The control revolution: technological and economic origins of the information society 9780674169869, 9780674169852

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RALLY PEOPLE in the Majesty of your Strength and forbid THIS.

Figure 6.1. The crisis of safety on the railroads helped rival canal and turnpike interests to incite local resistance to the development of intersectional lines.

In 1840 rioters actually tore up a Philadelphia rail line, which had to be abandoned. Despite this 1839 broadside intended to rally Philadelphians against

becoming “a suburb of New York,” that city had already been linked by a chain of railroads to Washington, D.C., by January 1838. (Courtesy of MetroNorth Commuter Railroad, New York.)

Industrial Revolution and Crisis of Control 223

ating speeds of up to thirty miles per hour. Travel on the shorter regional lines, although occasionally as fast, had been relatively free of accidents through the 1880s, so that the public had come to regard the railroad as a safe means of transportation. Salsbury sets the historical context for the great Western collision of 1841: The twentieth century has become blasé about disasters. Although train, aircraft, and even automobile wrecks are headline news, there is a general acceptance of the maxim. that accidents are the price of progress. Few newspaper subscribers are surprised to learn of several major disasters on the same day. That was not the case in Boston in the 1840s. Although ship mishaps were considered normal, no tradition prepared people for spectacular land wrecks. True, stages often overturned or smashed, but for the most part such accidents usually resulted in injuries rather than death and involved only a few people. By contrast, a single train carried hundreds, at speeds up to 30 miles an hour. The railroad disaster, with its potential to kill or maim scores, if not hundreds, held a special} terror. (1967, p. 183)

Investigation of the Western collision laid the blame on a failure of programming and communication. The company’s management, aware that running six or more trains simultaneously on more than 150 miles of track required special information technologies, had settled on two: precise scheduling and a strict written program that defined procedures for various contingencies. The eastbound train had been late in arriving at the Chester Village siding, according to an investigation by the Western’s board of directors, who reported of the conductor in charge of the train: “In conformity with the general order with which

he had been furnished and the time sheet which he had then in his possession and which he had consulted on the route, he should have remained at Chester Village until the arrival of the westbound train. He must have known by examining his timetable that if the westbound was then acting in conformity to the same order, the trains would most certainly meet between Chester and Westfield” (Salsbury 1967, pp. 185-186).

Explanation for the behavior of the conductor, who himself died in the wreck, seemed to lie in a general failure of control. Programming for contingencies like delays lacked precision, detail, and integration among various workers and functions. As a result, the chain of command among Western employees could be ambiguous. The company’s own investigation found “laxness in distributing copies of new orders

224 Industrialization and Processing Speed to the train crews” and concluded that the “general control of the trains was too loose” (Salsbury 1967, p. 186).

As a result of this fatal failure of control, the Western management instituted a wide range of innovations in bureaucratic organization, programming, information processing, and communication. Alfred Chandler has hailed the result as an early milestone in bureaucratic control, “the first modern, carefully defined, internal organizational

structure used by an American business enterprise” (1977, p. 97). Control of the entire Western line became centralized in a new Springfield, Massachusetts, headquarters, linked to three regional offices by what Salsbury (1967, p. 187) describes as “solid lines of authority and command.” One chain of command, headed by the chief engineer in Springfield, stretched through three regional “roadmasters” and controlled track, roadbed, bridges, and buildings. A separate chain of command, headed by the master of transportation at Springfield, stretched through three divisional masters and the various station agents and controlled all passenger and freight traffic. A third chain of command, headed by the master mechanic at the Western’s

major shops in Springfield, although normally under the master of transportation, stretched through deputy mechanics at each terminal and roundhouse and controlled all engines and rolling stock. Certainly the most modern aspect of the organizational structure in-

stituted by Western and eventually adopted by other railroads was the company’s particular attention to regularity in data collection, to formalization of information processing and decision rules, and to standardization of communication with feedback. Responsibility for updating the three roadmasters on the condition of track and structures fell to conductors, enginemen, stationmasters, and other subordinates who passed up to the regional hierarchies a continual flow of data. The Western required each roadmaster, in turn, to keep a “journal of his operations” and to make a formal monthly report to the chief engineer in Springfield. The company also specified that “no alteration in the time of running or mode of meeting and passing of trains shall take. effect until after positive knowledge shall have been received at the

office of the superintendent that orders for such change have been received and are understood by all concerned” (Salsbury 1967, p. 186). Although the Western left much to the discretion of central, regional,

and even local administrators, the company’s directors programmed its operating workers with “careful and explicit rules.” Enginemen, for example, became little more than programmable operators, duti-

Industrial Revolution and Crisis of Control 225 fully following rules like “in descending grades higher than 60 feet per

mile passenger trains are not to exceed 18 miles per hour and merchandise trains not over 10 miles per hour.” In transit the engineman obeyed the conductor, who told him even when to start and stop; upon arrival, however, enginemen fell under the supervision of the terminal’s master mechanic. The Western directors specifically charged conductors with the responsibility of reporting “any disobedience of the

engineman” directly to the superintendent in Springfield (Salsbury 1967, pp. 187-188).

Control of each train became centralized in its conductor, who had standardized detailed programs for responding to delays, breakdowns, and other contingencies, who carried a watch synchronized with all others on the line, and who moved his train according to precise timetables. The conductor controlled all operations between origin and destination, including those of the engineman and the brakeman on each car, from his platform outside the first car of the train. He controlled the brake of this car, and he alone—except in emergencies— determined when and where to stop and when to start, signaling his decisions by pulling a cord connected to the engine bell. To describe the conductors on the reorganized Western line as “programmed” might at first seem anachronistic, a needless intrusion of contemporary jargon into the early nineteenth century. The fact remains, however, that in their control of trains the Western conductors might have been replaced in many of their functions by on-board microcomputers or, given modern telecommunications, by a more centralized means of computer control. Seen in this way, the Western conductors take on new significance: they are possibly the first persons in history to be used as programmable, distributed decision makers in the control

of fast-moving flows through a system whose scale and speeds precluded control by more centralized structures. This use of human beings, not for their strength or agility, nor for their knowledge or intelligence, but for the more objective capacity of their brains to store and process

information, would become over the next century a dominant feature of employment in the Information Society. The directors of the Western Railroad labored quite consciously to program and reprogram the entire system. In investigating the com-

pany’s operations, the Massachusetts legislature reported that “the directors have been at great pains to collect and compare their rules with those of other similar companies in this country and in England, with a view to adoption of those which would produce the greatest

226 Industrialization and Processing Speed security.” The legislators also found that the directors reassessed an employee’s programming after an accident and used the experience to determine new rules that might make for still safer operations (Salsbury 1967, p. 189).

Because the Western was the first enterprise to extend beyond the span of a single manager’s close personal contacts, a distance Chandler

(1962, p. 21) sets for early railroads at roughly a hundred miles, and because the company attempted to contro! multiple units operating at the new speed of steam power, especially in opposite directions on the same track, it is perhaps not surprising that a crisis of control would arise in the first days of its operations or that its organizational and informational solutions to the crisis would serve as the earliest models for control by business well into this century. “As the first private enterprises in the United States with modern administrative structures,” Chandler (1962, p. 28) finds, “the railroads provided industrialists with useful precedents for organization building when the industrial

enterprises grew to be of comparable size and complexity.” And, as we shall see, when they came to control movements at comparable speeds.

From Safety Crisis to Control for Efficiency With the rapid diffusion of the telegraph, after Morse’s successful demonstration in 1844, and the adoption and refinement of the Western’s organizational innovations, the danger of collisions no longer ranked

as the railroad’s major control problem by the 1850s. In the first half

of that decade, which brought the first four trunk Imes—the Erie (1851), Baltimore and Ohio (1852), New York Central (1858), and Penn-

sylvania (1854)—connecting East and West, the control crisis of the railroads shifted from safety to efficiency in keeping track ‘of trains, cars, and personnel in increasingly large, complex, and busy systems. The history of the Erie Railroad, America’s first great trunk line, illustrates this shift. In 1841, the year of the Western collision and the Erie’s first in operation as a regional railroad, the company ran five locomotives, six passenger cars, and three freight cars, at an average speed of twelve miles per hour, on forty-six miles of track; this kept 112 people employed. Only a decade later, in its first year as a trunk line, the Erie ran 123 locomotives, 68 passenger cars, and 1,378 freight and baggage cars—at average speeds ranging from twenty-four up to

twenty-nine miles per hour (for the express)—on 445 miles of track; this operation employed 1,325 people (Mott 1901, p. 483). Compared

Industrial Revelution and Crisis of Control 227 to the largest interregional railroad (the Western) in the previous year,

the Erie in 1851 had three times as much track and moved about as much freight (a quarter million tons) and half again as many passengers—nearly 690,000.

In short, over the decade of the 1840s the Erie’s control crisis had become how to keep track of 450 times as many freight cars moving at twice the speed over ten times as much track. Needless to say, traffic on the Erie and the other great trunk lines quickly overburdened

the control technologies of the day. Imagine the manager who attempted to sustain efficient movement of several thousand rolling stock over hundreds of miles of track using the mercantile style of manage-

ment. In 1854 Henry Varnum Poor, editor of the American Railroad Journal, wrote that “the utmost confusion prevailed” in the Erie system during its early years, “so much so, that in the greatest press of business, cars in perfect order have stood for months upon switches without being put to the least service, and without its being known where they were” (Chandler 1956, p. 147). Although efficiency had come to overshadow safety, the Erie’s accident rate also reflected its control problem: no one was killed in its first two years of operations, but twenty-six people were killed in 1851

alone. One possible way to attempt to regain control, of course, was to hire more people: The number of Erie employees increased nearly twelve times between 1841 and 1851, doubled again to twenty-six hundred in 1853, and again to fifty-five hundred by 1862. Employees had themselves to be controlled, however; 167 were killed in the Erie’s first decade as a trunk line, a rate that in one year (1852) exceeded 1 per 100 employees (Most 1901, p. 488). Without innovations in organization and bureaucratic control, simply hiring more employees contributed to the control crisis as much as to

its solution. As a result, railroads found that, contrary to anticipated economies of scale, as their systems grew larger, per-mile operating costs actually increased. As early as 1856, however, the Erie’s superintendent, Daniel C. McCallum, saw the problem arising not from increasing scale per se but rather from the resulting decrease in ability to control operations efficiently: A Superintendent of a road fifty miles in length can give its business his personal attention and may be constantly on the line engaged in the di-

rection of its details; each person is personally known to him, and all questions in relation to its business are at once presented and acted upon; and any system however imperfect may under such circumstances prove comparatively successful. In the government of a road five hundred miles

228 Industrialization and Processing Speed in length a very different state exists. Any system which might be applicable to the business and extent of a short road would be found entirely

inadequate to the wants of a long one; and I am fully convinced that in the want of system perfect in its details, properly adapted and vigilantly enforced, lies the true secret of their [the large roads’] failure; and that this disparity of cost per mile in operating long and short roads, is not produced by a difference in length, but is in proportion to the perfection of the system adopted. (Chandler 1956, p. 146; 1965b, p. 101)

By virtue of such insights, Daniel McCallum must be considered among the first to appreciate the breakdown of control that results when a system exceeds the grasp of any one individual. As we saw in Chapter 1, Emile Durkheim would reach much the same conclusion

for markets generally in his Division of Labor in Society (1898). McCallum’s report also made clear that, even though the railroads first experienced loss of control as accidental loss of lives and equipment, by the 1850s their control crisis had become one of mounting operating

costs and loss of business. McCallum’s Erie Railroad, for example, faced increasing competition from the short lines along the Erie Canal,

which in 1853 consolidated to form the New York Central, thereby making that route more attractive for through traffic. In response to the New York Central, the Erie promoted McCallum, a formally trained civil engineer with experience in bridge building, to general superintendent of all five of its geographically separate operating divisions. To complement the increasing regularity and speed in the movement

of matter and energy then possible on the Erie, McCallum sought greater control over the railroad through greater regularity and speed in the movement of information—greater regularity and speed of communication. This he accomplished by means of a new hierarchical system of information gathering, processing, and communication designed to return control to the superintendent’s office. Among a half-dozen “general principles of organization and administration” McCallum placed major emphasis on intelligence gathering, hierarchical communication, feedback, and error detection. Although organizational control demanded that responsibility be formally divided and power distributed, McCallum believed, the general superintendent retained responsibility for system-wide control, which he saw as dependent on four informational capabilities: (1) “The means of knowing

whether such responsibilities are faithfully executed”; (2) “great promptness in the report of all derelictions of duty, that evils may be at once corrected”; (3) “such information, to be obtained through a

Industrial Revolution and Crisis of Control 229 system of daily reports and checks that will not embarrass principal officers, nor lessen their influence with their subordinates”; and (4) “the adoption of a system, as a whole, which will not only enable the General Superintendent to detect errors immediately, but will also point

out the delinquent” (Chandler 1965a, pp. 28-29). Clearly here, as in the subsequent implementation of these ideas, McCallum placed greater emphasis on communication from subordinates to their superiors than

vice versa, that is, not on lines of command so much as on lines of feedback and control. To illustrate these lines of communication and authority among the Erie’s various offices and employees, McCallum drew up a detailed diagram that Chandler (1965a, p. 30) calls “certainly one of the earliest organizational charts of an American business enterprise.” As Chan-

dler (1956, p. 148) describes it, “the design of the chart was a tree whose roots represented the president and the board of directors; the

branches were the five operating divisions and the service departments, engine repairs, car, bridge, telegraph, printing, and the treasurer’s and the secretary’s offices; while the leaves indicated the various local ticket, freight, and forwarding agents, subordinate superintendents, train crews, foremen, and so forth.” Although McCallum intended

this chart to be used for the Erie’s internal purposes only, Henry Varnum Poor had it lithographed and offered copies to his American Railroad Journal readers for $1 each. As if the formal hierarchy and lines of communication were not enough

to unite the Erie’s three thousand employees into a single information processor capable of controlling the growing system, McCallum also introduced the idea that all employees would wear a prescribed uniform indicating the wearer’s particular subdivision and grade in the organizational hierarchy. By thus making manifest the lines of authority drawn in the General Superintendent’s chart, the uniforms served to preprocess the crucial information that employees moving around in the far-flung Erie system would need in interacting with one another. As the general public came to recognize the various insignia, the uniforms also served to preprocess the Erie’s organizational information for its passengers and clients. The revolutionary nature of this innovation is evident from the fact that it generated considerable contro-

versy: Henry Varnum Poor, for example, defended the idea against the Railroad Record of Cincinnati, which considered it unbefitting a democracy.

To implement the flows of data that McCallum had outlined in his

230 Industrialization and Processing Speed “general principles” and had drawn into his organizational chart, he required that three types of reports—hourly, daily, and monthly— be sent to the General Superintendent’s office. Conductors and station agents began to report hourly, via telegranvh, on the location of trains and the reasons for any delays, accidents, or breakdowns. Processing these data required “a very considerable amount of extra trouble and expense,” the American Railroad Journal reported, including “the maintenance of a large office with eight active clerks“ (Chandler 1956,

p. 148). As McCallum himself described the data processing in his office, “The information being edited as fast as received, on convenient tabular forms, shows, at a glance, the position and progress of trains, in both directions on every Division of the Road” (Chandler 1965a, p.

30). Henry Varnum Poor, reporting triumphantly to his readers that “the superintendent can tell at any hour in the day the precise location

of every car and engine on the line of the road, and the duty it is performing,” also reflected the urgency of the control crisis: “All these reforms,” he added, “are being steadily carried out as fast as the ground gained can be held” (Chandler 1956, p. 147). So urgently were the reforms needed that many—including the organizational plan, the reporting system, and the use of the telegraph— had been initiated in part by the Erie even before McCallum became general superintendent in 1854. The first use of the telegraph in railroading, for example, came three years earlier when Charles Minot,

then a superintendent on the Erie, wired fourteen miles to Goshen, New York, to delay a train so that his own would not have to wait (Mott 1901, p. 420). McCallum systematized the Erie’s initial plans, however, and inte-

grated them into a comprehensive control system. His major contribution, according to Chandler (1965a, p. 30), lay in this larger understanding of communication and control: “McCallum’s use of the telegraph brought universal praise from the railroad world both in this country and abroad. What impressed other railroad managers was that

McCallum saw at once that the telegraph was more than merely a means to make train movements safe, but also a device to improve better coordination and better administration through this extremely efficient new technique of communication.” Data from the daily and monthly reports submitted to McCallum’s office, although not dependent on the rapid new telegraphic communication, did prove useful—often in unexpected ways—to control variables not arising from the increasing distances, speed, and volume of

Industrial Revolution and Crisis of Control 231 the Erie’s operations. When the railroad raised its rates, for example, it found that the resulting decrease in traffic actually reduced revenues. “To guard against such a result,” McCallum argued, “and to establish the mean, between such rates as are unremunerative and such as are prohibitory, requires an accurate knowledge of the cost of transport of the various products, both for long and short distances” (Chandler 1965a, p. 31). Continuing time series data, in other words, could be used to control rate structure and thereby maintain maximum revenues despite continually changing conditions—an application of data collection to control that would be adapted to industrial production in the latter nineteenth century. Eiven the monthly reports required of all heads of the Erie’s various service departments, recorded and filed by McCallum’s office in statistical format, proved useful to maintain the type of rational administrative control that would become known in the 1890s as “scientific management.” Comparison of data from two different soureces—conductors and station agents—on the loading and movement of freight, for example, served as a reliable check on the honesty and efficiency of these employees. Comparative analysis of the monthly engine reports revealed the engine best suited to even complex tasks (involving various loads, speeds, and grades) and the enginemen who operated their locomotives most efficiently. Even the Railroad Advocate, which

claimed to speak for engineers and other skilled railroad laborers, favored such analysis: “Although, perhaps, for a purely selfish purpose, the monthly reports acknowledge the full doings of each engineer, they still serve as an honorable stimulant to exertion” (Chandler 1956, pp.

149, 321). And, we might add, as a means by which the engineer’s exertion might be better controlled from the central office. From this office, using data based on the daily and monthly reports, McCallum even proposed a crude type of operations research, what

one text defines as “a scientific method of providing executive departments with a quantitative basis for decisions regarding the operations under their control” (Kimball and Morse 1951, p. 1). Because of the problem of unused capacity, for example (a control problem that continues to plague railrcads to this day, according to a New York Times editorial, “Boxcar Follies,” in 1983), McCallum proposed that his statistics be used to analyze traffic flow patterns so that prices might be “fixed with reference to securing, as far as possible, such a balance of traffic in both directions as to reduce the proportion of ‘dead weight’ carried.” As Chandler (1965a, pp. 31-82) adds, “unused or excess ca-

232 Industrialization and Processing Speed pacity on a return trip warranted lowering prices for goods going that way.” Many historians find the origins of operations research in World War II or, occasionally, in World War I (Trefethen 1954, p. 4); Daniel Bell (19738, pp. 29-83) has associated such statistical control techniques with

the postindustrial society. To describe McCallum’s early use of systematically collected quantitative data to inform decision making and control as operations research may not seem anachronistic, however, when we consider that the term has been applied to the still earlier work of Charles Babbage in England, especially to his 1827 study of the British postal system, to his On the Economy of Machinery and Manufactures (1832), and to his series of studies of the Great Western Railway in 1889 (Halacy 1970, pp. 75-77; Dubbey 1978, pp. 221-224; Hyman 1982, pp. 158-163). McCallum’s ideas, although they followed

Babbage’s by a quarter-century, stemmed from similar observations and experience with the new steam-powered systems—and they were more successful than Babbage’s in effecting immediate control. Despite the success of McCallum’s innovations, the control crisis had not yet ended for America’s railroads. Control problems with the first

interregional trunk lines like the Erie in the early 1850s gave way to a mounting crisis in the control of national through traffic as the railroads pushed westward to Chicago (1853), crossed the Mississippi at Rock Island (1856), and—with the driving of the golden spike at Promontory Point, Utah, on May 10, 1869—connected to West Coast lines. Meanwhile McCallum had left the Erie in 1857 to return to his bridgebuilding business, although during the Civil War he served as “military director and superintendent” of the Union railroads (he spent $42 mil-

lion to build or rebuild 2,745 miles of track and twenty-six bridges) and was made Brigadier General for helping to save Grant at Chancellorsville (Mott 1901, p. 434). Outside of the Union Army, McCallum’s

hierarchical system of information gathering, processing, and control continued to be tested and elaborated in other interregional trunk lines, most notably by the Pennsylvania Railroad. By the late 1870s the control crisis of the railroads had shifted once again, this time to the maintenance and extension of vast multiregional systems. The first of these, the Pennsylvania, which by 1874 connected New York City and Washington, D.C., with Chicago and St. Louis, confronted the problem of controlling $400 million worth of capital and six thousand miles of track—more than any national system except for those in Britain and France. Until the 1880s most railroad com-

Industrial Revolution and Crisis of Control 233 panies delayed building giant systems like that of the Pennsylvania because they lacked adequate control technology. “Managers opposed expansion,” according to Chandler, “because they considered any road much over five hundred miles in length to be too large and complex to manage” (1977, p. 136). As late as 1898, the Erie’s express trains

ran at an average speec of only thirty-five miles per hour, the same speed they had run under McCallum in 1854; ordinary passenger trains ran at twenty-five miles per hour—an actual decrease of five miles per hour over the forty-three years (Mott 1901, p. 483). Control of even transcontinental rail systems gradually became feasible through a steady progression of innovations intended to facilitate control: the through bill of lading (1853), standardization of cars (1867), adoption of a uniform standard time (1883) and standard gauge of track (1886), regulation by an Interstate Commerce Commission (1887), and

required standardized automatic couplers and air brakes (1893). By the 1890s, owing to these and many other innovations in control technology, the rail network of the United States had essentially been completed (Taylor and Neu 1956; Kirkland 1961, pp. 46-51; Stover 1961, chap. 6). Freight that in 1849 required nine transshipments between Philadelphia and Chicago could by the late 1880s move from coast to coast without a single one (Chandler 1977, pp. 122—123). Table 6.1 summarizes the major innovations in information-process-

ing and communication technology for the control of U.S. transportation and distribution from the 1880s—and the first applications of steam power—to the establishment of a standardized, federally conTable 6.1. Selected innovations in information processing and communication for control of transportation and distribution, 1830-1889

Year Innovation

1830s Wagon lines carrying freight between rural towns and ports begin to operate on regular schedules 1837 Telegraph demonstrated, patented 1839 Express delivery service between New York and Boston organized using railroad and steamboat 1840s Freight forwarders operate large fleets on canals, offer regular through-freight arrangements with other lines 1842 Railroad (Western) defines organizational structure for control 1844 Congress appropriates funds for telegraph linking Washington and Baltimore; messages transmitted

234 Industrialization and Processing Speed Table 6.1 (cont.)

Year Innovation 1847 Telegraph used commercially 1851 Telegraph used by railroad (Erie) First-class mail rates reduced 40-50 percent

1852 Post Office makes widespread use of postage stamps 18538 Trunk-line railroad (Erie) institutes a hierarchical system of information gathering, processing, and telegraphic communication to centralize control in the superintendent’s office Through bill of lading introduced

1855 Registered mail authorized, system put into operation First-class mail rates reduced—a second time—40 percent 1858 Transatlantic telegraph cable links America and Europe, service terminates after two weeks Overland mail service begins—twice weekly—to Pacific Coast

1862 Federal government issues paper money, makes it legal tender 1863 Free home delivery of mail established in 49 largest cities 1864 Railroad posval service begins using special mail car Postal money order system established to insure transfer of funds 1866 Telegraph service resumes between America and Europe “Big Three” telegraph companies merge in single nationwide multiunit company (Western Union), first in United States

1867 Railroad cars standardized Automatic electric block signal system introduced in railroads

1874 Interlocking signal and switching machine, controlled from a central location, installed by railroad (New York Central)

1876 ‘Telephone demonstrated, patented 1878 Commercial telephone switchboards and exchanges established, public directories issued

1881 Refrigerated railroad car introduced to deliver Chicago-dressed meat to Eastern butchers 1883 Uniform standard time adopted by United States on initiation of American Railway Association

1884 Long-distance telephone service begins 1885 Post Office establishes special delivery service 1886 ~— Railroad track gauges standardized

1887 Interstate Commerce Act sets up uniform accounting procedures for railroads, imposes control by Interstate Commerce Commission

ages risis of Industrial Re voluti

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cards automatically controlled the patterns woven. The idea may have come from late eighteenth-century musical instruments programmed to perform automatically under the control of rolls o puncrea paper. OuUrlesy OJ Curver Pictures.) e

248 Industrialization and Processing Speed cesses (as effected by machine tools), integration of processes by fitting outputs to inputs (as perfected in continuous-processing technologies), and factory design to facilitate throughputs. Advances in actual information processing—as opposed to information reduction or prepro-

cessing—included organizational specialization (as in rate-fixing departments, expert consultants, and governmental regulation), intraorganizational communication (shop-order systems based on routing slips), and programmed control (automatic recording devices, cost control of factories). To summarize this section, rapid industrialization created a crisis of

control in only those industries—primarily metal making and later metalworking—where progressively more intense applications of heat brought corresponding increases in the volume of production. There crisis resulted for much the same reason that it did in applications of steam power to transportation: increases in the speed and reliability of throughputs out-paced the development of information-processing and communication technologies adequate to control the larger systems. In other words, the wider crisis in control of societal systems, born of

the Industrial Revolution, made itself felt in all but three types of production: where more intensive energy could not be exploited, where continuous-processing machinery maintained control by integrating entire systems, and where the liquidity of flows facilitated their continued control even at vastly increased volumes and speeds. Whether or not a particular industry required new technology to control its throughput processing, however, all sectors, because of the increasing speed and volume of industrial production, experienced crisis in controlling the distribution of outputs on a comparable scale.

Control Crisis in Distribution Because genetic programming severely constrains the speed with which plants can be grown, industrializing countries experience no crisis nor

even much acceleration in the movement of materials through the various stages of agricultural production: tilling, sowing, cultivation, harvest. Even though various technological innovations—new machinery, fertilizers, strains of crops—may increase the speed or volume of throughputs at any one of these stages, the relatively fixed length of the growing season prevents integration of these improvements into a much faster system; small family farms remained the basic unit of agricultural production in the United States until well into the twen-

Industrial Revolution and Crisis of Control 249 tieth century. Once crops had been harvested, however, they increasingly entered a high-speed, national distribution system based on rail transportation and telegraphic control. Even without a control crisis in agriculture itself, therefore, America confronted—after completion

of the East-West trunk lines in the 1850s—a growing crisis in the distribution of wheat, corn, and cotton. In essence, the problem of distribution became one of coordinating and controlling the movement of these commodities from several million farmers scattered throughout the South and West to thousands of processors in northern and European cities. Central to the solution were specialized commodity dealers and brokers who purchased directly from farmers, sold directly to processors, and thereby eliminated most problems of coordinating intermediary transactions. The mercantile firm, which had served the function for half a millennium, disappeared from American agricultural markets in the 1850s and 1860s and was supplanted by new distributional structures made possible by rail transportation and telegraphic control. The key innovation in social technology was the commodity exchange, based on the telegraph and

later on telephone exchanges, which permitted crops to be sold in transit and even before harvest and allowed the exploitation of even minute-by-minute changes in prices. Commodity exchanges accompanied diffusion of the telegraph, which was launched in 1844 and in eight years comprised a continental telecommunications network of some twenty-three thousand miles (Fig. 6.4). The Chicago Board of Trade, established in 1848 as a merchant exchange, had by the early 1850s become a modern commodity ex-

change; the Merchants Exchange of St. Louis underwent a similar transformation in 1854. Meanwhile, wholly new commodity exchanges opened in other large cities: New York (1850), Philadelphia and Buffalo (1854), Milwaukee and Kansas City (1860), Toledo, Omaha, Minne-

apolis, and Duluth by the 1880s (Huebner 1911); cotton exchanges began operations in New York in 1870 and in New Orleans the following year (Woodman 1968, pp. 289-294). Evidence that these exchanges functioned to control distribution can

be found in the list of agricultural products not traded there: tobacco, meat, Sugar, cacao, and other imports, the only foodstuffs processed by mass producers, who quickly replaced commodity dealers and bro-

kers to integrate even further (vertically) the distribution of farm products. Coffee, the single import to have an exchange, was the only one not processed domestically; it reached retailers in the same bags

250 Industrialization and Processing Speed

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Figure 6.6. Innovations in market and retail control of distribution included the use of the postal system to distribute catalogs (1840s) and the resulting rise of large mail-order houses (1870s). By the 1890s Sears, Roebuck of Chicago ran crowded advertisements offering a “30 days’ free trial,” a “binding guarantee,” and various free catalogs or “an immense catalogue of everything” for fifteen cents. (Courtesy of Sears, Roebuck & Company.)

264 Industrialization and Processing Speed ture, new internalized control in the hierarchy of salaried managers, unprecedented preprocessing through the increasing rationalization of society, and a third level of programming—in addition to genes and culture—in bureaucracy’s formal sets of rules governing institutionalized decisions and responses. Bureaucratic control of production and distribution would have mattered little, however, without corresponding control over final consumption.

Control Crisis in Consumption Crisis in the control of consumer demand did not arise until the early 1880s, when new continuous-process technologies began to be applied within a short span of years to a wide range of industries: flour milling and soap making (1879), cigarette rolling and match manufacture (1881), food canning (1883), and photographic film processing (1884). So well did the new continuous-process technologies control production through

mechanical integration of the various stages that overnight they made more traditional industries highly capital-intensive, often increasing

the ratio of output to workers several hundredfold. As production became more capital-intensive, assurance of adequate return on investment required large, steady, and predictable demand for products in order to keep the new plants and machinery running at peak efficiency, even as it forced concentration of production in only a few locations and companies. This sudden need of largely local and regional firms for vastly greater demand, often available only through control of national and even global markets, led to the late nineteenth-century crisis in the control of consumption.

In the words of Harry Tipper, advertising manager of the Texas Company (later Texaco), with “the continued improvement in the ma-

chinery of production, transportation, communication, etc. ... the problem of disposing of goods became, consequently, more important”

(Tipper et al. 1915, pp. 4—6). Especially with the adoption of new continuous-processing technologies like those of the petroleum industry, which increased its throughputs three- to six-fold while halving unit costs during the 1860s alone (Williamson and Daum 1989, pp. 282285), producers had to teach consumers, Tipper argued, “to use more

than they formerly had used, and to discriminate between different

sellers or sections in order to control the market” (Tipper 1914, . 18).

° Tipper’s view, that consumer demand had to be stimulated and controlled in response to sharply improved production technologies and

Industrial Revolution and Crisis of Control 265 corresponding increases in output, seems to belie current economic wisdom. The so-called new economic historians find that demand led industrial expansion in the first half of the nineteenth century (Fogel and Engerman 1971b), as we have seen; Jacob Schmookler (1966) argues that technological innovation comes in response to rising demand. Counter arguments, however, abound in economic and business studies. Alfred Chandler, for example, notes that “the precise timing of innovations in production, like the organizational innovations in marketing, can be related more closely to the new speed and volume at which materials and goods could flow through the economy than to any change in demand resulting from an obvious shift upward in the rate of growth of population and income” (1977, p. 258; emphasis added).

Economists following the lead of John Kenneth Galbraith (1967, esp.

chap. 18) have begun to consider mass communication and market feedback technologies in the control by modern corporations of consumer demand.

Some of the earliest and perhaps clearest cases of productiongenerated crises in the control of consumption came with the first continuous processing of agricultural commodities in the 1880s. This resulted

in nothing less than a thoroughgoing transformation—in a matter of decades—of even the most basic eating habits of the American people (Cummings 1941). Three years after completion of the first automatic, all-roller, gradual

reduction fiour mill in 1879, Henry P. Crowell adopted comparable technology to the production of oatmeal. His plant literally received raw oats at one end and shipped cartons of packaged oatmeal out of the other: it has been described as “the first in the world to maintain under one roof operations to grade, clean, hull, cut, package, and ship oatmeal to interstate markets in a continuous process that in some aspects anticipated the modern assembly line” (Marquette 1967, p. 83). When Crowell’s plant began operations in 1882, however, most Americans scorned oats as fodder for horses and associated oatmeal with invalids and a few Scottish immigrants whose taste for the cereal was thought to reflect their dour personalities. As a result, Crowell soon produced twice as much oatmeal as the market could absorb. In Chandler’s judgement, “A new market had to be found if the great volume of output from the new machines was to be sold” (1977, p. 294).

Crowell addressed this crisis with a revolutionary new technology for the control of consumption: national advertising of a brand name product directly to the mass household market. By repackaging his

266 Industrialization and Processing Speed bulk meal in convenient twenty-four-ounce boxes, which he marketed under the now-familar brand label of the black-coated Quaker, Crowell managed to dispose of surpluses created by the control revolutions in production and distribution by inventing not only the modern breakfast

food industry but breakfast cereal itself—a product then almost entirely new to American tastes. Crowell’s innovations in advertising included many of the fundamental techniques and gimmicks still used today: scientific endorsements, testimonials, prizes, box-top premiums, and the like. In 1889, a year after

the country’s seven largest mills had merged to form the American Cereal Company, Crowell introduced another mass marketing innovation, the first prepared mix, Aunt Jemima Ready-Mix (Kelley 1954, p. 104). Two years later, Crowell ran a fifteen-car freight train from

his Cedar Rapids, Iowa, plant to Portland, Oregon, in perhaps the first national publicity stunt to promote commercial products. The train included not only public exhibits of breakfast foods but a professional

actor dressed as a Quaker to attract and entertain spectators. In Portland every household received a half-ounce sample of Quaker Oats, probably the first use of free samples distributed door-to-door (Marquette 1967). Seven years later the advertising trade journal Printers’ Ink, founded in the same year as the American Cereal Company (1888),

reported that “one result of its extensive advertising of Quaker Oats is that exceedingly few people now buy oatmeal in bulk” (Pope 1983, p. 55), early proof that mass consumption patterns could be created, altered, and controlled by means of national advertising to the new mass markets. Key to Crowell’s success were the brand name label and trademark, which themselves constituted a new technology for the control of consumption (Fig. 6.7). When Abraham Lincoln tended store at Old Salem, Illinois, in 1838, on the threshold of the railroad and the industrial age, only one packaged, branded product graced his shelves—Walter Baker’s Chocolate. In the words of Daniel Pope, historian of advertising, Shopkeepers in more settled areas might carry a few more items, but only a sprinkling of canned specialty goods, an occasional import, and some patent medicine concoctions carried a manufacturer’s brand. Manufacturing in pre-Civil War America did not, for the most part, produce goods suitable for national advertising, nor, of course, was there a network to distribute those goods throughout the nation. The most important industries in mid-19th century America—flour and grain milling, lumber and saw milling, even the relatively advanced textile and footwear indus-

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Figure 6.8. Mass marketing of trademarked, brand-labeled products through national advertising made many manufacturers of continuous-process goods household names by the turn of the century. Other businesses exploited this new element of mass culture—for example, a sheet music publisher marketed

pop ng, “Wg ng

a ular new so ‘Signs We See as We Pass Along.”

technology scrambled to control consumption by means of trademarks and national advertising. Washburn’s firm introduced Gold Medal Flour

in 1880; his leading rivals, the Pillsbury brothers, quickly countered with a flour bearing the family name. After 1890, when Minneapolis

Industrial Revolution and Crisis of Control 271 flour production had almost tripled to some seven million bushels annually in less than a decade, advertising alone could not control demand sufficiently and prices fell. As aresult, both the Washburn and Pillsbury firms adopted the strategy Crowell had developed for Quaker Oats— packaging rather than selling in bulk, stepped-up national advertising, and vertical integration through networks of buyers and sellers—in

order better to control distribution and consumption (Storck and Teague 1952; Gray 1954, chap. 4). Other entrepreneurs copied Crowell more directly by inventing new

breakfast foods. In 1893 Henry Perky and Wiliam Ford patented a machine that made wheat into filaments or “shreds” and thereby introduced shredded wheat biscuits into the morning meal. C. W. Post, considered by many to be the father of ready-to-eat cereal, introduced “Grape Nuts” in 1896 and “Post Toasties” in 1915; he also began pro-

moting his earlier “Postum” as a hot beverage that might substitute for coffee, which he attacked in advertising as bad for the nervous system. W. K. Kellogg, of Battle Creek, Michigan, who began producing fifteen-cent boxes of “breakfast food” in 1896, had in ten years

established Kellogg’s Corn Flakes on the American breakfast table (Cummings 1941).

Table 6.4 summarizes the major developments in U.S. advertising and mass communication technology from early industrialization through

the 1880s. As this list of innovations illustrates, increasing control of consumption in response to the resolution of crisis in mass production and distribution came through the coevolution of mass media and their messages to attract, hold, and imprint the mass attention: short slogans endlessly repeated (1856), secular symbols of Christmas (early 1860s) and other “festivals of consumption” (Boorstin 1978, chap. 18), commercial premiums (1865), trademarks (1870), patented package labels (1874), and the multiple elements of national advertising and publicity campaigns (1889).

Power-driven printing distributed by rail, the major mass medium before broadcasting, improved rapidly—parallel to the developing erisis in control of consumption—though a spate of innovations: the first electric press (1839) and rotary printing (1846), wood pulp and rag paper and the curved stereotype plate (1854), paper-folding machines (1856), the mechanical typesetter (1857), high-speed printing and folding press (1875), and linotype (1886). Utilizing these purely mechanical

inventions, mass publishers developed a wide range of new organizational and social innovations to improve control: the penny newspaper (1833) to expand mass readership, a press association (1848) and

272 Industrialization and Processing Speed Table 6.4. Selected innovations in advertising and mass communication technology for control of consumption, 1880-1889

Year Innovation

1833 Penny newspaper (New York Sun) opens way for mass press

1839 Printing press run by electricity Photographs (daguerrotypes) produced

1841 Advertising agency (V. B. Palmer) established 1842 Design patents authorized, issued to typeface, other designs Illustrated weekly (Brother Jonathan) published

1846 Double cylinder rotary printing press (Hoe) adopted by Philadelphia Ledger, produces 8,000 sheets per hour

1848 Newspaper press association formed Periodical index (Poole’s) published

1854 Wood pulp and rag paper introduced for printing Curved stereotype plate for Hoe rotary press cast, used

1855 Professional printing magazine (Typographic Advertiser) published

1856 Advertiser (New York Ledger) establishes “iteration copy” by purchasing full-page newspaper ad, repeating same line 600 times Machine to fold paper for books, newspapers installed

1857 Typesetting machine demonstrated Early 1860s Display type introduced, ending requirements of agate type and single columns in newspaper advertising Christmas begins to be promoted commercially

1865 Advertising monthly (Advertising Agency Circular) published Premiums (lithographed pictures) given for coupons on manufactured product (Babbitt Soap)

1869 Book (Rowell 1869) published for advertisers listing all U.S. newspapers with accurate estimates of circulation

1870 First federal trademark law passed, 121 registered Human-interest illustrations appear in newspaper advertising

1873 Successful illustrated daily (New York Daily Graphic) begun

1874 Label patents authorized, first issued to breakfast hominy label Macy’s offers window display devoted exclusively to Christmas

Industrial Revolution and Crisis of Control 273

Year Innovation

1875 Advertising weekly (Advertiser’s Gazette) issued “Open contract” makes advertising firm sole agent for advertiser High-speed newspaper printing and folding machine— producing 400 four-page sheets per minute—installed at Philadelphia Times

1878 Full-page newspaper advertising introduced 1879 N. W. Ayer & Son surveys grain market for an advertising client

1881 Second federal trademark law passed 1883 Joseph Pulitzer takes over the New York World, makes it America’s first modern mass-circulation daily

1884 Newspaper syndicate (McClure) organized 1885 Daily railroad delivery of newspapers begun 1886 Linotype machine used commercially (New York Tribune) American Newspaper Publishers Association organized

1888 Trade journal (Printers’ Ink) established for advertising industry

1889 National publicity stunt used to promote commercial product (Quaker Oats)

professional printing magazine (1855), mass-circulation dailies (1883),

newspaper syndicates (1884), daily railroad deliveries (1885), and a publishers association (1886). Parallel to the combined mechanical and organizational infrastructure of mass publishing, a new infrastructure developed for mass control of consumption via national advertising and market feedback. An

increasingly specialized advertising sector met the control crisis in consumption, following the spread of industrialization through the ma-

terial economy, with an array of innovations no less impressive than the better-known ones in communications technology, including advertising agencies (1841), indexes of periodicals (1848), a monthly trade journal (1865), book of newspaper circulation (1869), weekly trade paper and sole-agent contracts (1875), market surveys for clients (1879), and

an industry-wide journal (1888). Almost a century before the advent of television, which John Kenneth Galbraith (1967, p. 342) declared “essential for effective management of demand,” nineteenth-century

274 Industrialization and Processing Speed advertisers pioneered the use of visual media and techniques of communication to stimulate and control consumption: daguerrotypes (1839),

patented typefaces and illustrated magazines (1842), iteration copy (1856), display type (early 1860s), national consumption symbols like Thomas Nast’s cartoon Santa Claus (1863), human-interest illustrations (1870), illustrated daily newspapers (1873), thematic store window displays (1874), and full-page advertisements set-off by “white space” (1878) (Fig. 6.9). So important did such mass advertising innovations become for controlling consumption of the output of the new continuous-process mills that as late as 1913 (the earliest year for which statistics are available), despite new consumer products like the automobile, phonograph, and electrical appliances, foodstuffs from the mills still dominated national magazines, the most important advertising medium of the age. Of the top thirty-five advertisers in that year, six marketed processed grain

products, including two of the three leading accounts: Quaker Oats (ranked second behind Proctor and Gamble), Postum (third), Kellogg (eleventh), Cream of Wheat (seventeenth), National Biscuit (twentysecond), and Washburn-Crosby, producer of Gold Medal flour (thirtythird). None of these companies ranked among even the top seventyfive industrials in assets, however, and only two—National Biscuit (at

seventy-sixth) and Quaker Oats (one hundred and thirty-fourth)— ranked in the top two hundred and fifty (Pope 1988, pp. 41-45). Among all consumer packaged foodstuffs produced by continuous-process tech-

nology in 1917, the leading manufacturers of each type had begun operations before 1900—many before 1890; all had made early use of national advertising to establish their trademarks as household names: Borden’s Condensed Milk, Fleischmann’s yeast, Royal Baking Powder, Coca Cola, Heinz, Wrigley’s gum (all firms that ranked among the top two hundred and fifty U.S. industrials in 1917 assets) (Navin 1970).

Apart from the producers of breakfast foods and packaged flour, who prospered from the application of integrated continuous-processing machinery to milling, the only other crisis in the consumption of Figure 6.9. Increased control of consumption came through the coevolution of mass media and messages to attract, hold, and imprint the mass attention, including the secularization of Christmas and other festivals of consumption in the 1860s. By 1873 the illustrated periodical press promoted Easter as an occasion to display the latest fashions in men’s and women’s clothing (Harper’s Weekly, April 26, 1873).

Industri volu e l dandCrisis ofControl 275 ______ Industrial Revolution Crisis of

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Mass Production and Distribution 301 a minimum of carrying and hauling. Six years later Kahn helped Ford overcome burdensome rail-freight charges by designing a branch assembly (or “reassembly”) plant beside the rail yards in Kansas City, Missouri, to which the manufacturer sent knocked-down Model T’s— introduced the previous year—on regular freight cars and with great economy of space. In the same year Kahn also began construction of the Highland Park plant to accommodate the world’s first “line production system” based on a well-planned sequence of processes and machinery to be used for automobile manufacturing. After the moving assembly line had been perfected by 1917, Ford himself supervised construction of the much more ambitious River Rouge plant in which each building had been carefully designed to accommodate streams of production (Arnold and Faurote 1915; Nevins and Hill 1954). In both grandeur and pretension, River Rouge might be seen as the ultimate building gua processor— the rational culmination of a half-century’s effort to preprocess away the informational burdens of complex production at the draftsman’s table.

Automatic Control Even as Ford completed River Rouge, physical control of industrial processes had begun to shift away from architecture to greater use of automatic control devices (Fig. 7.8). When continuous processing began

to replace batch stills in the oil industry about 1910, for example, workers controlled most of the processes manually—aided by off-on controllers and pneumatic valve actuators—based on readings from local thermometers and pressure gauges. By the late 1920s pneumatic controllers had been developed with proportional, integral, and reset modes that could be tuned on the plant floor according to recorders mounted nearby. Such instrumentation of factory processes flourished in the early 1930s after pneumatic devices gained a derivative mode to become the so-called “PID” (proportional-integral-derivative) threeterm controller. This innovation, developed in factories without benefit of supporting theory, brought automatic control to many industrial processes previously difficult to regulate at all, even manually. Development of pneumatic transmitters in the mid-1930s brought the stillfamiliar centralized control rooms with their heavily instrumented control panels by the end cf the decade (Evans 1977).

302 Toward an Information Society

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Table 7.1 places the development of automatic control of industrial processes in its intellectual and historical context. The idea of feedback control dates at least from the waterclock of the third century B.C., as we saw in Chapter 5. No fewer than nineteen innovations in automatic control, listed in Table 5.1, appeared in the early industrial period, 1740—1830, culminating in Andrew Ure’s generalization of the principle of negative feedback in the thermostat. Practical use of electricity in the 1830s made possible industrial applications of electromagnets, inspiring thousands of new feedback controllers, many to feed and adjust are light carbons or to regulate the voltage and current of generators. In 1852 French physicist Leon Foucault established a new self-regulating device and its modern name, gyroscope, meaning literally “to view the turning.” Although Foucault predicted its use as a compass, its first notable application proved to be his own pendulum, which was

used to demonstrate the earth’s rotation (Hughes 1971, p. 131). A decade later, Foucault patented another controlling device, a governor incorporating a centrifugal pendulum but relying on an air brake in-

Mass Production and Distribution 303 Table 7.1. Selected innovations in automatic control, 1880-1939

Year Innovation

1830 Andrew Ure generalizes the idea of the thermostat, an application of negative feedback to control

1852 Physicist Leon Foucault introduces the modern gyroscope; its first notable use is in a pendulum

1862 Foucault patents centrifugal weight-driven governor with pendulum and air brake, the first of: his several new governors

1866 Charles Siemens invents a liquid governor with speed-sensor like the impeller of a centrifugal pump, alternative to pendulum

1868 William Thomson (Lord Kelvin) describes a new centrifugal weight-driven friction governor United States

1883 Elmer Sperry files for patent on dynamo-electric machine regulator, first of 11 patents in automatic control in next five years

1902 Air-conditioned factory (Brooklyn printing company) established with automatic temperature and humidity control

1905 New factory built that changes air five times per hour, automatically filtering and washing it and controlling humidity

1907 Sperry begins investigating gyroscopic control 1910 Automatic bread plant opens in Chicago; dough and loaves are untouched by humans except when placed on wrapping machine

1914 Electric substation with a rotary converter goes into service completely unattended in Detroit

1926 Photomaton Studios, based on fully automatic film developing machinery, launched on Broadway, New York City Late 1920s | Pneumatic proportional controller is developed for industrial processes; integral reset mode can be tuned in the plant

1930 Colorscope, a photoelectric cell which reacts to colors more precisely than the human eye, is publicly demonstrated; it gives off electric currents capable of controlling machinery Windowless factory erected, has ultraviolet lighting, soundproofed cork walls, temperature and humidity control Early 1930s Adjustable controllers gain the derivative mode to become the three-term or PID (proportional-integral-derivative) controller, a major turning point in process instrumentation

304 Toward an Information Society Table 7.1 (cont.)

Year Innovation 1931 Photoelectric cell (“magic eye”) installed commercially, provides automatic control of swinging doors in restaurant

1933 H. L. Hazen develops a light-sensitive servomechanism that follows plotted line to alter signal controlling a machine Wolverine-Empire Refining Company completes a new oildistilling plant run automatically by process control equipment

Mid-19380s Pneumatic transmitters are developed for industrial process control, bringing within a decade centralized control rooms with large control panels

1936 Term automation introduced in automotive industry for the replacement of human tasks by machine functions

stead of mechanical friction for control. An alternative to the centrifugal pendulum, a “liquid governor” whose control depended on the

depth of immersion of an impeller attached to its drive shaft, was described in an 1866 paper by British industrialist Charles William Siemens. Two years later Lord Kelvin introduced an extremely simple centrifugal governor that used the friction of its two weights pressing

outward against a stationary ring to maintain control. All of these innovations, as Mayr (1976) has shown, influenced James Clerk Maxwell to write his famous paper “On Governors” (1868), generally considered the first theoretical analysis of control (Evans 1977). Despite considerable initial publicity, Maxwell’s paper had limited influence before Norbert Wiener resurrected it in his widely read Cy-

bernetics (1948, pp. 11-12); Mayr (1976, p. 187) finds only a few references to “On Governors” up to World War I. Certainly American

contributions to automatic control came independently and brought increasing numbers of patents by the 1880s, when Elmer Sperry began work on a regulator for dynamo-electric machines that exploited automatic control. Of Sperry’s nineteen patent applications between 1883 and 1887, eleven included some form of automatic control, more than half involving closed-loop feedback (Hughes 1971, pp. 45—46). Although

Sperry’s inventions were hardly unique (the U.S. Patent Office granted protection to twenty-two generator regulators in 1884 alone), his early

career does provide further evidence that information engineering, cybernetics, and even computer science trace their origins to the 1880s

Mass Production and Distribution 305

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Mass Production and Distribution 329 Chalmers-Detroit successfully tested a two-way system in its automobiles at distances up to three miles. American Telephone and Telegraph began commercial ship-to-shore radio telephone service on De-

cember 8, 1929, when William Rankin, an advertising executive in New York City, called Sir Thomas Lipton, the tea magnate, aboard the liner SS Leviathan at sea. The coevolving networks of transportation and communication served to move still more generalized media of exchange, including travelers’ checks (1891), precanceled stamps (1917), and facsimile bank checks

(1926). In 1918 the first electric funds transfer system, known today as “Fedwire,” eliminated the medium of paper in moving money between the Federal Reserve and member banks; two years later Pitney Bowes eliminated the need for postage stamps when it secured federal approval of metered mail. Even distribution of liquid flows became generalized: in 1932 the Wayne Company of Fort Wayne, Indiana, marketed the first computer pump that automatically calculated, displayed, and recorded the amount dispensed, its cost, total amount pumped, and payment received or due. Distribution of all goods became progressively easier during the same period as a result of several new federal postal services: rural free delivery (1898), parcel post (1918), regular air mail (1918), and air service to South America (1929) and to Europe (1939). The telegraphic “Market News Service,” inaugurated by the U.S. Department of Agriculture in 1915, helped to integrate the distribution of American farm

products into a single national system of prices. Here the telegraph and mass media came at last to be applied directly to the problem of the “imperfect” market, the persistent regional variations in prices that had kept the colonial merchants—as we saw in Chapter 5—in “continuous exchange of information about market conditions, prices, and expectations” (Shepherd and Walton 1972, p. 54). Within a year after Ford introduced the moving assembly line, the U.S. Postal Service began to rely on the mass-produced automobile for collections and deliveries, first in Washington, D.C., but soon on the newer, more sparsely settled RFD routes as well. Two years later Figure 7.6. Wristwatches became popular in Europe and America after the British army used them to synchronize troop movements in the Boer War, 1899-1902. This widespread rationalization of time helped to win public acceptance of Daylight Saving Time to aid the American war effort in 1917. (Courtesy of the New Jersey Historical Society.)

330 Toward an Information Society the federal government began its continuing support of the highway infrastructure with the Federal Aid Road Act, passed by Congress under its constitutional authority to establish “post roads.” Growing numbers of vehicles and increasing speed of traffic brought no dramatic

crisis but certainly a steadily mounting problem of control: highway fatalities rose from forty-two hundred in 1913 to nearly forty thousand in 1937, an annual total passed only once (1941) until 1962; the average death rate for the period 1933-1937 remains the highest ever recorded in U.S. history. Between 1906 and 1923 the rate for motor vehicles passed that of eight other leading causes of death, including diphtheria, typhoid, and scarlet fever (U.S. Bureau of the Census 1975, pp. 58, 719-720).

As we might expect, the growing problem of highway accidents brought new information and communication technologies for control of traffic: white lines to designate lanes (1911), electric traffic signals

and road maps (1914), a national highway route numbering system (1925), police radio control (1933), and permanent state license plates (1937), among many others. In 1986 Pennsylvania State College began the first teacher training course in traffic safety, including both classroom and highway instruction. The following year Harvard University established the first of the nation’s many graduate courses in traffic engineering, control, and administration. Even before control of traffic began to assume this highly rationalized modern form, however, the automobile itself would greatly alter control of economic distribution

at the retail level.

Market and Retail Control of Distribution Department stores and mail-order houses began to dominate American retailing by the 1870s, as we have seen, but the early 1920s brought signs of change: large decentralized shopping centers and supermarkets with parking for thousands of automobiles. These new retail institutions reflected an even more fundamental shift in market and retail control of distribution: from continued use of centralized processing and postal communication for mass marketing into the 1910s toward

increasing decentralization of outlets and reliance on retailing built around the private automobile after the 1920s. Based on several twentieth-century extensions of solutions first Implemented during the nineteenth-century crisis of control in distribution, the revolution in control of marketing and retailing included innovations at all levels of informational activity: preprocessing, organization, programming, processing, and communication.

Mass Production and Distribution 331 As in the nineteenth-century struggle to control distribution, many innovations involved preprocessing to facilitate market transactions. Earlier successes at reducing the amount of information necessary to process about commodities—including such innovations as packaging in containers of fixed sizes and weights (1840s), standardized methods of sorting, grading, weighing, and inspecting (early 1850s), fixed prices (1860s), standardized clothing sizes (early 1880s), and periodic presentations via catalog (1880s)—could be extended logically in new types of preprocessing: fully automatic vending machines (Fig. 7.7) that exploited both fixed prices and standardized packages (1897), perfection of the four-color, mail-order catalog (early 1900s), standardization through

franchising (c. 1911), preselection like that of the Book-of-the-Month Club (1926), packaging—as opposed to packing—that “sold itself” (late 1920s), and price uniformity enforced through “fair trade” laws (1931). The functions of retail credit and installment buying, adopted from the neighborhood shopkeeper by large department stores in the late nineteenth century, became increasingly specialized after 1904, when the Fidelity Contract Company formed in Rochester, New York, to purchase installment contracts from retailers. With the spread of the family automobile, installment buying became a major American institution. The Guaranty Securities Company, organized in 1915 in Toledo, Ohio, to finance the installment purchase of Willys-Overland cars, proved so successful that it soon moved to New York to handle twentyone listed makes. By 1917 forty sizable automobile-sales-finance companies had begun operations; the number exceeded seventeen hundred by 1925. General Motors, noting this success, entered the field in 1919; Ford followed in 1928 with a “Universal Credit Corporation” to help dealers as well as customers (Boorstin 1978, p. 424). Installment credit outstanding for automobiles totaled $304 million in 1919, nearly 43 percent of all consumer goods paper and almost 12 percent of the total U.S. consumer debt. Four years later almost 80 percent of 3.5 million new passenger cars sold on time-payment; by 1929 credit outstanding had reached $1.4 billion, nearly 20 percent of the total consumer debt (U.S. Bureau of the Census 1975, p. 1009). As indicated by Table 7.5, which summarizes selected developments during the transitional period 1890-1939, the revolution in market and retail control of distribution continued not only in information reduction or preprocessing but also in transaction processing itself. In the nineteenth century such innovations had included differentiation and specialization of bureaucratic control structures (1860s), monitoring of transaction rates via stock turn and other quantitative indicators (late

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