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Posted on: 07/12/2000; Publication date: July 2000
The Industry In Its Heyday
© Plumbing & Mechanical 1993
The ‘Roaring Twenties’ were a time when all participants had their act together.
Imagine how great it would be if all the industry’s players made a thorough commitment to traditional three-step distribution. Suppose they raised the equivalent of millions of dollars a year to promote the industry, and saw to it that thousands of contractors received top-notch training and personal assistance in accounting, finance, salesmanship, advertising, merchandising and every other facet of business education. What if the industry’s largest trade association had twice as many members? What if the government worked hand-in-hand with industry leaders to make it easier to do business? What if there was so much work available that your main concern was finding enough people to handle it all?
A hopelessly utopian vision, you say? Nope. This is pretty much the way the plumbing-heating industry operated during the 1920s.
Fresh from victory in "the war to end all wars," America rode a wave of optimism and prosperity unlike any seen before or since. The United States of 1920 had but 5 percent of the earth’s population, but was producing 24 percent of the planet’s agriculture, 40 percent of its minerals and 35 percent of manufactured goods. Our GNP of $225 billion was almost three times as great as England, our closest competitor. We had a $5 billion trade surplus and half of all the gold in the world. U.S. bank deposits surpassed those of all other banks in the world combined, with billions to spare. Yet there was no inflation. Prices of manufactured goods were actually declining, making more and more modern conveniences affordable to more and more people. "It is impossible for things to go wrong," declared a bank executive in a speech that cited these statistics.
Check out this giddy description penned in 1920 by Henry Gombers, long-time staff chief of the Heating and Piping Contractors National Association, now MCAA:
"As a nation we are out of tune with the infinite. It may be that our national life never vibrated in exactly the same key. Or perhaps the harmony of the spheres has changed from the sweet music of the ancients to the clanging, clattering, ear-splitting noises of a ‘cow-town’ on circus day ...
"The past year has been our circus day. What a wonderful ‘fling’ we have had! We have lived on the top of the world. Nothing has been too good for us. We have thrown our money around in true cowboy style. We have hooted and yelled and let our shooting irons bark on the slightest occasions," wrote Gombers.
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In It Together
National prosperity gave most industries a boost. Another driving force for the plumbing-heating industry was a movement known as "trade extension." It was a concept borrowed from an organization called the National Dealer Service Association, which represented manufacturers and wholesalers in various retail industries.
This was an era before TV and radio. Whatever passed for "mass marketing" had to be channeled through slow and inefficient print media. Big merchandising businesses concluded that better results could be achieved by helping retail dealers advertise in local markets. Left to their own devices, retailers were not apt to do much advertising, and what little they did tended to promote themselves rather than brand name wares. So manufacturers and wholesalers "extended" themselves to paying in whole or part for advertising at the local level that featured their products. Thus the term "trade extension."
The practice described persists to this day, now called "co-op advertising." It’s just that in an era before mass media, it played a bigger role in the overall merchandising scheme of this and many other industries. It also fostered closer cooperation and interdependence throughout the chain of distribution.
Then as now, there were concerns about encroachment into plumbing and heating markets by outsiders such as hardware chains and mail order houses. Contractors complained about "piratical jobbing houses," i.e., wholesalers selling retail. Trade extension enabled manufacturers and wholesalers to resolve these problems as well as increase sales.
The movement arose in a markedly pro-business environment. This hadn’t always been the case with the American masses. The nation had passed through business eras highlighted by slavery, robber barons, child labor, sweat shops and other outrages that showed the dark side of unfettered capitalism. Beginning with abolition, through the antitrust legislation of the 1880s and continuing to World War I, the federal government was compelled to rein in many of the business world’s abuses.
Then the American business community got caught up in the patriotic fervor of the war effort and sacrificed along with everyone else. This seemed to gain them respect, and, of course, everybody loves a winner. The afterglow of victory unleashed pent-up consumer demand, and people began to sense that business relationships epitomized social harmony. President Calvin Coolidge expressed this in his famous 1925 dictum, "The chief business of the American people is business." In this context, trade extension could be viewed not only as a business strategy, but as a sort of noblesse oblige that enhanced social order.
In the plumbing-heating industry, the trade extension concept quickly expanded beyond advertising. The complaint then, as now, as always, was that the retail link was the weakest. Manufacturers and wholesalers kept hammering away trying to create "merchant plumbers" out of the mechanically-minded trade. Plumbers and the master fitters of steam and hot water heating were acknowledged to be superior craftsmen, but most lacked even rudimentary business skills. Unless you shored up these deficiencies, went the thinking, advertising support would go for naught.
What resulted was a decade-long era of massive, feverish business assistance to contractors, something resembling an intra-industry Marshall Plan. It got underway with establishment of the Trade Extension Bureau (TEB) in 1919.
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Education & Service
The group that was to become TEB began meeting as a committee in February 1918. "It was the first time in the history of this industry that all branches of the industry sat around the table to talk about a common cause," one prominent participant later reminisced.
War was raging at the time and the government had put a stop to virtually all but war-related construction. In a series of meetings over the next six months the Trade Extension Committee worked on ways to comply with directives from the War Priorities Board, yet still foster business opportunities for contractors. What it came up with was a series of clever trade advertisements exhorting contractors toward renovation work.
"Make NEW Business From OLD Factories ... The Needs of the Nation Include Factory Efficiency ... Sanitation and Bodily Comfort Is More than Ever a National Necessity," read one of the ads, with artwork showing Uncle Sam pointing a plumber toward a smokestack-ridden plant.
Shortly after the ads appeared in print, Germany surrendered. When Armistice Day came in November 1918, the committee was able to hit the ground running with a mission defined as "devoted to educational advancement so that when peace prevails, America will be the most sanitary nation in the world."
The committee became chartered as the Trade Extension Bureau. It was run by a 22-man board composed of representatives from six manufacturer associations, three regional supply associations and the industry’s two national contractor organizations — the National Association of Master Plumbers (NAMP), forerunner of NAPHCC, and the Heating & Piping Contractors National Association (HPCNA), now MCAA. The contractor groups were assigned three seats each on the board of directors, and TEB’s original by-laws specified that the president of NAMP would automatically serve as chairman.
Selected as staff manager of the Bureau was one of the most innovative movers and shakers in the history of the industry, William J. Woolley, of Evansville, Ind. Known as "the Hoosier genius," Woolley was a successful plumbing and heating contractor and industry activist who revived the moribund Indiana state master plumber organization. Under his guidance, the Indiana Society of Sanitary Engineers began furnishing members, free of charge, uniform estimate sheets, a filing system, collections methodology, uniform contract forms and a system of calculating overhead expenses, among other services. As a result, it began to realize impressive membership gains — 22 percent in 1914, the record shows. What he accomplished at the grass roots level served as a prototype for an ambitious nationwide program of contractor education and services launched by TEB.
The Bureau was officially introduced to the industry in June 1919 at the NAMP Convention in Atlantic City. Based in Woolley’s hometown of Evansville, it was to be funded by contributions from member associations and individual companies. Manufacturers were asked to kick in amounts from $100 to $500. NAMP gave $1,000 and HPCNA $250 towards a first-year funding target of $50,000. In actuality they ended up with $36,918, still a healthy sum in those days. It would be equivalent to more than 10 times as much in today’s dollars.
Some master plumbers got a bit too zealous about the new organization formed to support their interests. Early on, Woolley had to send out a letter asking them not to lean too hard on manufacturers for Bureau funding. On the flip side there was a bit of a turf skirmish, with some state association officials speaking out against TEB, fearing the new organization might usurp their authority over education programs. For the most part, however, the industry was united to a greater degree than ever before.
Sales promotion was TEB’s original mission. That quickly expanded into three separate departments for Accounting, Promotion and General Education. By the time 1919 was over it had compiled service bulletins on calculating overhead and "Short Cuts to Estimating," two topics identified in a TEB survey as the most troublesome to contractors.
In 1920 TEB launched with much hoopla a "National Campaign for Knowledge." The centerpiece was a "Business Efficiency Course," that dealt with accounting, estimating, costing and markup. It was packaged into a series of short, meaty lessons placed at the disposal of local associations.
Later that year TEB trained the first four of its "road men." Drawn from the ranks of experienced industry authors and consultants, these field representatives traveled the country teaching TEB courses and visiting local plumbing-heating businesses. Throughout the decade it lent personal assistance to thousands of small plumbing and heating firms and gave classroom instruction to tens of thousands of individuals.
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In Full Roar
Following the war, the nation found itself with a shortage of approximately 1 million.
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