The chamber of commerce as a community builder

Front matter

£. Petersen

The Ch amber of Commerce as a Commun i fy Builder

THE CHAMBER OF COMMERCE AS A COMMUNITY BUILDER

Preface

The chamber of commerce movement in community affairs is receiving greater attention today than ever before. Cities and towns throughout the length and breadth of this country are spending large sums of money, and men and women otherwise engaged in business and professional activities for themselves are giving large portions of their time to foster organizations of this type. A new profession has come into being — that of chamber of commerce secretary, and men are leaving other callings to enter this new field, a field that is technical and specialized, yet which, because of its newness, perhaps, has not been given the serious thought and careful study of scholars of research that it deserves.

It is because of the very apparent lack of organized and comprehensive literature on the subject that the present author has been moved to direct himself to a careful inquiry into the subject of the chambers of commerce of this country: their history, ideals, purposes, and methods of operation. It is hoped that what is written here may be found useful in particular to those now engaged, and those who in the future are planning to engage in the great work of building communities.

The sources of information used in this work have been gathered from every corner of the nation. Many observations and conclusions are the result of the author* s personal experience as secretary of a local chamber of commerce, as well as his activities as a state-wide organizer of such bodies. The inquiry breaks new ground in many respeots; and this must be the writer's excuse if the treatment

iii iv

of the subject seems loose and incomplete. If the Inquiry shall stimulate further researoh into this highly important field of oivio endeavor, it shall not have been in vain.

Elmore Petersen

University of Illinois August 1, 1930

Contents

Chapter Page

PREFACE iii

I INTRODUCTION _- 1

Chapter I Introduction

History and Growth. France was the birthplace of chambers of commerce in the modem sense of the word. Sources of information differ as to the exact date when the first chamber of commerce made its appearance, but this event occurred at Marseille probably near the end of the fourteenth century or the beginning of the fifteenth. This chamber was vested with remarkable powers by virtue of a government grant which gave to it the authority to share in municipal jurisdiction and in the administration of justice in commercial and mercantile questions. It had an intermittent career, having been several times suppressed and regularly restored before it finally received a definite organization in 1650, from which time it has been continuous.

In 1664 a Council of Commerce was established by Colbert, with powers and functions considerably greater than those assigned to the Marseille chamber, but the seed had been sown, and by 1700 Dunkirk created a local chamber, followed by Lyon, Lille, Rouen, Bordeaux, Rochelle, Nantes, St. Malo, Bayonne, Toulouse and Montpellier in 1701. 2

By order of the Council on August 30, 1703, a direct relation was established between the various chambers and the central Council ^Chambe^s Encyclopaedia, Vol. II, p. 747

^Commercial Organizations in France, U. S. Department of Commerce, Special Agent Series No. 98, 1915, p. 8.

of Commeroe. By this order the local chambers were authorized to transmit to the Controller General of Finances memoirs setting forth their views on commercial subjects, not only within their respective districts, but also in places that had no chambers of commerce to represent them. This authority was extended so far that contemplated measures of the central government were submitted to them for opinion. This was in essenoe, a fore-runner of the modem method of referenda employed by the Chamber of Commeroe of the United States, as will be described later in this chapter.

The French Revolution interfered with the work of these organizations. By the decree of June 14, 1791, all corporations were abolished, and the chambers of commeroe went with them.^ Several months later the ancient Council of Commerce was re-established, and with it returned the suppressed ohambers. These were later given the right to reorganize as voluntary organizations. In the years immediately following, many new chambers of commerce were formed.

A consular edict of 1803 stated the population of towns in whioh chambers of commerce might be established. It also fixed the number and character of the representation of the chambers, from which one candidate from each group was selected to sit in the general Council of Commerce at Paris.

The chambers of commerce of France have always existed under the closest regulation of the national government. These regulations have been modified from time to time, but always with the end in view of making the ohambers closely cooperating bodies of the central government. The history of the whole movement in France shows that ^See page Vo

*U. S. Department of Commerce, Special Agent Series No. 98, 1915, p. 9.

the purposes of the chambers of oommeroe have been to advise the government on industrial and oomraeroial subjects; to suggest means of increasing industry and commerce in their respective districts; to improve commercial legislation and taxation; to suggest the execution of works requisite for public service, such as the construction of harbors, deepening of rivers, and the formation of railways; and when this information was not volunteered, it was demanded by the government.

Chambers of commerce in Germany began in the old Hanseatic Confederacy. The chambers of commerce of Hamburg, Bremen and Ltibeck have been evolved out of the old corporations which looked after the interests of the Hans traders. The Hamburg Chamber of Commerce as such, originated in 1665 under the name of Deputation of Commerced In 1866 the name was changed to Chamber of Commerce, and in 1870 the formation of the German Empire necessitated a reorganization of the chamber to conform with provisions of the central government. ^

The Chamber of Commerce of Hamburg is also the chamber of shipping, and port and docks board. The exchanges and public sale rooms of the city are under its control. It publishes official quotations as well as weekly price lists of goods and produce at the port of Hamburg. It has the right of proposing judges and of nominating experts attached to the courts. It is entitled to elect members to the "Burgerschaf t" or lower house of representatives, and the chamber must be consulted by the Burgerschaf t with reference to all proposals affecting trade and navigation. 5

Encyclopaedia Britannica, Eleventh Edition, Vol. 37. %. S. Department of Commerce, Special Agent Series No. 78, 1914, p. 129.

In Bremen and Lubeok, the other Hansa cities, the chambers are likewise closely associated with the governments. In Lubeck, however, the senate must consult the chamber of commerce not only in matters of trade and navigation, but also in all proposals that are entered into on behalf of the state.

In other parts of Germany, the oldest chambers of commeroe owe their origin to French legislation. 7 The Rhenish Provinoe was ceded by Prussia to France in 1801, and chambers of commerce were instituted at Cologne in 1803, at Crefeld and Treves in 1804, and later at several other places in that section. A second group was formed between 1830 and 1835 under the name of Merchants' Corporations at Berlin, Danzig, Konigsberg and Magdeburg. The organization at Berlin, however, became a cooperating body with the Chamber of Commerce, which was founded under that title in 1901.

In most of the states of Germany, the chambers of commeroe are intended to represent the interests of commerce and industry exclusively. In some places, however, as in Bavaria and Saxe-Meiningen, the chambers of commerce are at the same time chambers of trade. In all cases are the organizations created and regulated according to specific stipulations of law, usually of the state in which they operate. For this reason they are not altogether uniform in their structures and operations.

The history and growth of chambers of commerce in Switzerland parallel in many respects the development of similar bodies in France and Germany.8 The French system of chambers was the pattern for both the German and the Swiss organizations, although it may be 'U. S. Department of Commerce, op. oit., p. 97.

SU. S. Department of Commerce, Special Agent Series No. 101, 1915, p. 7.

said that the ultimate origin of the Swiss ohambers dates back to the merchants1 and artisans' guilds of the middle ages. In the second half of the seventeenth century commercial bodies were organized in Basel, Zurich and St. Gall. These were known as merchants' directorates, and before the end of the century similar bodies were found in Berne and Geneva.

The scope of these early chambers was more extensive than those found in France and Germany. They administered the postal system, regulated markets, inspected warehouses, controlled freight traffic, regulated bills of exchange, and even controlled newspapers as well as entire industrial enterprises.

With the general upheaval and disorganization of Europe at the beginning of the nineteenth century, conditions in Switzerland suffered with the rest, and the old commercial organizations went out of existence. With the return to more stable times, new organizations were formed to supplant the old ones. In 1848 new federal legislation stimulated commerce and trade, and later encouraged development of railway transportation. At the same time this very legislation robbed the existing Swiss chambers of their last vestige of special privilege. In 1870 the Swiss Commercial and Industrial Association was formed, which has now become the central association of all Swiss commercial bodies. The present system in Switzerland oonsists of two classes of organizations, those that are entirely independent, and those that are organized under state auspices. The former resemble the chambers of commerce of England and America, while the latter are comparable to those of France.

Turning now to Great Britain, we find the oldest British cham-

Q

ber to be that of Jersey, founded in 1768. Other early chambers of commerce were those of Glasgow, founded in 1783, Dublin in 1785, Edinburgh in 1786, Manchester in 1794, Belfast in 1796, Birmingham in 1813, Liverpool in 1851, and Sheffield in 1857. The Chamber of Commerce of London, one of the strongest in point of members, dates only from 1881.

In the beginning the chambers of commerce were incorporated by royal charters which gave them the standing of corporate bodies. Later they were formed under patents issued by the Board of Trade, and more recently still, the new ones are in effect ordinary partnerships, the liability of each member being unlimited.^ Unlike those in continental Europe, the chambers of commerce of Great Britain operate without any restrictions, regulations or supervision from the national government. They are voluntary associations of business men and manufacturers, perfectly independent, receiving no subsidies whatever, and meeting their expenses entirely through membership fees.

In 1860 the Association of Chambers of Commerce of the United Kingdom was formed, and later incorporated in 1875. This association comprises the chambers in the United Kingdom, as well as those abroad, of which the first to be established was that in Paris in 1873. In addition to this one, there are British chambers in Genoa, Alexandria, Barcelona and Constantinople. The total number of chambers belonging to the national association were 109 in 1915, these having an aggregate individual membership estimated to be 38, 000. n

^Encyclopaedia Britannica, op. cit. r-0U. S. Department of Commerce, Spec. Agent Series No. 102, p. 8. 11Ibid., p. 10.

Just where and when the first chamber of comraeroe began in America seems to be a matter of dispute. In one instance we read that "in 1631 Kiliaen Van Rensselaer, at that time owner of all the tract of land on which Albany is built, formed a limited partnership with Samuel Godyn, Johannes de Laet, and Samuel Blomraaert of the Amsterdam Chamber of the Dutch West India Company for the sole purpose of carrying on the fur trade along the Hudson River as far north as Albany. This partnership, although organized for the members' interests only, was in reality a chamber of commerce, the first chamber of commerce to promote trade and industry in America."'-2

Be that as it may, it still remains for the New York Chamber of Commerce to claim the honor of being the oldest organization of its kind, not only in America, but in the world, having been founded in New York City in 1768. 13 While there were older chambers in Europe, as has already been shown, these were organized and maintained under government supervision and regulation, while the New York society was free and independent of action, as were its contemporaries in Great Britain.

It was on April 5, 1768, that twenty merchants of the little colonial city of New York met at Bolton and Sigel's Tavern and there founded the Chamber of Commerce. For three years previous to this time they had been united for the purpose of protesting against government action, notably that of the Stamp Act of 1765. It is apparent that these men had a clearly defined purpose in view for their proposed organization because a declaration which was submitted

^"Old Albany, the New City," distributed with the Annual Report of

the Albany, N. Y. , Chamber of Commerce for the year 1919. 1,5Bishop, "The Chamber of Commerce of the State of New York," p. !♦

■1> and adopted oontained the following:

"Whereas, mercantile societies have been found very usefull in tradeing cities for promoting and encouraging commerce, supporting industry, adjusting disputes relative to trade and navigation, and procuring such laws and regulations as may be found necessary for the benefit of

trade in general For which purpose and to establish

such a society in the City of New York the following persons convened on the first Tuesday in, and being the 5th day of, April, 1768 ■

From that date to tne present, except for an interim of eleven years from 1806 to 1817, the work of the New York Chamber of Commerce has been continuous. Its history of more than one hundred and fifty years is a chronicle of a century and a half of illustrious service to its city, state, and to the nation.

At the beginning of the nineteenth century, four chambers of commerce existed in this country: New York, organized 1768; Charleston, S. C, organized 1784; New Haven, Conn., organized 1794; and Philadelphia, organized 1801. Like the New York chamber, all of these bodies were composed of business men meeting regularly to discuss trade matters and to consider and pass resolutions on topics that vitally affected commercial affairs. These pioneer organizations, while limited in their scope of activities, were the forerunners of that vast group of chambers of commerce that have since been formed.15

During the first half of the nineteenth century the organization and development of chambers of commerce showed but little < progress. The total number of four in 1801 had grown to thirty in 1858. After the development and extension of means of transportation

^Sturges, "American Chambers of Commerce, " pp. 13-13. 15Ibid., p. 41.

and communication had begun, organizations of this type sprang up wherever there were growing cities, until by 1898, it was estimated that this country had 2,944 such associations under various names, *6 and in 1919, the number of trade and commercial organizations had reached well beyond four thousand, sixty five percent of which were organizations with community objectives.^

The history of the movement shows more tnan simply an increase in numbers of organizations. Its greatest significance lies in the fact that it has developed from a small handful of chambers of commerce that had for their purpose the interests of a limited class of people engaged in trade and commerce, until today the American institution, at least, consists of thousands of organized groups that place the emphasis on the human element and its welfare in their respective communities, realizing that only by so doing are they laying the foundations for true commercial and industrial development.

It is also interesting to notice that the purposes and ideals

in ohamber of commerce work have changed and progressed in the same

manner and along side of the purposes and ideals of democratic

government. Chambers of commeroe the world over, amounted to very

little before the American independence. In America, just one had

been born before that event, and its purpose was avowedly in the

interest of liberty from its first meeting. Up to the time of the

Civil War, the growth of the movement was steady but slow, but when

that struggle was finished and another great step forward in popular

government had been taken, the chamber of commerce movement went

ahead in like manner. From that time until the end of the nineteenth 16

^Sturges, op. cit., p. 45.

U. S. Department of Commerce, Miscellaneous Series No. 99.

century, chambers of commerce followed closely commercial expansion, until, like the development of so-called "big business," many evils crept into the administration and functions of commercial bodies. They resolved themselves, in many instances, into "booster clubs" and "factory grabbers," without any foundation for tneir actions, exoept that their eyes were upon dollars and bigger populations for their communities, without taking into consideration the steps necessary to take to reach those ends. The result was that they lost favor in many places, and died from the lack of clear vision as to their real purpose. In other places they became the tools for unscrupulous individuals for the purpose of furthering their own selfish ends at the expense of the community.

Then came the world war and with it another step forward as to the conception of human rights and duties in civil government. Again this was reflected in the activities of the chambers of commerce of the nation. During the days of nostilities these organizations performed tirelessly and well the duties entrusted to them as the logical organizations to care for the war work in the various communities. As often as not, local councils of defense were identical with boards of directors of the chambers of commerce. Liberty Loan drives, food conservation, Red Cross activities, and scores of other duties were cared for by them, until through the National Chamber, to be referred to later, the business men and women of the country . were solidly united and stood behind the government in its prosecution of the war to a victorious conclusion.

In the nearly two years tnat have elapsed since the close of the war, the chamber of commerce movement has taken a new lease on life and is growing as it has never grown before. The reason for this lies in the fact that for the first time in ita history have the purposes and ideals of a chamber of commerce been clearly and correctly stated, and for the first time, also, have communities, and the individuals in them, faced their duties and obligations to their communities in any way as seriously as they are now doing. As men are beginning to realize more and more that the essential feature of self-government is that it falls upon the shoulders of every citizen, and the oitizen who does not take part shirks a duty,1® so also are they beginning to realize that no man is free from a like responsibility to the community in which he lives, and this responsibility can most easily and most effectively find its useful expression through membership and service in the local chamber of commerce.

Scope* The chamber of commerce movement in the United States has become so widespread tnat its scope is practically commensurate with the boundaries of the nation. A comparatively few years ago there were many cities of twenty to fifty thousand population which had no chamber of commerce. Today it is unusual to find a town of five thousand population without one, and tnere are hundreds of these organizations serving towns and villages of just a few hundred inhabitants, and even smaller. ^

Because of tneir being so widespread, and because of the lack of def initeness in their undertakings in the past, there has been a great variety of names by which these organizations have been , designated. The most common names under which they have existed,

^Root, "The Citizen's Part in Government," Chap. 1. 19Independent, May 8, 1920.

except that of chamber of commerce, have been those of commercial club, board of trade, board of commerce, association of commerce, commercial association, business men's league, community club, boosters' club, and many others. All of these have for their purpose the same end, and in general, employ the same metnods to attain this end.

During the past four years, however, more and more of these organizations have changed their names to chamber of commerce. The reason for this is evident. The title of chamber of commerce has a definite meaning, especially In foreign countries, witn whom this country hopes to have closer relations through the means of foreign trade. 2^ This title has been accepted as standard abroad, and in Europe, as well as in the Orient, the name Chamber of Commerce is one that commands respect. Correspondence written on letter heads bearing some other title does not command tne attention that it would if the title on the letter head were Chamber of Commerce. This is important when the nature of the work of a chamber of commerce is considered, requiring as it does, a vast amount of written intercourse.

Another reason wnich has led to the change in name is that where so many titles are used there is bound to be confusion as to the exact function of an organization bearing some other title than Chamber of Commerce. While there are a few chambers of commerce that • are not civic organizations in the accepted sense, the number of such is very small. More than ninety-five percent of the chambers of commerce in the United States are commercial organizations with 30

■Building and Maintaining a Local Chamber of Commerce, n Chamber of Commerce of the U. S., Organization Service, p. 37.

oomraunity objectives. "x A questionnaire sent out by the organization

service of the Chamber of Commerce of the United States in 1915,

showed that only 40 per cent of the organizations answering called

themselves chambers of commerce. Four years later a survey showed

63 per cent answering to that title. This indicates a marked tendency toward the adoption of a uniform title that will be understood in foreign oountries as well as at home. Chamber of commerce organization has not confined itself to local community aspects alone. A study of the field of its activities reveals that it has reached out into county, regional, state, national and even international affairs.

County organizations are effected in different ways. One method used is to merge rural and urban interests and efforts, where conditions permit such merging. Under this plan the chamber of commerce is usually headed up in the county seat and is designated as a county chamber. Its organization is identical with that of the standard chamber of commerce, but its membership is drawn from every section of the county. It has for its purposes primarily a countywide program of work, although such a program of work does not differ materially from that of a strictly city or community organization, aside from the fact that it covers a wider territory. The objectives of such a typical county chamber of commerce are as follows:

"The objects of this county Chamber of Commerce shall be to advance the agricultural, horticultural, viticultural, commercial, industrial, civic and community interests of the city and county, and all other industries, whether in the nature of farming, manufacturing, or otherwise; to acquire, preserve and distribute industrial, commercial and civic

2 It,

opU. S. Department of Commerce, loc. cit. ^Chamber of Commerce of U. S., loc. cit.

^Fresno, Calif., Fresno County Chamber of Commerce, Accomplishments, 1919, p. 22.

statistics and information of value, and to have a part as representing the county in the consideration and decision of matters of legislation and matters of county, state and national interest."

Another method of county organization is used in some places. In this case, the organization is effected not by means of individual memberships, but by representatives from the various local chambers of commerce existing in all the towns and cities within the county. Each chamber, or similar organization in the county, may become a member of the county organization upon application to the governing board, which is made up of two members from each affiliated chamber. Dues are assessed upon a per capita basis for each chamber, but all the representatives have equal voting power, irrespective of the size of the local body from which they may come. Monthly meetings are held, the plan being to rotate the sessions among the various communities in the county.

The objects of this kind of county chamber of commerce have been stated to be "to link together the commercial clubs and similar organizations in the county for the study and discussion of all questions relating to the general good and advancement of the business interests of the county, and to increase the influence and efficiency of individual commercial clubs, each in its own field. To promote every special line of activity which tends toward the better development and settlement of its agricultural lands, the building up of its general prosperity, and to advertise and give better publicity throughout the United States to all of the county1 3 advantages and attractions. To cooperate with the county commissioners and to provide for them a medium through which to expend the advertising fund appropriated by them under the laws of the state." 24

24Colorado, Weld County Commercial Club, Constitution and By-Laws, P« 4«

The regional form of organization is similar to the county form last described above, except that it applies to a region which may include several counties, rather than any one county alone. Such an organization is made possible only where the region involved has peculiar kindred interests throughout, either by reason of natural location or because of other physical features which oause it to have common problems affecting all localities within the region.

As an example of what an association of this kind finds to undertake, one organization of taais type has set before itself six great factors for development within its region. They are agriculture, education, marketing, transportation, industry, and the people. With these are included wholesome advertising propoganda and field service work, made available to all the counties in the group.

When we consider the chamber of commerce movement in its state-wide aspect, we find four types of organizations more or less related. One of these is what is commonly known as the State Association of Commercial Secretaries. This type is in no sense a chamber of commerce, although its membership is made up of those most actively engaged in chamber of commerce work, namely the secretaries. It is more in the nature of a professional organization where the individuals engaged in a common task band themselves together for mutual benefit, purely personal, and of value to the state as a whole only indirectly as the efficiency of the secretaries increases, and thus affects their local communities. One such association has given as its reason for existenoe the following:26

"The object of this association shall be to increase the efficiency of the secretaries and thereby to promote

3 5

0^Terre Haute, Ind., Wabash Valley Empire bulletin, pp. 1-2. "^National Association of Commercial Organization Secretaries, report of first Annual Meeting, 1915, p. 149.

looal strength and effective cooperation in hastening the development of the South' s vast resources."

Another type of organization that is found more or less scattered throughout the country is that of the State Federation of Commercial Clubs and Chambers of Commerce. This form is for the most part a resolution body, holding a limited number of stated meetings each year and relying upon the strength of its affiliated members to accomplish results. The main purpose of its sessions is to serve as educators of the delegates and of corresponding benefit to the state.

Only a few of this type of organization have been successful. They are decidedly in the minority among state associations in the United States today,27 and the reason is obvious. A federation usually has a structural plan too loosely devised to escape the danger of disintegration. If the federation fees are nominal, an insufficient budget to carry out worth while projects is the result. If the dues are heavy enough to give the federation a working revenue, the drain upon local chambers is prohibitive. Furthermore, the danger of jealousies and sectional difficulties are apt to creepin for the reason that the financial, and hence the voting strength, is usually confined to the more populous industrial sections, while other portions of the state have little, if any, representation. Therefore it would seem that the federation type of state body has so many objectionable features that it defeats the very purpose for which the organization was effected.28

A third type of state organization is that of the State Development Federation, sometimes called the State Association. Such an

association is usually composed of individual memberships centered 38

National Association of Commercial Organization Secretaries, 2<?loc. cit., p. 154.

U. S. Department of Commerce, loc. cit.

around a definite objective, as for instance a publioity movement to feature industrial or agricultural facilities; a concerted effort to secure for the state a certain proportion of the activities, institutions and business of the federal government; or the agitation for civic and social reforms. °*

The work of the development federation is very definite and ooncise and a high percentage of accomplishment of important matters is the result. Its chief handicap is that it, too, like the federation of commercial clubs, is apt to become sectional and to work in too specialized a field to cover the whole state. Jealousies have often arisen in smaller communities that have insisted that the officers of the development federation have simply worked for the large cities in the state and the only place the smaller communities have found is that of a big share in paying the bills. This feeling is often due to the fact that membership based primarily on a selfish motive, may be withdrawn upon being satisfied or dissatisfied, as the case may be, with some particular achievement.