At the beginning of 1923 postwar adjustments seemed to be over and the outlook was bright. By the end of the year, however, a dark cloud of depression hung once more over the industry. This time it lasted for a long period: 1925 and 1927 were two of the worst years in the history of American woolens. Old and well-known mills failed. The giant in the field, the American Woolen Company, lost money for five of the ten postwar years; in 1927 it ceased paying dividends even on preferred stock. The huge Pacific Mills of Lawrence, Massachusetts, after earning $2,000,000 in 1925, was forced the next year to pass its dividends for the first time in forty years. Only occasionally did a wave of prosperity raise the woolen industry from the sand-bar of depression.
Several factors lay beneath this condition. One was the impact of steadily advancing wages. More important was the effect of changing living habits. American homes and offices were better heated than before the war. Automobiles and other conveyances came to be enclosed and heated. Dresses were shortened and men’s suits were made less full. As a result, Americans demanded lighter woolens and per capita consumption increased. Furthermore, rapidly changing styles continued to create problems. Manufacturers more and more found themselves operating on short-term contracts. Meanwhile, worsteds declined in popularity. Woolens, even the cassimeres of the 1870’s, surged forward to perplex manufacturers who just recently had shifted their machinery to worsteds. And other fibers began to vie with woolens for the business of clothing Americans.–Harry Poindexter
Recovery was hampered by uncertainties. Wool prices fell sharply when the government suddenly started disposing of the 525,000,000 pounds on its hands at the close of the war. Before January, 1919, three rapid auctions reduced prices about twenty percent, handing woolen mills heavy inventory losses and bringing a plague of erratic prices.
Tariff debates also created worries. Visions of disaster came to owners whenever they thought of the possible effects of the existing tariff. Passed in 1913, the act had swept away all but the shadow of protective duties. In the first seven months of its life before the war, imports of foreign cloth suddenly tripled. To American manufacturers it seemed that the home market might be lost if barriers were not quickly erected to stem the tide.
A new dike soon appeared in the form of the emergency tariff of 1921, and its high duties were buttressed in the following year on a more permanent basis. Most foreign cloth was effectively barred by an ad valorem rate of fifty percent and a compensatory duty of unprecedented height. As far as tariffs were concerned, woolen manufacturers had every reason to be happy during the twenties. Nor did they complain when the Hoover Administration, against the advice of economists, revised the tariff structure upward in 1930 and increased ad valorem duties on woolens to sixty percent.–Harry Poindexter
In the decade after the World War, Amerlcan woolen mills sometimes were swept along in the general prosperity and at other times found themselves trapped in eddies of inactivity. As the nation leaped into a churning sea of prohibition and frenzied finance, woolen manufacturers soon discovered that after each promising swell came a trough of frustration. Chronic depressions constantly disturbed them and ate away the foundations of inefficient mills.
The first postwar jolt was the abrupt end of war production in which two-thirds of the mills were engaged. At the same time many civilian purchasers, hopeful or a price decline, promptly cancelled orders. By January, 1919, forty percent of the country’s broad looms lay idle.–Harry Poindexter
Van Wagenen became general manager in January, 1918. Marchant remained as superintendent and Valentine was reelected president, now mainly an honorary post. But Van Wagenen was in complete charge during the trying last year of the war. The substantial profit and dividend which the operations produced in that troubled period earned him high praise and a large salary increase. In January, 1920, he was elected president and general manager. A strong capable hand was once more at the helm.
With the European war over, the directors could now forget the tensions of the preceding years and turn to the problems of the postwar years.
The appearance of Van Wagenen brought the mill in line with a trend within the woolen industry which had been underway since the turn of the century. Prior to1900, technical direction or American woolen mills was largely in the hands of man who had grown up in the industry. Now graduates of textile schools filled more and more of these positions. They brought not only a divorce of management from stockownership but a new
experimental attitude as well. While Van Wagenen probably never attended a technical school, he did resemble these people: he owned no stock at the time of his employment, and after the war he showed a readiness to launch out into new processes and to discard time honored ways of doing things.–Harry Poindexter