CONSUMERISM

In the 1920s, America became a modern consumer society. The number of automobiles, radios, refrigerators, and other new appliances exploded as factories introduced mass production techniques and advertisers developed new ways of selling these goods. But reformers feared that modern consumers found themselves powerless in the face of manipulative advertising, mass technology, and a maldistribution of income. Consumers could no longer judge the quality of packaged, technically complex items simply by taste, touch, or smell, nor could they bargain over prices. Those concerns gave rise to a consumer movement in the 1920s. The movement began with the publication of Stuart Chase and F. J. Schlink's Your Money's Worth(1927), a best-selling book that exposed false advertising and adulteration of nationally advertised brand-name goods. In response to this book's success, Chase and Schlink established Consumers' Research, the country's first product-testing agency. Although the organization had only several thousand members, the idea that consumers needed help in reforming modern capitalism gained widespread acceptance during the Great Depression.

The Depression led to the creation of new governmental agencies dedicated to protecting consumers. Facing economic devastation and dire need, consumers wanted more for their money. Though the economy experienced massive deflation, not all prices declined as fast as wages, especially as large corporations sought to maintain prices and cut production as an attempt to stabilize profits. In addition, many manufacturers resorted to cheapening the quality of products as a way to cut costs. But the biggest problem that consumers faced during the Great Depression was lack of income. Indeed, many New Dealers believed that underconsumption resulting from a lack of mass purchasing power caused the Depression. Though capital spending fell far more than consumption, the idea of underconsumption as the country's main economic problem had widespread popular appeal.

When President Franklin Roosevelt introduced the New Deal, he adopted a purchasing power rationale and promised an expansion of governmental authority to end underconsumption and increase purchasing power: "The aim of this whole effort is to restore our rich domestic market by raising its vast consuming capacity." But the National Industrial Recovery Act and the Agricultural Adjustment Act were necessarily inflationary. The National Recovery Administration (NRA) suspended antitrust provisions to allow businesses to stabilize production and prices. As a result, the NRA codes worsened the problem of what New Dealer Gardiner Means called "administered prices." Section 7a of the National Industrial Recovery Act was intended to increase wages, but industry noncompliance rendered collective bargaining ineffective. The efforts of the Agricultural Adjustment Administration (AAA) to increase the purchasing power of farmers by raising commodity prices was also inflationary. The initiatives of both the NRA and the AAA led to higher prices without substantially increasing national income, and higher prices threatened to undermine public support for the New Deal. As a result, Congress created new bodies to look out for the interests of consumers and to contain consumer protest.

The creation of the NRA's Consumer Advisory Board signaled the incorporation of a progressive attitude into the New Deal and the official recognition of the importance of consumers to economic recovery. The board's first chairman was Mary Rumsey. Born in New York in 1881 to E. H. Harriman, a railroad financier, Rumsey grew up in elite circles, but she maintained a lifelong interest in social welfare. During World War I, Rumsey helped organize community councils under the Council of National Defense. Those councils played an important role in monitoring wartime prices and served as the basis of cooperatives after the war. During the 1920s, Rumsey developed close ties to the female reform community, and she received her appointment to the Consumer Advisory Board at the behest of her close friend and roommate Frances Perkins. Rumsey, who also had the ear of Eleanor Roosevelt, appointed to the board representatives from women's groups that were sympathetic to consumer issues, including the American Home Economics Association, the General Federation of Women's Clubs, the National Consumers' League, the Women's Trade Union League, the League of Women Voters, and the American Association of University Women. Rumsey also appointed social scientists, such as Gardiner Means, Robert Lynd, and Paul Douglas.

In the AAA, Secretary Henry Wallace created the Consumers' Counsel to protect consumer interests, and he appointed Frederic Howe as its first head. Howe was a leading municipal reformer who had long advocated the need for public markets. World War I was a formative experience for Howe, as it had been for Rumsey. While serving as commissioner of immigration at Ellis Island in New York Harbor, Howe wrote The High Cost of Living (1917), in which he argued that food monopolies paid farmers too little for their products and charged urban consumers too much. As head of the Consumers' Counsel, Howe argued that processors raised prices more than was necessary to make up the value of the processing tax, and thus gouged the American public. Howe's theories about monopolistic pricing in the food industry, as well as in other important industrial sectors, received support from Gardiner Means, who served as Wallace's economic adviser. In addition, liberals within the AAA, such as Modercai Ezekiel, Louis Bean, and Jerome Frank, along with Undersecretary of Agriculture Rexford Tugwell, supported the Consumers' Counsel's attack on high prices, low wages, and degraded quality, which they believed to be impediments to economic recovery.

Although the NRA Consumer Advisory Board and the AAA Consumers' Counsel were established to diffuse consumer protests, they legitimized and fueled growing activism. At the policy level, they had little impact, but at a popular level, they gave administrative endorsement to the idea of high prices as profiteering and low wages as economically unsound. In the fall of 1933, the formation of the Emergency Conference of Consumer Organizations, which represented fifty consumer groups, signaled a growing unrest, as did the hundreds of thousands of letters that citizens sent to Washington with details of economic difficulty. Especially telling were the thousands of bread wrappers that consumers sent to demonstrate what they believed to be, and what Secretary Wallace had told them were, unjustified prices. In response to increasing agitation, Eleanor Roosevelt invited the Emergency Conference of Consumer Organizations to the White House for a high profile meeting on consumer problems. One of the most vocal representatives, Leon Henderson, condemned the Consumer Advisory Board as ineffective. As the director of the remedial loan division for the Russell Sage Foundation, Henderson saw first-hand how economic necessity drove low-income wage earners into the grips of loan sharks. After the White House meeting, NRA administrator Hugh Johnson hired Henderson as an advisor on consumer problems. He was soon promoted to the post of chief of the NRA research and planning division, a position he used to continue his attack on high prices and low wages.

New Deal consumer advocates pushed for three programs. First, they sought to organize county consumer councils to create a consumer movement. In response, the NRA created the Bureau of Consumer Economic Education under the direction of economist Paul Douglas and underconsumption theorist William Trufant Foster. The bureau established councils in two hundred counties; each council included home economists and county agents, as well as housewives, wage earners, and farmers of modest means. These councils, along with women's clubs, churches, labor unions, and other organized groups, received new government publications on consumer issues. The Consumers' Counsel, for example, sent out tens of thousands of copies of Consumers Guide, which listed average prices for basic goods like meat, milk, and bread, and urged consumers not to pay more. Second, in addition to grassroots organizing, consumer advocates pushed for an end to price fixing in NRA codes. Finally, consumer advocates called for a government system of quality standards to provide consumers with essential product information. The Consumer Advisory Board hired well-known sociologist Robert Lynd and consumer advocate Caroline Ware to investigate the possibility of government-imposed grade labeling on the theory that even if consumers were not well organized, they could benefit from knowing more about the goods they purchased. Demands for better standards culminated in the Federal Food, Drug, and Cosmetic Act of 1938 that required better product labeling and extended the Food and Drug Administration's regulation to the cosmetic industry.

New Deal rhetoric aroused consumers who felt entitled to fair prices and good quality, especially during a time of serious economic need. In the spring of 1935, when record-breaking droughts caused a shortage of cattle, consumers protested rising meat prices. In cities across the country, housewives formed High Cost of Living Committees to demand price cuts on meat, milk, and bread. Regardless of the real causes for price increases, these angry consumers blamed food monopolies and demanded justice in the marketplace. Some of this movement's leaders came from the country's most politically radical groups, including the Communist Party, but many of the movement's followers were ordinary housewives having a hard time making ends meet. The League of Women Shoppers, for example, was a Popular Front organization that gained a middle-class following during the meat crisis by mobilizing housewives against price increases. In Detroit, Mary Zuk, another radical activist, led housewives on a meat boycott while also helping to form the United Auto Workers.

By the late 1930s, business was forced to acknowledge the presence of a growing consumer movement as testified by the popularity of Consumers' Research and the spread of consumer boycotts. Business Week argued that the business community should support the demands of consumer groups for a Department of the Consumer as a way to keep track of this burgeoning threat. The mobilization for World War II bolstered the consumer movement. Both New Deal consumer advocates and grassroots organizations staffed the newly created Office of Price Administration (OPA), which was set up to curb wartime inflation. Its first administrator was Leon Henderson, who implemented a national system of price controls, rationing for fair distribution, and government grade labeling. To enforce compliance, the OPA set up "little OPAs" in every community. These boards were the heirs of the NRA county councils. Though not the Department of the Consumer that advocates had desired, the OPA pushed for many of the programs that had been at the heart of the consumer movement during the Depression.

See Also: ADVERTISING IN THE GREAT DEPRESSION; HENDERSON, LEON; NATIONAL RECOVERY ADMINISTRATION (NRA); SCIENCE AND TECHNOLOGY.

BIBLIOGRAPHY

Angevine, Erma, ed. Consumer Activists: They Made a Difference, a History of Consumer Action Related by Leaders in the Consumer Movement. 1982.

Campbell, Persia. Consumer Representation in the New Deal. 1940.

Glickman, Lawrence. "The Strike in the Temple of Consumption: Consumer Activism and Twentieth-Century American Political Culture." Journal of American History 88 (2001): 99–128.

Jacobs, Meg. "'Democracy's Third Estate': New Deal Politics and the Construction of a 'Consuming Public.'" International Labor and Working-Class History 55 (1999): 27–51.

Orleck, Annelise. "'We Are that Mythical Thing Called the Public': Militant Housewives during the Great Depression." Feminist Studies 19 (1993): 147–172.

Sorenson, Helen. The Consumer Movement: What It Is and What It Means. 1941.

Meg Jacobs