recreational facility for the townsfolk, had long been evolving toward something else. A simple merry-go-round was replaced in 1912 by an elaborate carousel with fifty-three carved animals. In the '20s, more rides including a Ferris wheel and airplane swing were added, and in the '30s came a penny arcade, a “mill chute” ride, and more, so that by the late '40s the park contained more than two dozen rides. But in 1970, it was closed—and reopened as Hersheypark, a Disney-style theme park with daily admission charges.
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Finally, many of the town's historic buildings were repurposed. In 1977, Milton Hershey's High Point mansion was turned into a suite of offices for top corporate officials. In 1980, the company closed the community center and transformed it too into offices.
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Like Lowell before it, Hershey, Pennsylvania, was surrendering many of its quirks—and perhaps its unique identity.

In the West, the exploitation-minded, smash-and-grab side of the American personality reached its fullest expression. The area's very bounty seemed to prompt a rapacious stripping of resources and only a tenuous relationship with any given place. As early as 1871, Mark Twain observed of the gold-mining territory around Sacramento, California: “You may still see, in places, its grassy slopes and levels torn and guttered and disfigured by the avaricious spoilers of fifteen and twenty years ago. You may see such disfigurements far and wide over California.”
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The lush forests of the Northwest encouraged just such an approach. Logging camps arose in Oregon, California, Washington state, Idaho, and Montana to cut stands of spruce, cedar, fir, and redwoods. Crews were ever on the move to virgin woods, so these camps were never more than temporary homes. Some featured barracks to which wheels could be easily attached for relocating, and in others cabins were constructed as barges for easy flotation down rivers.

Timber-mill towns were more permanent affairs. The first such community was likely Port Gamble, established in 1853 by the Puget Mill Co. on Washington Territory's Kitsap Peninsula. With a second mill constructed five years later, the town had a workforce of 175. Like many of the mill men who built the Northwest's timber industry, Port Gamble's founders were transplants from the Northeast, primarily from Maine. With its growing number of small frame houses, the town looked every bit a New England village. To be sure, not all the workers were considered members of the family: Port Gamble employed many American Indians whom it segregated into a separate outpost, a town called Little Boston on the other side of Gamble Bay from Port Gamble.

Operations in Port Gamble continued into the twentieth century, as did production at such places as Valsetz, Oregon; Sappho, Washington; and McCloud and Samoa, California. But many mill towns were short-lived. Wanton cutting was followed by abandonment of the settlements. The Manley-Moore Lumber Co. town of Montezuma, Washington, for instance, was left deserted after that company shuttered its mill in the early twentieth century. As giant corporations took over other companies and their towns, owners showed little interest in maintaining the towns or in maintaining family-like relations with workers.
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The clearest example to the contrary—and, perhaps, of utopian promise on the West Coast—was Scotia, California, the Pacific Lumber town in the Northern California redwood forests that was established in 1882 as Forestville.

Up to that time, the prospect of harvesting the mammoth redwood forests had seemed daunting. Some redwoods were as much as a thousand years old, hundreds of feet tall, and fifteen feet in diameter. Moreover, in pre-automobile days, it was difficult simply to get access to such trees. But with America's eastern forests and their stands of smaller trees increasingly logged out, there were few alternatives.

By the late 1880s, Pacific Lumber founders A. W. McPherson and Henry Wetherbee had three hundred employees living in Forestville. The settlement contained little more than a church, post office, and telegraph station. Reflecting the presence of many emigrants from Canada's eastern coast, the town's name was changed to Scotia. Pacific Lumber had become the largest producer of lumber in Humboldt County.

In the early 1890s, the company was purchased by Simon Jones Murphy, who'd made a fortune lumbering in Maine and in Michigan real estate, mining, and timber. It was the beginning of a long Murphy family association with Pacific Lumber. Although an 1895 fire destroyed the town and all of the company's facilities, Pacific Lumber quickly rebuilt and expanded. By 1920, the company had 1,500 workers and owned 65,000 acres of forest.

If left to its own devices, Pacific Lumber might not have become an environmentally progressive company. Both tax benefits and pressure from San Francisco conservationists encouraged the tendency. But for whatever reason, Pacific Lumber became a trailblazer in forest conservation: In the 1920s, it sold the largest remaining contiguous holding of old-growth redwoods—over 9,000 acres—to the Save the Redwoods League, becoming part of Humboldt Redwoods State Park. Moreover, in the following decade the company announced it was abandoning the industry standard of clear-cutting—or taking down everything in a given area—in favor of “selective cutting.” No more than 70 percent of the mature trees in a stand would be felled, with younger trees left to hold the soil and reseed. Finally, the company began harvesting on what it called a “perpetual sustained-yield basis”: Never would it cut more trees than its forests could regrow in
a year. Hiring some of the industry's first foresters, Pacific Lumber began its own nursery that would plant up to a million seedlings a year.
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More to the point, Pacific Lumber became renowned for its humane employment practices. “We're a paternalistic company,” president Stanwood Murphy told a journalist in 1971. “I know that's a dirty word,” continued the red-haired, craggy-featured executive, “but it's accurate.” Tiny, picturesque Scotia included attractive wood-frame bungalows, with low rent, free water and garbage removal, and regular maintenance by the company. The town also included a range of stores, a school, a forty-bed hospital, a skating rink, a Catholic and a Protestant church, an administration building, a fancy directors' cottage (for overnight use by corporate directors), and the ornate, all-redwood Winema Theater. Pacific Lumber gave its workers pensions, free life insurance, and bonuses, and their children got college scholarships. Every Labor Day, everyone in town gathered at the bank of the Eel River for a holiday blowout.

Labor at Pacific Lumber was difficult, sometimes dirty, and frequently deafening. Out in the woods, loggers felled the huge trees, then trucked them into Scotia and either stacked them at the “cold deck” or plunked them into the ten-acre millpond. In Scotia's three huge mills, men operated cranes, conveyor belts, rollers, and a variety of saws. Seventy-ton logs would be stripped of their bark, then sliced into a variety of lengths and widths. Then the lumber was sorted by grade and size, stored in warehouses for a lengthy drying period, and perhaps even kiln-dried.

Generation after generation of workers found the package to be a good deal. There were trade-offs, of course. Although Pacific Lumber paid better benefits and higher wages than rivals, it fought hard to keep unions out. Up until World War I, Scotia featured a “safety valve” called the Green Goose—a combination brothel, saloon, and gambling parlor. But with Prohibition, Scotia became a dry town—and it stayed that way. Afterward, social life in town centered on the volunteer fire department and a little-used, YMCA-like Scotia Men's Club, where card-playing was allowed but no gambling. (To be sure, gambling and drinking continued in establishments right across the Eel River, in the town originally known as Wildwood and later as Rio Dell.)
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All in all, life in Scotia was pretty calm—at least until the 1980s.

In that decade, with Scotia seemingly frozen in time and Pacific Lumber holding 70 percent of the remaining privately owned old-growth redwoods, corporate raider Charles Hurwitz moved to take over the company. The company's physical property—including a new headquarters building in downtown San Francisco—its cash position, and its absence of debt made it an appealing target. Hurwitz's Maxxam Inc. quietly obtained just under 5 percent of company stock. Then in October 1985, after an initial offer of $797 million, or $38.50 per share, Maxxam persuaded initially resistant Murphy family members to give in. The final purchase price was $868 million.

But the buyout, organized by Wall Street takeover specialists Drexel Burnham Lambert, meant taking on lots of debt. To pay this down, Pacific Lumber's new owners announced they would be ending the company's pension plan, absorbing $60 million in “overfunding,” and selling off the company's non-forest assets. They also announced a doubling of their redwood harvest. For a short time, Scotia's workers were raking in the overtime pay, and its mills were running extra shifts. But the aggressive new tree-cutting inflamed California's environmental activists, prompting almost two decades of struggle that featured protest marches, confrontations with pepper-spray-brandishing police, “tree sits”—in which protesters actually lived for months in the high branches of threatened redwoods—and a car bombing that nearly killed two activists from the Earth First! organization.

Moreover, within three years of the buyout, the insider trading scandal broke, in which it came out that Drexel junk-bond kingpin Michael Milken and trader Ivan Boesky had engaged in a series of bets on corporate takeovers based on inside information. Among the deals on which they wagered and Milken helped finance: Maxxam's buyout of Pacific Lumber. The Milken-Boesky activities violated federal law, and when their shenanigans were revealed, both men were sentenced to prison terms. Boesky was fined $100 million and barred from the securities industry. Moreover, Los Angeles stockbroker Boyd Jefferies was accused of having “parked,” or clandestinely purchased, 539,600 shares of Pacific Lumber stock on Hurwitz's behalf. The shares were key to Maxxam's Pacific Lumber takeover effort.

What had happened to the idealistic company, its sheltered workers, and the model town? Buyouts such as Maxxam's were then—and are today—justified on the grounds that new owners streamline operations
and maximize a company's value. But in the case of Pacific Lumber, to all appearances the new owners brought little other than a fresh rapaciousness, and their very aggressive pursuit of profit, not to mention the Drexel scandals, damaged Pacific Lumber's reputation. Despite a 1988 announcement of a voluntary moratorium on clear-cutting of virgin redwood forests, Pacific Lumber regularly fell afoul of California forestry regulations and faced court injunctions issued to stop its logging. As if in divine judgment against the turn of events, in April 1992, three major earthquakes struck the Scotia area within eighteen hours. Sawmills and homes were badly damaged, and the local shopping center was destroyed.
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