THE AMERICAN TRADE AND BUSINESS ASSOCIATION: A STUDY OF ITS GROWTH, STRUCTURE. AND FUNCTIONS IN THE EMERGENT AMERICAN SOCIETY Thesis few the Degree of D. B. A. MICHIGAN STATE UNIVERSITY Desmond D. Martin I964 ___..) ,4) \II I MICHIG IIIIIIII \IIIII :4 ‘00 I... N... I00 14::— O 01 «CD: II if This is to certify that the thesis entitled THE AMERICAN TRADE AND BUSINESS ASSOCIATION: A STUDY OF ITS GROWTH, STRUCTURE, AND FUNCTIONS IN THE EMERGENT AMERICAN SOCIETY presented by Desmond D. Mart in has been accepted towards fulfillment of the requirements for M degree in Wt ‘N~ 1x . WM‘J‘W’ Major professor Date November 16, 196a 0-169 LIBRARY Michigan State University ‘bVIESI.) RETURNING MATERIAgg: PIace In book drop to “Bananas remove this checkout from .JIIIKS-IIL. your record. flflg§,wi11 be charged if book is returned after the date stamped beIow. MIM I ABSTRACT THE AMERICAN TRADE AND BUSINESS ASSOCIATION A STUDY OF ITS GROWTH, STRUCTURE, AND FUNCTIONS IN THE EMERGENT AMERICAN SDCIETY by Desmond D. Martin This study was specifically designed to answer key questions about the increasing significance of large—scale national trade and business associations in the American society. Particularly, the central purpose was to examine these associations and their in- creasing importance as vehicles used by economic organizations in dealing with environmental forces that present obstacles to the achievement of their respective goals. Since the sc0pe of the study was quite broad, a general framework was provided to view these associations in a most meaningful manner. Trade and business asso— ciations were examined as they exhibit changes and consistencies in four major environments as follows: First, an historical environ— ment of growth and develOpment. Second, the immediate environment of these associations. Third, the environment provided by the total society. Fourth, the environment provided by the business world. In order to control the boundaries of the analysis two coor- dinate hypotheses were tested° First, the hypothesis was set forth that trade and business associations come into being, grow and flourish to the extent that members perceive them meeting their needs, in particular, promotion and protection of mutual interest. Secondly, Desmond Do Martin it was hypothesized that these associations vis-a-vis society originate, grow, and flourish to the extent that their objectives are congruent with the psychological, sociological, and economic forces of the emergent society. A corollary to this latter hypothesis suggests that survival of a given association depends upon its ability to adjust to these emergent forces in the greater society. Three methodological approaches were used to test these hypotheses: the historical, empirical, and case method. Questionnaires, published histories, and supplementary association pamphlets were the primary sources of data used. The questionnaire was sent to a selected sample of 442 large—scale national trade and business asso- Ciations. For purposes of analysis, it was necessary to stratify the sample into meaningful categories. The categories selected conform to the Standard Industrial Classification Cede and included the following activity types: agriculture; manufacturing; transportatlon, communications, and utilities; wholesale and retail trade; finance, insurance, and real estate; and services. A final non—SIC category (national business associations) was added to account for special types of business associations. The criterion used in assigning in- dividual associations to a specific category was the primary activity of the association. The hypotheses were tested in the context of both the major environments and the specific activity types of associations. The major findings of the research confirmed the validity of the hypotheses within the limits of the research designo In fact, each of the three methods yielded remarkably similar results with Desmond D. Martin respect to the hypotheses tested. Historically, trade and business associations have originated, grown, and flourished to the extent that they have been able to fulfill this need-oriented mission in- herited from the guild system and modified by more recent history. Empirically, these associations have exhibited unique patterns of both internal and external relationships designed to sustain them- selves in the greater society. Case studies of individual asso- ciations provided additional support to the basic hypotheses. For example, membership need-oriented functions were apparent throughout each association's history. Also, emergent forces threatened the survival of each association studied, and steps were constantly taken to remain congruent with these forces and survive. The research clearly showed that the modern trade and business association is the product of an emergent American society. THE AMERICAN TRADE AND BUSINESS ASHDCIATION: A STUDY OF ITS GROWTH, STRUCTURE, AND FUNCTIONS IN THE EMERGENT AMERICAN EDCIETY By ‘ v Desmond D9’Martin A'WEflS Submitted to Michigan State University in partial fulfillment of the requirements for the degree of DOCTOR OF BUSINESS ADMINISTRATION Department of Management 1964 TABLE OF CONTENTS CHAPTER PAGE I INTRowCTION.OOOOOOOOIOOOOOOO0.00000QOOCOOUODOOU0 l Purpose, Scope and Significance................ 1 Publications EBaling with Formal ASSOCiationSOOOOOOOOOOOOOOOOOOOOOOOOCODOOOO. 4 II RESEARCH DESIGN AND METHODOLOGY.................. 27 IntrOdUCtionOOOOOOOOOO.IOOOOOOOOOOOOOOOOOOOOOOO 27 Definition of Trade and Business Associations................................ 29 Trade and Business Associations: A Pop- Ulation and a sampleOOOOOOOOOOOOOOQOCOOOOOCD 30 Major Research Tools........................... 41 III THE HISBDRICAL EVOLUTION OF TRADE AND BUSINESS ASQCIATIONSOOOOOOOOOOOOOOOOOOOUOOOOOO 49 Introduction................................... 49 Trade and Business Associations: An Historical Perspective...................... 50 IV THE ACTIVITIES AND FUNCTIONS OF TRADE AND BUSINESS ASSOCIATIONS AS THEY RELATE TO TH HEIR OWN IWIEDIATE ENVIRONMEIIT AND THE BUSINESS VDRLDOOOOO (‘ottQOOOOOOUCDC-OOCL‘UCCC‘I‘ mt uC " 8’3 IntrOdUC‘tionec-Ioonoo oooooo oooocooc \«‘I>IIH 83‘ Environmental Faci;ors Affecting Trade and Business Association Location . . f... . B4 Organizational Membership and S art C arac» terist ics of Large- Scale National Trade and Business Associations...... ......,.i. 93 The Financial Characteristics of Trade and Business Associations .......-,-...,. ll; Internal Educational Activities of Trade and Business Associations...cu...as......... 123 Summary............ ...... ........t,.._.to...... 125 ii CHAPTER V THE ACTIVITIES AND FUNCTIONSIDF TRADE AND BUSINESS ASSOCIATIONS AS THEY RELATE TO THE GREATER SOCIETY WITH PARTICULAR EMPHASIS ON THE GOVERN- MENTAL SPHERE...... ......... .o.... ..... ...o. The Established Position of Large- Scale National Trade and Business Associations in the Greater Society.... The Governmental Sphere: The Vital Role of the Activities of Trade Associations in Political Affairs.....o The Public Sphere: The Significance of Trade and Business Association Activities in Broad Areas of Ameri- can Public Life........................ Summary.................................. VI THREE CASE HISRDRIES THAT CHARACTERIZE THE GROWTH, ACTIVITIES, AND RESULTING FUNC- TIONS OF LARGE—SCALE NATIONAL TRADE ASSOCIATIONS................................ Introduction: The Use of the Case Study Method in this Study... ............... ... A History of the American Bottlers of Carbonated Beverages...............- ..... A History of the Investment Bankers Association of America.............o..... A History of the National Assoc1ation of Electrical Distributors.......,. Summary.. ..... .. ........... ..n....l.......... VII SUMMARY AND CONCLUSIONS ....... .. ...... u.....t.... BIBLIOGRAPHY..... ......... ............................ APPENDIX A - PRE~TEST QUESTIONNAIRE.......... ......... APPENDIX B - FINAL QUESTIONNAIRE ........ . ............. iii PAGE ISO 130 132 146 157 163 163 164 175 190 201 20.3 213 4'16 426 TABLE 10 11 12 13 14 LI ST OF TABLES Number of Trade and Business Associations in sample by ACtiVity TypeOOOOOOVOOOOOOOOO0.0.0.000. Association Questionnaire Responses by Acti— vity Type of Trade and Business Associations.... Activity Type by Age of Association............... Trade and Business Association Membership GrOWth by ACtiVity TypeOOOOOOOOOOOOO ...... 0000.. Trade and Business Association Processes of Merging and Dividing by Activity Type.o ......... Major Impact of Emergent Forces on Trade and Business Associations Development by Year....... Present Location of Headquarters by Activity TypeOOOOIOOOOOOOO... ........ O 0000000 000.00.00.00 Number of Affiliates by Activity Type............. Extent of Departmentalization by Activity Type.... Type of Membership by Activity Type............... Comparison of Number of Organization Members and Extent of Departmentalization of Large- Scale National Trade and Business AssOC1ations.. Activity Type by Occupational Category.i.......... Number of Paid Staff by Activity Type......... Comparison of Number of Paid Staff and Extent of Departmentalization Among LargeoScale National Trade and Business Associations. ... .. iv PAGE 39 48 68 72 76 79w8O 86 95 98 100 103 105 109 111 TABLE PAGE 15 Size of Annual Income by Activity Type......... 116 16 Associations Receiving Membership Income only by ACtiVity Type.....OOOOOOOO0.000...... 118 17 Primary Sources of Income (Public or Private Criteria) By Activity Type................... 121 18 Presence or Absence of Internal Education Program by Activity Type............ ......... 124 19 Activity Type by Contact with Federal, State, and Local Governments...... ..... ...... 133 20 Presence or Absence of Formal Agreement with Federal Agencies by Activity Type............ 139 21 Presence or Absence of Informal COOperation with Federal Government Agencies by ACtiVity Type....OOOOOOOOOOOOOOOO 00000 O 000000 142 22 Trade and Business Associations that Take a Stand on Public Issues by Activity Type...... 146 23 Issues Which Associations Take a Stand on by ACtiVity Type....OOIOOOOO. OOOOOOOOOOOOOOOO 1.53 24 Presence or Absence of External Education Programs by Activity Type.. ...... . ...... ..... 157 25 Relative Extent of Trade and Business Asso— ciation Interaction in the Governmental and Public Spheres by Activity Type.......... 160 PREFACE This study of trade and business associations was made pos- sible by use of research tools and data drawn from a broader study of American associations under the direction of Professor W. Lloyd Warner of Michigan State University and financially sponsored by the Car- negie Corporation. This broad study of large-scale national associa- tions in American life has been a collaborative effort by a research team. The most important individual effort in the success of the overall association research was supplied by Professor Warner. Under his expert direction the total association research has been guided toward a meaningful end, and without it this particular study of trade and business associations would not have become a reality. In addition to the leadership provided by Professor Warner, earlier foundations for both the broader association research and this research were laid by a number of members of the research team. Pro- fessors Warner, Orvis Collins, and John Trimm, and Mr. James Shrier all contributed significantly to an early research design for the broader study of American associations. These individuals provided source materials through library research and personal contacts that were used throughout both the broader study and this study. The En- cyclopedia of American Associations, a comprehensive list of existing associations published by the Gale Research Company, emerged as a key tool used in both analyses. Once preliminary data were collected and vi analyzed, Professor Warner selected a representative sample of large- scale national American associations. This sample was cross-checked with samples selected by other members of the research team. In the early stages of the broader research, Professor Frank Nall and Mr. John Jackson were added to the research team. These two men played important roles both in final questionnaire develop- ment and in the creation of the operative research design for the American associations study. Since the present study uses data ob- tained from responses to that questionnaire, whatever merits it may contain can be directly traced to the high quality of the association questionnaire that emerged from team effort. Generally speaking, the broader study of American associations is concerned with all types of large—scale national voluntary associa- tions. It emphasizes particular differences among these associations. For purposes of analysis, American associations are placed in activity types that include eight major categories. They are: 1. Production, ownership, management, and exchange 2. Agriculture 3. Civilian and military government and public administration 4. School and education 5. Religious and church 6. Physical and social welfare 7. Physical, biological, other sciences and arts 8. Recreation and sociability vii A total sample of 1,093 associations composes these eight activity types. This selective sample accurately reflects the true representation of large-scale national associations in each of these activity types. The questionnaire was mailed to these 1,093 associations and 793 or 72.5 percent were completed and returned. Of this 72.5 percent, approximately 60 percent were returned on the first mailing and an additional 12.5 percent on the second mailing. Res- ponses to this questionnaire yielded significant information about governmental relationships, organizational characteristics, and gen- eral purposes of the associations. These responses have been analyzed and integrated in a meaningful study of American associations. Trade and business associations that compose the production, ownership, management, and exchange activity type of the broader study are the major focal points of this analysis. This activity type is a basic part of the entire economic segment of the society, and this specific study analyzes in depth the associations it contains. A special interest in trade and business associations nourished by the author's participation as a member of the broader research team is re- sponsible for this endeavor. Since it uses data collected by the total research team, this study is an individualized product of the total research. Trade and business associations are treated as individual entities within a social type; this study can now be regarded as a separate study of trade and business associations apart from the broader study of all large-scale American associations. Thus, given viii its relationship to the broader association research, the ensuing analysis emphasizes methodology, analysis, and conclusions as applied to trade and business associations. Professors W. Lloyd Warner, W. J. E. Crissy, and Dalton E. McFarland of Michigan State University made substantial contributions that improved the methodology and content of the individual thesis research as a separate study. I am verngrateful to all of them for their valuable and generous assistance. ix CHAPTER I INTRODUCTION Purpose, Scope and Significance The central purpose of this study is to examine trade and business associations and their increasing importance as vehicles used by economic organizations in dealing with environmental forces that present obstacles to the achievement of their respective goals. The ensuing analysis will show that these associations have exhibited a dynamic growth pattern in terms of membership sizes, scope of opera- tions, and total influence in American life. Thus this study is specifically designed to answer key questions about the increasing significance of trade and business associations. It is particularly important to determine why this growth has occurred. Is it concentrated in any one type or kind of trade association? Have trade and business associations experienced marked influences from evolutionary forces? What are the internal and external relation- ships of these associations, and how do they relate to their role and importance? Two coordinate hypotheses will be tested that will help to provide answers to these key questions as follows: Hypothesis I: Trade and business associations come into being, grow and flourish to the extent that members perceive them as meeting their needs, in particular, protection and promotion of mutual interest. Hypothesis II: Trade and business associations vis—a-vis society come into being, grow and flourish to the extent that their objectives are congruent with the psychological, sociological, and economic forces of the emergent American society. A corollary of hypothesis II: Survival of a given association depends upon its ability to adjust to the emergent forces in the surrounding society. Three methodological approaches are used to test these hypotheses. First, the historical method is utilized in determining association growth patterns and how growth and functional types of associations are related. Secondly, empirical analysis is employed in discerning key relationships from a wide range of data. Finally, the case method is used as a vehicle for analyzing particular associations in light of the two fundamental hypotheses suggested in the study. While the boundaries of this analysis are primarily controlled by the nature of the hypotheses to be tested, a general framework is provided within which these associations may be studied. They will be examined as they exhibit changes and consistencies in four major environments as follows: 1) An historical perspective of trade and business associations: changes that take place as associations are older or younger. 3 2) Their own immediate environment: within the trade and business association complex. 3) The total society environment: government, the larger business world, and the greater society. 4) The business world environment: corporations, marketing institutions, or financial organizations. An inter-relationship exists among environments 2, 3, and 4. For example, given that a trade or business association is primarily concerned with the three worlds of 2, 3, and 4, it is postulated that these three worlds are undergoing very rapid change and that these associations adjust to that change in each of these areas. A trade association may undergo an alteration in its structure to adapt to a change in its own immediate environment, or to a change in the total society. Furthermore, it may mean some type of alteration in purpose, function, or in membership composition of the association as these three worlds exhibit their changing faces as part of an emergent society. One need only look at the developments in transportation, com- munication, production, and distribution in the past thirty years to realize that our society has become more urban, more mobile, and more complex. Today no part of this society is remote and communications between corporations and trade and business associations are very easily accomplished even though they may be located in different parts of the country. Also, the growth of urban areas has presented market— ing problems that did not exist forty or fifty years ago. Many cor- porations find themselves in a highly competitive situation in which 4 success or failure of productive enterprise in the market place may hinge on what little is known about consumer motivation. While it is true that more is being done today to learn about consumers and about mass marketing enterprise, it is also true that the changing nature of our society has made such study more difficult. This analysis is concerned with how these developments have shaped the face of modern trade and business associations. Particular emphasis will be placed on an examination of membership, structural characteristics, and activities of such groups to determine their place and influence in American economic life. Publications Dealing with Formal Associations In view of the general purposes of this study as set forth in the early part of this chapter, it is essential that a brief review be made of the existing association literature in order to determine how much is already known about voluntary association relationships in their basic environments. While some research contributions have been made to a greater understanding of associations, the current state of theoretical knowledge in this area is quite undeveloped. Further, the body of knowledge about association functions, growth, and societal relationships (the primary interests of this study) is concerned with voluntary associations in general rather than with trade and business associations. The paucity of studies of this type is particularly apparent when a penetrating analysis is made of the classic works in the field. Many attempts were made to 5 uncover both the sources and content of the available literature dealing with voluntary organizations. A valuable aid in this effort was provided by Professor Buford H. Junker's exhaustive bibliography of voluntary organization literature which he compiled at the Univer- sity of Pittsburgh.1 His coverage includes the literature of the relevant disciplines - political science, business administration, sociology, and psychology. The present study is an attempt to fill in some gaps of knowledge that are revealed in the review of classic publications about voluntary associations. Specifically, these gaps of knowledge occur mainly in the areas of functional purpose and environmental adjustment of these associations as set forth in hypotheses I and II. Some early writers, such as Kropotkin (1914), made specific reference to the problem of human association as distinguished from other evolutionary processes. Kropotkin argued that the major pur— pose of human association was one of mutual aid;2 There is little question that we group together as human beings for mutual protection and advancement, but the most important aspect of this grouping takes on a special characteristic that can best be described by the term formalization. The findings in this study suggest that it is mutual lBuford H. Junker, "Voluntary Organizations in American Com— munities," Unpublished bibliography, Department of Sociology, Univer— sity of Pittsburgh, 1958 (mimeographed). 2Kropotkin, Mutual Aid: A Factor in Evolution (New York: Alfred Knopf, Inc., 1925), Chapter 1. 6 aid (the support through banding together) that lays the foundation for voluntary associations such as trade and business associations as well as other types of human association that have arisen since the beginning of mankind. As stated in hypothesis I, protection and promotion of mutual interest will emerge as the goals of people seeking mutual aid through trade and business association membership. M. F. Robinson's Spirit of Association, published in 1913, was an early attempt to analyze specific types of associations. After studying the multiplicity of associations in Great Britain, Robinson came up with what he calls four great forms of association.3 These are: l) Guilds (religious, social, trade, and craft) 2) Friendly societies (movements for mutual aid and social advancement of one's life through group relationships). 3) COOperative movement (the social reform movement which was an expression of a desire for social betterment, and resulted in the socialistic community of Robert Owen as one example) . 4) Trade unionism (mutual aid in the form of the accumulation of benefit funds with which to enhance the power of the worker in his effort to restrain the forces of unrestricted competition as it effects him). 3M. F. Robinson, Spirit of Association (London: John Murray, 1913), Chapters I, VIII, X, and XVII. 7 Robinson offers an early attempt to distinguish between dif- ferent types of associations, and although he is not specific in categorizing associations into activity types, he does use activity as a determining factor in deriving his four classes of associations. Trade associations, as will be developed in Chapter III, are an out- growth of what Robinson calls guilds because the trade and craft guild was an early form of trade association. The friendly societies and cooperative movements Robinson defines differed from the guild primarily in the extent of their social activity. These organizations worked for public betterment and social reform and are counterparts of modern social welfare associations. Finally, the labor union, Robinson's fourth class, was concerned with improving conditions of work within the framework of the existing industrial system. Trade unions then operated for the benefit of the working man and were more directly concerned with his workplace as Opposed to the widespread social concerns of friendly societies and c00perative movements. Trade guilds Operated in a broader industrial setting than did trade unions, and were particularly concerned with problems in the higher echelons of economic life. Interestingly enough, Robinson perceived this difference and separated the two on the basis of their activities. These differences will be further analyzed in subsequent chapters. Kropotkin and Robinson make two basic contributions to an initial understanding of the association process. First, Kropotkin 8 recognizes common human needs resulting in universal characteristics that reach into all kinds of voluntary associations; and, secondly, Robinson provides a starting point for further analysis by dis~ tinguishing between different types of associations. The four great association classes of Robinson are important because they indicate how vital "associative effort" is with respect to national progress. Guilds, unions, friendly societies, and cooperative movements pave the way for social reform. In reality, legislative and legal activities do not necessarily pioneer social reform, but rather are supported by "associative effort" from which these activities receive democratic sanction. Thus, in the present inves- tigation it is recognized that associations, by their very nature, have important social and economic influences on the processes of organization in a given society, i.e. government, business, and education. Robert Lowie's Primitive Society, published in 1920, contains a more sophisticated approach to the association problem. Lowie uses Schurtz's theory of associations published in Germany in 1902 as the basis for his analysis. Schurtz theorizes that a profound difference in the psychology of the sexes underlies the differen— tiation between kinship and associational groups.4 For example, women are eminently unsociable and any associational activity in which they engage is considered to be of little consequence. Men, 4Robert H. Lowie, Primitive Society, (New York: Boni and Liverwight, 1920), p. 297. 9 on the other hand, are eminently sociable, and this masculine gregariousness fosters significant association activity. In addition to the sex differentiation, Schurtz's theory recognizes age differentials as playing a key role in association development. Schurtz regards the antagonism between the older and the younger generation that separates parent and child as the basis for the oldest type of associated grouping. A basic axiom of this theory is that grouping by psychological age and matrimonial status preceded all others.5 In primitive societies sex and age are the primary socializing agencies. There is little doubt that these agencies, as they operate in such societies have the effect of both identifying and protecting the social patterns of behavior associated with age and sex differences. How- ever, in more advanced stages of societal development, sex and age do not remain as the only socializing agencies.6 The more advanced society is characterized by a differentiation according to rank and wealth. Clubs tend to arise supplanting the earlier age classes and entrance fees and other qualifications emerge that destroy the pure age stratification system of the society. Such clubs can become highly secular or they may take the form of purely social organizations. 51bid., p. 298. 61bid., p. 350. 10 Finally, Schurtz refers to secret societies as the other type of association formed by masculine gregariousness. A prominent trait of secret societies is the attempt to keep women and slaves in subjection. This latter feature is certainly identified with the basic nature of associations as conceived by Schurtz. This early theorizing by Schurtz was crude and left many questions unanswered. Probably the most devastating attack on his theory can be centered on the fact that the nature of age and sex groupings is culture bound. In fact, Lowie in his ensuing dis- cussion of Schurtz raises this fundamental objection. Although such limitations of the theory reduce its value, they do not nullify its usefulness completely. The protection and promotional functions of hypothesis I are present in Lowie's analysis of Schurtz. Schurtz perceives a protective function being performed by associations. It doesn't matter whether groupings are on the basis of age, sex, wealth, or social class because the association can play the same type of role in each case. Schurtz clearly points this out in his discussion of secret societies. Camilla H. Wedgewoods's study of secret societies among the peoples of the South Pacific is a logical extension of Schurtz's approach.7 Wedgewood considers the problem of why secret associa- tions develop in certain societies and, perhaps even more important, 7Camilla H. Wedgewood, "The Nature and Functions of Secret Societies," Oceania, I (July, 1930), pp. 129-45. 11 the nature of the functions that they perform. Her functional analysis of secret societies has particular meaning to this study of associations, and the ensuing discussion of Wedgewood's findings points out some important analogies between the charac- teristics of secret societies and trade and business associations. In the context of this study the overall conclusions of the Wedgewood study are particularly significant. Wedgewood states that no association continues in existence unless it has a definite function to fulfill. A distinction is made between two specific types of function which a secret society may fulfill, first, the "ostensible" or "manifest" function, and second, the "latent" or "underlying" function. According to Wedgewood, it is this latent function that must be present in every association, but the outside world and even its own membership may be oblivious to it. She defines the "ostensible" function as the object for which the society was designed or the function which it is recognized by its members as performing. Since many secret societies do not rigidly adhere to their original purposes, many of these societies have no "ostensible" function. A secret association or secret society, in its broadest sense, is a voluntary association whose members, by virtue of their membership, are possessed of some knowledge of which non-members are ignorant.8 The nature of this knowledge will vary from one such 81bid., p. 132. l2 association to another: it may comprise magical or religious rituals or spells; some sacred objects; the identity of the mem- bers; the "ostensible" function of the association; or the very existence of the association itself. But regardless of the nature of the secret, the important point is that a secret society is an organized, self—conscious association whose members are possessed of some kind of a secret. Wedgewood qualifies her state- ment that these associations are voluntary by pointing out that there are certain circumstances in which an individual is forced to join a secret society. In many of the societies that she studied one's social prestige was dependent upon certain society memberships, and in other instances, social obligations forced such membership. Although the modern trade and business associa- tions analyzed in the present study are also considered to be voluntary in nature, their respective memberships also experience compulsory influences similar to those of the secret society meme berships of Wedgewood's study. For instance, in order to achieve industry prestige or competitive effectiveness as a company, a requirement may be company membership in the appropriate industry trade association. Wedgewood's functional analysis of secret societies contains another interesting conclusion about their latent functions that has particular significance in this present analysis. She suggests that fundamentally all secret associations may have one latent function in common. In every individual there are two conflicting l3 impulses, one of which is to resemble his fellows and the other to be different from them.9 While everyone wishes to remain within the community, most individuals desire to be important in the community.10 Hypothesis I suggests that trade and business associations serve a similar purpose for the corporate or indi- vidual memberships. Specifically, membership within the trade association can easily constitute a sense of belonging to the larger group of members, e.g. a recognized part of the industry. Also, the services rendered by the trade association in serving its membership such as providing technical knowledge or specialized data about market trends tend to set members apart from non-members, and therefore provide them with advantages and need fulfillment. If hypothesis I is tenable, the common latent function of Wedgewood's secret societies is at work in modern trade and business associa- tions. In fact it is crucially important to their very existence. With particular reference to political organization, Wedgewood declares that autocracy and democracy are both fertile environments in which secret societies flourish. Secret societies supply men with the opportunity to acquire prestige and self- expression without endangering themselves or running counter to the established order of things in both of these political environ- ments. The pressures of an unpopular autocracy can give a secret 91bid., p. 139. 101bid., p. 140. l4 society the ostensible function of overthrowing the system. Ee- mocracy, characterized by a free environment and attendant com- petitive problems, suggests a need for formal association to help c0pe with these problems and attain a preferred position within the society. For example, some of the findings in the present study suggest that the American political and economic environment, although of a democratic nature, exhibits certain pressures and restrictions on the industrial sphere. These pressures are directly related to trade and business association growth and sustenance. Particularly, they interact in such a way that membership in the voluntary association satisfies the needs of both the individual and the company for greater power and prestige. This precisely coincides with Wedgewood's important functions of secret societies in a democratic community. In the context of hypothesis II, actual representative membership of a corporation in a modern trade association provides an avenue for adjusting to both political and economic environmental forces that may result in an exceptional position of superiority for the members. In fact, this hypothesis suggests that these associa~ tions grow and flourish to the extent that they are congruent with these environmental forces. In Wedgewood’s analysis the desire for superiority and differentiation leads to the establish- ment of new associations as old associations become larger with broader membership bases. She bases this conclusion on the fact that the amount of prestige gained from belonging to a larger 15 group is diminished by the simple effects of size. Selectivity, then, is a basic factor in determining the force exerted by a particular association. In the trade association setting, the new interests that continually arise in the business world support the formation of new associations to promote these in— terests in a select fashion. But, special interests may per- meate a common membership base, and the growth of this base may actually result in greater power and prestige of the membership than ever before. Thus membership in large powerful trade or business associations may be highly valued by members and non- members alike. This fact is really a product of large-scale growth in an emergent society. Nevertheless, in the Wedgewood sense, membership in a small, select group may also be highly valued in a complex society. Another finding in the Wedgewood study is that secret societies serve as a unifying force and means whereby men are brought into social relations with others outside their normal sphere of contact.11 Members may be drawn from several social groups, geographic areas, etc. This fact is also of basic impor— tance to this study of trade and business associations, because this type of organization provides a direct means of bringing men representing common interests together and regulating their mutual behavior. llIbid., p. 142. 16 These early writings about associations emphasize the uni— versalistic aspect of the process of association that transcends every society. Since the present study is primarily concerned with the American society, the remarks of Alexis de Tocqueville in his classic Democracy in America are pertinent. This perspicacious foreign observer of American society pointed out that association is a distinctive characteristic of every aspect of American life. For example, de Tocqueville says: I met with several kinds of associations in America, of which I confess I had no previous notion; and I have often admired the extreme skill with which the inhabitants of the United States succeed in proposing a common object to the exertions of a great many men, and in getting them voluntarily to pursue it.12 He further states: Thus, the most democratic country on the face of the earth is that in which men have in our time carried to the highest perfection the art of pursuing in common the object of their common desires, and have applied this new science to the greatest number of purposes. Is this a result of accident or is there in reality any connection between the principles of association and that of equality?13 Surely associations could not have grown as they have nor flourished as they have in this country unless its laws and basic social norms recognized the rights upon wnich the existence of such groups depends. The observations of Wedgewood concerning democratic processes and association develOpment are pertinent to de Tocqueville's 12Alexis de Tocqueville, Democracy in America (New York: D. Appleton and Company, 1904), p. 594. 131b1d. l7 speculations, and the environmental forces of an emergent democratic society referred to in hypothesis II are also applicable to de Tocqueville's thoughts. It seems reasonable to conclude that associations tend to de- rive from and grow out of the basic institutions of American culture. They appear as ways and means by which the cultural membership is more or less formally organized for the purpose of giving support to and upholding existing institutions, i.e. they help to preserve and main- tain the cultural institutions within our society. At the same time they allow for a modification of existing institutions through the combined expression of their respective memberships. This is a slow process at best because some oppositions and conflict within member- ships and between memberships of various associations always exist to some extent; however, some general expression must emerge to substan- tially influence a modification of existing institutions. Associations, therefore, seem conducive to cultural change but without upsetting the continuity and stability of at least the more basic institutions of our society. The associations that emerge from the basic institutions of American society may then be grouped into complexes of associations that represent significant and strongly the institutions from which they emerged and now represent. From this analysis the concept of trade and business associations emerges as a separate entity apart from other complexes. For instance, we can categorize some of these basic complexes of associations as trade, governmental, educational, 18 social welfare, and religious. This research study is concerned with only one of these complexes, namely, trade and business associations or in the more specific definition, those associations that help to arrange order and support production, ownership, management, and exchange. These studies of associations mentioned up to this point were all conducted prior to 1935, hence the resulting contributions to knowledge cannot be considered recent. While certain gaps in knowledge of trade and business associations were filled by these early studies, they have the common characteristic of answering only broad questions about associations in such areas as function, purpose, and effects of the political environment. The Wedgewood study was particularly important in setting forth a basic understanding of volun- tary association functions, and is pertinent to the hypotheses inves- tigated in this study. An examination of more recent studies of association does not' add much to this earlier body of knowledge. In fact, more recent conclusions by American sociologists about classification of associa- tions are very similar to what Robinson found in Great Britain. Panunzio, an American sociologist, has divided associations into three classes or parts as follows: contractual, familistic, and compulsory.l4 Unlike Robinson, Panunzio distinguishes between these three types of associa- tions on the basis of their more general characteristics as opposed to activities. Familistic associations are characterized by much face—to 14Constantine Panunzio, Major Social Institutions, (New York: The Macmillan Company, 1939), p. 14. l9 face contact among members, much mutual dependence, and rights and duties are implied rather than clearly defined. Contractual associa- tions are bound by legal or other specific bonds and ordinarily they involve only one sector of life or interest such as economic, religious, or political. According to Panunzio, the characteristics of contractual associations are specific objectives, rights, and duties clearly de- fined, and less face-to-face contact among members. Panunzio would fit trade and business associations into this second class. His third class, compulsory associations, are characterized by a dominant member who seldom is concerned with the welfare of the members. In the extreme case, he may force the association upon others. Panunzio has contributed the broadest possible classification for a theory of associations. His classification includes voluntary and involuntary associations as well as a tight-knit small group versus large informal groups. Of primary importance to this study is his recognition that little face-to-face contact among members may exist in his contractual associations which include trade and business asso- ciations. In the absence of face-to-face contact, Panunzio hypothesizes that there is a primary bond that holds together every association, and that any association ordinarily disintegrates whenever the primary bond ceases to exist. For trade and business associations, this bond will normally take the form of an economic interest centered in some aspect of the business or professional world. The economic world provides the interest, and the ability to promote this interest through formal association creates the bond. 20 R. M. Maclver states this concept mOst clearly as follows: Associations develop as means or modes of attaining interests. "An association is likely to be formed whenever people recognize a like, complementary, or common interest sufficiently enduring and distinct to be capable of more effective promotion through collective action."15 Thus, the existing economic environment generates the primary interests that involve the protection and promotional functions of hypothesis I and trade and business associations originate to fulfill mutual interests. Robert Angell in his The Integration of American Society and W. Lloyd Warner's The Social Life of a Modern Community, Volume I of the classic Yankee City Series, both make vital contributions to the general pattern of analysis of this particular study of trade associations. The results of Angell's research on associations lead him to conclude that the forces that have produced and maintained the capitalistic system, namely, struggle groups and benevolence, are in 16 With in- large measure responsible for the rise of associations. creasing urbanization the old—fashioned community contacts declined as a form of interaction, and correspondingly, urbanization paralleled by an increasing division of labor gave impetus t specialized interests. The natural outgrowth of these two developments was the 15R. M. MacIver and C. N. Page, Socieiv - An Introductory Analym sis, (New York: Rinehart and Co., 1949), p. 439. 16Robert Angell, The Integration of American Society, (New York: McGraw Hill Book Company, Inc., 1941), p. 180. 21 rise of interest groups or associations. He places emphasis on the "voluntary" aspect of the association movement. In his view, associations voluntarily evolved to meet the needs of an emerging society and they are not necessarily an outgrowth of conflict. In Angell's terms, a basic difference between a labor union and a trade association is that a labor union is a struggle group and strictly an outgrowth of conflict, while a trade association is an outgrowth of needs created by a changing economic environment characterized by a voluntary participating membership not necessarily in conflict with external forces. The need orientation concept as stated in hypothesis I is, of course, vital to this present study of trade and business associations. In analyzing the associations of Yankee City, Warner and Lunt perceived the existence of a hierarchical structure among these organizations.17 For example, there were both superordinate and secondary or satellite types of associations in Yankee City. The superordinate association acted as a coordinator by linking other secondary associations such as schools and businesses together. In fact, an "interconnectedness" was found to exist primarily through association that permeated the entire political, social, and economic structure of the community. The Warner study emphasizes the knitting or cohesive role of associations with respect to the separate entities of American life and hence gives impetus to further research directed at 17W. L. Warner and Paul Lunt, The Social Life of a Modern Community, (New Haven: Yale University Press, 1941), p. 314. 22 understanding more about this role. In keeping with the premise that associations tend to interconnect the institutions from which they derive is the supposition that they would also tend to support each other, i.e. tend to influence each other and integrate their actions in a kind of supreme effort. Therefore, trade and business associa— tions in one activity type will influence associations in another activity type and the broader range of trade associations arising from the great economic institution of one culture will influence other great institutions, such as political, educational, or govern- mental organizations. This study takes account of these broader re— lations and pays particular attention to the differences between coor- dinate and satellite types of associations and how their respective characteristics shape into the concept of interconnectedness Warner found in Yankee City. ' The Warner and Lunt study is a first real attempt to look at the multiplicity of associations in American life in analytical fashion. For example, what roles do individual associations play in the greater society, and how does the performance of these roles influence the individual association, other associations and the total environment? In testing hypotheses I and II of this present study, a knowledge of these interacting performance factors of individual associations and environmental influences is particularly important. Moving further away from general functional and societal views of voluntary associations, Dr. Herbert Goldhammer's study of partici- pation in voluntary associations completed in the early 1940's answers 23 questions about the relationship between variations in age, education, and certain personality characteristics to variations in the degree to which persons participate in voluntary associations.18 His ques- tionnaire responses from 4,000 Chicago residents provided some in- teresting answers to these questions. Participation in voluntary associations was found to vary directly with education for educational levels above primary school.19 Education also varied directly with number of officerships, amount of dues paid, and type of association preferred.2O Generally speaking, educational attainment broadens one's interests, develops a sense of social importance and responsi- bility, and generates certain aspirations around one's status position in the community. It can be expected that these same findings would also hold true for trade and business associations, because the same forces are at work. Since these associations are normally composed of business and professional people, both formal education and professional problems tend to support an interest in participation. Goldhammer's study also reveals important findings about age and participation in voluntary associations. Primarily, age and asso— ciation participation are inversely related in early years and directly 21 related in later years. Participation declines in the oldest age 18Herbert Goldhammer, "Some Factors Affecting Participation in Voluntary Associations," (Unpublished Ph.D. dissertation, Uni- versity of Chicago, 1943). 191bid., p. 88. 20Ibid., p. 89-90. 211b1d., p. 87. 24 group and the attendance frequency of young men exceeds that of old men. To the extent that one's zeal and zest for activity is greater in early and middle years as opposed to later years, this would pro— bably also apply to trade and business associations. In the context of hypothesis I the problems facing these trade and business asso- ciations may call for participation for protective rather than social purposes, and this type of influence will motivate membership par- ticipation more on the basis of need rather than age. According to Goldhammer, the number of officerships held in voluntary associations is directly related to length of membership and frequency of attendance. No doubt this finding is explained by the fact that one's participative effort tends to influence his political position in the association. It is reasonable to assume that this fact would also hold true for trade and business associa- tions, however, the politics of these association memberships is relatively complex. For example, officerships are often held by people that represent firms with substantial economic power even though their participation effort is minimal. General studies of trade associations in the American society are limited in both number and scope. C. E. Bonnett's History of Employers Associations in the United States gives a good account of the rise of trade associations in the 19th century. Bonnett emphasizes the decline of the guild system and the emergence of industrialization as the key factors in the growth of employers associations. During the 1920's and early 1930's numerous publications appeared dealing with 25 the history of trade associations and the services they render to in- dustry. In 1930 Joseph Foth's book, Trade Associations, Their Services to Industry, presented some of the broader aspects of the trade asso- ciation function in the industrial setting. Foth primarily emphasized the service aspect of trade promotion, and exchange of information accomplished through trade association activity. Glover, Cornell, and Madden's The Development of American Industries, published in 1932, gives a good account of some of the broader aspects of trade asso- ciation development until 1920. And, in 1934 Simon Whitney's Trade Associations and Industrial Control looked closely at the performance of these associations with respect to the NIRA. DUring this same period the government was particularly concerned with open price trade associations and issued some publications concerning their activities. The United States Chamber of Commerce has sponsored some studies of trade associations in recent years, but the emphasis has been largely on surveys of current association structures and activities with little emphasis on broader societal relationships. Probably the most comprehensive study with respect to overall influence was undertaken by the Political and Economic Planning Commit- tee of Great Britain concerning industrial trade associations in that country until 1950. This study focussed on broader societal influences on trade association growth, activities, and functions such as in— creasing industrialization and economic crisis. In summary, while available publications are useful in explaining the history and activities of trade and business associations they do 26 not provide very deep insight regarding the relationship of these associations to their immediate environment, the business world, and the total society. There is still a dirth of studies on this latter point. The present investigation hopes to fill in some of the apparent gaps in knowledge about trade and business associations. It is proposed to study trade and business associations in relation to the major environments with which they interact. In testing the hypotheses I and II, it will be necessary to place underlying func- tions, structures, activities, and growth patterns in historical perspective (Chapter III). Also, these organizations must be ana- lyzed on the basis of a rational classification system. The specific criteria for distinguishing among types is integrated with discussion of the research design (Chapter II). CHAPTER II RESEARCH DESIGN AND METHOEDLOGY Introduction The research design adopted provides for testing the hypotheses both in light of historical evolution of trade and business associations as well as in terms of data collected in the larger study (see Preface). The historical method is used throughout Chapter III to test these basic hypotheses. With respect to hypothesis 1, an' historical perspective of trade and business associations provides insight into their growth and prosperity in our emergent society. Through the use of research data obtained from questionnaires, pub- lished histories, and supplementary association pamphlets, a detailed historical typology of trade and business association growth by functional type is constructed. Fundamental conclusions are next drawn about need fulfillment and how membership perception of need fulfillment affects association growth and prosperity. This process particularly involves protection and promotion of mutual interest. The historical perspective is also useful in testing hypothesis II. Any meaningful examination of the psychological, sociological, and economic forces set forth in this hypothesis must be given historical depth. Chapter III provides this depth by emphasizing three basic 28 periods that have decidedly affected trade and business development as follows: 1) World War I and before 2) The great depression of the 1930's 3) World War II and after The rural influences that occurred before 1900 are also con- sidered. This study will show that these periods produced changes in trade and business associations, and that these changes result from trade and business association interaction with an emergent American society. The corrollary to hypothesis II is also sharpened by an exami- nation of the historical evolution of such associations. Particularly, in showing which ones have survived and flourished. Empirical data set forth in Chapters IV and V test the basic hypotheses of Chapter I. These two subsequent chapters deal indi- vidually with the other three major environments set forth in Chap- ter I. Their purpose is to examine each environment in the context of the fundamental hypotheses of this study; the end result supports the tenability of these hypotheses, and answers basic questions about the relationship of trade and business associations to American life. Most of the data used in these two chapters were obtained from the responses to the questionnaire previously mentioned in the preface. These responses are cross-tabulated by functional type of association to determine patterns of growth, activity, function, and structure in American trade and business associations. 1 E ' —‘—__fi‘_ 29 Finally, Chapter VI utilizes the case study method to support the findings of the previous chapters. The data used in this chapter are provided by supplementary materials made available by the particular associations studied, published historical facts about these associations, and pertinent questionnaire responses. This chapter clarifies the role of emergent forces in effecting membership need fulfillment and subsequent growth patterns of selected associations. Thus, this latter chapter contains an intensive analysis of specific cases in the association population. Definition of Trade and Business Associations For purposes of analysis a trade or business association is defined as a voluntary cooperative organization of business competitors designed to assist its members and its industry in dealing with mutual business problems. Operationally, both organizations and individuals are viewed as constituting business competitors. Thus, a trade or business association can be composed of individuals as well as organi- zations (businesses). The term competitor can include intra-as well as inter-industry competition among individuals, corporations, and other cohesive enterprises. Within this context, a trade or business association may be composed of professional service people, e.g., accountants, office managers, purchasing agents, et al., who are not necessarily in competition with each other. These associations are formed to establish standards, to formulate codes of ethics, or to systematize knowledge that will further their respective industries, 30 the larger business world, or the greater society. Therefore, this broader definition of trade and business associations will not limit this study to associations composed of business firms dealing with mutual business problems. The expanded concept of trade and business associations can also include service groups and other individuals directly concerned with some aspect of the commercial world. In this all inclusive senSe, trade and business associations are those asso- ciations that help to arrange, order, or support production, owner- ship, management, and exchange in the American society. This defi- nition includes the broadest aspects discussed above, such as indi- vidual services and trade practices as well as the more traditional competitive business environment. In addition to the narrower term "trade," the definition requires that the broader term "business" be applied to the sample of associations. This accounts for certain associations in the sample that satisfy the formal definitional requirements set forth above, but that are not trade associations by the strictest definition. Both trade and business associations are the concern of this study. Trade and Business Associations: A Population and a Sample What constitutes the population for the purpose of this study? Ideally, this population consists of all trade and business associations that conform to the above definition. However, since there is no single all-inclusive list of trade and business associations, there is no positive way of determining the exact number of these associations 31 in American life. United States Department of Commerce figures indicate that there are about 2,000 national trade associatiOns currently in l Of course, there are many more state existence in the United States. and local associations that are not national in scope. This figure provided a general guideline to the population of trade and business associations from which a sample could be drawn. The primary source used in compiling this pOpulation was Volume I of a series entitled National Organizations of the United States, published in 1961 by the Gale Research Company. Volume I is an Encyclopedia of American Associations, and is a comprehensive listing of all types of national associations in the American society. The Gale Research Company has been compiling this directory for several years and their efforts have resulted in the most comprehensive listing of associations in total number and variety recorded in one volume. Another valuable source referred to is the Directory of National Associations of Busi- nessmen published by the U. S. Department of Cbmmerce, Washington, D. C. The listings in these two publications provide the population from which the sample was selected. Out of this population a sample of specific associations was drawn to correspond to basic criteria that had been established. Two basic criteria served as fundamental guides throughout the selection 1Jay Judkins, Directory of National Associations of Businessmen, U. S. Department of Commerce (Washington, D.(3.:IJ.S. Government Printing Office, 1961), p. 2. 32 process: the first was a sample of trade and business associations that were large-scale organizations, and the second was to select associations that were national in character. In distinguishing those characteristics required under these two criteria six sub—criteria were used: 1) Large-scale in number of members. 2) Large by coordinating or federating other structures of large scale. 3) Large within the trade association universe. 4) Size of staff in both absolute number and type. 5) Geographical representation in terms of regions and states. 6) Sc0pe of activity in terms of spatial reach. It can be noted from the above that the first four sub-criteria serve as an index to the extent of large—scaleness among trade asso— ciations, and the last two determine whether or not the particular association is of national character. In order to indicate more about the nature of large-scaleness as viewed through the selection process, each of the six sub-criteria will be developed further. The four sub—criteria used to determine large-scaleness were not viewed individually but as a totality in relation to each association. An organization with a relatively small membership might still have been chosen if it was particularly significant in coordinating other structures of large scale, or had a large staff. The essential characteristics looked for under the six sub— criteria were as follows: 33 l) Large-scale in number of members. This determination in- volved a comparison of membership sizes among all trade associations. From this comparison both large and small membership sizes were dis- tinguished, thereby making it possible to isolate those trade asso- ciations with both large individual and organizational memberships. In making the final selection full recognition was given to the idea that organizational memberships should be given different weights than individual memberships. In order to account for this difference, a second selection factor was introduced into the analysis. 2) Large by coordinating or federating other structures of large scale. These other structures might be other associations or business firms. For example, an association with five organization members could be of particular significance in terms of large—scale- ness if these organizations were business corporations such as Ford, General Motors, Shell, or even lesser corporations in terms of eco- nomic power. Since many trade and business associations are composed of other organizations, particular emphasis was placed on type of organization and role of the association in the coordinating process in determining large scale. 3) Large within the trade and business association population. This determination was essentially a comparison of all the criteria with respect to trade and business associations. Those that appeared to be larger than average with respect to all trade associations were given special consideration. 4) Size of staff in both absolute number and type. If a trade 34 or business association possesses a relatively larger staff in com- parison with other associations it was given special consideration. Staff size is an indication of an amount of effort exerted to perform some task or to do something that supposedly falls in line with the purposes and objectives of the association. In fact, the effort exerted by an association as a result of a large staff operation tends to be distributed broadly with the impact being felt throughout the society. Type of staff is also important. If a particular association has a small number of organization members, but a relatively large staff it may well be of larger scale than a similar organization with numerous individual members but a small staff. Thus, staff size is a key variable used to determine large-scaleness. 5) Geographical representation in terms of regions or states was an important criterion used in determining whether or not an association was national in scope. An association was considered to be national in scope if it fits the following general description: Its membership consists of individuals who are widely distributed geographi- cally or its membership consists of other organizations whose combined and individual memberships are widely distributed geographically. An association with few individual members or few organization members widely dispersed geographically was believed to be as important nationally as one with great numbers. If the few members represent important firms, social classes, or occupational groups spread geographically, it was thought their influence could be integrated On a national basis. 35 6) Scope of activity in terms of spatial reach was a final consideration used to determine national sc0pe. It was felt that an association could be composed of memberships that were primarily localized geographically if the sCOpe of its activity was widely dispersed geographically. For example, this criterion would apply to regional lumber or livestock associations whose activities were felt throughout the entire national economy. Since the Encyclopedia of American Associations gives mem- bership characteristics, staff size, headquarters location, and a brief comment about the association's activities, it was possible to apply the above criteria to the Gale listing of trade and busi- ness associations. Where supplementary sources were used, an attempt was made to obtain comparable information about the particular asso- ciation. The criteria then were applied to each association on the basis of this fundamental information which included membership characteristics, size, staff size, and scope of activity. Essentially, the sample as drawn was an attempt to bring together the group of trade and business associations from the popu- lation of all these associations that are of the largest scale and are national in sc0pe. The sample used in this analysis can be re- garded as a selective sample of large-scale national trade and busi- ness associations. Once these criteria were carefully applied, a total of 442 associations emerge that are representative of the truly large-scale trade and business associations in America. 36 Since this study uses the trade association concept in the broadest sense, it was necessary to stratify the sample of trade and business associations in some meaningful way to make a useful analysis of the total research effort. The categories of trade and business associations selected conform to the Standard Industrial Classification under the sponsorship and supervision of the Office of Statistical Standards of the Bureau of the Budget. The classifications use the revised SIC codes contained in the 1957 Standard Industrial Classi- fication manuals. The categories are as follows: agriCulture; manufacturing; transportation, communications, and utilities; whole- sale and retail trade; finance, insurance, and real eState; and services. For purposes of analysis the contract construction and mining categories listed separately in the SIC are combined with the manufacturing category. This combination is necessary because of the limited number of associations the sample included in the mining and contract construction fields. A final non-SIC category (national business associations) is added to account for special types of busi- ness associations. The analysis is based on seven categories of trade associations, six of which are as set forth in the SIG. The next step was to classify each association drawn in accor- dance with the seven-fold plan. The key criterion used in this classification was the primary activity of the particular association as set forth in the directory. This use of primary activity was neces- sary because any one association might carry on a variety of activities. In making the selections the definition of activity used in W. Lloyd Warner's The Living and the Dead was followed closely. In reference 37 to associations, Warner defines activity as "a recognized, open and explicit level of social behavior occurring in a situation which involves the relations of members alone or the members of the associa- tion in relation to the rest of the community."2 Accepting this definition, situations are emphasized that involve the relations of the members of the association with the rest of the community, i. e., the total society. This classification then is based upon those activities that serve to relate associations to their external social environment. In this sense, the activity serves as a point of articu- lation between an association as a system and those systems external to it. Returning to the broad definition of trade and business associations as helping to arrange, order, and support production, ownership, management, and exchange; this concept or process of pro- duction, ownership, management, and exchange constitutes an external system and the seven sub—categories as parts of this system. Then, by using the concept of activity as the point of articulation, each trade and business association is placed in its prOper relationship to the broader system. To give a clearer picture of how this placement of specific associations operates, Association A serves as an excellent example. This association cites its primary activity in terms of a primary aim or objective, namely, "to improve the standards of design, production, 2W. L. Warner, The Living and the Dead (New Haven: Yale University Press, 1959), p. 35. 38 and quality of gray iron castings." From the above description, we would conclude that this association helps to order and support those who are professionally involved in the production of gray iron castings. Its primary activity would suggest it helps to arrange, order, and support production so it naturally fits our broader definition and the resulting general category of trade and business associations. Moreover, since its primary activity centers in production as opposed to ownership, exchange, agriculture, etc., it is placed in the manu- facturing category. Although numerous other examples could be given, this one illUStrates the process used in classifying each association. Since it is now clear that activity was the main criterion for asso- ciation classification in the seven sub-categories, these seven categories will be continually referred to as "activity types" in the ensuing discussion and analysis. National business associations meet on a localized basis, but are concerned with business problems that are national in scope. Pri- mary examples are such service clubs as Kiwanis and Lions. Although national and state chambers of commerce are often concentrated in regional localities, these organizations are included in this cate- gory because their functional business activity is national in scope. Since many trade and business associations are service organi- zations in the broadest sense, problems arise in distinguishing what should be included in the services activity type. In order to deal with this problem, the criterion of the primary activity itself is augmented with a consideration of the end result of this activity. 39 If the service aspect appears to be the goal or end result of the pri- mary activity of a particular association, it was classified in the services activity type. On the other hand, if the end result of the service is to promote some type of manufacturing process or some aspect of retail trade, it was placed in the corresponding activity type which it serves. For example, an association of accountants or personnel managers whose primary activity centers in the advancement of their respective profession would be placed in the services activity type; but an association of marketing executives whose primary activity served the distribution process of a particular product would be placed in the wholesale retail trade activity type. When heavy re- liance was given to the concept of primary activity, few other difficulties were experienced in this general problem area. The sample of 442 large-scale national trade and business associations classified by activity type is shown in Table l. \ TABLE 1. Number of Trade and Business Associations in Sample by Activity Type Agriculture 45 Manufacturing 124 Transportation, Communications, and Utilities 37 Wholesale and Retail Trade 66 Finance Insurance and Real Estate 35 Services 86 National business associations 49 Total 442 40 It can easily be seen from Table 1 that no attempt is made to keep an equal distribution of trade and business associations among the seven activity types. In fact, there is a wide variation in the number of associations included in each of the seven categories from a maximum number of 124 in the manufacturing activity type to a mini- mum number of 35 in the finance, insurance, and real estate activity type. Since this sample of large-scale national associations was drawn from the total trade and business association population, the disparity of representation among the seven activity types is an index of the extent of large-scaleness found in each activity type in the total population of such associations. As can be seen from Table 1, manufacturing ranks highest among all activity types in large scale representation with 124 associations in the sample. If the 442 asSociations were evenly distributed among the seven activity types, approximately sixty-three would fall in each category. Thus, in addition to manufacturing, the services and wholesale retail trade activity types rank above average with eighty- six and sixty-six associations, respectively. Conversely, the finance, insurance, and real estate; transportation, communications, and utilities; and agricultural activity types rank considerably below average with thirty-five, thirty-seven, and forty—five associa- tions, respectively. The remaining activity type, national business associations, is also below average with forty-nine associations represented. The nature of the manufacturing process, for example, division 41 of labor, technological progress, and specialization of productive effort, may account for its greater representation of large-scale national associations. The same trends in the economic segment of our society precipitate the need for services which help to explain the second place ranking of the services activity type. The narrower interests of the finance, insurance, and real estate and trans- portation, communications, and utilities activity types subject them to these same influences on a more limited basis. In summary, this sample is one of large-scale national trade and business associations designed to be representative of the total population of trade and business associations. Major Research Tools The basic tool used in this study was a questionnaire mailed to the sample of 442 associations. This same questionnaire was mailed to all large-scale national associations in the bigger association research and the generally useful nature of the questions asked placed few restraints on this specific study. Initially, in preparing a valid questionnaire, hypotheses were crystalized about large-scale national associations and these were formulated into questions designed to discover important information about these associations. Such things as income, membership size and growth, organization structure, occupational groups represented in the membership, number of paid staff, and purposes of the association were regarded to be of primary importance to a successful study. The second step was to conduct a series of interviews with executive 42 secretaries of large-scale national associations directed at determining what types of information could be obtained, particularly how many of the essential basic questions could be answered. Responses to these interviews suggested that large national associations rarely keep de- tailed records of historical facts. Also, due to a variety of both membership classes and terms assigned to particular aspects of the associationS' activities and structure, the necessity of clarity and preciseness in the questionnaire was recognized. The third step in- volved correlating the facts obtained from the interviews with infor- mation actually desired. This correlation produced a questionnaire suitable for mailing to large-scale national associations. This questionnaire was mailed to 157 associations in a pretest sample; approximately fifteen of these associations were trade and business associations. Since 82 (over 50 per cent) of these question- naires were completed and returned, the pre-test was highly successful. This pre—test sample was composed of national associations that did not fully meet the criteria of large-scaleness as outlined earlier in this chapter. The coding and analysis of the pre-test questionnaire led to some minor changes in the final draft of the questionnaire, particularly the classification of questions on membership. The pre— test questionnaire requested the association to identify the number, types, and classes of membership. Since responses to this question made coding difficult, it was modified to ask specifically for the number of full time and/or part time members. The question on member- ship growth was clarified for easier response, as the time span of 43 years dealing with membership sizes was revised. The number of members representative of each occupational group in a particular association's membership was also sought. The responses indicated that this type of information would not be provided so the revised version asked only for occupational groups represented. Since the pre-test questionnaire further substantiated the belief that it would be difficult to obtain historical materials in questionnaire form, it was decided to ask specifically for historical supplementary materials in the cover letter that accompanied the final draft of the questionnaire. This change was designed to provide a significant sampling of the historical aspect of the association movement in the United States. The pre-test ques- tionnaire is set forth as Appendix A. When this type of revision was completed, a final version of the questionnaire was prepared based on the results of the pre-test. A copy of this final questionnaire is included as Appendix B. The responses selected for tabular presentation are from those questions directly related to testing the major hypotheses of Chapter 1; these also provide a greater understanding of the four environments represented in the general approach to this study. Some of the specific questions that were used to accomplish the basic objectives of the study are discussed in the following paragraphs. Section A of the questionnaire investigates present and past locations of headquarters and date of founding. Responses to this questionwdetermine the locational patterns of trade and business associations with respect to their activities and functions in the 44 business world. Conclusions can be reached about particular patterns of location by activity type, and whether there is a functional ex- planation of headquarters locations of particular associations. The date an association was founded in a particular city was correlated with the original founding date, to determine any patterns of movement of headquarters. Age of association is asked in Part I, question 7, and a comparison of age among the activity types of associations helps to reveal the effect of industry age on association formation and resulting growth patterns by activity type. Section B of the questionnaire examines the governing body of the association. Question 8 is of particular importance as it asks if the responsibility of the association's principal voluntary or paid officers require them to be in regular contact with federal, state, or local government officials. This question is used to determine the relative amount and strength of contact among the activity types of these associations with federal, state, and local governments. These responses help to determine the relationship of large-scale national trade and business associations to the total society. Section C of the questionnaire explores employees rules, and organization structure. The present study is primarily concerned with Questions C1, C5, and C5a. Question C1 determines how many full time paid employees work at the association's headquarters. Responses to this question give an indication of the relative staff sizes of trade and business associations and lead to conclusions about the extent of administrative efforts on behalf of the activities that they represent. 45 In a relative sense, these comparisons reveal patterns of staff size among different industrial classifications. Question C5 and C5a determine the number of administrative departments in the association's structure. This question acts as a guideline to the extent of departmentalization among large-scale national associations, and can be correlated with many other variables to determine its functional significance in trade and business asso- ciation activity. Section F examines organizational finances and the questions on size and sources of income are used in both an absolute and rela- tive sense among the seven activity types. Correlations with other variables throughout the analysis result in the true relationship between financial structure and association activities, function, and position in American life. Section G contains questions involving external and internal communication and questions 2 and 2a in this section involve educa- tional programs directed at the internal membership of the association. Responses to these questions give a better understanding of the internal functions of these associations with respect to their individual mem- berships and their own immediate environment. Question 4 studies the external educational programs directed at the general public, and question 6 examines the position of the association in regard to public issues. Responses to these questions contribute to an under» standing of the position of trade and business associations in the total society environment. ReSponses to question 6a reveal the types 46 of issues that are of primary concern to large-scale national trade and business associations. Section H explores relationships with other associations and federal agencies. Question H asks if the association is affiliated with or a member of any other associations. These responses aid the understanding of the immediate environment of the association and whether or not its activities are widely dispersed among other associations or confined to its own respective memberships. Question H4 asks if the association has a formal written working agreement with any agencies of the federal government, and quaiion 4a asks if the association carries on any cooperative activities with federal agencies. These two questions are used to determine the relationship of trade associations to the federal government, particularly in terms of the strength of these relationships both by activity type and for the population as a whole. These responses further our knowledge of the trade and business association position relative to the total society, viz., the government representing the total society. Question H5 asks if the association has ever merged with, absorbed, or branched off from another association, and determines historical growth patterns, by activity type. Particularly, whether or not the merger and division process is vital to the growth and development of large—scale national trade and business associations. Section I relates to the membership of the association, and questions are asked about numbers of individuals and organizations that are members of the respective association. These responses are exten- sively used in the analysis to determine differences in membership size 47 and composition. Question 8 was added to reveal membership size and growth since the date of founding. This question is extensively used to determine the amount of growth of the respective activity types and among large-scale trade and business associations in American life. Section K queries the occupational composition of the association's membership, and this study concerns itself with Question Kl which asks for the occupational representation by business, government, farming, etc. These responses reveal characteristics of individuals by occu- pation found in both the American trade and business association popu- lation and in particular industrial types of associations. The basic questionnaire that included the above questions was mailed to the 442 large-scale national trade and business associations in the sample. ’Table 2 is a breakdown by activity type of those questionnaires sent and returned. This table shows that 334 or 75.6 percent of the 442 associations returned completed questionnaires. The agriculture and finance, insurance, and real estate activity types rank particularly high with over 88 percent of the associations in each of these two activity types returning completed questionnaires. The national business association activity type ranked lowest with 69.4 percent returning usable, completed questionnaires. Although no attempt was made to match the distribution of large-scale national trade asso— ciations against the seven activity types, Table 2 indicates a suffi» cient number of questionnaires was returned in each category to provide meaningful analysis and comparisons. The number of questionnaires varied from a minimum of thirty-one in finance, insurance, and real estate to a maximum of eight—four in the manufacturing activity type. 48 The relative variation in questionnaire number among the seven acti- vity types reflects the true representation of large-scale national associations in each activity type. This study is purposely de— signed to be representative of large-scale national trade and business associations but there is still a significant number of associations falling within each activity type to make valid com- parisons to prove the tenability of the hypotheses set forth in TABLE 2. Association Questionnaire Responses by Activity Type of Trade and Business Associations Sent Returned Percent Agriculture 45 40 88.9 Finance, Insurance and Real Estate 35 . 31 88.6 Transportation, Communications, and Utilities 37 28 75.7 Manufacturing 124 92 74.2 Services 86 62 72.1 Wholesale and Retail Trade 66 47 71.2 National Business Groups 49 34 69.4 Totals 442 334 75.6 this study, and to gain a greater understanding of the role of trade and business associations by examining individually the four major environments in which they interact. Chapter III that follows begins this analysis by providing an historical perspective of these associations. CHAPTER III THE HISDDRICAL EVOLUTION OF TRADE AND BUSINESS ASSOCIATIONS Introduction In the previous two chapters a foundation was laid for analyzing large-scale national American trade and business ass0w ciations, and this chapter is primarily concerned with testing the hypotheses set forth in Chapter I. Hypothesis I of Chapter I suggests that trade and business associations come into being, grow, and flourish to the extent that they meet certain needs of members such as promotion and protection of mutual interest. The ensuing analysis demonstrates that influential time periods, charac- terized by the development of special economic interests, provided great impetus to trade and business association formation and growth. Furthermore, hypothesis II of Chapter I suggests that these trade and business associations come into being, grow and flourish to the extent that their objectives are congruent with the dynamic forces of an emergent society. The historical perspective contained in this chapter does the following three things with respect to this latter hypothesis: First, it points out the nature and extent of these dynamic forces; secondly, it indicates the importance of the objectives of trade and business associations being congruent with these forces; and third, it supports the corollary to hypothesis II that the 49 on .. _ .- 50 survival of trade and business associations depends upon their ability to adjust to emergent forces in the surrounding society. Trade and Business Associations: An Historical Perspective This analysis begins by answering certain basic questions about the origin and development of trade and business associations. The first question asked is what are the primary factors that gave impetus to the formation of the early trade and business associations; and secondly, how did these same associations multiply into the complex system found today? Most of the evidence available in the literature indicates that craft guilds appeared as early as 1297 when they began to regu- 1 The early craft guilds in America late apprenticeships in Europe. appeared around the mid 17th century. These earliest guilds were voluntary associations formed for the mutual aid and protection of their members. Consequently, there was a distinct relationship be- tween the functions of these guilds and the functions of many of the modern associations. But, with the rise of industries many of the early guilds assumed the function of controlling specific trades within these industries. The regulation of the industry became the chief Objective of the craft guild, and in many instances it supervised the processes of manufacture in a particular branch of industry. Records show that there were attempts by guilds to control specific trades 1C. E. Bonnett, History of Employers Associations in the Uriited States, (New York: Vantage Press, 1956), p. 25. 51 within New York City as early as 1690, associations or guilds attemp- ting to fix wages of skilled workers were found as early as 1633 in Massachusetts, and in 1646 a company of shoemakers of Boston peti- tioned for and were granted a charter to form a guild.2 The American craft guild was an employers association from its origin, dominated by employers' interests, and primarily dealing with labor matters. Trade unions are not exact counterparts of employers' associations because the employer associations dealt with conflicts of interests not only among workers within the enterprise, but also interest con- flicts between different enterprises. Since the craft guild or em- ployers' association was the first indication that employers might organize to relieve certain conflicts of economic interest, these simple associations were characterized by the same elementary func- tions of modern trade associations. This simply organized guild of the 17th and 18th century was the product of the simple industrial society that existed during that period. The advent of the factory system threatened the exis— tence of the guild in its original form. The new economic forces generated by the introduction of new industries organized on a more modern basis caused companies to gradually lose control over the regulation of the industry. The early guilds were so concerned with monopolistic control of their respective trades that their purposes became incompatible with the new ideas of individual liberty and free comPetition that were generated by the greater separation of capital Ibid., p. 35. 52 and industry, and employers and workmen. The tendency of these early organizations to promote their own interests without regard to the welfare of the community was outdated, and changes became necessary if they were to survive. This historical fact lends specific support to the corollary to hypothesis II which states that "survival of a given association depends upon its ability to adjust to the emergent forces in the surrounding society." Guilds declined because their existing form was not suitable to deal with these emergent forces effectively. In their fight for survival the entire nature of these associations was changed. Their activities were expanded to provide the opportunity to pool the interests and knowledge of individuals or enterprises in order to assist each other in dealing with mutual business problems; problems such as relations with the industry's employees, competing enterprises, and the general public. The charter of the Master Plasterers Company of Philadelphia organized in 1804 indicates this pooling of interests and knowledge 3 among individuals and enterprises. The constitution of this early organization included among its purposes a section providing for improving the knowledge of those within the industry and assisting those in need. Their constitution particularly stressed the con- tinued advancement of the science of architecture, and helping the underpriviledged members of the organization. The promotion of the general welfare of the industry is a clearly defined purpose of this organization. A look ahead a few years to the 1860's indicates that 3J. G. Glover, W. B. Cornell, and J. T. Madden, The Develop- ment of American Industries, (New York: Prentice-Hall, Inc., 1932), p. 871. 53 these same characteristics were found in the first national trade associations. The oldest national trade associations in America were formed from 1861 to 1865, and were characterized by this same pooling of knowledge and promotion of the general welfare of their respective industries.4 Among the earliest trade associations that exemplify this fact were the Writing Paper Manufacturers Association organized in 1861, the United States Brewers Association organized in 1862, the American Iron and Steel Association and the National Association of Wool Manufacturers organized in 1864. While there were many local associations found in the late 18th and early 19th centuries, these four associations organized before 1865 are generally credited as being among the oldest trade associations on the American scene. In fact, the Writing Paper Manufacturers Association claims to have supporting evidence that it is the oldest national trade association in the United States. However, it must be emphasized that while these earliest national associations most closely followed the pat— tern of such organizations as the Master Plasterers, there was also a large group of employers' associations in the early 19th century that exhibited entirely different characteristics. These associations held as their primary objective the handling of those needs and interests of their employees that did not necessarily mesh with those of the enterprise as a whole. Such things as regulation of hours of work, wages for different types of skilled jobs, and length of employm ment were basic decisions that had to be made within the framework of 41bid., pp. 871. 872. 54 mutual consideration for both employee and employer. Thus, some of the organizations such as the Master Plasterers were operating under a similar framework of objectives as found in many of our trade and business associations today while many others were assuming the function of a company union. The nature of these latter organizations changed as the society developed from the early simple industrial state to one of an increasingly larger production and distribution complex, with the relatively limited number of mutual problems multiplied. As this organizational state of the American economy pro- gressed, there was also a multiplication of the number of methods that were employed to reduce conflicts arising between individuals, groups, and organizations. Although these methods developed rapidly, there was a paralleling develOpment of a wider range of conflicts resulting from demographic, economic, and social forces. In short, the emerging demographic, social, and economic changes of an emerging society affected the business environment by favoring or- ganizational development to deal with these new and challenging eco- nomic conditions. It is important both to trace the development of these forces and to identify the nature and extent of their existence. Initially, it was the latter part of the 19th century when big business began to flourish; mergers were numerous, and industrial capacity was greatly increased. Correspondingly, large markets and market centers arose to handle the greater amount of goods that tended to flow from the productive facilities of the growing industries“ In consequence, this growth of the smaller industries into a larger 55 industrial and distribution complex gave the greatest impetus to trade and business association formation. Adam Smith and other nineteenth century economists envisioned an economy in which a large number of firms would compete in each field. The presence of intense competition would guide the economy toward optimum efficiency in production and distribution. The control of their respective industries by individual firms would be negligible; and since the firms would be at the mercy of the market place, each firm would not need to concern itself with market share, public policy, or other external problems. Instead, these problems would be satisfactorily settled through the interplay of competitive forces. The most interesting fact facing the growing economy was that in actual practice the market did not follow competitive patterns in in— dustry growth. Competitive forces did not prevail to solve all indus- trial and market problems for both the interest of the respective industries and the welfare of society. In fact, the small firms of the seventeenth and early eighteenth century began to be replaced by larger firms dominating certain fields of production. A very large part of the steel, petroleum, aluminum, and automobile markets fell under the control of a few firms in each industry. The problems that faced industry and society extended into many areas as the public be— came concerned about preserving the merits of the competitive frame- work pointed out by.Smith and the classical economists. They made their feelings known not only in individual and group action but also through such governmental legislation as the Sherman Anti-Trust Act of 1890. Conversely, industries, and more particularly specific firms within these 56 industries, wanted to assure their own competitive niches in the. changing face of the industrial segment of the society. The smaller firms were in a fight for survival while the position of the larger firms was constantly being challenged in society by an enlightened public opinion as reflected in the passage of the Sherman Anti-Trust Act. As a result of these developments, the small employers' asso— ciation was no longer capable of dealing with the multiplicity of problems that arose. Many of the modern trade associations find their roots in attempts to deal with this new range of problems. Probably the most important single factor leading to association of firms and individuals concerned with trade was the changing competi- tive environment in the late 1800's and early 1900's. The existing economic power of large-scale enterprise of this period created threatening self—interests through enterprise attempts to gain greater shares of the market or greater control of the market place. Also as large corporate structures developed, goods tended to be distributed in wider geographical areas; and in contrast to the early smaller enterprises, these large-scale business organizations were dealing with mass markets about which relatively little was known.‘ Many of the early trade associations were designed to fill the resulting need of facilitating information about the channels of distribution and the nature of the market place in the expanding trade regions and this need involves the promotion and protection functions of hypothesis I of this study. Early trade and business associations were formed where people 57 recognized a like, complementary, or common interest sufficiently en- during and distinct to be capable of more effective promotion through collective action. The initial forces that generated these interests were centered in the competitive aspects as discussed above. Im— provements in transportation were also widening markets, extending areas of competition, and making large-scale production worthwhile. Large-scale production was made possible by advances in metallurgy and engineering, and the necessary concentrations of capital that were readily affected through joint stock organization, limited liability, the growth of a capital market, and an efficient banking system. While in the beginning these interests were primarily local and confined to small geographical areas and the relative number of associations formed was quite small, the expansion of the economic aspect of the society offered greater opportunity for the creation of organized groups than did the previous simple industrial society. As the scale of enterprise grew, production tended to become not only more specialized -— a fact which encourages association between firms using the same machinery and processes -- but also concentrated in relatively large firms. Firms whose high fixed costs made them susceptible to trade depression and between whom competition was becoming a cost struggle among equals rather than a simple elimi- nation of the inefficient, clearly saw the necessity for such agree- ments as could be provided through formal association. Many writers have referred to the period 1890 to 1911 as the formative stage of trade associations, and the factors summarized above 58 suggest that this conclusion is quite accurate.5 This analysis has suggested that it was the attendant problems of the emerging economy that produced this formative stage. The big industries and widening markets that have been mentioned presented new and challenging prob- lems to American business. Businessmen were desirous of adjusting their activities more intelligently and accurately on the basis of the best technical practice and actual market conditions. Under these circumstances the so-called "open price" trade associations were in- augurated. These associations distributed and exchanged price infor- mation among their competitors. There was also a large group of closely related trade associations that distributed a wide range of trade statistics but excluded prices. Modern trade associations are an outgrowth of attempts to satisfy the crucial need for knowledge about competitors and the market place that was apparent at the turn of the twentieth century. The tendency toward bigness was a key factor in trade and business association formation. Essentially, it was the attendant complexities of bigness that generated a common interest that was sufficiently enduring to sustain collective action. Particularly, this common interest arose from the prevailing compe— titive situation, and competitive influences really shaped the trade and business association function. Protection and promotion of mutual interest referred to in hypothesis 1 centers in improvement and pro- tection of competitive position. Since the competitive situation was influenced by the 5Ibid., p. 872. 59 governmental environment, and conversely, the attendant problems created by firms attempting to gain greater market control affected the government environment; many of the earliest trade and business associations were immediately concerned with legislation affecting their respective industries. While the Sherman Act of 1890 and the Clayton Act of 1914 were major control devices, numerous acts affecting specific industries were either proposed or passed in this early period. In line with hypothesis 1, this legislative situation stimulated association among firms in a given industry in order to protect their interests with government. Therefore, much of the groundwork that provided incentive for association within industry had been laid in this early period. The economic base of the American economy was expanding and the basic problems were present that could best be handled through collective industry action. The war years introduced new and greater challenges to American industry, and provided one of the most fertile periods for trade and business association formation. According to the U. S. Department of Commerce, the number of trade associations increased rapidly between 1914 and 1919 from about 800 to 2,000 associations.6 This increase can partially be accounted for by wartime production problems and the establishment of the War Industries Board, which desired to deal with industries in organized groups. Mobilization of production toward the war effort, including unification of industry production and more 61bid., p. 872. 60 efficient distribution, was a basic factor that stimulated both trade association growth and formation. World War I influences tended to temporarily shift association emphasis away from competitive problems within the industry to the production problems created by the pressing dogma of the worldwide struggle. Many new techniques for coping with previous problems emerged during this period. There was a rise in the use and practical appli— cation of statistical information. The need to coordinate production quotas coupled with the urgent need to allocate resources in the most efficient way from a defense point of view opened the door to the essential role of statistics. It will be shown later that much of the modern widespread use of statistical information among trade associa- tions grew out of the needs of the war years. Wartime shortages and production problems and controls brought many associations into close contact with government officials for the first time. This contact was encouraged by such formal agencies as the War Industries Board, and was a natural result of closer con- tact between government and business that was a necessary by-product of producing goods for purposes of national defense. In fact, many of the existing associations today found their basic impetus for or- ganization in the challenge to their industry that World War I pro- vided. Needless to say, from that time on, government's role has become increasingly important both in its interest in trade and busi— ness associations and in these associations interest in government. It is true that these associations had an earlier interest in govern- ment as exemplified in early trade legislation, but the closer contact 61 with government due to the war effort strengthened the bonds and ties of this relationship.‘ One can say that at the close of World War I trade and busi- ness associations had assumed many of the characteristics that, as will be shown later, are found to be typical of them today. The competitive aspects began to blossom from the late 1800's on, the statistical aspect became prominent during the war years, and governmental relationships were strengthened during wartime condi- tions. While many of the large-scale national trade associations were formed after 1920, the basic stimulus to their formation had emerged in the society by 1920. The foundation had certainly been laid in the society for continued growth of a trade and business association segment. During the 1920's with both their formative stage and the wartime problems a thing of the past, trade associations extended a program of widespread cooperative advertising for promotional pur- poses. Mass communication was emerging as a definite asset that could be used by these associations to promote their respective causes. glover reports that a survey of thirty-seven national pub~ lications revealed that the amount spent on advertising by these associations increased from less than $400,000 in 1919 to over $6,000,000 in 1929.7 In addition, several times this amount ($6,000,000) was expended by trade and business associations in trade promotional work other than cooperative advertising in these 71bid., p. 873. 62 same publications. The prosperous years of the twenties provided the economic environment that stimulated large—scale promotional activities. It was during this period that trade associations took on the true national character that is found in the large-scale national associations represented in the sample. The depression years of the early thirties and the corres- ponding problems that faced American industry provided another de- cisive influence on the character of American trade and business associations. Although these associations had experienced a forma- tive stage and continued their development through the problems of a world war, they had not yet experienced a basic threat to our eco- nomic system until this great depression. Industry saw the need to restrict competition and to erect safeguards against price cutting. Moreover, there was a universal concern among businessmen about general‘ market conditions that overshadowed prior emphasis on intra-industry competition. There was an urgent need to learn more about the market place, in order to deve10p ways to increase sales and survive. Trade associations were faced with a distinct challenge if they were to really serve their respective industries.“ The mass promotional campaigns of the twenties were re—examined with a new emphasis on market research. A preliminary report made by the trade association department of the U. 8. Chamber of Commerce indicated that over 200 trade associations stepped up cooperative advertising in the 1930's at a cost of several million dollars, and that 143 associations adopted specific programs of market research.8 Trade and business 8Ibid., p. 879. 63 associations had been forced to realize the urgent need to gain a greater understanding of all of the factors entering into the market environment. The severity of the depression dealt a serious blow to the effectiveness of many of these associations. In fact, while their stepped up programs of market research were to become a permanent characteristic of these associations, the immediate effectiveness of these programs was slight. The short-lived National Industrial Re- covery Act of 1933 was a primary influence that galvanized renewed life into the trade and business association function. The American trade association occupied a key position under this act because it thrust many of them into a position of central authority for their industries. The act provided for these associations to draw up a code of fair competition for their respective industries, and then to take an active part in developing and enforcing it in practice. The N. I. R. A. therefore established the trade association as an instrument of industrial control, and although its effectiveness in this area can be questioned, the act certainly helped to secure an established position for trade associations in the modern industrial setting. There was an apparent trend toward closer internal regula- tion in industry, and trade associations continued an active role in this area throughout the 1930's. While their effectiveness during the depression has been seriously challenged, the N. I. R. A. restrengthened their position and possibly avoided a substantial decline in their growth. The outbreak of World War II interrupted the move toward 64 closer internal regulation of industry, but greatly stimulated asso— ciation activities by bringing them once again into close and con- tinuous touch with government. They participated, with varying degrees of responsibility, in the allocation of materials to manu— facturers and played a critical role in providing statistical infor- mation about their industries for national defense purposes. The statistical aspect of association activity increased to an even larger extent during World War 11. As mentioned previously, the exchange of statistical information among association members and government grew out of problems created by the first world war, but the second world war expanded this role. Trade and business associations also played an increasingly important role in facili- tating relationships between government and industry for purposes of national defense. Partially as a result of these wartime in- fluences, these associations emerged from the second world war as a vibrant and influential force in our economy. The current state of the trade and business association seg- ment will be dealt with in more detail in subsequent chapters; how- ever, some of the basic trends of the post World War II years will be summarized briefly here. Since these associations occupied an enhanced position following World War II, many of them experienced their greatest gains in membership growth during this period. There was a continuation of the information function facilitated by the statistical activities of the war. The tremendous strides in mass production and automation stimulated through wartime production car- ried over into peacetime industry following the war. The increases in productivity put the informational function 65 in a permanent status position among large-scale national trade and business associations. The governmental relationship particularly involving potential legislation that would affect specific industries was given renewed emphasis. Many trade and business associations increased their lobbying activities and there was a tendency to maintain legal counsel or offices in Washington, D. C. The c00pera- tive promotional activities characteristic of the twenties were given renewed status and many associations originated advertising and promotional departments. Concurrently, market research was used as a tool by trade and business associations to determine the extent and effectiveness of their promotional appeal. These associations were undergoing a period of reappraisal and expansion. The foregoing activities were extensions and re- finements of similar activities that had proved useful prior to the interruption caused by World War II. The emerging complexity of the economy called for this continued expansion and refinement. A new major influence occurred following the war that added an additional function to trade and business association activity. The emergence of large-scale production and attendant service industries directed attention to the need for establishing and maintaining good public relations. In response to this need, many of these large-scale asso- ciations established public relations departments. These departments were, for the most part, designed to stimulate national opinion in behalf of the major activities that were represented. During the course of assOciational development the growth of 66 particular industries has paralleled the growth of the trade seg- ment by activity type. The following tables derived from data received from questionnaires answer many of the questions about the formation and development of large-scale national trade and business associations in American life. The trends in development emphasized throughout this chapter receive additional support from the ahalysis of questionnaire responses. Table 3 indicates the trends in activity types by age of association in the sample. Of particular note is the predominance of the formation of manufacturing associations in the early years. While 53.4 percent of all the manufacturing industries trade asso— ciations in the sample were formed prior to 1920, only 3.3 percent were formed after 1950. This fact suggests that the majority of large-soale national manufacturing trade associations existing today find their roots in industries that were established before 1920. In fact, while only 3.3 percent of these associations were formed after 1950, 86.7 percent were formed before 1941. Although few of the total sample of associations were formed after 1950, manufac— turing still ranks next to the bottom in "start-ups." Table 3 also reveals that the larger percentage of the associations in the sample were formed before 1920 with associations in the transportation, communication, and utilities fields being the only exceptions. Secondly, 77 percent of this latter group was founded between l92l and 1950. This fact can be accounted for by the historical develop- ment of these industries, because the modern developments in transW portation, communications, and utilities did not originate until after 1920. 67 Another interesting indication from the table is the fact that more agriculture associations were founded after 1950 than were any of the other activity types. One might infer that the recent trends in overproduction and specialization in agriculture is a major cause for this trend. The basic needs of protection of com- petitive position and promotion of industry welfare are being con- tinually brought to the foreground in the agricultural setting. But further analysis of the agriculture activity type yields significant information about its relative importance in early years. In spite of the fact that more new agricultural associations have been formed since 1951, Table 3 also shows that this same activity type leads all others in the formation of national associations during the period of 1900 and earlier. When an examination is made of the individual agricultural associations founded prior to 1900, an interesting pat~ tefln prevails. The greater percentage of the large-scale national agricultural associations formed in this period were associations dealing with particular kinds of livestock. For example, associations concerned with hereford, jersey, angus, shorthorn, holstein, and shropshire cattle were all organized before 1900. In addition, a national cattleman's association dealing with the many aspects of livestock production was founded in 1898. The other agriculture associations formed before 1900 were concerned with the older fiber producers such as wool and cotton, and with the lumber industry. The National Wool Growers Association, founded in 1865, is one of the oldest in the sample. The emergent process is particularly apparent in this activity type because the early cattle and crop associations 68 OOH NNm m.m NH O.OH Om N.Om mm O.NN Om O.OH Om aHaeoN OOH Nm Hsv N.O N HOV N.HN N Amv O.mN N AHV m.Nm NH ”NV H.a m naaHaaHeo.m< mwofimfim Hmcofiwz OOH NO Amv O.H m ”NV s.NN NH NOV N.sN mH HOV N.Hm HN HOV N.N O meaaesem OOH ON HNV N.N N AHV O.Om O HHV N.Os NH ANO N.m H Hmv m.HH m aaHeHHHaO aw NEOHPNOHHBE .éoo €033909m¢¢§ OOH Om HOV m.m m HOV 0.0H N Amv .Hm Om ANV N.Om mm Asv N.OH mH Naaaseaacaaam OOH as HNV m.N H HOV m.ON m AHV m.aN OH AHV N.NN NH HOV m.ON a eases HHneam s aHaaaHoaz OOH Om AHV N.O N ANV m.m H ANV 0.0: NH Amv m.ON N HNV N.ON O museum Hsem aw momdede «occmfium OOH OH 3 m.OH 4 5 3H N E N.HN N GO 8.3 s E 38 sH .8382? m * .OeO u * .OeO a x .OeO N t .aaO m m .saO N t .02 .03 JR .03 Jim hmHprm 8». tn. 0. Hesse aeeaHaHmOH omaHaHsaH osmHaHNaH ONOHaHOaH a OONH e N uHeHe H i.‘ 8338...... .Ho owe. .3 08? 3333 .m mama 69 of this late 1800 period were generally concerned with particular breeds of cattle or specific kinds of crops, but those associations in agriculture formed after 1950 are more generally organizations bringing the different kinds of cattle and cr0p producers together in single organizations. Examples of this finding are the National Swine Growers Council founded in 1954 and the National Wheat Growers Association founded in 1950. The finance, insurance, and real estate, and wholesale retail trade activity types also rank above average in the formation of new associations during the 1900 and earlier period with over one-fourth of the former and one-fifth of the latter activity type being formed during this period. One can certainly include the monetary and credit problems of the 1880's and the resulting mone- tary and banking reforms of this period as factors affecting fi- nancial interests and generating collective patterns among particular segments of the financial world. The growth of corporate entities and limited liabilities no doubt influenced the insurance field in terms of protecting personal and pr0perty interests. These latter develOpments gave rise to more widely dispersed market centers which probably encouraged the expansion of wholesale retail trade associations. National business associations; finance, insurance, and real estate; and transportation, communications and utilities have re— mained fairly static at between six and eight percent since 1951, while wholesale and retail trade was the least active in terms of trade association formation during this period. Service organizations 70 were surprisingly dominant in formation during the 1941-50 period. The wealth of statistical problems during World War II and the reconversion problems following the war certainly were a predisposing influence on establishment of the service activity type. The most important single contribution yielded by this table is the fact that approximately 45 percent of all large-scale national trade and business associations in the sample were formed prior to 1921, and that there has been a steady decline during the three periods that followed to a small 5.3 percent after 1951. Two pri— mary conclusions can be drawn from this finding. First, a great percentage of the large-scale national associations found today are not young relative to the sample as a whole. This fact partially results from two forces of probably equal strength. One force suggests the hypothesis that large-scale national trade and busi- ness associations take a number of years to grow, because many of the big ones are older; and the other suggests that a large propor— tion of the modern industries represented by these associations emerged from smaller industries founded prior to 1921. Further evi» dence for this conclusion is found in the fact that few new large« scale national trade and business associations have developed since 1951. Second, and probably more important, the hypothesis is sug- gested that the basic needs of industries are met early in their development because the large-scale associations emerge with the early growth of the industry. This conclusion is clearly indicated in manufacturing; finance, insurance, and real estate; wholesale retail trade; transportation, communications, and utilities; and services. 71 Added recognition must be given to the 1921-40 period as being signi- ficant in transportation, communications, and utilities industries as'- well as those in finance, insurance, and real estate. Also, as men- tioned previously, the trends in services resulting from the influences of the World War 11 years and the reconversion period of the late 1940's had a pronounced effect on service associations. New needs were created between 1921 and 1945 in each of these industries, and as suggested in hypothesis 1, the satisfaction of these needs can be considered basic to the growth of the respective associations. Agri- cultural associations experienced early growth then declined during the 1921 to 1950 period but resurged again after 1951. Recent changes resulting from research and mechanization in agriculture help to ex- plain this trend. The pattern of deve10pment set forth earlier in this chapter is confirmed by the findings of this table. These data clearly support the fact that the basic motives for trade and business associations formation were prevalent in the economy by 1920. More~ over, the additional conclusion that the growth of younger industries and the deve10pment of statistical and service functions of trade associations had pronounced effects on trade and business association development after 1920 is also supported. While a large percentage of trade and business associations were formed prior to 1921, average membership size for those associaw tions reporting was quite small in these earlier years. As can be seen from Table 4, the average membership per association in the trade segment was only 1,642 individual members for the twelve asso— ciations reporting in 1910. This figure increased steadily to 21,079 72 NNO.H4 OOO.HNm.H HOH mmm.Nm OOm.msm.H Nm NNO.HN OOO.HOO Om aHaeoa fiNV OmN.H OOm.NH OH ANV OOH.N OON.: N ANV OmN.H OOa.m N .eHOHHHeO am .8500 N . mafia Amv OON.OH oom.NON mN Amy mNm.N OON.OO NH HOV OOO.N OOO.OH a .eOHeaem HOV OmN.a OOO.NN NH HOV NNN.O oom.Ns a Hmv mmO.N OON.HN O NaHesOeaNsamz HOV OON.ON OOH.HHH NH HOV OOH.OH OOH.ONH N HOV NON.H OOH.HH H .OeN HHee tom aw mam. mmaorus HMO NHO.ss OOs.mmm NH HOV NNO.ON OOH.OaH N HHV OON.mN OON.OHH m seesaw Haem aw . de «02:...ch ANV OOH.ON OOO.OOO 4H ANV mmm.am OON.ONO O HNV ONN.OH OON.HNN N .OOnaH ameaHaam .Haaz HHV oms.sOH OOH.NOm.N 4H AHV NNH.OmH OOO.mmO.H N AHV ONO.NO OOH.Omm O easeHeOHema .OeO .OaO . .OeO Jam .0934. JE .0634 .xm .834 989802 unease...“ Mo 3085: 508:0: mo 98852 306.802 mo 093. mpfifipod 093.93. H309 . oz mmwhmué H.308 .oz mmwngd H308 .oz mmaH. mOOH‘ OHNH ease NOHpHeaH_Ne H3398 3:308:02 qoflmHoommO. mmocflmfim 98 0629 .4 mqmHeo¢ Hence vowsmz poz m>wm commas o>mm omha.hpw>flpo<.hn wqfivfi>HQ new waHmHmm Mo mommmoosm QOHpmHoomm< mmmchdm 6cm posse .m mqmde 77 slightly larger percentage in wholesale retail trade‘have undergone this type of structural change. Those in the remaining activity types fall in a middle range with between one-fourth and one-fifth reporting mergers. One must conclude that mergers do play a signi- ficant role in the growth process of trade and business associations, and that the problems facing manufacturing and the transportation, communications, and utilities industries are predisposing influences toward merger. Particularly, the competitive conditions that face these industries are constantly changing. For example, in manufac- turing when a firm or firms emerge as industry leader(s), it is likely that existing trade association structure will be altered to the extent that smaller firms in the industry find it necessary to merge their associations to compete with industry giants. Con- versely, the emergence of industry giants may dictate a change in existing association structure that is more adaptable to new firm problems. This new structure may call for an emphasis on govern- mental relations to avoid trust law violation, or for a vehicle that can be used to keep smaller firms in line. In the area of transportation, communications, and utilities the concept of controlled monopoly makes the trade association perm form a vital function with regard to governmental relations. While government often serves as a watchdog for the public interest in many of the industries represented in this activity type, the trade asso- ciation promotes and protects the interests of its industry. Changing public views, new discoveries, and urban growth pose threats to the stability of many industries in transportation, communications, and 78 utilities and often invite merger of existing associations to meet new needs. Thus the promotion and protection needs of members re- ferred to in hypothesis I are altered as industry conditions change and merger or division of existing trade and business associations may result. Summary Table 6 puts the major findings of this chapter in summary form; it demonstrates the important relationship between the dynamic forces set forth in hypotheses II and the nature of trade and busi- ness associations. The growth and deve10pment of these associations have been distinctly influenced by basic forces in our society. Trade and business associations were an outgrowth of the early guild system, and exhibited certain new characteristics necessitated by a changing society. The objectives of the early guilds were not con— gruent with the dynamic forces of the society because their functions and ideals were too narrow to fit into a more complex society. Simi- larly, in the context of hypothesis 1, guilds did not grow and flourish because they no longer met the needs of their membership. Dynamic forces were producing a complex urbanized society that was becoming increasingly competitive. A new organization with a broader membership base and more sophisticated economic knowledge was needed to protect competitive position and promote membership welfare. The modern trade and business association emerged with these fundamental characteristics and objectives. Table 6 clearly indicates that the trade and business associa— tion that was a product of the economic environment at the turn of the 79 th>HHom .p_>ow OHU ma pommmho ind aOHpmenomcH HmoHpmempm .umfip pcmsnnm>ow vmconpmaonpuom umfinpununfl no aOHeaHnmoe HaanopaH .oouuw mafifiaomv opfi mafia potency Umaflnmhflmw .a .m .H .z seeaeuem sauna: wnfimwphm>vm m>Hp nwnwmooo mvmnwmwn muom 1.59 am 83085 .033 spaces now unoflpmnnsom wqmsnum>om new: pompcoo cacao .cmwno mo .nwna «nowpmempm .w.m «compose monvflcnomp 362 .83.... 39335, am mums... mo hopes: :H mammmonH HH .33 p.263 .H .m .H .2 n.0m machommohm H .33 p.303 :oHpHmom o>HpHpmm [Eco mo cOHpompouQ e GOHmepomcH pmxume oOdHqu mmew>Hpom £93690 mwmpm 0>Hpmeuom hhpmquH mamomlmwumq anHHfim mo onHHoom cowpwuomuoo mo mmfim aHanosm a HaaHeHHoa ass 83 OHS ONaH -HmaH. . _ .HHNH .HNNH. 7 _ : _ -HONH. nmflahmm pmfimapcooH .w coma mosom pamwnmsm wmmw hp pcmSQOHm>mQ «cowpmwoomm< mmechsm paw obese so mwomom psowgmem mo pomQEH ponmm .0 mqm¢e 8O mange—”E muoapmogfiaoo mmmz Ho 38¢ 98 soapmpgmohmma Ho mmwn viva op Joana 305390. 98 3.95 deans . pamocoo mgmfiwx was 58: 98 Bum: gas: wamfifia 5.” coflficwoomn 32mg mfiummhofi 5mm 96.5 um 96.5 8H¢un>w90d 95.5 93 m8 mosmfuomcfi .QEEB :59: hp .083 mo #55 Imoambmu 98 555% you 203mech pagogm map umESohm 1H: wfimmmnocH 38935” H35 365... wgggm mo 882 w 3 Ummgosm .033 .838 H36 mmmcflmdo, aw mug“. :3.qu mo mfiHomQ ”mlmoflmoaonpmmm um Hmoawoagoom 834333 quofioegm aw moapomp Iona menp 09 sowonmaw umfiofiflfiom m 23% uaoapmamu 3.32m MO £33me 59288 name canpsgm 28.: L898 um Hmmfimhmmmmm coHfimm .33 pmom @80on ”M H8328 1 .HBS 83 . 33 83 “$23 wmflmémg .1HmmHi ..JL..LL43mHLLTLwfimmei 4.8.9” 1 . Lumoomfi .mopom pnmwpmem A.pn00v w mqmHp0< Hmporw .Hmnpo copwfismmz xpow Ema osmmowgo ‘1' I1 (I? ,. 9me hpflbfipod k3. mpopsmsgmom mo cOHpmoQH psomopm . mama. 87 concentrated in New York with a few of the insurance control asso- ciations, such as the National Association of Insurance Agents, lo- cated in Washington, D. C. The real estate associations most fre- quently identify Chicago as the site of their national headquarters. Associations with headquarters in other cities tend to locate in major cities that are identified with their industries as indicated by the number of national insurance associations located in Hartford and Philadelphia. These findings suggest that the financial and insurance associations account for New York's high percentage of national headquarters in this activity type, and the real estate associations help account for Chicago's second place position. Some financial associations are also found in Chicago. The insurance associations are the most likely of the three groups to be found in Washington, but they also contribute greatly to the 25,8 percent that locate headquarters outside the three major sites. [The manufacturing activity type contains a unique pattern of headquarters location by type of individual association. The 31.6 percent of this activity type located in New York are largely asso— ciations representing a variety of industries, or the more general aspects of a particular industry. Primary examples are both the National Association of Manufacturers which is a general organization in terms of widespread industry representation, and the United States Brewers Association promoting the brewing industry, both located in New York. While Chicago attracts some of the more general repre- sentative organizations, it tends to have many of the narrow interest associations such as those representing farm equipment and mobile 88 homes. Washington attracts both broad and narrow interest associa- tions in manufacturing but to a lesser extent. A useful finding is the fact that those associations locating outside these three cities primarily consist of particular national manufacturing associations locating near the centers of their respective industries. For example, many of the national iron and steel associations are in Pittsburgh and Cleveland, automobile assoCiations in DetrOit, pe- troleum in Texas and Oklahoma, and lumber associations in the north- western United States. The services activity type, which ranks high in its per- centage of New York City headquarters, contains service associations in a variety of fields. Those associations primarily concerned with industry services such as management and advertising tend to locate in New York. Those dealing with credit management and accounting services are evenly distributed in New York, Washington, and Chicago. The 29.1 percent of this activity type with headquarters located elsewhere are, for the most part, associations offering more special services such as motor hotels, photographers, etc. In consequence, the industrial influence of the New York area tends to show up in services as well as manufacturing associations. Finally, the wholesale retail trade activity type, which is fairly evenly distributed in terms of national headquarters in the three major cities, contains similar locational patterns to the above three activity types. New York again attracts a great majority of wholesale retail trade associations directly concerned with in- dustrial products; noteworthy examples are associations concerned 89 with trademarks, standards, and particular industries such as the shoe industry. Chicago attracts a great majority of national trade asso- ciations in the food distribution field such as the National Asso- ciation of Retail Grocers, which claims to be the largest trade asso— ciation in the United States. Washington, D. C. is identified with a variety of wholesale retail trade associations, and it is difficult to determine any definite trend other than some basic interest in the legislative aspects of the distribution process among these associations. Totals in Table 7 for the three major cities yield a sur- prising result. In spite of the fact that New York is the most frequent location for the aforementioned four activity types, Washing- ton, D. C. is the most frequent location of headquarters of all trade and business associations with 24.9 percent compared with 24.3 per- cent for New York. A distinct relationship between the governmental sphere of our society and trade and business association activity is suggested. Although this relationship will be dealt with exten- sively in a later chapter, of particular note here is the fact that over 70 percent of the transportation, communications, and utilities associations in our sample are located in Washington. The relation— ship between these industries and the federal government is obvious; the large percentage specifically suggests facilitating activities among these associations and the federal government. Agriculture and national business associations also show up with considerably higher percentages in Washington than in New York. The close real- tionship between agricultural problems and federal legislation, and the functioning of national business associations in the governmental 9O sphere account for this finding. Chicago has a goodly representation of headquarters from each of the activity types, but regardless of its midwestern location, it only attracts 10 percent of the agricultural associations, which is considerably less than its representation of the other activity types. Both the national business associations and agricultural associations in our sample predominantly locate their headquarters outside these three major centers. Closer examination of the particular associations included in these categories explains this finding. Although national busi- ness associations lead all activity types with twenty-two associa- tions (64.7 percent) locating headquarters outside New York, Washing— ton, and Chicago, twenty of these associations are state chambers of commerce, and consequently, their headquarters are located in their respective states. Only two associations other than these chambers of commerce located their headquarters outside the three major sites. The large national chambers of commerce such as the United States Chamber of Commerce and the Council of State Chambers of Commerce are located in Washington, and the international chamber is located in New York. The governmental complex in Washington and the interest of the national chamber in governmental affairs account for the Washington location. The remainder of the national business asso- ciation category is primarily made up of the national service clubs such as Lions, Kiwanis, and Circle K; they tend to locate their national headquarters in Chicago. Since the activities of these service clubs are widely dispersed geographically, it is not surprising 91 that they would choose ChicagO‘s central geographic location for their headquarters. Although national business associations have the highest percentage of associations with headquarters outside New York, Washing- ton, and Chicago it is now clear that aside from the state chambers of commerce virtually all of the other associations in this activity type are located in these cities, and the unique nature of state cham- bers of commerce preclude their location in these three cities. The agriculture activity type, which ranks a close second to national business associations in locating headquarters outside the three major cities presents a somewhat different picture. An analysis of the individual associations in this category indicates that the greater percentage of agricultural associations that locate head- quarters elsewhere are crop or cattle associations that locate near the particular areas where these commodities are primarily raised. Most of the national cattle and national wheat associations are lo- cated in the midlands and western states where these food products are raised. National cattle and wheat associations headquarters are concentrated in Texas, Nebraska, Kansas, Missouri, and Iowa. National tobacco, fruit, and vegatable associations also locate near their growing areas in such states as North Carolina for tobacco and Cali- fornia and Florida for citrus fruits. The other agricultural asso- ciations that are concerned with a wider variety of products or wide geographic areas of production tend to follow the general trends and locate in Washington and Chicago. Prime examples are the American Farm Bureau Federation that has located its headquarters in Chicago, and many of the national agricultural associations most directly 92 concerned with governmental legislation that are located in Washington. Forestry and wildlife management organizations with widely dispersed geographic interests are included in this latter group. The transportation, communications, and utilities activity type which reports no associations outside the three major sites, is, of course, heavily concentrated in Washington, D. C. Close examination of the individual associations in this activity type indicates that most of the public power and transportation control associations are located in Washington, but a few of the more technical associations are located in Chicago and New York. Examples of these are the Ameri— can Railway Engineering Association in Chicago and the Edison Electric Institute in New York. The general indication therefore is the fact of government or industry control that accounts for the Washington location, and those associations located in the other two cities are less likely to be characterized by a control function and more likely to have narrower technical interests. Generally speaking, it can be concluded from the above analy- sis and the data in Table 4 that large-scale national trade and busi- ness associations as well as large—scale organizations of other types such as corporations, government agencies, and banks tend to locate in the major metropolises of New York, Washington, D. C., and Chicago. In reference to hypothesis I of this study, membership need fulfill- ment tends to influence a given association's choice of a headquarters site. Furthermore, performance of the protection and promotional functions of hypothesis I that are continually developed in this 93 analysis involves the opportunity for governmental contacts and the proximity to industrial and market centers provided by these locations. Organizational Membership and Staff Characteristics of Large-Scale National Trade and Business Associations An important aspect of the functional nature of trade and busi- ness associations is their proliferation of activity through affiliation with other associations. Affiliation is one element of the dynamic pattern of organizational and structural characteristics of trade and business associations that helps explain their individual effectiveness in meeting membership needs referred to in hypothesis I. Affiliation is a tool used by associations to make their influences felt in their total environment of industry and society. Affiliation represents a bond of interest and activity that naturally increases the sc0pe of influence, the activity range, or scope of the association. This bond of interest can take numerous forms ranging all the way from written working agreements and representation on the boards of di- rectors of other associations to informal working agreements and pooling of knowledge and information between associations. Those associations with larger numbers of affiliates can be regarded as using this tool of influence to a relatively greater extent. Another significant aspect of affiliation is that it gives an indication of the degree of cohesiveness found among the seven activity types. Table 8 indicates percentage and rank order of the large- scale national trade and business associations by number of affilia- tions only, and no attempt is made to isolate affiliates from the 94 parent association. Extreme care was taken, however, to uncover any unusual patterns of affiliation such as activity types with few affiliates in numbers, but where affiliation channels ran directly to one dominant parent association. If this occurs the result is a very tight knit association complex. The most prominent case of this type is the National Association of Manufacturers which solidi— fies the manufacturing activity type as a whole through its ties with a large number of affiliated associations. Table 8 reveals that over 50 percent of all the associations have at least one affiliate. Agriculture, with 46.2 percent reporting no affiliations, and wholesale retail trade, with only 15.6 percent reporting no affiliations, are the two extremes. While wholesale retail trade associations report that 84.4 percent have affiliations with other associations, none reported more than five affiliates. Correspondingly, national business associations report a significant 65.6 percent with affiliation but, again, only 3.1 percent of the associations in this activity type have more than five.affiliates. Large-scale national manufacturing trade associations report over 21.4 percent having over fiJe affiliates. The functional nature of the manufacturing activity type seems to call for a larger number of affiliates. This finding can be partially explained by common prob- lems that face many industries such as labor relations, governmental legislation, and the cooperative promotional activities pointed out in Chapter III. It can be concluded that the manufacturing activity type is most cohesive in terms of the extent that affiliation is used by its associations. The fact that wholesale retail trade associations 95 TABLE 8. Number of Affiliates by Activity Type Number of Affiliates Activity Type 1:5 Rk. Over 5 Rk. Rk. Total # % Ord. # % Ord. # % Ord. # % Wholesale Retail Trade 38 84.4 (1) 0 0.0 (7) 7 15.6 (7) 45 100 National Business Assoc. 20 62.5 (2) 1 3.1 (6) 11 34.4 (6) 32 100 Services 35 58.3 (3) 6 10.0 (5) 19 31.7 (5) 60 100 Manufacturing 46 54.8 (4) 18 21.4 (1) 20 23.8 (4) 84 100 Trans., Comm., 8 Util. 13 48.1 (5) 5 18.5 (2) 9 33.4 (3) 27 100. Fin., Ins., & R. Estate 13 41.9 (6) 5 16.1 (4) 13 41.9 (2) 31 100 Agriculture 14 35.9 (7) 7 17.9 (3) 18 46.2 (1) 39 100 Totals 179 56.3 (1) 42 13.2 (3) 97 30.5 (2) 318 100 are particularly prone to affiliation but only in terms of a few affil— ates per association suggests that this activity type is not nearly as cohesive as manufacturing, although certain problems faced and func- tions performed by these organizations do call for between one and five affiliates for m0st associations. The problems faced by marketing organizations, are different from those of manufacturing. While it is true that their interests are strong in areas of legislation, labor relations, and promotion, the findings suggest that there is less unity needed in performing their functions successfully. An example of this difference is found in the promotional interests of the two activity types. Manufacturers are often concerned With gaining a general type of acceptance for their industry‘s product, but whole- sale retail trade is likely to be more interested in the competitive side which requires distinguishing brand names or types within the industry. 96 The functions of national business associations are also re- vealed in their affiliation pattern. Since by their very nature many of these associations are state and locally oriented, it is not sur- prising to find that they rank next to the bottom with only 3.1 per- cent reporting over five affiliations. Their localized interests tend to limit the scope of their influence and this fact suggests that cohesiveness of this activity type is not high. The American Farm Bureau Federation plays a crucial role in bringing together the divergent locations, backgrounds, and interests of American farm families, and the cohesiveness of the agricultural activity type is certainly strengthened by this dominant parent organization. It is apparent that promotion and protection of members' mu- tual interest referred to in hypothesis I affects affiliation pat- terms. Manufacturing associations find it necessary to affiliate with a large number of other associations to be most effective. Whole- sale retail trade and national business associations also affiliate but with a fewer affiliates per association than manufacturing. All remaining activity types affiliate with other associations in a more balanced fashion between large and small numbers of affiliates. Cer- tainly, affiliation is a key factor in effective performance of func- tions that meet the needs of individual association memberships. While affiliation involves an external modification by asso- ciations to strengthen their effectiveness, departmentalization within the association is an internal modification that is used by associations to increase their ability to perform protection and promotional func- tions. A knowledge of internal departmentalization among trade and 97 business associations indicates the extent of formalization of struc- ture required if an association is to successfully meet the needs of its membership. Where Table 8 shows that some activity types are more prone to affiliation than others, Table 9 indicates a similar finding about internal departmentalization. For purposes of analysis, a high degree of departmentalization is defined as those associations with four or more distinct administrative departments. Agricultural associations which rank low in affiliation report the least degree of departmentalization with only 27.5 percent of these associations ex- hibiting four or more distinct administrative departments. This com— parative pattern does not exist among all activity types in the two tables because financial, insurance, and real estate associations have very few affiliations and yet they exhibit a relatively high degree of departmentalization. This fact is also true for national business associations but to a lesser extent. The functional activities of both finance and manufacturing associations attract departmental organization most frequently while the functional activities of agricultural associations do not produce the same effect. Further support for the above findings is obtained from the fact that an average of 47.3 percent of all associations in the sample report a high degree of departmentalization, and it is the associations in wholesale retail trade; transportation, communications, and utilities; and agriculture that fall significantly below this average. The con- clusion is that in fulfilling membership needs the activities of these 98 OOH 2mm ~.Nm OHH m.~s mmH aHmpoa OOH OH m.- HN Asv m.HN HH asasHaoHsma OOH Om p.06 NH HOV m.am HH aaHpHHHpO a...asoo ..mamse OOH a: H.~m em Hmv O.NH ON mamse HHmpam a aHmaaHosz OOH NO «.mm mm Any 0.0H am .aaoassam OOH an m.mm OH AmV H.~: OH .OOma< mmaeHmsm HanHsmz OOH mm ~.mm N: HNV m.:m Om waHssaomOseaz OOH Hm m.mm OH “HO 5.66 Hm .pmm Harm .maemssaHH .moamaHm m * ALMcmEphmmmn % .vno .qupcmEphmmmn% Hesse .eHEOm : asap numHv .OHEO< pochmHO asee so 4V meme.msH>Hso< soapwuflawpcmspnwamn spa deflpmufiampcmEpummmn nwflm seme.meH>Hao<.sn sOHsasHHaseaEpsmOam O6 peapxm .O mHmaa 99 latter three activity types are less likely to require a high degree of departmentalization than do the others. Additional questions about the trends in departmentalization are answered in Table 10 which examines the membership characteristics 0f trade and business associations. The manufacturing and the finan- cfia1,insurance, and real estate associations rank highest in organi- zational memberships with approximately 75 percent of manufacturing and 59 percent of financial, insurance, and real estate associations reporting organizational members only. Since these same two activity types report the highest degree of departmentalization, a relation- ship is suggested between organization structure and type of member- ship. Although transportation, communications, and utilities asso- ciations report a lower than average extent of departmentalization, they still have a greater than average number of organizational mem- bers. This finding does not contradict a suggested relationship be— tween the number of organizational members and extent of depart- mentalization because the transportation, communications, and utili- ties associations also have a much greater percentage of individual memberships than either manufacturing or finance, insurance, and real estate associations. A substantial 46.7 percent of all the associations in the sample have organizational members only. Excluding national busi- ness associations and agriculture, this percentage rises above 50 percent. An important thing to note in Table 7 is that these same two activity types (national business associations and agriculture) had the fewest total headquarters locations by percentage in the three lCO OOH OOO O.OO Os O.OO OOH 0.00 OO aHaaaa OOH OO HOV O.OH HH AHV O.OO mm HOV H.OH OH OaHssOoaOaaaz OOH Om HOV 0.00 O HOV 0.0m OH HOV O.OH m OOOOOO HaaO O ..maH .aoeaOHO OOH OO HOV 0.00 OH HOV 0.00 OH HOV 0.00 HH aaase HaasaO O.OHamaHoOz OOH ON HHV H.OO OH HOV O.OH m HOV 0.0m O .soams mmaeHaaO .Hsaz OOH mm HOV O.OH O HOV 0.0m OH HOV O.OO O .HHOO a...esoo ..maase OOH mm HOV 0.00 OH HOV 0.00 HO HOV O.OO Om .OOHssaO OOH NO HOV O.OO OH HOV O.OH O HHV 0.00 OH asapHsaHsOO O * .OsO O O .OOO O O .OsO O O .OO .OO .OO Hmpoa OOOHOEOO OHOO waspsaz OHOO assess: OOOO.OOH>HOOO GOHpmNHcmwho HOBOHbHOQH OOOO.OOH>HO6<.OO OHOasOOEOE O6 meme .OH OHOOO 101 major centers of New York, Washington, and Chicago. This fact suggests at least a partial relationship between headquarters location and type of membership. Interestingly enough, the agricultural asso- ciations in the sample report the largest percentage of individual memberships, the lowest extent of departmentalization, and are second only to national business associations in locating their head- quarters outside of the major centers of New York, Washington, and Chicago. This fact alone suggests more than a casual relationship among these three variables. National business associations rank high in the combined membership category with 62.1 percent reporting this type of member— ship. The nature of the organizations included in this activity type suggest the reason for this finding. Manufacturing associations rank at the bottom in combined memberships as well as individual member- ships, thereby indicating that organizational memberships are more characteristic of this activity type of trade association than any of the others. Thus, manufacturing trade associations rank high in organizational members, high in departmentalization, and low in the tendency to locate their headquarters outside New York, Washington, and Chicago. Wholesale and retail trade associations fall near the average in each of the three membership types with 27.5 percent reporting individual members only, 47.5 percent reporting organizational members only, and 25 percent reporting combined memberships. Services asso~ ciations rank substantially higher than average in individual member~ ships slightly above the average for combined memberships, and 102 substantially below average for organization memberships only. This finding is explained by the fact that the functional aspects of ser- vice organizations exhibit more individual membership patterns than do manufacturing organizations. Table 11 provides a better understanding of the relationship between the number of organization members and the extent of depart- mentalization. As a means of testing this suggested relationship between these two variables, a chi square test was computed from the data in Table 11. The results of this test, as indicated at the bottom of the table, show a significant relationship between the number of organization members and the extent of departmentalization at the 5 percent level of significance among the large-scale trade and business associations in the sample. The fact that only twenty- nine of the associations reporting no organization members have four or more distinct administrative departments (high departmentalization) while 51 of these associations have less than four departments (low departmentalization) is significant. Also, while forty-one of the sixty-two associations with 1,001 or more organizational memberships report high departmentalization, only twenty-one of these sixtywtwo associations report low departmentalization. This finding indicates the strength of the dependency between the two variables. The con— cluding point to be made from this table is that although the de- pendency between high departmentalization and a large number of organization members is not universal among all trade associations in the sample, it is still of considerable significance. 103 TABLE 11. Cbmparison of Number of Organization Members and Extent of Departmentalization of Large-Scale National Trade and Business Assoc. Extent of Departmentalization Number of Organization Total Members High Low 1 - 200 39 50.7 38 49.3 77 100 201 - 1,000 30 38.0 49 62.0 79 100 1,001 - 3,000 22 61.1 14 38.9 36 100 3,001 - 10,000 10 58.8 7 41.2 17 100 10,001 - 100,000 9 100.0 0 0.0 9 100 No organization members 29 36.3 51 63.7 80 100 Totals 139 46.6 159 53.4 298 100 5df x35 2 11.07 x2 = 25.27 Two basic conclusions are drawn from the above analysis of types of membership. First, and most important, the functional nature of these associations in the business world supports a predominance of organizational and combined memberships as Opposed to individual meme berships. Secondly, fundamental comparisons between type of member- ship, headquarters location, and extent of departmentalization suggest more than a casual relationship between these three variables. A larger percentage of organizational members tends to indicate a greater extent of departmentalization, and an increased tendency to locate national headquarters in New York, Washington, or Chicago. With the conclusion already established that a great per» centage of these associations are made up of member organizations, further understanding oftheir functional nature in the business world 104 can still be gained by examining occupations represented by the in- dividual members. Table 12 is a percentage ranking of activity types by the four major occupations reported in the sample. The dominance of managerial personnel in the memberships is obvious from a first glance at this table. In fact, over 70 percent of all members of both the wholesale retail trade and manufacturing activity types in- dicate that their memberships are composed of managerial personnel exclusively, In all of the activity types except agriculture and national business associations substantially over 50 percent of the memberships are composed of managerial, professional, and white collar personnel. Over 48 percent of the agriculture associations reported their membership to be composed of farmers exclusively. National business associations are widely distributed among various occupational categories. It can be recalled from Table 7 that these latter two activity types were the least likely of the activity types to locate their headquarters in the three major cities mentioned. Consequently, there is an apparent relationship between headquarters location and type of membership by occupation of members. Those activity types with a greater percentage of members from managerial and professional ranks are more likely to locate their headquarters in the three major centers (New York, Washington, and Chicago) and the opposite is true for the activity types with lesser membership representation from these managerial and professional occupational ranks. Another important finding revealed from Table 12 is the paucity of blue collar occupations represented in trade and business association 105 OOH ON HOV O.OH m HOV 0.0 HOV 0.0H m HOV O.Om : HOV O.Om OH .HHOO sv.gae6o ...:asa OOH a» HOV 0.0 O HOV :.H OOH mm Amv m.mH O Amy O.m 3O H.O O 5 «.OH O E 3:. mm waaaaaaaaz OOH OOO O.Om OO . 0.0 O 0.0 Hm H3: On «:3 OHH «H369 OOH HO H8 O.OO HO 5 O.O H 8 O.O H 3 0.0H m E 0.0 O .3qu Jam .Heaz OOH R HHV H.HO on e: 0.0 H c: O.O H HOV O.O O HOV O.OH m 6.3882de OOH OH 5 «.3 O E O.O O E 0.0H O 3 0.0H n 5 0.00 a 338 .O :5 :Hfim OOH HO 3 O.OH OH 3 0.0 m H8 0.0H O. AC 4.3 OH 3 21% OH .8ng H H H E O.O H HOV H.m N a 4.1:. ON 829.. Haasam O mHaaaHoa: N a OER «6.5 & méuo u % .Onow O .98 m __H .xm .xm .xm .xm .xm u:OHp hmaaoo mqflm anHoo mpanz H369 unfinaoo .3360 3.33 Hang—.385 HEOHaummoE .ano 6&3. hpflrflod quaHOEOm H820Haummoam HdHnmwucazn Hafinmmmaux Hwanmqumz HdHnomuqmz EOOBOO 853388 On 25 31.533 .OH BO: 106 memberships. No more than one association in all activity types ex- cept services reported a combination of both blue collar and white collar personnel in their respective memberships. The services activity type reported only three associations with this combination, and that was the maximum number for any activity type. These findings reveal that there are very few blue collar members of large-scale national trade and business associations. A basic difference is there- fore established between the function of the large-scale national trade and business association, and the function of the trade union in the business world. Chapter III pointed out the evolution of modern trade associations from early employer associations, and how these associa- tions became primarily concerned with promotion of industry welfare and protection of competitive position. On the other hand, trade unionism evolved as a protective device for the individual worker as opposed to the company or industry as a whole. The paucity of blue collar members of these associations supports the conclusion that a basic difference in purpose and function has continued between the labor association and the trade association. Furthermore, the func- tional difference between the two is so great that few blue collar workers join trade and business associations. This fact is particu- larly noticeable among the manufacturing trade associations where only 1.4 percent report a combination of blue collar and managerial professional memberships, even though the large number of blue collar workers engaged in manufacturing is self-evident. Since agriculture and national business associations deviate most from the prescribed pattern of managerial professional occupational 107 memberships, it can be recognized from most of the analysis in this chapter that these two activity types are least characteristic of the large-scale associations in the sample. They tend to contain fewer organizational memberships, have fewer affiliates; also, agriculture is particularly less departmentalized. Now that an examination has been made of the organizational and membership characteristics of large-scale national organizations, it is important to look next at the size of staff used to carry out the association‘s function. Staff size is an indicator of how the association functions. Since this study is particularly concerned with the need fulfillment aspect of association activity, major em- phasis is placed on internal staff activity as an indicator of the given association's functional effectiveness. Table 13 breaks down staff size with percentage rankings for the seven major activity types. It is significant that 48.6 percent of the sample report a staff size of less than fifteen. Small staffs are particularly characteristic of those associations in wholesale retail trade and agriculture. Since these two activity types reported a relatixely large number of individual members per association as was snown in Table 4, this finding is highly significant. The finance, insurance, and real estate; transportation, communications, and utilities; and manufac’urlng activity types reported the largest percentage of staff sizes greater than 100. As can be seen from Table 10 earlier in this chapter, these same three activity types report the largest percentages of organizational memJ bers only. These findings suggest a distinct relationship between 108 type of membership and size of staff. Since those activity types re— porting a relatively larger average number of individual members per association (agriculture and wholesale retail trade) also report smaller staffs, and those activity types with a relatively larger number of organizational members (transportation, communications, and utilities; and manufacturing) report relatively larger staffs, the general conclusion can be drawn that the functional nature of asso— ciations with greater percentages of organizational members support larger staffs and the opposite is true for associations with greater percentages of individual members. Nearly one—fourth of the finan- cial, insurance, and real estate associations report staff sizes greater than 100, while approximately 60 percent of this same acti— vity type have organizational members only. The transportation, communications, and utilities activity type also has both a greater than average percent of organization members and a relatively larger than average number of associations with staffs exceeding 100. These conclusions are made with full knowledge of the fact that almost two- thirds of all associations in the sample have less than thirty on their staffs. Given this fact, the financial, insurance, and real estate; transportation, communications, and utilities; and manu- facturing activity types show up most frequently with the larger staff sizes.! Thus, the above conclusions about the relationships between type of membership and staff size have given both full recognition to and are consistent with these more general findings. Further, there is a significant relationship between size of staff and extent of departmentalization. Table 13 shows that the three 109 OOH HOO 0.0H Om H.HO OO 0.0H Om 0.00 HOH O.O O «HOOOO OOH OO AHO 0.00 O ONO 0.00 O AHV 0.00 O AOV 0.00 O AOO 0.0 O .OOO HOOO O ..mOH ..OHO OOH O: OOO 0.0 O Amv 0.0H O AOV 0.0H O AHO 0.00 Om AOV 0.0 O OOOOO HOOOOO O .HO: OOH HO Amv 0.0H O AHV 0.00 OO ONO 0.00 ON AOO 0.00 mm Amv H.H H OOHOOOOOOOOOZ OOH OO AOO 0.0 O AOO 0.00 OH AOV O.HH O AOV 0.00 mm AOO O.H H .maassmm OOH OO AOO 0.0 m OOV 0.00 O Amy 0.0H m AOO 0.0m OO AOV 0.0 H OOOOHOOHOOO OOH ON AOO 0.0H : AOO 0.0H O AOV H.HH O AOO 0.0m OH “NO 0.0 H .HOOO O ..ss6O ..neOsO OOH Om Amy 0.0 O AOV O.HH O Amy 0.00 O Amv 0.0m OH AHV 0.0 O .OOOOO OOOOHOOO .Hpmz O V195 w u :5 w w .96.“ was O. O -an W O. ova .xm . ova ova 33 O finish): nO>O_O.HOHt1...OOH...Hm.t . . omnOH : mHuH . 282 95.. .3333. iil‘l'll ‘1'..|l||’!| .4!!!» . ’lll'i . Ill'lvllullt . 101 I711... |.| .l(ll|l|.||v||1|. lluuil‘lrl1islltltrlnllltllrlilfll OOOO_OOH>OOOO.OO OOOOO OHOO O6 smpsaz .OH OOOOO 110 activity types with the greatest percentage of small staffs (whole- sale, retail, trade; agriculture; and transportation, communication, and utilities) also rank lowest in extent of departmentalization as shown in Table 5. Therefore, as would be expected, smaller staffs are related to less departmentalization. The manufacturing and financial, insurance, and real estate activity types which rank consistently higher in staff sizes over fifteen also rank highest in extent of departmentalization. Table 13 also shows that a few large-scale trade and busi- ness associations have no paid staff. The national business 8550- ciations activity type with 8.8 percent reporting no paid staff has the most significant percentage of associations with this character— istic. Since a total of only 2.1 percent of the sample report no paid staff, it can be said that the general characteristic is to have some paid staff. A plausible explanation for these associations with no paid staff is the possible utilization of volunteer workers. It is less likely that large-scale associations could function effectively without some staff assistance. Table 14 contains data concerning the strength of the re- lationship between the number of paid staff and extent of depart- mentalization among the associations that compose the sample. The chi square value computed from these data was a large 106.35 with only 9.49 needed for significance at the five percent level with four degrees of freedom. Thus, the dependency of a large staff for high departmentalization is clearly revealed. Although this finding may be somewhat naive, it indicates that large association staffs lll tend to be associated with four or more distinct administrative de- partments. While a total of 104 trade and business associations re- ported paid staffs larger than thirty one, only nineteen of these associations had low departmentalization. Over 75 percent of those associations with staff sizes between thirty-one and 100 report high departmentalization, and 94.1 percent of those associations with staff sizes over 100 report high departmentalization. It is there- fore apparent that departmentalization is likely to occur with even relatively smaller staffs and it becomes progressively more fre- quent as staff size increases. This conclusion is further supported by the fact that over 64 percent of the associations with staffs numbering more than fifteen report four or more administrative departments. Table 14 indicates that a staff size of sixteen or more is a cut-off point at which high departmentalization begins to predominate. TABLE 14. Comparison of Number of Paid Staff and Extent of Depart— mentalization Among Large-Scale National Trade and BUsiness Assoc. Extent of Departmentalization Number of Paid Staff High Low Total None 0 0.0 7 100.0 7 100 l - 15 34 21.1 127 78.9 161 100 16 - 30 38 64.4 21 35.6 59 100 31 - 100 53 75.7 17 24.3 70 100 101 and over 32 94.1 2 5.9 34 100 Totals 157 47.4 174 52.6 331 100 4df x85 2 9.49 X2 : 106.35 112 The analysis of organizational, membership, and staff charac- teristics contained in this chapter provides one basis for under- standing the trade and business association environment in the busi- ness world. There appears to be a demonstrable interaction between membership need fulfillment and the immediate environment of the association, specifically, in such matters as extent of departmentali- zation, type of membership, and size of staff. It is clear that there are certain common characteristics present in the complex of large- scale trade and business associations, found in the American society. For instance, their staffs are usually quite small; they tend to affiliate with other organizations to a greater or lesser extent; and they are generally made up of organizational or combined member- ships. Moreover, and perhaps most important, there exist consistent differences among the activity types with respect to how closely they follow these general characteristics. Those associations with few or no organization members tend to be less departmentalized and will tend to locate headquarters outside the more common sites. Those associations with large staffs are usually more departmentalized, have more organizational members, larger numbers of affiliates, and are most likely to locate headquarters in the common sites. These findings are directly related to successful pursuit of the need fulfillment functions of these associations. For example, it is apparent that the sustaining activities of manufacturing and financial and real estate associations exhibit a fairly consistent pattern of organizational memberships, larger staffs, and more departmentalization; while agricultural associations and national business associations 113 present somewhat different trends. In fact, the sustaining activities of each activity type of association presents some unique character- istic pattern throughout most of the tables. The Financial Characteristics of Trade and Business Associations Thus far the locational, organizational, and staff character— istics of large-scale national trade associations have been analyzed and certain generalizations and conclusions have been drawn. Next, in order to determine more about the environmental relationships of these associations, questions will be answered about how these asso- ciations are financed. Those individuals or organizations that con- tribute money to an organization generally receive either direct or indirect benefit from its activities in the form of a personal or group service from the organization's activities or in the form of publications, enhancement of personal prestige, or promotion of' general industry welfare. Specific findings about the sources of income of trade and business associations is very important in sub- stantiating the vital relationship between the meeting of membership needs and the success of the particular associations as set forth in hypothesis I of this study. It is also helpful to know the relative size of income among organizations. For example, activities and functions of associations can be increased due to sizable capital resources or limited because of financial constraints. In terms of the previous discussion of the benefit or service aspect of association financing, it can be said that those associations with the greater incomes are either selling 114 their services at higher prices or reaching broader bases with their beneficial activities. With these generalizations in mind, their financial characteristics will be examined. Table 15 breaks down size of income by activity type of asso- ciation into five different categories. At first glance one can see that the greater percentage (52.1 percent) of the associations in the sample have incomes between $76,000 and $500,000. The wholesale re- tail trade and national business association activity types rank particularly high in this category with over 60 percent of these associations reporting incomes falling within this range.. Finan-~ cial, insurance,and real estate associations rank low with only 35.7 percent of these associations reporting incomes in this $76,000 - $500,000 range. Only 12.1 percent of the sample report incomes be- low $76,000, and the finance, insurance, and real estate associations are considerably below this 12.1 percent average. Financial, in- surance, and real estate associations have the largest relative in- comes among all the activity types; a total of 46.5 percent of this activity type have incomes over $1,000,000 and a significant 14.3 percent have incomes greater than $2,000,000. Although transportation, communications, and utilities asso~ ciations have the highest per:entage of associations with incomes over $2,000,000, over 26 percent of the manufacturing activity type have incomes over $1,000,000 which ranks them second to finance, insurance, and real estate in the larger income brackets. While the finance, insurance, and real estate and manufac- turing activity types rank highest in the larger income brackets 115 (over $1,000,000) agricultural associations report the larger per- centage of associations with incomes under $76,000. National busi- ness associations also rank high in the low income bracket with 23.3 percent of this activity type reporting incomes less than $76,000. Both national business associations and services rank lowest in the larger income brackets with only 10 percent of each of these activity types.reporting incomes greater than $1,000,000. Some basic conclusions about the financial nature of large- scale national trade associations in American life are suggested. Since only 12.1 percent of the sample have incomes less than $76,000, it can be said that few associations are characterized by such a low income. Secondly, since a majority of tne sample reports incomes falling in the $76,000 to $500,000 bracket, this can be called a median income range for large=scale national trade and business asso- ciations. Furthermore, approximately 35 percent of the associations in the sample report annual incomes greater than $500,000 but only about one-fifth of the sample receive annual incomes greater than $1,000,000. This latter group can be considered to be the high in- come associations within the trade segment. Further conclusions can be drawn by looking at specific acti~ vity types falling within these high, middle. and low income ranges. The income analysis indicated that financial, insurance, and real estate; and manufacturing associations ranked highest in the high income bracket (over $1,000,000). Earlier in this chapter it was pointed out that these same two activity types rank highest in percent of organizational memberships and extent of departmentalization. An 116 OOH mow m.m 0N 00H mm “NV m.m N 00H 0H AHV 0.ma m 000 NN Amy m.NH 0 000 0N ANV n.4H 0 00a 0m A00 0.0 m 00H 0m Amv N.0 N 00H 0N A40 N.0H m 0.0H 0N a.ma H: H.Nm 00H A00 0.5 0 A00 0.mH 0 Adv N.m0 mN ANV 0.0 o AHV O.HN : Adv 0.Nm Ha ANV 0.0H 0H ANV 0.0N ma Amv 0.m0 mm Adv N.Nm 0 “mo N.0H m ANV N.mm 0H Amv 0.: N Amy o.ma 0 Any o.mm 0N A00 0.0 H “NV N.0 N ANV H.00 0H Amy N.0H 0 A00 H.N N A00 0.N: NH Ova ova 0% 0% Hmpoa 90>0 0. 000.000.N 000.000.H 000.00m 000.H00.N. .000.H00.H....1000.H0m, .000.$N H.NH Nm on m.m N A00 m.m Amv 0.0 A00 H.N “NV 0.4a N flNv m.mN N mint—i AHV o.mN m m * 9090 a % 9690 R % echo a m qugo m % sumo m m .03 000.mN -000.H nampoa 00090 afimpmm 0 mammmaogz .0000 0...gs00 ..mgwsa @353 03.502 .000 Hmmm 0 ..00H ..cfim mm 0.3.3 m .oomma .mpm .Hpmz mépfioflhe 0.5. .3330... 093. hpwfinposq ho. @08qu H.355. mo muflm . mH amda 117 apparent relationship therefore exists between size of income, type of membership, and extent of departmentalization of large-scale national trade associations. A larger number of organization mem- berships tends to support both a larger income and a greater extent of departmentalization. As a corollary to these conclusions, larger paid staffs are also employed in these associations; Table 13 indi- cates a greater percentage of the larger staffs occurring in the financial, insurance, and real estate; and manufacturing activity types. Additional support to the above conclusions is provided by services, national business associations, and agriculture which have relatively low incomes, rank low in number of organized memberships, and are slightly below average in extent of departmentalization. This low ranking is particularly true of agriculture and national business associations which rank lowest in organizational member- ships among all the activity types. Earlier in this discussion of the financial aspects of trade associations, the importance of sources of income among associations was emphasized particularly in terms of providing a functional under~ standing of association activities. Table 16 shows the percentage rankings of the seven activity types of trade associations receiving membership income only. It is significant that 73 percent of the associations in the sample report that their income is derived from membership exclu- sively. Since the larger percentage of these associations receive their financial support from their own memberships exclusively, in 118 ooa 8N o.NN HN 0.3. N3 £8.09 00H 0m N3: NH CV m.mm HN 0080. flmfim .0 003333 00H :0 H30 ma $0 «Rm 3 0.303020... 00H .3 dam ma 5 0.3 0N .8053 00H 0N 0.8 N c: HAN 3 33mm dam .0 28H 203 00H «N N. 2 fl R V 0.00 0m 0028.. 088032 00H «N 0.2 m ANV 0.N0 0N $3330 .0 2580 range 00H mN 0.0 0 ANN 0.00H mN mechpwfloomm< mmmefimsm HaaONpmz m m a .0 .20 ca m N. .2309 noohsom .8030 EEO mmogom 3:30ng on“: 30590.0. 093. mauflflnpgw ho, EEO mEoocH 3:308:62 wcfismmoom 303300000. .ca @493. 119 line with hypothesis I, it logically follows that the membership re- ceives, or thinks it receives, substantial direct or indirect benefit from services rendered by the association. The economist's concept of the rational behavior of economic man is that man will divide his expenditures among alternatives in such a way that total utility is maximized. If this axiom is applicable to this situation, then it follows that utility received from association membership dues or contributions compares favorably with utilities that would have been received if this money had been spent on alternative products or services. All national business associations in the sample report their income is derived exclusively from membership sources. It can be re— called from Chapter II that this activity type is composed of chambers of commerce, and national business organizations meeting at local and regional levels. This evidence would indicate that these organizations are particularly membership oriented. Transportation, communications, and utilities; and manufacturing associations also rank considerably higher than average in receiving their income exclusively from mem- bership sources, indicating an especially strong service orientation toward their respective memberships. Both the agriculture and wholesale retail trade activity types rank lowest in exclusive membership income support with approximately 55 percent of these associations reporting income from membership only. In order to learn more about these associations that receive income from sources other than membership, Table 17 has been included. 120 This table divides income into public, private, and combined sources; and therefore would indicate any sharp deviations from a private mem—' bership orientation in association income. This table further supports the membership orientation of trade and business associations referred to in hypothesis I by demonstrating the almost exclusive relationship of private income sources to trade and business association finance. For example, over 98 percent of all the associations in the sample receive their income from private sources only. Among the seven ac- tivity types, only three report any income from public sources. Transportation, communications, and utilities; agriculture; and services are the only activity types reporting incomes from public sources, and for these activity types the percentage is negligible. Only one association in both the agriculture and services activity types reports income from public sources only, and only three asso- ciations report incomes from public and private sources combined. The obvious general conclusion about trade and business associations suggested by the data in Table I7 is their overwhelming reliance on private sources for membership support. In Chapter III the point was made that competitive influences shaped the trade association func— tion, and such things as protection of competitive position and pro- motion of industrial welfare were their primary functional charac— teristics. These functions would suggest a predominance of private financing among these associations, because competitive interests are rather narrow industry and membership interests. In line with the overall financial views presented early in this analysis, it is clear that membership is paying for the benefits it receives through mom OOH m H.H m O.O Omm H.OO mHmOoa gm OOH Amv H O.m AHV H m.m Asv mm m.:m OHOOHOOHmmd a: OOH Amv H 0.0 “NO H m.m HOV m: O.mm mOUHpcmm mm OOH HHV H m.: O O.O “NO mm H.ma .HHOO O u.esoo ..mcmca 1 Wu mm 00H 0 0.3 o 0.0 AHV mm O.OOH .oomm< mmoCMmsm HmQOH4mz Om OOH O O.O O O.O AHO ON O.OOH mumpmm .m O «.mOH ..ch Om OOH O 0.0 O O.O AHV mm O.OOH mawca HHmpam O OHmmmHomz ms OOH O O.O O O.O AHV ms 0.00H wchapommnemm %“ m .OMO .xm m m .OHO .xm % R .OHO .xm % m ,aoe. mOOHOquOom O .Osoo aocu.mpcmco O OHnm .Ogsom a..p>OO IHmQEmE m.msm 80mm..EoHM upcmpo «mshflm Hmpoe mOOHO H.Oqsm OOOHaO .msm.SOsm mpOHO mpemeOmm>aH coma sOHsHpoa .mcHMHmm ease OHH :Osm O.OHemsOOeOz nOHHOS O mpprpm omhe_%pH>Hpo<.mQ Amanmpflho opm>flpm no OHHbdmv mEoocH mo moohdom.mymswpm .Onsm OOOHQO 55 3.8m 25 OHHOE SHHmE Scum mcmdpcm mmoOHpnom a.mmamm_fictm mpmmoopm «aficapmpEmz ”mpw>Ham 122 formal association. Since membership is essentially the sole bene- factor from the association activities, it is usually the sole finan- cial supporter of the association. Some basic differences also emerge between trade and business associations and other types of associations, such as social welfare or religious organizations, with respect to sources of income, because the benefits of these latter organizations accrue to non-members as well as to members of the association. It is now possible to say some specific things about trade and business associations, the business world, and membership need ful- fillment. Throughout this analysis, numerous functions of these associations have been uncovered, and in each case the functions were primarily directed at serving the membership in some aspect of busi- ness or industry. Such activities as providing statistical informa- tion, cooperative advertising campaigns, conducting market research, and such functions as promotion of industrial welfare and protection of competitive position have emerged as attendant factors to the re— lationship between large-scale national trade associations and the business world. These characteristics suggest that the trade and business association function is primarily a service function to its members, Furthermore, since its members are in strategic parts of the business world, its broader function is serving particular seg- ments (industries, corporations, groups,) within the business world. These conclusions are particularly supported by the fact that large- scale trade association finances are almost exclusively derived from private sources that are concentrated within the business world. 123 Internal Educational Activities of Trade and Business Associations The concept pf education is distinctly related to the need fulfillment pattern that has emerged from this research. Successful performance of the promotional and protective functions of these associations is greatly aided by educational programs. Since these functions are associated with members' needs, a look at internal education programs conducted by these associations is important. The data contained in Table 18 indicates that the greater percentage of large-scale national trade and business associations conduct specific internal educational programs among their memberships. Additional support is added to the general evidence suggesting the validity of hypothesis I of this study, and the predominance of the membership service orientation of these associations with respect to their func- tion in the business world is made even more clear. As indicated by Table 18, 83.3 percent of the associations in the sample report the presence of an internal educational program among their memberships. The finance, insurance, and real estate; wholesale and retail trade; national business associations; and ser- vices activity types rank particularly high with over 90 percent re— porting internal educational programs. These findings are consistent with the nature of the activities represented in each of these activity types. National business asso- ciations, and services are both characterized by associations repre- senting a proliferation of business activities that can be directly benefited through educational information about business conditions, 12h OOH Own H.OH mm m.mO JAN Hmpoa OOH pm m.mm O AHV ~.OO OH mmHOHHHpO a ..esoo ..mcmca OOH Hm 0.0m Om HOV O.HN mo weHcspomOsams OOH o: m. «N m Amv m . t. Hm O.HEHOOHQH. OOH Hm 0.0 m HOV m.Om Om msmpmm Hmmm O ..mnH ..:Hm OOH HO 0.0 m Amv O.Hm om “OOHscmm OOH mm H.O m HOV 0.00 Hm chHOmHOomma mmochOO HmaOHpmz OOH o: 0.0 H AHV O.Hm m: means HHmpmm cam mHmmOHoea m. H309 * m 02 cm Logo. . OE 8w m m 093. 3:33. make hpfi>a¢o¢.mn Ednwopm GOHpmoscm HmcumeH mo mocomn< no mommmoum .ma mqmfie 125 promotional appeals, or specific techniques of operation. This same reasoning also applies to the finance, insurance, and real estate activity type. The particularly high percentage (97.8 percent) of wholesale and retail trade associations in this area can be accounted for by the intensely competitive nature of the distribution process which is confronted with changing markets and products. These con- ditions naturally lend themselves to a continuous educational process involving product, promotion, and price. Although the agriculture; manufacturing; and transportation, communications, and utilities associations conduct a great number of internal educational programs, they rank below average for the seven activity types. This fact tends to suggest that their industries are least supportive of this type of educational activity when compared with the rest of the trade segment. While transportation, communi— cations, and utilities and manufacturing rank lowest, these industries are more concerned with specific processes of production and the eco- nomic problems, and seem to approach these problems through affilia- tion and broader informational exchange. Table 8 earlier in this chapter indicated that these two activity types are most likely to have larger numbers of affiliates. Finally, agricultural associations rank only slightly below average in amount of internal educational activity, and their re- latively larger number of individual members helps to explain this trend. Summary The descriptive presentation of locational, organizational, 126 membership, and financial characteristics of large-scale national trade and business associations contained in this chapter has focused upon the similarities and differences that occur among the seven ac- tivity types with respect to these variables. While throughout the chapter heavy reliance was placed on data in tabular form, important general findings emerged from the analysis. Essentially, the large— scale national trade and business association was characterized as a service-oriented institution benefiting most directly its immediate membership and indirectly proliferating its activities throughout the business world. Moreover, the findings confirm the fact that these associations have sufficient funds, organization, and staff to Operate effectively in both their immediate environment and the business world. In performing their functions certain key geographical loca- tions are likely to be selected as the base of operations. Outside forces have shaped the nature of trade and business association functions in the business world, and these forces have interwoven their influences into a generalized pattern of organi— zational and financial characteristics. These characteristics give support to conclusions in Chapter III about the effects of the emer- ging society on these large-scale associations. Modern trade and business associations with organizational memberships and affiliations, staff activity, and high incomes are in sharp contrast with the early trade associations. There is no doubt that these associations are playing a crucial role in the business world, and will continue to grow in size and effectiveness. Specifically, these conclusions are drawn from the significant 127 data presented in this chapter. An emergence of power centers is apparent in many areas of the American society and trade and business associations are attracted by their magnetic strength. The fact that New York, Washington, and Chicago are chosen as the most frequent location of association headquarters is certainly important, but more significant is the unique way that the choice of a particular head- quarters site tends to relate to the specific association's functional interest such as public power, finance, or insurance. Our society is characterized by increasing urbanization and concentration and this has had more impact on trade and business association concentration than any other factor included in this study. Large-scale enterprise and the competitive struggle that accompanies urban growth are con- tinuous influences on the nature of the function and purpose of these associations in the society; and locating headquarters in close prox- imity to government, industry, and market centers is an end result of this combination of important forces. The pattern of organizational, membership, and staff charac— teristics of trade and business associations is also reflected in the forces of a changing society. Externally, the great extent of affil- iation undertaken by many associations is really an attempt on the part of the association to better its position to deal with dynamic problems (legislative, competitive, industrial) in an emerging so- ciety. Internally, the extent of departmentalization varies in a clear pattern among trade and business associations; the larger and rhore powerful associations tend to be highly departmentalized. Large size, specialization, and bureaucratization have paralleled urban l28 growth in our society, and the result is a greater degree of depart- mentalization among formal organizations. These same forces also affect internal membership patterns among associations. A more com- plex and specialized society tends to generate a polarization of interests according to common group characteristics and resultant needs, and the dominance of managerial personnel and the paucity of blue collar occupations represented in trade and business asso- ciations memberships are a direct result of this phenomenon. Large- scale organization has resulted in a greater separation of management and workers and a trend towards professionalization of managerial personnel. These trends and interests are reflected in trade and business association activities that have largely left out the blue collar class. The financial characteristics of trade and business asso- ciations are also significant indicators of their environmental position. Those associations that represent a consolidation of powerful interests in their respective industries are characterized by large incomes. For example, the polarization of interests pre- viously mentioned can manifest iteself into very powerful groups such as the National Association of Manufacturers and large amounts of funds are provided by the membership to support their interests. Staff size varies to handle the volume of work necessary to promote these interests, namely, promotion and protection. The data provided in this chapter play a major role in supporting the first hypothesis. Certainly, trade and business asso- ciations grow and flourish to the extent that members perceive them 129 as meeting needs. In meeting these needs, they exhibit a unique pat- tern of internal and external characteristics that help to explain their effectiveness in the society. Throughout this chapter the strategic relationship between need fulfillment and association characteristics has clearly emerged. The position of trade asso- ciations in the total society is examined in the next chapter. Al- though in the previous chapters it has been suggested that there is important interaction between trade associations, the business world, and the total society, in the next chapter an attempt will be made to measure both the extent and effect of this interaction. CHAPTER V THE ACTIVITIES AND FUNCTIONSlOF TRADE AND BUSINESS ASSOCIATIONS AS THEY RELATE PO THE GREATER SOCIETY WITH PARTICULAR EMPHASIS ON THE GOVERNMENTAL SPHERE The Established Position of Large-Scale National Trade and Business Associations in the Greater Society The deve10pment of both the activities and structural organi- zation of large—scale trade and business associations as contained in the previous chapters provides an understanding of the nature of these organizations. These associations have continued to increase in prom- inence and functional usefulness in the business and industrial seg— ment of American economic life. The importance of the industrial segment to the organization and progress of the total society is un- questioned. One need only review the role played by American in- dustry in winning two world wars or the tremendous influence of the business and economic depression of the early thirties on the po- litical and social environment in American life to realize how deep the roots of industry and trade flow within the greater society. America's position of world leadership and her internal expansion is to a significant extent determined by how successfully her eco- nomic segment is able to function. Economic growth is directly related to the emergent process and is, in fact, a part of that process. As organizations grow into laarge-scale institutions, they grow economically as well as physically 130 131 and socially. The emergent process is as clearly at work in the industrial segment as in any other segment, and the influence of the process on the face exhibited by trade and business associations was developed in both Chapters III and IV. It was shown that these large-scale associations have experienced the same emergent process that has permeated the greater society. The key objective of this chapter is to examine these asso- ciations and the emergent forces that have shaped their function. Specifically, the analysis uses the empirical method to test the tenability of hypothesis II and its corollary as set forth in Chapter I. Hypothesis II suggests that trade and business associations vis- a-vis society originate and prosper to the extent that their ob- jectives are congruent with emergent forces in this society. The corollary to hypothesis 11 suggests that survival of a given asso- ciation depends upon its ability to adjust to these forces. In studying societal relationships of formal organizations such as associations, the nature and extent of their governmental a<:tivities serve as the chief index to a given organization's position if! society and throughout this chapter data concerning governmental IWBlationships with trade and business associations will be analyzed. Enuergent forces of the society are also reflected in this relationship ttrrough association activities designed to sustain their position VidS-a-vis society, for example, contact with government officials, le“aislative activity, and formal and informal c00peration with govern- ‘nerlt bureaus. The ensuing analysis examines these activities in detail, aruj also gives attention to trade and business associations activity in 'the total public sphere. 132 The Governmental Sphere: The Vital Role of the Activities of Trade and Business Associations in Political Affairs As suggested above, the fundamental relationships of trade and business associations to the greater society have occurred through their governmental activities. Earlier discussion of association de- velopment indicated the importance of this relationship. Legislative problems were shown to influence the formation and function of early trade associations, and the two world wars and the great depression of the 1930's strengthened the bonds and ties of this relationship. One means of analyzing the nature of this governmental tie among these associations would be to ask associations about their contacts with all echelons of government. It is of primary importance to know how many trade and business associations have contacts with govern- ment, and at what levels these contacts are most likely to occur. This kind of information can provide answers to questions about the sc0pe and importance of functions performed by these associations within the greater society. Table 19 contains a summary of the types of governmental con- tact of the seven activity types of large-scale national associations. Since only 46.6 percent of these associations report no contact, over one-half (53.4 percent) of all large—scale national associations have some type of contact with either federal, state, or local government. This is a particularly significant percentage in view of the question that was asked in the questionnaire: "Do the responsibilities of the association's principal (voluntary or paid) officers require them to k>e in more or less regular contact with federal, state, or local 133 OOH «mm 0.00 mmH m.H m 0.0N mp 0.0H OO OamH Hm uHmpoa OOH S O 0.00 OO O HOH H 0.00 OH O O.OH m N 0.0 m £53 33% .meumHoé OOH ON O O.OO OH H O.O H O O.O.m O O H; O O 0.0H O 333.5 as. .8038 Iandasoo sneapwpnonncmns OOH HO O 0.0m OO 0.0 O O O.OO ON O HOH H m O.OH 4H Ofiépoaaamz OOH HO O «.mOOH O «.OH O. 0.0 O H O.OO O O H.OHm 33am H8O , paw qmonwnnuqH .mucwqwh OOH OO O. 0.0m NH 0.00 m 0.00 H m 0.000 m méHN. 933823 OOH HO H 0.0m mm m O.H H m 0.0H m H 0.0 O O 0.0H NH OOOHsnmm OOH Om m H.OO mH m 0.0 H O O.HH O m 0.0m p H 0.0m N uaOHpOH locumd unmqfimsm HOQOprz O O .BOOOOOOEROO. 0.0.su O.OH: O .OO ca 3a ca ca 538... 3333.— .anO 0.2.3 O H83 O .33... H38 c: :28 35mm: HEOOOO H23...“ .HEOOOO 25 .3232 upownnou Ramsanmpow agnosqnmboo Hwooa flaw «mumpm «Hwnmnmm £9H§.powpcoo_hn mama.hpw>fipo< omH mamOH 134 government officials?" There was no question asked about the various types of indirect influence that may occur with government officials. The histories received with the questionnaires indicated that the informal influences directed at governmental legislation were great, and a major point to remember is that this percentage (53.4) would be significantly higher if indirect influences were also considered. Over one-half of the majority of activity types experience formal official contact. Agriculture reports the greatest amount of con- tact as only 30 percent of these associations report no contact; and conversely, the services activity type reports the least amount of contact with a substantial 57.3 percent of these associations re- porting no contact. The 70 percent of the large-scale agricultural associations that have direct governmental contact is strong evidence of the mutual interest between agriculture and government. The services activity type is largely made up of associations serving other organizations in a somewhat narrow or technical sense. As a result, many of these associations are not directly active in the governmental sphere, and this fact helps to account for the paucity of their contact with government officials. Although the 57.3 percent of these associations that report no contact is the largest among the activity types, it leaves 42.7 percent that do have this formal contact--still a substantial figure. Manufacturing trade associations compose the other activity type that falls slightly below average in this type of formal govern- mental contact. A plausible explanation for this finding is the rnanufacturing process itself. Many of these associations are concerned 135 with coordinating and controlling particular aspects of production, and consequently are not as active in governmental circles as other activity types that serve broader interest groups. Approximately one-half of the manufacturing associations do have formal contacts with federal officials, and although this percentage is below average among all activity types, it is still relatively high. Table 19 also shows the great importance of the federal government with respect to large-scale national trade and business associations. While 53.4 percent of the sample report that their principal officers have more or less regular contact with government officials, 22.6 percent of these associations indicate that this con- tact is at the federal level only. Wholesale and retail trade; transportation, communications, and utilities, and agriculture rank highest among all activity types with at least 30 percent of these associations reporting this type of contact at the federal level only. Table 7, Chapter IV, indicated that these same three activity types ranked highest in locating their national headquarters in Washington, D. C. The fact that the Washington location facilitates federal government contact is the reasonable explanation for this finding. The relatively high percentage of associations in more or less regular contact with government officials is a determining force for the high percentage of associations that locate their national headquarters in the nationis capitol. National business associations, services, and agriculture rank highest in the percentage of associations whose officers are in regular contact with federal, state, and local government officials. 136 Evidently, the activities of these three activity types attract a greater dispersion of governmental relationships at all three govern- ment levels. Furthermore, the functional activities of agricultural associations that protect and promote mutual interests seem to call for governmental contacts at all three levels in many cases. Since the national business association activity type contains state and national chambers of commerce, it is not surprising to find that it is also above average in federal, state, and local contact because these organizations operate at all governmental levels. The services performed by large-scale national service associations tend to center in these widely dispersed governmental contacts as Opposed to con- centration at either the federal or state level. Since accountants, managers, etc. are concerned with state and local regulations as well as federal statutes, one would normally expect this pattern to prevail among service associations. None of the trade and business associa— tions in the sample reported these regular contacts with local government officials only, and just two associations reported contacts at the state level only. This finding is not surprising because a basic criterion used in selecting the sample was that the associations be national associations, and the governmental activitics of this type of association is normally concentrated at the federal level. Important conclusions drawn from the preceding analysis of Table 19 are that over one-half of the associations in the sample report direct contact with government officials, and this contact primarily occurs at the federal level. Although the agriculture activity type tends to use formal 137 governmental contacts to a greater extent than do others, the per- centage difference between most of the activity types is not large enough to draw many striking contrasts. The services activity type reports a relatively lesser percentage of direct contact than others. All are significantly high and this supports the general conclusion that government has an important impact on trade and business asso— ciations in an emergent American society. In support of this general conclusion, it is essential to emphasize that earlier chapters have supported the membership need fulfillment orientation of these associations as set forth in hy- pothesis I. The overall results of Table 19 suggest that in the performance of their need fulfillment functions such as promotion and protection of mutual interest, government relations evolve as an aid. In order to explain the reason for these ties with government, it is necessary to go beyond hypothesis I to hypothesis II and the corollary to it. Governmental relationships provide avenues that are used by trade and business associations to stay congruent with the emergent society. Government is sensitive to the changing so— cietal environment, and by maintaining close relationships with government, these associations use that sensitivity to adapt them— selves to the changing society. This adaptation is vital to success- ful fulfillment of their neednoriented mission. In establishing the fact that trade and business associations use governmental ties to adapt themselves to the emergent society and thereby increase their effectiveness, it is important to learn more about the way these ties are integrated into a useful network of relations. One of the most 138 effective ways that this integration can be accomplished is through formal (written) working agreements with federal government agencies. In this context the following question was asked: "Does your asso- ciation have any type of formal (written) working agreement with any agencies of the federal government?" The "yes" responses to this question are shown in Table 20. One can immediately see that the number of these associations which have a formal agreement with federal goverment agencies is considerably less than those whose principal officers have formal contact. While 53.4 percent of the associations in the sample indicated that their officers were in more or less regular contact with government officials, only 11.5 percent of these associations have formal working agreements with federal agencies. However, this latter percentage should not be taken lightly because it represents one of the closest kinds of governmental relationships. About one in ten of the national trade and business associations in the sample have this close contact, and even this small percentage adds support to the importance of the general position of these associations in the governmental sphere. The agriculture activity type again emerges as the most active in terms of this kind of governmental relationship. Over 34 percent of the large-scale national agricultural associations report the presence of a formal working agreement with a federal agency, and this percentage is particularly significant when compared with the 11.5 percent average for the total sample. Financial, insurance, and real estate associations rank second to agriculture in the percentage 139 TABLE 20. Presence or Absence of Formal Agreement with Federal Agencies by Activity Type leg N9 Total Activity Type Rk. Rk. # % Ord. # % Ord. # % Agriculture 13 34.2 1 25 65.8 7 38 100 Finance, Insurance and Real Estate 4 14.3 2 24 85.7 6 28 100 Transportation, Comm. 8 Utilities 3 11.5 3 23 88.5 5 26 100 Manufacturing 9 10.1 4 80 89.9 4 89 100 Services 4 6.6 5 57 93.4 3 61 100 Wholesale and Retail Trade 3 6.5 6 43 93.5 2 46 100 National business associations 1 3.0 7 32 97.0 1 33 100 of associations with formal working agreements with government agencies, but the percentage is only 14.5, far behind agriculture. In addition, over 10 percent of the transportation, communications, and utilities; and manufacturing activity types report formal agreements with federal agencies. Service associations, national business associations, and wholesale retail trade associations rank somewhat below average in extent of formal agreements with federal agencies. National business associations rank farthest below average with only one association or 3 percent of this activity type having a formal agreement with the federal government. Table 19 showed that national business associa- tions ranked somewhat above average in terms of formal federal, state, and local government contact; but ranked last in federal contact only, \Nith just 6.9 percent of these associations reporting such contact. Iliese findings tend to suggest that the national business association 140 activity type is the least active of all large-scale national trade and business associations at the federal government level, but that it is still quite active at state and local levels. Data on formal agreements with Federal agencies are summarized in Table 20. The frequency of formal contact between agricultural asso- ciations and the federal government is high. This is in line with the amount of face-to-face contact reported in the business section. Secondly, it is apparent that, in general, national trade and busi— ness associations do not formally align themselves with federal government agencies. It is suggested that governmental relation- ships are really a facilitating mechanism and not a control mecha- nism. Some associations (notably agricultural) can best sustain themselves in the society through such formalization, but most of these associations stay away from such a "tight knit" arrangement. Many large-scale associations seek a more flexible arrangement characterized by full use of governmental sensitivity to an emerging society, but remaining free to adjust in a variety of directions to emerging forces. This conclusion is supported by Table 21, which is designed to get at the more informal or flexible interaction be~ tween these associations and the federal government. Table 21 is a percentage-ranking of tne seven activity types of associations in the sample that maintain informal c00peration with federal govern- ment agencies. While only 11.5 percent of these associations re- ported formal working agreements with federal government agencies, Table 21 shows that 50 percent report informal agreements indicating that the governmental tie exists. 141 Financial, insurance, and real estate associations rank high- est in the extent of informal cooperation with the federal government as almost 70 percent of these associations reported this type of relationship. The agricultural and wholesale retail trade associa- tions rank second and third respectively in extent of informal coop- eration with the federal government. Although national business associations ranked consistently below average in extent of federal government contact in previous tables, they have 44.8 percent re- porting informal c00peration with federal government agencies. The services activity type has also ranked consistently below average in government contact as shown in the previous tables, and ranks lowest among the seven activity types in extent of informal cooperation with government agencies with 41.4 percent of these associations reporting positive responses. Both the services and national business asso- ciation activity types tend to be relatively less active at the federal level in many respects but they still exhibit a significantly high percentage of informal cOOperation with federal agencies. In the previous tables contained in this chapter the manu— facturing activity type has consistently ranked near average among the seven activity types in the extent of its governmental relation— ship. It follows this same pattern in Table 21 with 49.9 percent of the manufacturing trade associations reporting informal c00peration with federal agencies. Informal COOperation with federal agencies is a direct means Of achieving sensitivity to changes in society through government interaction, while still retaining individuality as an association. 142 TABLE 21. Presence or Absence of Informal Cooperation with Federal Government Agencies by Activity Type u, Yes fig Total Activity Type Rk. # % 0rd . # % # % Finance, Insurance and Real Estate 18 69.2 1 8 30.8 26 100 Agriculture 20 55.6 2 16 44.4 36 100 Wholesale and Retail Trade 21 51.2 3 20 48.8 41 100 Manufacturing 42 49.4 4 43 50.6 85 100 Transportation, Communications 8 Utilities 12 48.0 5 13 52.0 25 100 National business associations 13 44.8 6 16 55.2 29 100 Services 24 41.4 7 34 58.6 58 100 Totals 150 50.0 150 50.0 300 100 A good summary of this analysis of trade and business asso- ciation activities in the governmental sphere requires a re-emphasis of the importance of the relationship between these associations and government. Because the assOciations in the sample are largemscale national assoc1ations, this relationship is particularly strong at the federal level. Agricultural associations have the most frequent and closest ties With the government. General farm legislation, price support programs, and crop restrictions help to account for this finding. Historically, government has played a definite role in organizing and controlling food production in the United States and this has been of such importance that agriculture has rated a cabinet position in the 143 federal government since 1889. Agricultural associations provide an excellent example of usefulness of formal association in facilitating governmental relations. It is through these associations that farmers are able to express their own interests, and to adapt these interests to a dynamic society. Often the interests of society as set forth in proposals for legislation do not mesh with the interests of a "tight knit" membership-oriented association. If membership needs are to be fulfilled some compromise must be reached between agricultural interests and interests of other groups in the society. Agriculture offers a prime example of the congruency and adaptability needs of associations as set forth in hypothesis II. The need for adaptability to the changes mentioned above is apparent, and the establishment of avenues for collective action with government is a result. Such things as price supports and crop control programs (soil bank) are products of the emergent forces of the society. As suggested in hypothesis II, associations must remain congruent with these forces, because these forces are directly related to perceiving and meeting membership needs. United collective action through for- mal association is necessary to achieve the type of congruency that supports farmer interests. Certainly basic farm legislation affects the competitive position and general welfare of each individual far- mer, but by acting individually he would be less likely to be effec~ tive in promoting his own interests. It is through the collective action of a formal association that his interests are given sufficient organization and strength to be an effective force in influencing governmental legislation. Thus, the trade and business association 144 has a difficult two-fold mission in the governmental sphere. First, it must remain congruent with the forces of a changing society so it will not be destroyed as being ancient and useless, and secondly, it must accomplish something for its membership in the process. While agriculture has served as a worthwhile example of the interaction between government and trade and business associations, the preceding points are equally applicable to the other six activity types. These other activity types do not necessarily hold the same official status that agriculture occupies in the governmental sphere, but the importance of their activities in that sphere is apparent. It is through governmental activities that association influence directly permeates the total society. Government in our democracy theoretically represents‘the interests of the people in it; therefore. it represents the total society in the most general sense. Conver- sely, this analysis has emphasized that trade and business associations represent the interests of their respective industries in the general sense, and of their individual memberships in the specific sense; the promotion of either one produces some effect on the other. More particularly, the promotion of trade association interests in the governmental sphere may produce an alteration of the total society s position regarding the specific interest involved, and conversely, the promotion of the total society interests with respect to trade associations can easily result in an alteration of the associationTs position regarding the specific interest. It is the above intere- lationship between government and trade and business associations that 145 that results in the proliferation of association activity throughout the total society and continued congruency with emergent forces by these associations. For example, suppose a major national trade association wishes to have a high tariff levied on imported goods, which its industry produces here, and it actively campaigns for this tariff through congressional lobbying. Since the passage of this tariff would no doubt raise the price of these goods to American consumers, they, through the process of representative government, make known their Opposition to this legislation. The interests of the association have aroused in the greater society enough interest to create Opposition to the proposed legislation; the final result could easily be some compromise between the two interests depending on the relative strength of the two forces involved. This compro— mise represents an adaptation of interests in which the association membership, the association, and the society have all been served. These few examples are by no means the only ways that trade and business association activities are felt in the total society environment, but they do help to illustrate the way that their inter— action with government on specific interests permeates the total society. The government section of this chapter plays a crucial role in supporting both hypothesis II and its corollary, because this section clarifies the importance to trade and business associations of remaining congruent and adaptable to the dynamic forces of an emergent society. 146 The Public Sphere: The Significance of Trade and Business Association Activities in Broad Areas of American Public Life Since governmental relationships are only one means of sus- taining a given association’s position in the greater society, it is necessary to extend the analysis into the broader public sphere of activity. One of the significant ways of keeping abreast of change in an emergent society is to be an active participant in public matters that affect the association's interest. Table 22 contains a summary of the percentage of associations that take stands on public issues by the seven activity types. Over one-half (58.4 percent) of the sample report that they do take a stand on public issues. The national business associations, whole- sale and retail trade, and agricultural activity types rank highest with over 70 percent of the associations in each of these activity types taking stands on public issues TABLE 22. Trade and Business Associations that Take a Stand on Public Issues by Activity Type Take Stand Do Not Total Activity Type Rk. Take Stand # % Ord. # % # National business associations 24 77.4 1 7 22.6 31 100 Wholesale and Retail Trade 32 72.7 2 12 27.3 44 100 Agriculture 27 71.1 3 11 28.9 38 100 Finance, Insurance 8 Real Estate 20 66.7 4 10 33.3 30 100 Transportation, Cbmm. 8 Utilities 15 62.5 5 9 37.5 24 100 Manufacturing 38 46.3 6 44 53.7 82 100 Services 22 39.3 7 34 60.7 56 100 Totals 178 58.4 127 41.6 305 100 147 It is easier to explain the high percentage of national busi— ness associations and agricultural associations that take stands on public issues than it is to explain the high percentage of wholesale and retail trade associations that are also very active in the public sphere. In the case of the first two activity types, there are dis- tinct factors brought out in the governmental section that explain their high degree of public activity. It will be recalled that the national business association activity type is heavily concentrated with chambers of commerce and service clubs. Earlier in this chap- ter information contained in Table 19 revealed that these organi- zations were particularly active at federal, state, and local government levels. Since their governmental activities are strong at both state and local levels, many of these organizations are taking stands on issues involving state and local problems. Closer analysis of specific associations indicates that this is particu- larly true of the chamber of commerce type organization, as many of these associations maintain legal offices in Washington that serve as legislative watchdogs for issues affecting their respective states. A major purpose of state chambers of commerce is to promote the interests of their constituent memberships through taking stands on public issues, and more particularly, those issues af- fecting the business and professional community. The other major component of the national business association activity type is national service clubs, and they are also very active promoters of a stand on public issues. Closer examination of these associations indicates their stands usually emanate from local levels 148 and are often concerned with local issues. Lions, Kiwanis, and Zonta are only a few of these organizations that are particularly active in the public sphere at the grass roots level. Since the agricultural activity type has continually been a leader among all activity types in the extent of its governmental activity, it is not surprising that it also ranks high in the per- centage of its associations that take stands on public issues. Ag- ricultural associations are primarily concerned with public issues that affect the economic status of the farmer, and their activities in the public sphere reflect this fact. All types of food programs, school work laws, and school hours, are of interest to them at state and local levels, and at the national level, they are concerned with wages, foreign trade, and crop restriction, justifying their signi- ficant activities on public issues at all government levels. The high percentage of wholesale and retail trade associa- tions that take stands on public issues is a little more difficult to explain until a close examination is made of the particular asso— ciations involved. Farm c00peratives, associations representing specific types of distribution such as automatic vending machines, trucking associations, all within this activity type are particu- larly concerned with such areas as trade legislation, vehicle li~ censing, taxation, and import legislation, tnat can greatly affect their respective competitive positions in the distribution process; consequently, they are quick to make their position known on this type of issue. As the data in Table 19 indicated, these problems are usually federal with some occurring at the state level, accounting 149 for the fact that wholesale retail trade leads all other activity types in formal contact with federal officials only. The manufacturing and services activity types rank below average in taking stands on public issues with approximately 39 and 46 percent respectively of these associations taking such stands. The service orientation of the services activity type helps to explain its degree of activity in the public sphere. Such groups are primarily concerned with serving existing industries in a professional capacity, leaving much of the legislative activity to the industries themselves. Manu- facturing associations are primarily involved with the production process; and although this activity naturally leads to concern with public issues, they exhibit less direct activity in this area than many of the other industrial types with broader interest bases. The finance, insurance, and real estate, and transportation, communications, and utilities activity types rank above average in the extent to which their respective associations take stands on public issues. Legislative problems continually face these industries, and close examination of these particular associations indicates a strong amount of influence is exerted on issues of federal and state importance. An overview of Table 22 gives a striking indication of the great extent of trade and business association activity in the public spheres. Almost three-fifths of the associations in the sample take stands on public issues which provides a good measure of how their activities can be felt throughout the total society. Public issues are issues of major concern to the greater society, and although they 150 may crucially affect some area of the economic world specifically, the fact that they do permeate the greater society makes the position of trade and business associations in the society even more pronounced. Public issues also reflect change. Issues of today are different from issues of yesterday. For example, the mere right of labor unions to exist was effectively challenged until the passage of the Wagner Act in 1935. Many associations tried to promote the interests of their industries by vigorously Opposing this right and hoping to keep unionization under control. But the forces of changing society (depression, New Deal, etc.) prevailed and unions won their right to exist in industry. More effective trade and business asso- ciations had to adapt to this change and accept the right of the unions to exist. As a result new stands were taken to control unions and reduce their impact on the firms represented by these associations. A more SOphisticated group of issues developed in the area of sound labor relations. This example is more meaningful if a close lock is taken at the types of issues upon which trade and business associations take a stand. Certain areas such as labor relations emerge as being significant to trade and business association activity, and important conclusions can be drawn about issues and Change. Table 23 places the public issues of concern to modern trade and business associations into meaningful categories. The 178 asso— ciations of Table 22 that take a stand on public issues are placed into these categories by type of issue involved. Since many asso~ ciations take a stand on more than one issue, the totals do not equal 100 percent. The nine categories of Table 23 are particularly 151 'mportant because they tell a great deal about the nature of the dy- namic forces that are referred to so often in this study. Forces are constantly at work in each of tne nine areas that affect the success of given associations. As change is imminent, stands are taken by associations to modify that change and to make it easier to live with, Type of modification sought is influenced by member- ship needs and interests. Closer analysis of the table indicates the areas of change where interests are most likely to be channeled by activity type. Of particular interest is the fact that over 50 percent of all associations reporting a stand on public issues take a stand on those issues dealing with taxation and fiscal matters. Over 70 per- cent of the organizations in both the finance, insurance, and real estate and national business associations activity types take a stand on issues in this general area. Transportation, communications, and utilities associations also rank high in this area. Interestingly enough, the agricultural activity type ranks lowest with only about one-fourth of its associations that report a stand on public issues being active in the taxation and fiscal area. Table 23 indicates that it is the agricultural, foreign affairs, and health and welfare areas where agricultural associations are most ctive. While 55.6 percent of the agricultural associations that take a stand on public issues do so on agricultural matters, 25.9 percent of these associations also take stands on foreign affairs issues and 18.5 percent take sstands on health and welfare matters. In line with a previous discus~ sion, the export and import trade laws, and related food shipments 152 abroad account in great measure for agricultural association interests in foreign affairs; and various food welfare programs along with pure food and drug legislation help to explain their interests in health and welfare matters. On the other hand, the interests of financial, insuran'e,and real estate associations in fiscal matters is selfw explanatory, and the high percentage of these associations that take stands on taxation and iiscal matters would normally be expected. Earlier, the interest of national business associations in promoting issues at the local level primarily affecting the business and pro- fessional community was established, and Table 23 indicates that these interests often are centered around taxation and fiscal problems. The interest of these organizations in problems at the grass roots level is also indicated through the Wide range of issues on which they take stands. At least 8 percent of the national business assow ciations take a stand on issues involving every major category listed in Table 23, and this is the only activity type with this widespread representation. This national business association activity type is particularly active in general legislation, health and welfare, labor relations, and education; and the issues in LEGS“ :ateqories often predominate at state and lo:al levels. Manufacturing trade assOciatiOhs are particularly active in areas that affect competition and produ, ion. Taxation and fiscal matters are very important to costs of production and profits. Over 50 percent of the manufacturing trade associations take stands on these issues. Thirty~one percent of these assOciations take stands on foreign affairs issues. 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NH m m.NHm H m.NN N méma N mini N 0.8 NH 4 m.NHm H N.mNN H QNN n «6 N .834 .8535 NN N N.mNN m dem : o.oo o :.N N m m£Hm N H.HHm N N.mNN ; o.o o m 0.00 H 9mm mH 83d .25 u N125 u ‘68 u ‘68 u N63 u a .20 u N 6.5 u N120 u .726 a .725 u N Guam Ova Ova Qua CUE Ova Oé Iva Ova Ova 8:3» mfixg Hanna a 82523 banana afiaflom 83H»: 833 .58.: 838:8 SHfiBHH 8:»ng3 83958.3 83339 qflnfi 933 use 3&3 ”328 HEB 25. 3.332 3.3832 avian H388 wens .3333 P so 33m a 33 8033082 523 83% .mN Ema. 154 eyqaort-import restrictions, and government sales and purchases from aeroad are of basic concern to manufacturing, Public resource issues atytract the interest of 23,7 percent of the manufacturing associations “wiich is significant; raw materials and public power interests of rnariufacturers account for their interest in this area, It is sur- purising that they rank fifth in taking stands on labor relations :isssues with a 13,2 percentageo A plausible explanation for this lcnwer ranking is that labor unions are more entrenched and accepted iri manufacturing than in wholesale retail trade or services, and pose lenss of a threat to the welfare of the respective memberships, These Ilartter two activity types rank high in their interests in labor re— lertions. Wholesale retail trade, which ranks first in this area, is ccnastantly threatened with labor union inroads it feels it cannot afFford from the standpoint of costs. Services represent a profes~ Simonal interest quite opposed to the ideals of organized labor° Many Of: the services associations sustain managerial interests in regard 'tO labor unions° While trade and business associations are most active in taXation and fiscal matters they are least active in the categories ‘Df Civil liberties, military, and education, In fast, national busi- flesss associations, with their diffusion of interests, are the only aSESociations that are significantly active on these latter issues, Thf? paucity of trade and business association activ1ty in these catew gOJTies indicates that changes in these three areas do not signifi- Carltly threaten them generally, It is clear from the preceding analysis Of‘ Table 23 that change in particular areas of society is a basic 155 interest of trade and business associations. The emergent forces at work in the area of labor relations are of particular interest to wholesale retail trade. Inroads of foreign competition and the attendant problems that face manufacturers generate a basic interest among manufacturing trade associations in foreign affairs. Trans- portation, communications, and utilities associations are continually interested in issues involving the use and control of public resources. Trade and business associations are generally concerned with taxation and fiscal issues which affect costs and profits in their respective industries. The fact has been established, as suggested in hypothe- sis I, that these associations are membership-oriented institutions and they exist to fulfill certain membership needs. Emergent forces producing changes in basic areas such as those identified above affect both membership needs, and subsequent demands made on asso- ciations. Given associations, as suggested in hypothesis II, attempt to flourish in the face of an emergent society by taking stands on major issues that serve their respective memberships, and seek modi- fications that help keep them congruent and adaptable to the dynamic forces of the society. While taking stands on public issues by trade and business associations is a significant vehicle for influencing change in the public Sphere, it often involves more reaction to forces rather than actually shaping the forces themselves at the grass roots. An effec- tive means of shaping the forces of change is to educate the general putflic to a particular point of view. These associations do conduct external educational programs directed at the general public, 156 Table 24 is an analysis of the extent of this external edu- cational activity among the seven activity types. Nearly one-half (46.6 percent) of all trade associations conduct external educational programs directed at the general public. While this figure is con- siderably less than the 83.3 percent that conduct internal educa- tional programs as indicated by Table 18, Chapter IV, it is still large enough to indicate that this type of activity plays an impor- tant role in the functional nature of many of these associations. The agricultural activity type ranks highest with 67.5 percent of these associations reporting positive responses to the external edu- cational activity question. The manufacturing activity type also ranks above average with 53.3 percent of these associations indi- cating that they have external educational programs. The wholesale retail trade activity type ranks seventh with one-third of these associations conducting external educational activity. The co- hesive nature of the competitive problems that face agriculture and manufacturing helps to account for their higher ranking when comm pared with wholesale and retail trade. Transportation, communications, and utilities associations face a high degree of governmental control and also rank low in this activity among the seven activity types. How- ever, the fact that nearly one-half of all the associations in the sample do conduct these programs emphasizes grass roots activity that can be used to influence the public. Disseminating knowledge favorable to the association facilitates its adjustment to a changing environment. Opinions are shaped, issues are recognized, and information is ex- changed that support the trade or business association's position in 157 TABLE 24. Presence or Absence of External Education Programs by Activity Type Xss. N_o Mel Activity Type Rk. Rk. # % Ord. # % Ord. # 96 Agriculture 27 67.5 1 13 32.5 7 40 100 Manufacturing 48 53.3 2 42 46.7 6 90 100 Finance, Insurance and Real Est. 15 48.4 3 16 51.6 5 31 100 National business associations 15 45.5 4 18 54.5 4 33 100 Services 23 37.1 5 39 62.9 3 62 100 Transportation, Comm. 8 Utilities 10 37.0 6 17 63.0 2 27 100 Wholesale and Retail Trade 15 33.3 7 30 66.7 1 45 100 Totals 153 46.6 175 53.4 328 100 the greater society, and all this is accomplished at the grass roots level, which is so vital in democratic government. This brief analysis of the public sphere is not comprehensive of all possible avenues of trade and business association influence in that sphere. Instead, two basic vehicles were investigated that are used by trade and business associations to shape and adapt to change. The extent that these associations use each vehicle adds further support to hypothesis II of this study. Summary It was hypothesized in Chapter I that trade and business asso~ ciations vis-a-vis society come into being, grow, and flourish to the extent that their objectives are congruent with the psychological, sociological, and economic forces of a changing society. A corollary 158 to this hypothesis states that survival of a given association depends upon its ability to adjust to the emergent forces in the surrounding society. The contents of this chapter are supportive of the above hypothesis and its corollary. By focusing on the governmental sphere and the broader public sphere, this chapter exhibits data that demon- strate the important interaction between trade and business associa— tions and the greater society. Governmental relationships and public influence mechanisms emerge from the analysis as vehicles widely used by these associations in their attempt to stay congruent with the dynamic forces of the society. Table 25 contains a capsule summary of the chapter by taking the important variables analyzed and assigning high, medium, and low values to each of them by activity type. These high, medium, and low values are assigned relative to the other ac- tivity types. A given activity type can rank low or medium in amount of activity in a given area when compared with other activity types; but, as the data presented have shown, it can still conduct a signi- ficant amount of activity in that area in the absolute sense. Table 25 shows that participation in the governmental and public spheres is considerable, even on a relative basis. Five of the seven acti- vity types rank high in at least one area of participation; and a sixth (manufacturing) conducts a moderate amount of activity in all areas mentioned. Services is the only activity type that ranks com~ paratively low in extent of participation in these two spheres, but earlier analysis revealed that its participation was significant in certain limited areas. Extreme specialization of interest which characterizes services associations accounts for this finding. While 159 it is a significant fact that agricultural associations have the closest ties with government, and are particularly active in the public sphere, Table 25 indicates that the broader societal re- lationships of the other activity types must not be undernempha- sized. Particularly, the finance, insurance, and real estate, and wholesale and retail trade associations are very active in the two spheres. The economic development of the American society is reflected in this finding. The financial problems of the 1880‘s, trade legislation in the 1890's, and the highly cyclical nature of economic activities in the first half of the twentieth century were of basic importance to these two activity types. These problems and ensuing legislation were products of a changing society, and they, in turn, produced further changes that greatly affected fi- nancial and business interests. For example, banking failures and the subsequent establishment of the Federal Reserve System, the de- pression of the 1930's and the bank reform and work projects that followed created definite interest channels between government and finance. The trade and trust problems of these earlier decades that resulted in such legislation as the Sherman Anti-Trust and Clayton Acts as well as later trade legislation have deveIOped si- milar interest channels between government and wholesale retail trade associations. Although these examples refer to those activity types that rank highest in governmental and public activity in a relative sense, it is again stressed that other activity types also significantly participate in these spheres. Similar explanations could be given 160 .883 hpAbflpom .350 on hpgfipow @5939“ Ho «Ammo. was. no .39595 Umfiwfimum 833.4? 30A paw .83.”va «swam z z m z A m .0034 nmofimsm Adsowpmz A A A A A : umofifimm z A z z z m manager: a. aowpmo IASEEOO «Gowpwfiomage m A m m A m page $3.9m A 3330:: m z m m z m 28 .mocmwwwwwmqummfim z z z z z : mawfipoaaaaz m m m . v , v _ m m m mbSHdofiuw< M3232 83% 335 , Hmnowpwoppm co 5ow 3.. mowoammd Hmhmumm moncmw< .986va Bowficoo H.309 353$ 683m god? :35 8.3.26 5A: 35.2 3.169 855 hays: .mo 23% . . 8.. peace . 188 Agog ummaa Hence on? .3233 .3 mmpmfim 335m cam Agcmefiopoo on... E” 530335 2033033. mumfimsm cam mumps mo EBA 33.3% .mm Ems... 161 for these other activity types, and each explanation would have one thing in common. Communality is seen in the fact that activity in the governmental and broader public spheres is considerable because it is used to both influence and adjust to the psychological, socio— logical, and economic forces of the surrounding society, which is. fundamental to a given association‘s survival and success. Thus, the tenability of hypothesis II and its corollary are clearly re- flected in the findings of this chapter° In the governmental sphere democratic government reflects societal hOpes, feelings, and changes; and trade and business associations facilitate congruency and ad- justment to these changes through the establishment of governmental ties. The public focuses on the grass roots elements of the society, and public activity such as stands on public issues and educational programs by these associations are designed to influence emergent trends in their favor. Activity in each sphere reflects the vital importance to the association of being congruent with emerging forces, and constantly adjusting to these forces. The tenability of both hypotheses of Chapter I has been supported. Chapter II tested both hypotheses through the historical method. Chapters IV and V utilized the empirical method, With Chap- ter IV testing hypothesis I and Chapter V testing hypOthesis II and its corollary. Chapter VI that follows contains three case histories of large-scale national trade associations that ha.e been carefully selected to contribute depth and insight into earlier quantitative discussion, and further test the validity of hypotheses I and II through the case method. While they are not representative of the 162 data in any quantitative sense, they do give a very clear picture of how the basic functions of trade and business associations have re- sulted in dynamic activities designed to adjust a given association's environment to the functional accomplishment of its goals. CHAPTER VI THREE CASE HISRDRIES THAT CHARACTERIZE THE GROWTH, ACTIVITIES, AND RESJLTING FUNCTIONS OF LARGE-SCALE NATIONAL TRADE ASSDCIATIONS Introduction: The Use of the Case Study Method in this Study It is the purpose of this chapter to look at three particular association histories in detail to demonstrate most clearly the na- ture of the influences that have shaped the face of each association. Primary attention is directed at testing the fundamental hypotheses of Chapter I using the case study method. The first chapter of this study of large-scale trade and business associations indicates that from an historical standpoint there are three primary focal points of analysis. Historically, three distinct periods produced pronounced effects on the character of large-scale national associations in terms of their activities, functions, and growth, namely, World War I, the great depression of the 1930's, and World War II. In line with the findings and conclusions of the preceding chapters, the case histories contained in the present chapter give a clearer picture of how the numerous influences affected each asso- ciation individually and the particular industry represented. Further- more, these cases give more penetrating insight into the need ful- fillment concept of hypothesis I and the emergent forces concept of 163 164 hypothesis II. Specifically, this chapter shows how these concepts operated in individual cases. Moreover, the three associations have been purposely selected in order that three major activity types would be represented, namely, manufacturing; finance, insurance, and real estate; and wholesale retail trade. In order to make each case history more meaningful, a brief introduction is included prior to each case which characterizes that particular association in terms of the categories contained in previous chapters. A History of the American Bottlers of Carbonated Beverages The first case history involves the American Bottlers of Car— bonated Beverages, which is contained in the manufacturing activity type. The ABCB's Washington headquarters, which moved from Detroit, is highly departmentalized with five administrative departments. The United States Chamber of Commerce and the National Association of Manufacturers are among the large number of affiliates of this asso- ciation. The ABCB membership contains managerial personnel repre- senting 2,605 member organizations. Like most trade and business associations, it is primarily financed by this membership through their payment of dues. Its total revenue exceeds $375,000, which is in the average range for these associations. Also, like many asso- ciations, it has no formal working agreement with federal agencies but does cooperate informally with the federal government. An in~ ternal educational program is maintained by the ABCB but formal exm ternal education is not conducted. Finally, its staff size numbers twenty—four, which is typical of the larger staffs of manufacturing 165 trade associations. Since the above description does not contain extreme examples, this association can be regarded as being highly representative of manufacturing trade associations. An historical view of the American Bottlers of Carbonated Beverages, the leading national trade association representing the soft drink industry, provides insight into how the aforementioned factors have affected the historical deve10pment of this particular association. Much of the historical data contained in this analysis were provided by John Riley's published history of the soft drink industry.1 The American Bottlers of Carbonated Beverages Association was formed in 1919 and was the outgrowth of earlier smaller asso- ciations that served the soft drink industry from 1882 to 1919. The earlier small associations were organized with protective goals. For instance, the U. S. Bottlers Protective Association, founded in 1882, had as its principal objective the prevention of the pirating of bottles, particularly the shipment of stolen bottles from one part of the country to another; it also attempted to secure passage of a federal law prohibiting the importation of carbonated waters, duty free, into the United States. The earliest association in the soft drink industry represents a clear attempt to both protect the competitive position of the membership of the association through regulating the type or extent of foreign competition, particularly the importing of carbonated waters; and secondly, to promote the 1John J. Riley, A History of the American Soft Drink Industry (Washington, D. C.: American Bottlers of Carbonated Beverages, 1954). 166 general welfare of the industry by regulating the traffic of stolen bottles from respective producers. However, little progress was made in efforts to secure the passage of a federal law prohibiting traffic of stolen bottles or the importation of carbonated waters, duty free, and a new association, the American Bottlers Protective Association, was organized in 1889. This association was also de— signed to protect the bottlers' property rights with respect to their individual bottles, and its principal activities were designed to carry out this objective. Pledged to the elimination of this loss, the American Bottlers Protective Association continued to attract new members and in 1894 a pr0posed federal bottle law was approved and referred to a special committee for Congressional introduction. Although the measure actually passed the House of Representatives in 1896, successive failures to secure its passage in the Senate re- sulted in the association's 1899 decision to abandon the federal approach and press for passage of stringent state laws. The Spanish- American War, at the turn of the century, introduced the first threat of a federal tax on soft drinks. This association was active in showing the unfair and unproductive nature of such a tax and its enactment was avoided. Another milestone was passed at a 1901 meeting when this same association endorsed a prOposal to require bottle deposits as a step towards a solution of the still prevalent stolen bottle racket. Again, the protection of competitive position and promotion of general welfare of the industry represented is clearly prevalent, and for the first time taxation arises as a major problem of a national trade association. It will be recalled from 167 Chapter V that trade and business associations take more stands on public issues involving taxation and fiscal matters than on any other issue. Similarly, this early American Bottlers Protective Association took a strong stand against the first federal tax to threaten the soft drink industry and was successful in preventing its enactment. Annual meetings of this association were held during the early years of the 1900's, but the interest of carbonated beverage bottlers lagged. This disinterest was largely due to the fact that membership of the ABPA included both bottlers of beer and soft drinks, a situation that frequently resulted in divergent objectives. In these early years many favored the reorganization of the asso- ciation to include only bottlers of soft drinks. Since no action was taken, however, the association entered the World War I period considerably divided in its organization and objectives. This fact gives a crucial example of what this study has alluded to in reference to the promotional and protection functions of hypothesis 1. It is obvious that the interests of the soft drink industry often con- flicted with the general welfare of the bottled beer industry, and as a result, a wide divergence in objectives and a cleavage developed between the two segments within the same association. During the early years of Wbrld War 1, beer interests were waning in this asso- ciation, and the bottle beverage industry united in its efforts to deal with new tax legislation designed to finance the war effort. Naturally, as a protective device the association wanted to keep taxes on its particular products at a minimum, but the changing demands of 168 the war years made this fight even more difficult. Taxation was the compelling reason for the reorganization action taken at a 1918 asso- ciation meeting with a new national association being formed specifi- cally to handle financial problems. The name adopted was the Na- tional Bottlers Association; however, this association was particu— larly concerned with the soft drink industry. This organization existed for only one year and its efforts were primarily directed towards tempering the federal 10 percent soft drink tax levied under a revenue act of 1918. The association was unsuccessful in efforts to combat this tax. In 1919 it took a Tong look at itself and the needs it must fulfill in order to meet its functional responsibilities. It was decided that the organization must be made both stronger and more representative of its industry. As a result, the association was reorganized into the present American Bottlers of Carbonated Beverages. While this case study concerns itself with the American Bottlers of Carbonated Beverages, this association was strictly an outgrowth of earlier organizations and each was essential in the for— mation of a national trade association representing the industry from its inception in 1882. The primary objective of the American Bottlers of Carbonated Beverages was the elimination of the unfair federal tax burden on its products, and in early years work was devoted alw most entirely to this cause. By 1921 this association had been suc~ cessful in modifying the position of the government with respect to the tax burden on the soft drink industry. The 10 percent tax on soft drinks was reduced significantly as of January I, 1922. In Chapter III the point was made that national associations 169 embarked on large-scale programs of trade promotion during the 1920's. This was also true of the American Bottlers of Carbonated Beverages. The association conducted special trade promotional campaigns with emphasis given to placing the industry's production function on a level equal to the steadily growing importance of the food products field. Particular attention was paid to prOper plant Operation from the standpoint of sanitation and product quality, and in the late 20's the scientific research began to appear. However, a basic program of publicity and trade promotion was the primary emphasis of this association during the period 1920 to 1930. The association indicated that in the early 20's the American consumer was familiar with carbonated beverages although he probably knew them by the name soda water, soda, or pop, common terminology for many decades. But, the industry's optimistic view, as reflected in the trade associa- tion, was based to a large extent upon prOper cultivation of the consumer preference for its product. Many customers were prone to look upon soft drinks as one of those products to be enjoyed only at a ball game or at a picnic and promotional activities were designed to change the image of the soft drink into a more widely consumed product. During the period 1926 to 1929, the American Bottlers of Carbonated Beverages subscribed to a national advertising fund totaling almost $900,000 which included a series of ads in magazines of national circulation and in newspapers extolling the beneficial and wholesome qualities of carbonated beverages. Trade promotion was quite successful and bottled soft drink sales in 1929 reached an all time peak that was not attained again for several years. 170 Thus, the widespread promotional campaigns of all trade associations are clearly exemplified in the American Bottlers of Carbonated Bev- erages. Furthermore, protection and promotion of the mutual interest of the membership represented was clearly prevalent in this asso- ciation during the 1920-30 period. In Chapter III one of the conclusions was that the depression of the early 1930's had a pronounced effect on trade and business association activity and in reality presented a threat to the very existence of many of these associations. In line with the activities of many other national trade associations, the American Bottlers of Carbonated Beverages continued their efforts in the areas of trade promotion and product research, during the 1930's. These efforts were an attempt to solve growing industry problems that primarily involved declining sales. The broader aspects of the economic de- pression were, of course, the nation's primary problem, but during the depression the soft drink industry7s problems of discriminatory taxation reappeared and this particular association renewed its attempts to prevent high taxation. The ABCB is a prime example of the way the NRA brought rea newed life to many national trade associations. The NRA, with its code of fair competition, expanded federal authority and regulation, served as a substantial warning to the industry leaders that only through a strong national organization could the problems of con— stant change in a growing industry be met effectively. During the depression years, the coordinated direction of activity through ABCB 171 under the NRA was a factor which helped the soft drink bottler to be one of the first to regain his sound pre—depression position. It is doubtful that without the impetus provided by the National Recovery Act such a position could have been achieved in such a short time or that the industry's trade association would have played a key role. The latter part of the 1930's involved a reconsideration and expan- sion of the most successful activities carried on by the trade asso- ciation in the pre-depression period. The help of renewed strength granted earlier under the NRA made the late 1930's a successful period for the ABCB and the soft drink industry in general. In fact, the industry progressed rapidly each year until the Pearl Har— bor disaster on December 7, 1941. The events of World War 11 created another era in association activity that had no counterpart in the past. Restrictions of World War I were insignificant in comparison to those of World War II. The shortages of sugars, bottles, cases, gasoline, trucks, equipment, and manpower required for production and business operations of the soft drink industry were an everyday occurrence. Rationing created many difficulties and the ABCB was faced with some of its most serious problems. The bounds and ties of its relationship with the federal government were both strengthened and more pronounced. Official ad- visory committees appointed by the government from the association's membership were constantly active and did much to alleviate the greater difficulties. Even under these circumstances the industry was able to maintain a modest record of sales growth during the war years except for 1942. The exceptionally high demands for soft drinks 172 by the armed forces and workers in industrial plants, and by con- sumers generally were contributing factors. Thus, in line with the general conclusions of Chapter III, the American Bottlers of Car- bonated Beverages emerged from World War II with stronger govern- mental ties, higher sales, and a firmly established position in the soft drink industry. Significant advances were made in the application of sta— tistics to industry problems through cooperation with wartime agencies and these techniques made possible further advancements in the post- war years. The post-war years were also characterized by a new public relations objective on the part of large-scale national trade associations and the American Bottlers of Carbonated Beverages was no exception. This association undertook a program of several years duration with its major purpose being to provide authentic infor- mation about the origin of carbonated beverages in the health field and their wholesome, beneficial, and refreshing qualities that could be available to every individual. Association publicity and adver- tising in the journals of the medical, dental, teaching, nutrition, and other Opinion groups were important features of this ABCB program. In addition to the intensive effort and time spent by the association, generally, committees and members also took individual parts in the activity; over a period of ten years a total in excess of $600,000 was expended for this important work. Post-war problems of the industry also required the combined assistance of the association membership in other directions. The 173 transition from a war economy to a new peacetime status presented many obstacles to the industry such as scarcity of new equipment and materials for manufacture, and shortages of structural steel and other elements vital to remodeling many of the bottling plants to meet new and expanded requirements. The solution to these and many other conversion problems was greatly aided by the industry's asso- ciation through its Washington contacts with the federal government and its agencies. The strengthened ties with government as brought about by World War II certainly continued in usefulness particularly in the form of more open channels of government communication in the post-war years. As was true with many industries, the profit squeeze that followed the war was a major concern of the soft drink industry. Again, the ABCB used its strong governmental ties established during the war years to alleviate the problem of rigid prices. Through this association's combined effort with other associations, prices were allowed to return to a flexibility and freedom through com~ petitive interaction that permitted members of the industry to un- dertake a readjustment of pricing levels. In addition to the pub- lic relations activity that most characterized the post-war period, this pricing adjustment was a vital factor contributing to the in- dustry's growth. Renewed emphasis on statistical research and development of industry products is also exemplified in the activities of the Ameri~ can Bottlers of Carbonated Beverages. For example, during the 1950 s the ABCB developed a special text and materials on job evaluation, 174 aptitude testing, sales training, and on the essential features of cost controls and profit planning. All of these subjects were dis- cussed and illustrated at the annual meetings and several series of conferences or schools were held in various cities throughout the country. In summary, the ABCB is illustrative of the historical growth of a particular large-scale national association that is very similar to the growth of trade associations as a whole. In line with the developments of Chapter III, both World War I and II and the 1930 depression had pronounced effects on this trade association's acti- vities that later affected the way its functions were performed. For example, the ABCB exemplifies the large-scale public relations and expanded market research activities that occurred in the post World War II era. It is interesting to note that the expansion of the soft drink industry, along with many other industries was particu- larly great during the post~war years and trade associations, in performing their function of protection and promotion of mutual inw terest seemed to embark upon activities of a much broader scale than had ever been seen before. Certainly, they were still concerned with taxation and fiscal matters, but by and large they were also under- taking an entirely different kind of activ1‘y with respect to their industries. This activity could be characterized as a renewed per- ception of the importance of an enlightened public in the success of any industry's products. Market research and public relations are ways of both understanding and fulfilling the needs of an enlightened PUblic. These needs are probably a result of an emerging affluent 175 society where goods are easily produced, incomes are high, and wants are many. This case history contains further evidence supporting both hypotheses I and II. The membership need orientation of the asso- ciation is clearly present in all its activities. The protection and promotion of mutual interest of hypothesis 1, as seen in the ABCB, have remained constant throughout its development as the representative trade association of the soft drink industry. It came into being, grew, and flourished to the extent it could meet membership needs. In reality, the association was an outgrowth of earlier associations which had failed to fulfill successfully their need-oriented membership mission. The emergent forces concept of hypothesis II is also clearly present in this history. Emergent forces generated by the war years and depression period threatened the survival of the association, and many steps were taken to re- main congruent with these forces. As developed in Chapter V, in order to survive, activity in the governmental and public spheres was used by the ABCB to deal with these forces. Earlier associa- tions in this industry did not adjust to change and thus failed. A History of the Investment Bankers Association of America In contrast with the above case study. illustrative of manu- facturing associations,tfiwalnvestment Bankers Association of America founded in 1912 falls into the financial, insurance, and real estate activity type. Possibly some differences will emerge between his- torical growth of this financial association versus the typical growth 176 of a manufacturing association. Historical pamphlets published by the IBA contributed many useful facts to this case history. The IBA established its headquarters in Washington, D. C. in 1954, moving there from Chicago. It sustains a headquarters staff of twenty-three, not organized into administrative departments. This association is primarily financed by its 795 member organizations represented by managerial personnel. The total income of $386,000 in 1961 included some money from proceeds from sales and services. Although the IBA does not have formal working agreements with federal agencies, it is particularly active in both the governmental and public spheres. It maintains informal c00peration with government, particularly the treasury department. Stands are taken on public issues, and it recently opposed withholding taxes on interest and dividends. It also conducts both internal and external educational activity. The basic purpose of the Investment Bankers Association, as stated in its Constitution, is as follows: In order that investment bankers may the better serve both those who purchase and those who sell securities through which the necessary funds are raised for the operation and expansion of business activities and for the carrying on of public functions and they thus contribute to the increase in national wealth and in its wide difusion. And in order that they may aid in these directions through mutual cOOperation, through the maintenance of high standards of service, through self regulation, and through the support of apprOpriate legislation this consti- tution is hereby adopted by the Investment Bankers Association of America. It is clear from this statement of purpose that this financial asso- ciation still maintains the two key functions of protection and 177 promotion of the mutual interest of its memberships. Promotion of mutual interest is contained in the statements involving the main- tenance of high standards of service and through the general concept of better serving those who compose their market. The concept of protection of mutual interest is contained in the statements of activities in support of apprOpriate legislation and self~regulation within the membership. In fact, the historical analysis of this association indicates that through its officers, committees, and staff the IBA endeavors to keep its membership advised of signifi- cant deve10pments affecting their interests and those of investors. From time to time reports are published on various industries, govern- ment, municipal and corporate securities, and other investment—re— lated subjects. The association officers and committees also speak for its membership on significant issues of the day. Through these means an association is able to present its own interests and, since theoretically the association represents its membership, the mutual aid factor is present and the interests presented are generally the result of the consensus developed within the association. In this way, the interests of the membersnips of the association are protected. The competitive protection function is important to understanding the early founding and growth of the IBA. While this association was actually founded in 1912, its roots go back to the older American Bankers Association which was founded in 1875. The factors sur- rounding the separation of the IBA from the American Bankers Associam tion gives a greater understanding or this protective function and 178 also helps to show the way in which many of the newer types of industries or enterprises developed with the growth of the particular industry or enterprise. For instance, the Investment Bankers Asso— ciation deals with a particular kind of investment banking and in the late 1800's and early 1900's this particular activity was just beginning to blossom in the American economy. But the emergent forces of the great society continually pushed it further ahead in growth and importance until by 1910 the interests of investment bankers were crystalized and isolated as an individual activity apart from all bankers. Thus, in 1910 a group of organizations en— gaged in the investment banking business, including some commercial and private banks, suggested to the American Bankers Association that a separate section on investment banking be established. In- terestingly enough, the American Bankers Association Executive Council voted against this proposal, and as a result an organizing committee of thirty investment bankers decided to form an inde- pendent national organization. With their own interests crystalized into a unified whole, investment bankers realized that in order to promote these narrower interests they were better off in breaking with the parent American Bankers Association. This crystalization of interests among the investment bankers led to their own separate national association. The Investment Bankers Association of America, was organized at a 1912 meeting in New York of representatives of 181 investment banking organizations and banks drawn from all parts of the United States and Canada. Until 179 that time, this was the largest single gathering of investment bankers in one meeting. This fact alone suggests the need fulfillment that was being sought by members of this profession. In the early years of this association, the kinds of interests that were of primary concern to these people as investment bankers are clear. At the first convention the members were interested primarily in the blue sky laws of that period and subsequently adOpted a resolution re- questing the legislative committee to draft a model state law rep- resenting the best views of the association. Also, effort centered in the first federal income tax law before Congress in 1913 and the IBA legislative committee advocated changes designed to promote the membership's interest. In 1915 the IBA taxation committee was active in the income tax filing problems of IBA members and published an extensive report in book form called Principles of Taxation. The Federal Reserve Act of 1913 that set up the federal reserve system particularly interested the IBA membership, and the special committee on monetary legislation that followed this period had tremendous impact in Washington on the relationship between investment banking and the federal reserve banks- The function of protection of mutual interest of its membership is clearly seen in the above actions. In order to establish a preferred position with respect to membership interests in the governmental sphere, this association resorted to pressure in the form of a legislative committee formed to deal with tax problems and other problems of importance in the investment banking business. Also the promotional function emerges from the creation of the special committee on education in 1914, which 180 formulated a bond course for young men entering the securities busi- ness. Two years later a second education committee was appointed to revise that course and to plan a companion course on investment banking. In 1917 this same committee surveyed university and college courses on investment and subsequently prepared a number of courses in book form for training securities personnel. Traditional trade association functions are apparent in this associationis activities in the years that preceded World War I. The World War I era had a pronounced effect on this trade association. The case history of the American Bottlers of Car- bonated Beverages indicated some of the unique problems that faced manufacturing interests as a result of the war effort. The types of problems that faced financial associations such as the Investment Bankers Association of America were somewhat different from the problems facing manufacturers because these problems involved a purely financial base as Opposed to a production base. Nevertheless, financial problems in any war period are certainly of equal impor~ tance to those of production. In fact, from 1914 to 1917 a deluge of foreign securities was absorbed by Americans and hundreds of millions of dollars were loaned to foreign borrowers who had pre- viously depended on London for credit. Our financial community, which had made practically no foreign loans prior to 1914, was stag« gered by the requests for billion dollar Anglo'French credit late in 1915. The Invesiment Bankers Associa ion played a major role in helping to solve the problems created by such requests. The tre~ mendous latent capacity of our financial machinery surprised the 181 European financial experts and they were anazed when our capital market machinery went into high gear following the declaration of war on April 6, 1917. The IBA and its members actively c00perated with the Treasury Department in making the liberty bond drives a success and from 1917 to 1919 over $24,500,000 in government bonds were sold to people who had been described previously by a com- mentator as not thrifty and unaccustomed to buying government bonds. Also, by the close of the war our country loaned the allies more than $10 billion. The facilitating functions provided by a na- tional association of investment bankers certainly must be re- garded as an aid to the financing problems that this period pre- sented, especially since their function is to link those requiring capital to those able to supply it. Strong forces of a wartime economy threatened the financial sector and the ability of this association to help that sector sustain itself in the war—time en- vironment was a great contribution to its membership. At the close of the war, the Investment Bankers Association emerged as a strong financial force largely because of its strength- ened relationships in the governmental sphere and its successful pursuit of recognition in the role of financial advisor and aid in government war finance. During the 1920's the IBA used its expanded strength resulting from a successful war effort to help private en— terprise with deferred financing in the domestic market. This effort was so successful that along with the other efforts in American busi- ness, the country became financially self-sufficient. Although state 182 and local governments expanded their debt greatly, IBA activities facilitated funds for this expansion and many municipal improvements became a fact during the 1920's. The IBA staff continued to expand during the twenties to help handle this larger volume of financing. Additional groups were formed throughout the country to work on local problems and assist the national association at the national head- quarters level. It will be recalled from Chapter III and also in the example given in the American Bottlers of Carbonated Beverages that during the 1920's large—scale trade and business associations embarked upon significant programs of trade promotion and national advertising during this period. This was true in finance as well as in manu- facturing. The Investment Bankers Association began a national adw vertising campaign in 1924 to inform the public about the dangers of "get rich quick" schemes and to foster sound investing. Much was accomplished by the IBA publicity committee with a special budget of $250,000 provided by membership subscriptions in the mid twenties. In 1927 the IBA published a book on advertising investment securities in c00peration with the Financial Advertisers Association. While manufacturing trade promotion activities during the twenties cenu tered in promoting speCific advantages of different types of products produced by the industries which particular trade associations repm resented, it is apparent from the IBA that financial trade promotion often took the form of advertising on behalf of sound investing, sound borrowing, or sound financing. During the ‘20 s the IBA also emphasized some educational programs designed to acquaint people wit 183 the functions of investment banking° Applied to financial associa- tions, these particular types of promotions were sympathetic to the members of the respective association. In function, there is essen- tially no difference between the manufacturing type trade promotion and the financial type trade promotion in that each is designed to promote the interest of the membership represented. In manufacturing, of course, this interest represents a particular type of good, while in finance a particular type of investment, credit, or banking in- terest is involved. This association entered the depression period as a strong and vibrant association that was partially a result of the pros- perous twenties. In Chapter III of this study emphasis was placed on the tremendous impact of the great depression of the early thir— ties on the activities, nature, and position of large—scale na- tional trade associations. The great importance of the NIRA was pointed out both in Chapter III and in the case of the American Bottlers of Carbonated Beverages developed earlier in this chapter. But probably no group of associations in American life felt the im- pact of the great depression to any greater extent than did those associations particularly involved with the financial aspects of the economy. Further, probably no other association experienced any greater impact from the depression than did this Investment Bankers Association, which was particularly involved with the securities as» pect of finance. The period following the stock market crash of 1929 was one of profound change and adjustment for the financial community 184 in general and the securities business in particular because it marked the advent of a long series of federal laws designed to regu- late both banking and the securities business. These regulations were an outgrowth of the serious problems of American finance that were fully realized with the hardships brought on by the depressed con— ditions. The entire financial segment of American life was about to undergo a series of revisions and reorganizations. The Investment Bankers Association became involved in this type of revision acti- vity more than in any period of its history. The records of the association disclose that its officers, committees, and staff were devoted in large part to these problems, specifically in trying to devise constructive contribution to these proposed changes and additions to the law. In addition to the NIRA, the banking and securities acts of 1933 and the Securities Exchange Act of 1934 were key acts containing provisions dealing with all facets of securities and their regulation. The nature of these acts in their final form was certainly influenced by the legislative activities of the In- vestment Bankers Association but their effectiveness in actually changing any of the provisions can be questioned. Nevertheless, the activities of the IBA in the governmental sphere were recognized and given at least limited consideration, and the association entered the 1940's in a stronger position in the American economy than it had ever before experienced. While the activities of the association in the governmental area were a trying experience, they were important 185 and expanded in many areas designed to strengthen the position of the industry. The organizational structure of the association was re~ vised in 1936 and geographical units were established to help deal with municipal and state problems on a regional basis. But more significantly. this association in finance, as the ABCB and others in manufacturing, attempted to promote conridence and renewed demand among American consumers and investors. In the mid—thirties the IBA inaugurated a program to restore popular confidence in securities investment and to provide an increased volume of funds for economic growth. Groups and members were encouraged to conduct public forums on securities and investing, and newspapers were urged to give ad- ditional space to reporting the se:urities markets and related de~ velopments. Again, this general trend of trade association asti- vities in the thirties centered around the problem of reviving the economy, and the protection of membership interest took the form of an expansion of activities designed to revive the life of the par- ticular industry represented. In fact, in accepting the presidency of the association in 1938 President J. C. Witter pointed out that the association’s number one job was to revive the investment banking business, not alone for the benefit of those in the busi- ness but for the benefit of everyone in the country, the working man, the farmer, the businessman, the man on relief. President Witter also emphasized that the number two job was to explain the invest— ment banking business to the American people and to correct the general misunderstanding that has prevailed about the business. President Witter saw this problem as did many men of other industries as one in 186 which the industry had to be revived at the grass roots level. Just before World War II the IBA subscribed nearly $700,000 in addition to normal dues for a public information program conducted by a public information committee with offices in New York. The committee prepared booklets, speeches, and articles for publication in magazines and also sponsored the first IBA film "America Looks Ahead." This program was a part of President Witter's attempt to continually revive the investment banking business because the full effects of the depression on the financial segment had not been counteracted by 1940. This program was continued until the start of World War II and proved to be quite effective. The banking busi- ness was certainly on the upswing and the census showed that right after the start of the war in 1942 the aggregate capital of the membership was extremely high. In fact, as early as 1939 the sum had reached the $330 million mark. Thus, investment banking entered World War II with renewed life and the IBA played a major role in this revival. In World War II, as in the first world war, the IBA co— operated wholeheartedly with the U. 8. Treasury to foster the sale of government bonds to finance the war effort. The Treasury created victory fund committees in each of the twelve federal reserve dis- tricts in 1942; many who had been active in IBA affairs served on these committees throughout the war. Also, the IBA sponsored a war finance conference at their 31st annual meeting at New York City in 1942 to discuss the vast job of financing the nation’s defense needs. 18? Other attempts at solving war and postwar financial problems were continued until the close of World War II under the sponsorship of the IBA. As with other trade associations, the war effort strength— ened government ties and emphasized the fact that there was no sub- stitute for the organized association in helping to solve the mul- titude of wartime problems of the respective industries. Certainly as many other trade associations greatly aided production or services in the war effort, the IBA greatly aided the financial aspects of World War II and the effort was of comparable importance to the other segments. During the postwar years, like most other large-scale na— tional associations, the IBA continued to grow in prominence, strength, and numbers. This growth can, in part, be attributed to the growth of the financial system itself. Over the sixteen year period, 1946 to 1961, $120 billion of new money was obtained by in- dustry through the sale of securities, and the investment banker played a major, if not dominant role, in this operation. To assist the association's officers and committees in these expanded activi» ties after the termination of the war, a number of additions were made to the IBA staff. A Washington office, in addition to the Chicago office, was Opened in 1946. The staffs of the two offices were consolidated into a single office in Washington in 1954. While New York and Chicago emerge as financial centers in the locational analysis in Chapter IV, it is important to note that this particular association, while originally located in Chicago, in recent years transferred its headquarters to Washington. The close association 188 of investment banking to municipal and other types of governmental finance probably played a key role in this movement. During the postwar years the IBA, like many other trade associations, continually expanded its educational programs to in- clude training courses, management seminars, and all types of group educational activities. Public relations activities were increased through radio, television, and other media. The civil suit brought by the U. 8. Justice Department charging antitrust violations against seventeen member investment banking organizations in 1947 had some effect on stepped up education and public relations activities. This suit dragged on for four years but was dismissed in November, 1951 without further action. The suit essentially charged that the defendants entered into a combination conspiracy and agreement to restrain and monopolize the securities business of the United States, and that such business was thereby unreasonably restrained and in part monopolized. Although this suit was dismissed in 1951, it gives a splendid example of how protection of mutual interest as set forth in hypothesis I as a major trade association function can be Number of volunteer workers in 1960 regularly utilize tolunteer workers? [3 No 7 Is the national D Yes II> If YES, how many distinct headquarters composed departments are there ? of distinct [:1 N0 administrative departments? Does the association D Yes 9 Is there a manual of E] Yes have a procedures to guide tesearch department? E] No the employees' work? E] No ‘0 Is there a written §2 91 rules prescribing the conditions under which an [:1 Yes Employee may be dismissed or otherwise released from employment? [3 No Are there written job descriptions specifying employee responsibilities DYes, for most positions DYes, for some positions l and duties? [:1 No, not for any positions ‘2 Are the salaries or [:1 Yes Ci) If YES, E] 3 grades or less wages of the national how _ association's employees D No many E] 4 6 grades fixed according to a grades [3 7-10 grades formally (written) are tha 10 h graded schedule? there? Elmore n ( 0‘" many?) I 3 Does the association have an DYes I employee retirement plan? DNO REGIONAL, STATE, AND LOCAL STRUCTURE OF THE ASSOCIATION Does the association have regional DYes CD If YES, how many units (i.e. , units covering more such units than one state) ? DNO are there? Does the DYes C> If YES, how many association state units have state units? DNO are there? If NO b How frequently are meetings DOnce a year state unit, of the general membership go on to I held at the state level? DOther (specify) Question ' 6 How many full—time employees work at -—w I} the state headquarters of the association? r-—0~ 4 Who pays the D State unit employed officials D Regional unit of the [:I National association state units? [3 Other 5 Are the paid officials of the state units D Yes subject to the direct administrative l authority of the national association? D No Does the association have organized local units D Yes l:> If YES, how many of any kind? (For example, does it have local local chapters, societies, or groups organized on a DNO units _ municipal, county, or other basis?) are there? 1.1 221 If NO local units, membership of these 6bHow often does the general D Once a week [3 Once a month 7 l at all the local units of go on to local units regularly meet ? D Other (specify) Question 11 How many full-time workers are employed the association ? I} 8 Who pays the employees at the local units ? D Regional unit [:1 National association [:I Local unit DOther (specify) E] State unit Are the paid officials in the local units subject to the direct administrative authority of the national association? 1 D Yes DNO I o Is there a prescribed I maximum membership L—_> If YES, please specify maximum D Yes D No size for local units? " Where is the main activity of the association carried out ? E] National level [3 State level [:IRegional level [3 Local level E ORGANIZATIONAL FINANCES I What was the association's gross income How much of the association's income for 1960 for was allocated 1960 to research? $ 3“ How is the DMembership initiation fees DGrants from government agencies 2:2:1251311 DMembership dues DGrants from foundations (What [:IAssessments of the membership [:IProceeds from sales or services 2:31:18: of DPublic fund-raising campaigns DReturns from investments or its funds?) DUnited Fund or Community Chest endowments industry Gifts or grants from business or DOther (please specify) b NEXT :1) IL of its income. Please circle the item[s ] from which the association receives 25% or more 222 4 Does the association own any buildings or land? Yes D No [:]Less than $25,000 DBetween $25,000 and $100,000 DBetween $100,000 and $500,000 If YES, please indicate the approximate value of holdings below: DBetween $500,000 and $1,000,000 ClBetween $1 million and $5 million DMore than $5 million Approximately how many DNone D11 -2 0 D 51 - 100 DMore than 200 typewriters does the Lnational association own? Dl-IO DZI-SO [3101-200 F INTERNAL AND EXTERNAL COMMUNICATIONS FUNCTIONS OF THE ASSOCIATION i During the past two years, has the association taken an official stand on any public issues? - DYes DNO If YES, please indicate very briefly the name or nature of the three most important issues. 2 In what ways did the assomation make its posmon on these issues known? B Advertising in newspapers or DPublic addresses (Please magazines B Public debates check D Advertising on radio or television DPublic rallies marches etc all DContacting Federal legislators DFormal resolutions items DContacting State legislators D Other (please specify) which DContacting Federal officials apply) DContacting State officials I I 3 Is it the policy of the DYes 4 How is the DNewsletter , , , membership , assoc1ation to refrain DNO informed DBulletms from taking an official about the Djournal d l' ‘ association DForm letters Stan on p0 meal or and its controversial public issues? activities ? DOther (please specify) _.J 223 Does the association actively carry on educational programs for its members? DYes CD If YES, what DOrganized classes DLectures, talks, etc. DNo what forms do DSeminars DOthers (please specify) these programs DWorkshops take ? DConferences MEMBERSHIP Associations utilize a wide variety of classifications and methods for TYPES, SIZE, countingtheir members. For this reason, a single figure for total membership, AND while important, frequently fails to give an accurate picture of the complexities COMPOSITION of an association's size and composition. It will thus be very helpful if answers to the following more detailed questions about your membership can be provided. " Please list Classes or Types of Memberships Number the classes or types of l) __ memberships . 2) in the association, 3) and list the 4) number in each type. 5) , Please describe briefly the qualifications which prospective members must have in order to join the association. How many individuals and how many organizations 4 How frequently does the association were members of the association in these years? hold a national convention? Individual Member D Annually members Organizations D Other (please specify) 1960 How many members of the association 1955 5 registered at its last national convention? 1950 L 1945 1940 May the association DYes 1930 Efiirfsrfj: 3381:1188? DNO 1920 1910 May a member DYes be expelled for 1900 [file cause? DNO 224 Is your membership composed of persons from any of the following occupational groups? Check all that are applicable, and include, if possible, an estimate of the number of members from each group. V Number Occupational group Blue collar worker Clerical worker Retail salesman or clerk Other salesman Supervisor Minor executive Major executive Small business executive (sales under $50,000) Large business executive (sales over $50,000) El DDDDDDDD Number Occupational group Engineer Doctor Scientist Minister Professor Public school teacher Government official (federal, state, local) Other (specify) Cl DDDDDDD < If g Y b Is your membership widely dispersed among these occupational groups? EN? 9 Are all DYes [:INO |:> If NO, please explain members of the national association also members of its local units ? N TE 0 It would be very helpful if the information you have provided in this questionnaire could be supplemented by copies of the following. (Please check the material you are sending to us in the appropriate boxes. ) DConstitution or charter DOrganization chart D Literature describing activities E] Literature describing association '5 history E] Literature describing membership APPENDIX B FINAL QUESTIONNAIRE APPENDI X B Study of American Associations Michigan State University CODE USE A PRESENT AND PAST LOCATIONS OF HEADQUARTERS I 1 Name of Association I 2 Headquarters location ..... S I City State 3 Year headquarters was ..... 6 I established in above city: 4 Previous location of headquarters . . . 7 I City State 5 Original location of headquarters 8 when association was founded: ' ° I City State B THE GOVERNING BODY OF THE ASSOCIATION l L How many persons compose the governing body of the association? ''''' 9 I 2 How are the full DDirectly elected by the general membership (voting) members of DElected by incumbent members of the governing body the governing body DElected by representatives of the general membership ' ' ’ 10 selected? DOther (explain) I 3 How long is their term of office? B One year DMore than two years (specify) ,,,,, 11 I E] Two years [No time limit on term of office I 4 Is there a limit to the number of terms [:IYes L a member may serve on the governing body? [:INO ° ' ' 12 I 5 How frequently does the governing DOnce a year 13 bod hold re lar meetin 8? Other (specif ) """ I— )! an s [:1 Y 6 Do the members of the governing body receive any remuneration? D None D Travel expenses 14' I E] Salary DOther (specify) °°°° 7 How is the president DDirectly elected by the general membership (i.e. , highest officer) DElected by the governing body 15 of the association DElected by representatives of the general membership ' ° selected? DAppointed by: 8 Do the responsibilities of the association's A. Federal B. State C. Local ' ' ° ° ° 16 principal (voluntary or paid) officers . . . . . l7 require them tobe in regular contact with D Yes D Yes Yes 18 federal, state, or local government officials? D No D No D ‘No ' ' ' ° ' SAA62 ' page one 226 227 EMPLOYEES, RULES, AND STRUCTURE How many full-time, paid employees work at the association's headquarters? (Include paid staff of all ranks and grades.) ..... l9 Are there any other full-time employees, paid by the national association, whoggnot work at its headquarters? DYes E] No ----------------------------------------------------------- , ..... 20 l:> If YES, please enter the number of additional l full—time employees paid by the national association here: , ..... 21) Does the job of the highest paid official require his (her) D Full-time services on a full-time or part-time basis throughout the year? DPart-time ----- 22 Does the association have an E] Yes 23 employee retirement plan? E] No °°°° Is the national headquarters composed of distinct administrative departments? my... UN. .............................................................. 24 D If YES, how many distinct departments are there? Is there a manual of procedures [:1 Yes 25 to guide the employees' work? D No """ Is there a written set of rules prescribing the conditions under which an D Yes 26 employee may be dismissed or otherwise released from employment? E] No """ Are there written job descriptions D Yes, for most positions specifying employee responsibilities D Yes, for some positions ..... 27 and duties? CI No, not for any positions Are the salaries or wages of the national association's employees set according to a formally (written) graded schedule? DYes DNo ------------------------------------------------------------ 28 9“ D If YES, enter the number of grades here i 10 Does the association have a written policy stating the D Yes 29 1 conditions under which employees may be promoted? D No """ l I ‘ Does the association have an organization chart [3 Yes ----- 30 . depicting its administrative structure? D No I ..... 31) l . REGIONAL AND STATE ORGANIZATION OF THE ASSOCIATION I ...32) Does the association have regional units (units covering more than one state)? I DYes D No ----------------------------------------------------------------- 33 I“ ::> If YES, how many regional units are there? page two SAA62 CODE USE 228 CODE USE Does the association have state units? Yes N D D 0 --------------------------------------------------------------- 34 If %a If YES, how many state units are there? . """"""""""""""""""""""""""""""""" “I NO S—‘atg “mtg” Zb What is the total number of paid staff go on to employed at the several state units, combined? Section E DNO paid staff is employed at the state units °°°° 35 DThe national association does not keep records of the number of {l employees in the state units 2c Who pays the DState units employed DNational association , , , . , 36 officials DOther: of the DThe national association does not keep state units? records on officials in state units 23 Are the paid officials of state units subject to the direct DYes ..... 37 l administrative authority of the national association? DNO E LOCAL UNITS OF THE ASSOCIATION I Does the association have organized local units Of any kind? (For example, does it 1 have local chapters, societies, or groups organized on a county or city basis?) DYes Elm .......... 38 If 1“ If YES, how many local units , I are there in the United States? NO local units, I 0 on to 2 Does the association maintain records that DYes g ‘ indicate the number of local units in each state? DNO Section F 2“ If YES, please attach a list showing the number of local units in I each state for the year 1961, or send under separate cover. r 8 3 How Often DOnce a Week do the local DTwice a month , , , , , 39 units usually DOnce a month ‘ meet? ‘ ‘ DOther: ' I What is the combinedtotal number of paid 4 staff employed at the various local units? DNO paid staff employed at local units '''' 40 National association does not keep records on number Of paid staff in local units 5 Who pays National association D National association the paid Local unit does not keep records ,,,,, 41 staff of the E] State unit on who pays the paid local units? DOther: staff in local units 6 Are the paid officials in the . D Yes local units subject to the D NO ' ..... 42 direct administrative authority D No paid officials in Of the national association? , local units SAA62 page three 229 3 l CODE USE F ORGANIZATIONAL FINANCES i What was the association's gross income for 1961? ..... 43 I 2 How is the association financed? (Please check offall items from whichthe association receives income.) DMembership dues C] Grants from government DMembership initiation fees E] Grants/gifts from foundations DMembership assessments [:1 Proceeds from sales/services ---- 4’4 DPUbliC fund-raising D Returns from investments or [limited Fund/Community Chest endowments DGifts from business firms D Other: 3 Please C IR C LE the item[s] above from which the association receives 25% or more ..... 45 I Of its income. I 4 Does the association compile and publish an annual financial statement? I DYes D NO ____________________________________ 1 l:> If YES, and if it may be released tO us, please attach or send under separate I cover the association's financial statement for 1961. I 5 Does the association own any buildings or land? I DYes D No ___________________________________________________________ 46 5’ l:> If YES, please CI $25,000 or less D $500,001 tO $1 million ‘3 indicate the approximate [:1 $25,001 tO $100,000 E] $1,000,001 to $5 million I value ofthese holdings here: [3 $100,001 to $500,000 U More than $5 million I 6 Approximately how many CI None [3 11-20 C] 101-150 [I More than 300 typewriters does the C] l- 5 C] 21-50 [3151-200 (SPeleY) ----- 47 I nationalassociation own? C] 6-10 E] 51-100 [3201-300 I I 6 INTERNAL AND EXTERNAL COMMUNICATIONS P 1 How is the membership D Official journal informed about the C] Bulletin ..... 48 association and its E] Newsletter activities? D Other: I 2 Does the association actively carry on educational programs for its members? I DYes D No ________________________ 49 2 12> If YES, what [:I Conferences D Talks, lectures forms do these D Workshops D Other: programs D Classes take? E] Seminars [:I Demonstrations D Other. What was the (approximate) total number of members who were ..... 50 reached by these several types of educational programs in 1961? page four SAA62 230 Does the association actively carry on educational programs directed at the general public? DYes D No -----------------------—---—-—------—-----------—-------- If YES, E] Conferences DTalks, lectures what forms [:I Workshops do these D Classes DOther: programs [3 Seminars take? D Demonstrations DOther: What was the (approximate) total number of persons reached by these several types of educational programs in 1961? During the past three years, has the association taken an Official stand on any public issues? CIYeS D No --------------------------------------------------------- If YES, please indicate the name or nature of the three most important issues below: (1) (2) In what ways did the association make its position on these issues known? (Please check all items below which apply.) [1 Formal resolutions of the governing body E] Contacting business firms U Formal resolutions of the general DContacting officials of other membership associations Advertising in newspapers or magazines DOrganizing or participating in public E] Advertising on radio or TV assemblies, rallies, etc. D Contacting Federal legislators DPublishing pamphlets, booklets, etc. Contacting Federal officials U Contacting State legislators DOther: Contacting State officials Is it the policy of the association to refrain from taking an DYes official stand on political or controversial public issues? DNO DYes [:INO RELATIONSHIPS WITH OTHER ASSOCIATIONS AND FEDERAL AGENCIES Is your association itselfa member of, or affiliated in any way with, any other associations? -------------------------------------------------------- d (:1) If YES, please list names of other associations below. (NOTE: If space is insufficient for complete listing, please attach separate sheet.) Please CIR C L E the associations listed above on whose governing bodies your association has an official representative. SAA62 CODE USE ..... 51 ..... 52 ..... 53 ..... 54 ..... 55 ..... 56 ..... 57 ..... 58 page five 231 Do any associations have official representatives on the governing body of your association? DYes D No If YES, please list --------------------------------------------------------- q the names of associations here. NOTE: If space is insufficient for complete list, please attach separate sheet. _ CODE USE ..... 59 Does your association have any type of formal (written) working agreement with any associations other than those you have listed above? DYes DNO D If YES, please list the names of these asso- ciations here. (As before, if space is not sufficient for complete list, please attach separate sheet.) ..... 60 Does your association have a formal (written) working agreement with any agencies of the federal government? Does your association carry on any cooperative activities with any federal agencies? No If YES to either Question 4_o_r_4a, please list the . names of those federal agencies here: ..... 61 ..... 62 ‘xi‘ “+V“—_€t—§ —""—‘*—X‘ —‘”'———’s’—N- Has your association ever merged with, absorbed, or branched off from another association? , D Yes, merged D No C] Yes, absorbed Yes, branched off Name of Association If YES, please list here the names of the asso- ciations with which yours merged, branched off from, or absorbed - and give the year it occurred. THE MEMBERSHIP OF THE ASSOCIATION .....63 How many individuals were members of your association in 1961? How many organizations (e.g., business firms, schools, colleges, other associations, etc.) were members of your association in 1961? Are the individuals in these member organizations counted as members DYes of your association and included in the figure you entered in Question 2? DNO ‘ we" Ni'-‘h-r page six SAA62 232 ..A- D Yes Does the association maintain records indicating the number of members in each state in the U. S.? If YES, please attach a list showing the number of members in each state for the year 1961, or send under separate cover. 0\"— Vi"? Are all members of the national Yes association also members of its NO local units? Association does not have local units EIJD Yes No Are all members of the national association also members of its state units? DUE! Association does not have state units In what year was the association founded? Obi“ How many individual members and how many member organizations did the association have in the years listed below? Individual Member Individual Member Members Organizations Members Organizations 1955 1930 1950 1920 1945 1910 1940 1900 —-\O 9 Does the association regularly utilize volunteer workers? DYes D No D If YES, please indicate the number of volunteers utilized in 1961: -p‘~A—i-‘ “ O E] Yes D NO May a member be dropped or expelled from the association for any cause (other than non-payment of dues or fees)? May the association impose fines on its members for any cause? C] Yes D No Please describe completely the qualifications prospective members must have in order to belong to the association: Please attach, or send under separate cover, any printed matter which might supplement the above description of qualifications for membership. PURPOSES OF THE ASSOCIATION r I“ Please describe the purposes of the association here: Please attach, or send under separate cover, any printed matter which might supplement the above description of the official purposes of the association. CODEUSE . ..67 ..... 68 . ..69 ..... 70 . ..71 ..... 72 SAA62 page seven 233 OCCUPATIONAL COMPOSITION OF THE ASSOCIATION'S MEMBERSHIP ~5qu— Please check those occupational categories, below, from which your membership is drawn. BUSINESS AND INDUSTRY, ETC. GOVERNMENT D Owners 8: managers of small businesses El Managerial and supervisory E] Owners & managers of large businesses D White-collar workers D White collar (office workers, retail D Professionals clerks, salesmen, etc.) DMilitary officers D Blue-collar workers [3 Enlisted personnel Professionals OTHER FARM! ‘G [3 Students DSmall farmers D Housewives ULarge farmers 81 farm managers DRetired persons Please CIR C LE each category above from which 25% or more of your members are drawn. Which of the following age groups [:1 Adults are included D Adolescents in your membership? C] Children .hr—u)-—N Is your membership composed of D Males males, females, or C] Females both sexes? [3 Both sexes At several points in this questionnaire we asked for detailed information about your association. In some cases we did not provide space for the information to be filled in, but requested that you attach it as a separate sheet or forward it to us under separate cover. We wish to remind you here of the items of information which were requested above. Please place a check mark by each item you are sending. D1961 financial statement [:IHistorical description of the association [:INumber of members in each State [:INumber of local units in each state DCopy of constitution or charter Please return to: American Associations Study 114 Morrill Hall Michigan State University East Lansing, Michigan CODE USE ..... 73 ..... 74 ..... 75 ..... 78 page eight SAA62 ililnll I ’5' L ..‘.'zl".|‘llilll,'ll.|l'. I Il‘l I‘lIIIllI-lll III Igl‘lll’ [[1‘1‘.‘ Silo-"(ill ..lllf‘.l‘ll'|llII I s i “mi 0’ (‘0‘ «m... a in... ‘5‘ it... t .h C.,... n...) at n. ,. ‘1. m... 0. sun “ht. 5. 4 or. Pu... ‘llllllllllllli