Oneida Ltd. grew out of the commercial remains of the Oneida Community, which was a religious/social experiment founded in Oneida, New York. It was active from 1848 to 1881.
John P. L. Hatcher, a great-grandson of one of the original community members and himself a longtime employee of Oneida Ltd., explores the history of the community and subsequent company in this robust history.
The community and the company achieved great things—and neither should be forgotten. Upon the break up of the religious community, many of its members remained to continue businesses, including animal traps and the table flatware that would make Oneida Ltd. a household name.
By the middle of the twentieth century, the company, then called Oneida Community Ltd., commanded twenty-five percent of the silver plated flatware market. The company kept true to the community’s social and wealth sharing ideals.
But the dominant success of Oneida Ltd in the manufacturing of stainless steel flatware brought low cost foreign competition and the company was bankrupt in 2006. It was a textbook case of insufficient management, poor judgement, and extravagance. Find out what happened and why in A Goodly Heritage Gone Wrong.
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Oneida (Community) Limited
A Goodly Heritage Gone Wrong
By John P. L. Hatcher
iUniverseCopyright © 2016 J.P.L. Hatcher
All rights reserved.
Pierrepont B. Noyes, 1897-1950
In the summer of 1948, a huge celebration was staged in Sherrill's Noyes Park to commemorate the one hundred years since the founding of the Oneida Community. During these intervening years the utopian community had been voluntarily abandoned and succeeded by a commercial enterprise called Oneida Community, Ltd. This latter incorporated the productive assets of the original Community and many of its principles and people. A young man now grown old, Pierrepont B. Noyes, born in the Community, had overseen the development of the company from a producer of various products to a major manufacturer of silverplated flatware. At 78 years of age, he was still at the head of the company he had been leading since 1897.
Filling the park, several thousand employees and their families celebrated the occasion in a city that did not exist when Noyes took command of the company. For those with a historical bent, the place where it all began — the Oneida Community's home, the Mansion House — was open to visitors to tour and take in displays about life in the old days. For those who wanted to see how things were produced, tours of the company's factories were available. Speeches were minimal, goodwill was abundant, a good time was had by all ages. In the evening Tommy Dorsey played his theme song, "I'm Getting Sentimental Over You" to dancers under the stars. It was surely a sentimental occasion for many who were there and especially those who had been involved in the evolution of the great enterprise from modest and shaky beginnings to solid and promising circumstance.
Noyes was born in the Mansion House in 1870, a son of the Community's founder, John Humphrey Noyes. Formal education in the Community could be problematic; nonetheless, a love of learning and "improvement" was instilled and not just in its younger generation. Adult education classes were also a regular feature of Community life. A number of Community children would later graduate from various colleges following the Community's break-up in 1881.
As Noyes was well short of the academic background necessary for college admission and with little chance of getting it locally, in 1886 he entered a preparatory school, Colgate Academy, located in Hamilton, N. Y. Based on year-end exams, he was able to skip the next year and return as a senior. In the fall of 1887, he returned to Hamilton but, in a fit of nostalgia for the friends of his youth, he dropped out in November and entered the Loomis Academy which had been started in the home of the former Community where Professor Loomis had been hired to teach the 27 ex-Community children. Noyes wanted to be with them.
Graduating from the Loomis Academy, he was able to enter Madison University (now known as Colgate University), a school dedicated to producing Baptist preachers. After two years at Madison, Noyes had run through the entire non-theological curriculum and, not wishing to enter the ministry, he traveled to Cambridge, Massachusetts, in the summer of 1890 to see about entering Harvard. Despite being rebuffed by a secretary, he managed to reach the dean in charge of admission and worked out an arrangement whereby he would return in September to be tested on various subjects. If he passed, he could then study Harvard's junior year curriculum on his own at home. Following this solitary effort, he would again be tested to see if he had passed his "junior year" and could then become a senior at Harvard.
Noyes returned to Harvard three weeks ahead of the initial qualifying period. After intensive cramming, he was able to pass five Latin exams, four Greek exams, five math exams and one exam each in French, German and Roman/Greek history. Having never studied Greek history previously, he read the text the night before the examination. He had taught himself German in three weeks.
Returning home, Noyes set about tackling the course work for the junior year. Unfortunately, his mother sickened in the spring of 1891 and was diagnosed as terminally ill. Devastated by this news, he abandoned his studies and dedicated himself to caring for his mother. So ended his formal education although he eventually did receive a college degree. After many years of service on its board of trustees and 60 years after entering its Academy, Noyes was awarded the honorary degree of Doctor of Humane Letters from Colgate University.
Following his mother's death and a year of factory work at Oneida, he set off with his brother, Holton, for New York City in 1892. Their plan was simple: make a fortune by playing the stock market. Soon enough, they were stripped of their modest capital and disabused of that ambition. Fortunately, they were helped by a cousin, Mr. George Miller (the New York agent for Oneida Community products), who bolstered their partnership ("Noyes Brothers"), then set them up to sell silverware to restaurants and small stores.
In this sell-or-starve situation, Noyes learned a great deal about persuasion and persistence. He was able to increase his territory to include Upstate New York and some of Pennsylvania and began to generate some large orders. Accordingly, Mr. Miller increased the scope of Noyes' sales activities. Noyes was then able to sell steel traps and chains along with silverware to wholesalers and large department stores located in New England and several large East Coast cities. On top of this, he became a director of the company when his Uncle Abram temporarily gave up his seat on Oneida's board in 1894. This gave Pierrepont Noyes, at a young age, an insight into the company's operations that was to be fateful.
Most members of Oneida's board of directors had recently taken up the popular, late 19th-century fad of Spiritualism. Given the board's general lack of business background — with or without visitations from the spirit world — it was no wonder that company profits were suffering. Along with several "non-spiritualist" directors, Noyes conducted a stock fight which he won by a very narrow margin at the stockholders meeting of 1895. Now with a majority of shareholders behind him, Noyes was made manager of the Niagara Falls department which produced table flatware — the eventual future of the company.
Despite managerial responsibilities, he enlarged his sales work to all lines of product and categories of trade — retail, mail order (Sears & Roebuck), restaurants, and premiums — whatever it took to keep the factory busy. However, in the course of running the factory, he learned of troubling conditions which were to re-ignite the attitude and experience of his communitarian youth. Before long, the new knowledge would lead him to create a different kind of company — a company with a concern for the welfare of all its people as well as an equitable distribution of its profits.
Holton Noyes described the character of Pierrepont Noyes in this fashion:
Physically, his equipment was perfect. His wonderful constitution enabled him to thrive under an enormous load of work. He was never sick and seldom tired.
He had the very happy faculty of throwing aside his cares and entering joyfully into recreations in his hours of relaxation. Temperamentally, he was a glowing optimist, always expecting the best and never discouraged by setbacks. He considered them purely temporary, promptly forgot them and turned his attention to the future. He enjoyed fighting but was never quarrelsome, and he had the rare faculty of fighting relentlessly but never holding a grudge against his adversary. He appreciated the good in his associates and promptly forgot the bad.
He was without any definite religious creed. He belonged to no church, and, so far as I am able to remember, never revealed his beliefs.
Malice and envy had no place in his make-up. Commercially, he was a genius. A wonderful salesman and manager himself, he had that enthusiasm which is contagious. His associates lived upon his vitality. He was a perfect negotiator, never losing sight of his own purpose and yet fairly recognizing the viewpoint of his adversary.
Above all, he had vision and courage. His ambitions and energies were all for the Oneida Community, Ltd. and only incidentally for himself. He took his pay largely in the satisfaction which follows accomplishment and in the personal joy of seeing his young associates move forward to success. He could use the very firm hand of discipline when necessary, but much preferred the positive hand of encouragement. With all this energy and enthusiasm, his philosophical nature kept his perspective true. He saw things as they actually were and never allowed himself to become inflated with success. In later years, some members of the older generation felt that an all-wise providence had been watching over the affairs of the Oneida Community, Ltd. and had prepared a son of the old Oneida Community with almost ideal qualifications for the new leadership. With his new leadership, religion vanished from O.C.L. business affairs but political and business morality advanced to new and higher standards.
"He has few dislikes," another observer of Noyes added. "Only two that amount to anything. One is wealth and the other is poverty."
Along with his Niagara Falls responsibilities, the 26-year-old Noyes was put in charge of a committee to revitalize the animal trap business at Oneida. Although factory wages were increased overall, manufacturing costs were cut sufficiently to permit price competition as necessary.
At this time, Oneida Community, Ltd. offered a wide range of products: canned fruit and vegetables from its farm, steel traps and chains, refined silk sewing thread and finally, tableware. Profits from Niagara Falls had rescued the company in 1897. Nonetheless, with but three sales agencies and one salesman, Noyes had to spend much of his own time selling. His practice was to stay on the road until he got enough orders to keep his factories running.
In 1897, Noyes became general manager, thus effectively in charge of all company operations. His undeniable success, demonstrable ability, and dedication to Oneida Community values withstood suggestions that he was too young for such responsibility. It is interesting to note that, two years later, a rival chain company was purchased whose cost so alarmed the directors as to produce this sentiment: "We are now prepared to devote our net earnings, above our running expenses, and a reasonable dividend, almost entirely to getting receipts in full from our creditors, until the last dollar of our indebtedness is discharged." That noble ambition would be abandoned one hundred years later.
1899 saw the first and only labor strike in the company's history. Facing down a union organizing attempt at Niagara Falls, Noyes stood by a promise to his workers that he had a plan that would benefit them far beyond what any union could do for them. Events were to prove him right. Following this episode, he was again on the road opening up distribution on the West Coast and in Canada. However, he also oversaw the expansion of employee benefits in such areas as health care, housing, work breaks, and recreation. He would later write about this period that "the Community's conviction that 'life is more than meat' carried over to another generation." And with the strike and all else, the company had its best year ever.
In 1898, a nine-hour day for ten-hours pay had been instituted in Niagara Falls and was extended to Oneida, along with an 11% pay increase. By 1903, wages had increased some 30-40% which, when combined with an expensive advertising campaign to introduce Community Plate, frightened some of the older board members. On top of this, the company had begun a program of employee housing expansion which led, by 1905, to a formal plan for laying out on Community farm land what was to become the City of Sherrill. Housing lots were large, charges to employees were modest, money was loaned by Oneida Community, Ltd. directly or mortgages arranged, and housing bonuses were provided. The result was attractive and affordable housing for people whose labor made the company possible, successful, and profitable.
By 1902, Noyes was working out, along with his youthful management cohorts, his theory for a "semi-socialistic manufacturing institution" and the necessary business plan to keep it alive. He had already given up his early ambition to become wealthy.
Now, he believed "semi-socialism" would provide adequate executive salaries. But with it would be instituted a program for workers that would give them generous hourly wages, profit sharing ahead of dividend increases, and other benefits on the basis of "fair play and because they are deserved." As Noyes summarized: "Act always and only because you believe that Company success should add to the comfort and happiness of every member of the working group." This principle was to guide the company for most of its existence.
In 1900, after surveying the company's diverse range of products, it was decided that only silverplated flatware offered the prospect of sufficient growth in volume and profit to fulfill the ambition the young management team had for the company. Unfortunately, silverware was dominated by established New England manufacturers with well known trademarks. To break into that market, an extensive advertising campaign to promote "Community Plate" was undertaken and product quality was improved. Profits from trap and chain sales were to pay for it all until silverware became profitable in its own right.
The earliest years of the century were a time of building and experimentation. First, distinctive patterns were introduced. Second, the quality of Community Plate was upgraded to "triple plus," far above the level of competitive offerings. Pricing policy assuring dealer profit was introduced and the sales staff was expanded. Sales of other products were pushed to ensure sufficient total company profit to fund a Community Plate advertising budget of $30,000 — six times what the board had been anticipating! Thus, 1903 ended what Noyes described as "three years of study and experiment before we took the final plunge."
And then, in 1904, Berton L. "Doc" Dunn appeared on the scene. A child of the Oneida Community like Noyes, he had become an ear, nose, and throat physician with a practice in Syracuse. He gave it up to join the company and turned out to be an advertising genius whose insight and taste put Community Silver on the map. In fact, Doc's innovations and advertising theories were later widely imitated: use of valuable props (e.g., museum lace), full-page color ads, employment of famous artists, reduced copy, endorsement by well known authorities (e.g., Mrs. Vanderbilt), superb photography, and campaign continuity. All of this promoted the purchase of an excellent but unknown product at both trade and consumer levels across the land.
Noyes saw the need for organizational development and the need, as well, for talented "joiners." This was very much in the tradition of the old Community and allowed the company to attract superior people from every possible source. The future course of the company was effectively set as early as 1901. A young but seasoned management team, enriched by a bevy of "joiners," was in place to both secure the established manufacturing and marketing base and to push expansion in flatware.
Further advancement was threatened by a financial downturn in 1907 which caused a decline in profit of over 60% in 1908. The company, however, did not "panic" during the abrupt recession. On the contrary, advertising expenditures were maintained at a high level with the result that the company picked up sales from faint-hearted competitors. Profits quickly recovered and reached new heights in 1909. Profits rose again, by 30%, in 1910. That year, P. B. Noyes was unanimously elected company president at the age of 39 years.
During the period 1910-17, Oneida Community, Ltd. continued to grow in sales and profits. Along with this — and possibly because of it — the company increased both dividends and social expenditures for such things as school buildings and recreational facilities. Furthermore, it was decided in 1913 to relocate both the tableware factory from Niagara Falls, N. Y., to Sherrill along with any workers who wanted to stay with Oneida. Within a year, a new factory building was constructed along with housing for the transferred employees. The board of directors had been enlarged by five younger executives in 1911 and, a year later, the chain making business was sold, its future prospects not looking bright. Canadian manufacture of silverware was inaugurated in 1916 and, in the same year, the silk business was sold. Competition had eaten into its profits of silk and its sale proceeds were welcome help for expanding the silverware department.
Sales declined from another economic downturn coinciding with the beginning of World War I in 1914. As a result, executive salaries were cut in half, other wages were reduced, and the factory was put on short time. In 1916, employees were repaid what they had lost in wages and short time. When the company entered the war, it also gave its employees a separate weekly pay packet to compensate them for the prevailing inflation. This extra bonus eventually came to about 50% of employees' base pay.
Excerpted from Oneida (Community) Limited by John P. L. Hatcher. Copyright © 2016 J.P.L. Hatcher. Excerpted by permission of iUniverse.
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Table of Contents
1 Pierrepont B. Noyes, 1897-1950, 1,
2 Miles E. Robertson, 1926-1959, 13,
3 Stainless Steel, 25,
4 Pierrepont T. Noyes, 1960-1981, 33,
5 John L. Marcellus, 1981-1986, 47,
6 William D. Matthews, 1986-1999, 55,
7 Peter J. Kallet, 1999-2006, 71,
8 Epilogue: Bankruptcy and Beyond, 97,
Appendix 1 The Need for Diversification, 107,
Appendix 2 Company Parts, 115,
Appendix 3 Money Spent vs. Money Earned, 118,
Appendix 4 Corporate Financial Highlights, 119,
Appendix 5 Special Benefits and Contracts, 120,
Appendix 6 Presidential Salary Growth, 121,
Appendix 7 GNP vs Corporate Profit Graph, 122,