Friday, June 15, 2007

Cheap Shoes

If we are to believe local writers Frank Byrne’s and Joe Hannah’s account of the closure of Portsmouth’s Selby Shoe Company, it is the United Shoe Workers, Local 117, who are to be held largely responsible for the shutdown and liquidation of the firm in the late 1950s. Their account places Roger Selby, the company president, in his office in downtown Portsmouth, meeting face-to-face with Ernest Dunaway, the local union president. Selby’s profits were suffering “due to economic conditions at the time and changing labor laws.” Citing “spiraling labor costs,” Byrne and Hannah claim that Selby issued a threat to Dunaway: “I’m 74-years old and got all the money I’ll ever spend. If you go on strike, I’ll close the shoe factory down.” Again, if we are to believe Byrne and Hannah, Roger Selby was true to his word. After the union voted to strike, the firm that had made shoes in Portsmouth since 1877 shut its doors, “never to reopen.” A shocking story if it were indeed true!

Somehow the victims of Selby’s closure, the workers themselves, have come to be blamed for the loss of their jobs. Worse, unionized labor has in some ways, for some people, become the scapegoat upon which all of Portsmouth’s ills can be blamed. Selby’s demise, as written by Byrne and Hannah, fits into a popular myth about the causes of Portsmouth’s economic decline – the unions and their unreasonable demands drove away our manufacturing jobs and ended our prosperity. Since moving here in 2001, I’ve heard this explanation for why the steel mill shutdown, why the railroad repair shops were closed, and why the shoe industry failed. It has even been used to explain why so little manufacturing has returned to the area, despite similar revivals in other Rust Belt River Towns.

This popular myth, with its source most likely in the managerial class of Portsmouth and environs, has so infused popular understandings of local history that its narrative made its way into Byrne’s and Hannah’s history of Scioto and Greenup counties, which was published under the title of A Thirst for Land (2004). The source for their Roger Selby quote turns out to be Denver Moore, a long-serving employee of Joe Hannah. If ever one was looking for a reason not to trust oral history, the case of Denver Moore and his telling of the closure of Selby is certainly a classic example. Someone, somewhere along the way, simply made-up the story of Selby’s threat and the union’s strike. It simply did not happen. Moore’s error is no case of faulty memory. Byrne’s and Hannah’s uncritical acceptance of Moore’s tale is evidence of not only shockingly shoddy research but an anti-union bias.

One of the greatest voids in the published history of Portsmouth is that related to its shoe manufacturing. Not only has little been written down by historians, a good deal of what has been published is wildly inaccurate and incomplete. We know the rough outline of its history. The local shoe industry had its origins in 1850, when Robert Hunter Bell of Circleville, Ohio, set up shop in what is now popularly known as the Boneyfiddle District of downtown Portsmouth. From this small shop, where a handful of skilled cobblers made all of the shoes by hand, sprang a thriving industry, employing over 5,000 workers at its height before its decline and collapse in the decades following World War II. If R. Bell and Company started production, Williams Manufacturing Company ended it in 1976.

Selby was originally founded in 1877 by Frederick and Irving Drew, who had first established themselves working for R. Bell & Company. In 1880, George D. Selby, an industrial sales representative for the Singer Sewing Machine Company, joined the firm and ultimately bought out Irving Drew in 1906. By then, Selby was the largest employer in Portsmouth, with some 1,400 workers on their payroll.

Selby’s specialty was fine women’s shoes, with their Arch Preserver line being their most popular. By the early 1950s Selby’s profits were in decline, as the company was forced into making concessions to their unionized workforce, at a time, when the market share of high-end footwear was shrinking. Though labor costs were certainly a factor in Selby’s troubles, the unraveling of the firm flowed from a failed hostile take-over attempt made in the spring and summer of 1956. Sydney L. Albert, a businessman from Akron, Ohio, who was the majority shareholder of the Bellanca Aircraft Company, had taken an interest in Selby. Bellanca had become Albert’s vehicle for buying up and liquidating struggling companies.

In May 1956, according to Securities and Exchange Commission records, Bellanca purchased a total of 72,975 shares of Selby stock through a number of Wall Street brokers for $1,448,032. In the same month Albert personally purchased 1,800 Selby shares for about $37,000. Among the shares purchased by Albert and Ballanca were those of Homer and Mark Selby. Their youngest brother, Roger held on to his shares in an attempt to maintain local control of the firm. In a nasty proxy fight in June, where Albert and Bellanca attempted to gain control of Selby’s board of directors, Roger and Calvin Clarke, a local attorney, large shareowner, and Chairman of the Selby board, managed to hold on to power after other local investors bought shares and assigned their proxies to the Selby-Clarke faction. Disputed proxy votes involving some 1,300 shares had kept the board in the hands of Selby, but it became clear during the fight that Bellanca actually was in a dominant position and that Selby’s control could very well be short-lived.

Just as Bellanca’s attempt to takeover Selby failed, Sydney Albert’s house of cards began to collapse. Bellanca’s stock price on Wall Street fell dramatically in June and on into July, dropping from $25 down to $5. Selby and Clarke found themselves in a serious financial crisis. Fearing the collapse of Bellanca and the possible liquidation of Selby, bankers began refusing to extend their usual short term loans to Selby, credit which the firm relied upon for their upcoming fall season’s production. In an attempt to avoid bankruptcy, Albert and Ballanca moved to sell its Selby shares, but Selby and Clarke were not in a position to buyout Albert. In August, Roger Selby reluctantly traveled to New York City, where he met with Wall Street brokers, hoping to find what the Portsmouth Times called “a reliable purchaser who had financing and know-how.”

In mid-August, a deal was struck between Selby, Bellanca, and Rockwood & Co. Rockwood was a Brooklyn, New York firm, which specialized in the manufacture of chocolate candies; it had come under the sway of the Pritzker family of Chicago. When the Portsmouth Times announced the buyout, they claimed the new owners “are in the process of formulating plans for expansion and for a profitable business.” Roger Selby, according to the Times, had “refused to sell his holdings without iron-clad assurance that the Selby company would continue as a going concern and would continue to uphold the high standard set in the shoe industry by the Selby family.” Selby walked away with $1 million; Calvin Clarke with $340,000.

Rockwood’s promises of keeping Selby together, perhaps even expanding its production facilities, quickly proved to be little more than lies. By late October, Rockwood had announced they were closing Selby’s factory in Manchester, New Hampshire. Its machinery, molds, and other resources were soon sold to another footwear company. In the first months of 1957, the rights to various shoe lines, which had long been manufactured by Selby, either at the Manchester or Portsmouth factory, were being sold off. The last major line, the Arch Preserver, which was made in Portsmouth, was the last to be sold. Production of the AP line ended in early May 1957.

By the end of May, Rockwood had sold the AP line to U.S. Shoe Corporation of Cincinnati, which immediately announced that it would seek a new location for the production of the AP. Joseph Stern, chairman of the board of U.S. Shoe, said: “We cannot produce shoes in Portsmouth because facilities for producing the Arch Preserver line are no longer available in the Selby plant. The machines have been sold and the factory space used by the AP line is in such shape that we could not possibly get it ready for production of the fall line.”

At the same time that U.S. Shoe purchased what remained of Selby’s lines, another local Portsmouth shoe producer, Williams Manufacturing, purchased Selby’s factory building, with plans to use it as a warehouse until they could rent or sell it to another shoe manufacturer. Williams offered U.S. Shoe the use of the building, but U.S. Shoe declined.

Rockwood’s liquidation of Selby was complete and had been accomplished in such a way that the new owners, U.S. Shoe, had concluded that continued production of shoes in Selby’s Portsmouth plant was not a viable option.

The closing of Selby is often considered the beginning of the end, yet it was the infamous Flood of 1937 that struck the first blow to this industry in Portsmouth. After the water had receded, the Irving Drew Company, which had been formed in 1902, never truly restarted their Portsmouth operations. The company’s namesake founder, Irving Drew, had been one of the primary movers behind the creation of the firm that had evolved into Selby’s. His father, Frederick Drew, had overseen the introduction of machine stitching tools into the original R. Bell factory in 1869. By 1937, in the wake of the flood, Irving Drew, a pillar of the community, decided to cut his losses in Portsmouth and move his operations to Lancaster, Ohio. In an interesting twist of fate, Drew’s company is still in business, now specializing in orthopedic work and walking shoes. The firm, however, recently closed their Ohio plant and moved all of their production overseas.

The relocation of Drew began the decline in Portsmouth’s shoe industry, but it is the final liquidation of Selby in May of 1957 that points to an early start to the larger, region-wide deindustrialization process that is most commonly associated with the 1970s and 1980s. The final end to this chapter of local history came in 1976 with the shuttering of the Williams Manufacturing Company, which had purchased the old Selby factory building from Rockwood in 1957. Organized in the early 1920s, Williams had been a smaller operation until the 1930s when it experienced a dramatic expansion during the Great Depression. Whereas Selby and Drew manufactured fine, higher-priced shoes (shoes, it has been said, that many of their workers couldn’t afford), Williams specialized in low-cost, shall we say, “cheap” shoes. And, in the midst of an economic depression, with everyone still needing shoes, the discount shoe trade in the United States began to expand rapidly. It would be Williams Manufacturing Company that lasted the longest, until they too found it difficult to compete in a globalized, low-end footwear market.

By the time Williams went under, they had already begun shifting their production overseas to Taiwan. Some of Williams’ employees no longer made shoes; they simply relabeled Chinese-made footwear, which had been transported to Portsmouth in loose pairs, in huge cardboard containers. The shoes were then re-packaged and shipped out with the Williams’ brand names emblazoned on the shoes and their new boxes.

One of the greatest changes in the recent history of Portsmouth has been the loss of manufacturing jobs. Once a city renowned for its production of shoes and steel, what little manufacturing that remains only reminds us of what has been lost. Where steel workers once fed iron ore into huge coke-fired blast furnaces, where shoe workers once cut and stitched together millions of shoes, there are now largely empty brown fields, or in one exception, a newly opened Wal-Mart Supercenter. Numerous good-paying, unionized, manufacturing jobs have been replaced with a few non-unionized, service jobs, whose compensation is less than desired. Where the old Selby Shoe Company factory stood at the intersection of John and Seventh Streets, there are now neatly stacked piles of the building’s original foundation stones, looking like the ruins of some American Acropolis. In recent years, the streets around the former site of Selby’s factory have become a hangout for prostitutes, as if the name of John Street had come to accurately reflect the type of business now transacted along its sidewalks.

About the time of Williams’ failure, the United States Trade Commission completed a report on the impact of lower tariffs on foreign imported shoes that had been put into effect by the GATT world trade agreements. Congress had passed a law providing for special unemployment benefits to those workers negatively impacted by the lower GATT tariffs. The Commission’s majority found that the financial troubles facing Williams, which had already led to layoffs in the first years of the 1970s, had been caused by these lower tariffs. One commissioner, however, filed a dissenting opinion, wherein he blamed poor management decisions on the part of Williams’ executives. No commissioner blamed the workers. Considering the larger context of deindustrialization and the shifting of manufacturing jobs out of the Ohio Valley and the larger Midwest, blame, if we are to lay it, should fall on the shoulders of both the Williams management team and the larger forces of globalization associated with the tariff reforms of GATT.

All that remains of the once thriving Portsmouth shoe industry is Mitchellace, Incorporated. This manufacturer of shoelaces got its start supplying Drew’s, Selby’s, and Williams’ factories in the early twentieth-century. After the closure of Williams, local bankers convinced Kerry Keating, the President of Mitchellace, to move his operations into the then empty Williams building, located at the corner of Gallia and Murray Streets. Yet, even Mitchellace, in order to survive, has begun shifting its production overseas to Honduras, where cheaper labor and other production cost savings help improve the firm’s bottom-line. In a recent oral history interview with Keating, he explained that shoelaces manufactured in Portsmouth are exported to China, where they are placed in popular lower-valued footwear before being sold back into the United States and around the globe.

If the development of an American market for cheap shoes in the Great Depression helped at least one local Portsmouth firm survive through the 1950s and 1960s, cheap Chinese-made shoes continue to help support what remains of the once thriving, local shoe industry.

This past week Congressman Joseph Crowley (D-NY) announced his support for the Affordable Footwear Initiative, which seeks to eliminate what remains of the old US import duties on low-cost and children’s shoes. The current tariff regime, which was originally put in place in the early 1930s to protect American shoe manufacturers (like Selby, Drew, and Williams) has become a regressive tax on low- and middle-income American households. The old rates were set so that higher duties fell on lower-valued imported merchandise. In other words, the tax paid by Americans who purchase high-end footwear is actually less than that paid by Americans who buy their shoes at places like Payless Shoes or your local Target and K-mart. When I spoke with Rohit Mahajan, Congressman Crowley’s press secretary, he said: “Its Paris Hilton versus the rest of us.”

The elimination of these duties would recognize the reality of the disappearance of domestic low-end shoe manufacturing, but it would also virtually eliminate the possibility of its revival, whether here in Portsmouth or else where in the United States. Americans currently import 99% of their footwear, with nearly 80% of it originating in China. What remains of the US industry focuses on niche items, such as boots and other shoes for specialized purposes – duties on these types of footwear would remain in place. Backers of the Affordable Footwear Initiative include the American Apparel and Footwear Association and the Footwear Distributors and Retailers of America. A lack of opposition from retail giants like Wal-Mart, according to Mahajan, also suggests that the change would be welcomed.

“Common sense legislation,” is how Congressman Crowley is promoting the initiative. The current duties are protecting an industry that no longer exists in America and low- and middle-class Americans are left paying an un-needed tax in the form of higher priced discount shoes. How much cheaper would our shoes be? According to Mahajan, if the average pair of low-end shoes costs between $15 and $20, we could see their retail price drop by three-to-five dollars. With 99% of the market already in foreign hands and what remains of the American shoe industry still protected, it would appear that average Americans will see some significant savings, that is, as long as retailers like Payless and Wal-Mart pass the tax-relief onto their customers.

Retailers are no doubt hoping that cheaper shoes will lead their customers to purchase more shoes, more often; and for companies like Wal-Mart, where profits are made by selling massive numbers of products with slim price margins, the Affordable Footwear Initiative could certainly help spur sales. We may soon see lower priced shoes in the Lower Scioto Valley. And Mitchellace, if they properly take advantage of this proposed tariff reform, may very well see an increase in the number of shoelaces they export to China. Cheap shoes, once a hallmark of Portsmouth manufacturing, may yet help keep the last remnant of that industry in business.


  1. this is excellent. How many sources did you have to plow through? i have only seen warm and fuzzy anecdotal history on the shoe industy in p-town.

  2. JR: A couple years ago when I was putting together my course on Portsmouth and Ohio Valley history I went through all the previous county and city histories (most written at the start of the twentieth century). They've got the basic outline of the beginnings, but nothing really besides Byrne's and Hannah's book has "covered" more recent history. Beyond that I spent a few days going through old Portsmouth Times from the 1950s. I also drew some material from oral history interviews my students and I have done over the last two years. It is just the tip of the iceberg. A modern history of the Portsmouth shoe industry has really not been written.

  3. Dear Sir,
    Thanks for this great article on the selling out of the shoe industry.It was a big blow to the city and our country.
    If it wasn't for Williams, where my mother and father met I might not being writing this tonight. I think that like our Washington leaders of the recent history,the leaders of Portsmouth put power and greed before the welfare of the people they were elected to serve. It is sad how people will listen to the BS after BS and then take it as gospel. I left Portsmouth to join the Army in 1960 and only return to visit while on leave and to attend a couple of class reunions. I do try to keep up with what's happing by reading the different newspapers on line. By what I read the outlook for Portsmouth like our country is not the best. Like the parents who watches their child die before them,I fear that Portsmouth will die before we do. The only way I see that there is a possible way do save the city is for the public to be Americans and Citizens first then (DEM's)or (REP's). It's ok to be hard headed until you start blocing out reason. I think that's what the people of Portsmouth and our Country are doing.
    Thanks again for a great article,take care. You and your family are lucky to be living out by Turkey Creek. I hope it's still the same as it was 50yrs ago when I used to go swimming there.
    Neither left or right,red or blue. Just an American who sees the country he loved and fought to protect being sold out by our leaders.
    Randall Chapman Msgt (Ret)
    Vietnam Vet.
    4011 Grasmere Ave
    Las Vegas Nv. 89121
    702 597-0136

  4. RC: Thanks for the comment. There is definitely something to be learned by studying the history of Portsmouth. Whether we are ahead of some national curve or behind it, what we experience here maybe just a concentrated form of the larger national phenomena, and some times it's not so pretty.

  5. Dear Sir,
    While I was growing up in Portsmouth 1942-1960 never once did I hear that this region was part of Appalachia. That was the hills of Va,Wva and Eastern Ky.Not across the Ohio River into Southern Ohio.
    I guess the government awswer to the problem of cities such as Portsmouth is to look the other way or put them into another category and throw them a bone. It sad that our country can always find Tax Payers dollars to fund Wars,Foreign Aide and Pork,but when it come to help the needy in America,others get the meat we get the bone. One day if things don't change, the leaders of Our Country who want us to beleive this is the riches Country on Earth will change Our Country's United States of America to Appalachia.
    I'm new to this Blog thing and since I'm an old Ohio hillbilly if I do or say anything out of line please let me know.Take Care,the best to you and your family.
    Neither left or right,red or blue. Just an American who thinks our country is in the toilet and Bush's hand in pushing down the Handle.

  6. Nice try. I grew up in this town, and know the story is a bit different. Mgmt/Labor issues have ruled the day so badly for the past 60 years that there is a destiny in Portsmouth to see the demise of any manufacturer. The UK calls Portsmouth a "Micro-Economy": destined to fail due to circumstances within their control, but they are unwilling to correct the matter. In the end, differences rule the day, labor claims undue suppression (incorrect at the wages they make), mgmt. claims "spiraling wages" (the issues are actually the inability to get along), and in the end, the community crumbles. Ask Detroit Cyclops, Dayton Walther, Massey Fergueson, etc... the same story applies.

    How about getting together and getting along!? You might find it is more productive than sitting on your rear getting a welfare check and longing for the old days (which actually were different than you remember).

  7. DA: Thanks for reading and the comment. I wasn't sure if you were saying that the collapse of Selby was caused by the union, or if you were arguing that, in general, many industries here went under because of a failure of labor and management to compromise. I sense you want to spread the blame between these two, but, at the same time, it seems you believe the unions are ultimately to blame. Have I misread you?

    There is no doubt that Portsmouth has been the scene of quite a bit of labor strife, but I'm not sure that in many of these cases the demands of the union's were really that outrageous.

  8. Thank you for writing about Selby Shoe Company. My great-grandfather worked there in the 1920s. As I continue my genealogical research, I become that much more intrigued by the history and people of Portsmouth and Greenup County, KY. Most of my ancestors traveled back and forth between Greenup and Portsmouth for work and to start their families.
    Thanks again. I look forward to more of your blogs.