Encyclopedia of
american business history
VOLUME II
CHARLES R. GEISST

Encyclopedia of American Business History
Copyright © 2006 by Charles R. Geisst
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Encyclopedia of American business histor
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VOLUME I
CONTRIBUTORS iv
LIST OF ENTRIES vi
INTRODUCTION ix
ENTRIES A–M 1
VOLUME II
ENTRIES N–Z 293
CHRONOLOGY 491
SELECTED PRIMARY DOCUMENTS 495
GENERAL BIBLIOGRAPHY 565
INDEX 569
CONTENTS
Nader, Ralph (1934– ) consumer advocate
and political candidate Ralph Nader was born
in Winsted, Connecticut, on February 27, 1934,
a son of Lebanese immigrants. An exceptional
student, he graduated from Princeton University
with honors in 1955 and acquired his law degree
from Harvard Law School three years later. Nader
then commenced a successful practice in Hart-
ford, specializing in automobile accidents, and
also taught at the University of Hartford. In the
course of litigation, Nader became convinced

that traffic accidents were due more to faulty
engineering than human error. He carefully col-
lected statistics and published his findings in
numerous magazine articles. By 1964, this activ-
ity brought him to the attention of the U.S.
Department of Labor, which appointed him to a
landmark study of auto safety in America. The
following year he published his famous tome,
Unsafe at Any Speed, which excoriated the auto-
mobile industr
y for shoddy safety concerns. In
retaliation, Nader’s personal life fell under
scrutiny by private detectives hired by General
Motors president James M. Roche. When the
truth emerged, Roche publicly recanted, and
Nader became an instant consumer celebrity. He
subsequently expanded his inquiries to mines,
oil and gas pipelines, and environmental prac-
tices, with a view toward tarring corporate Amer-
ica as indifferent to public safety. No mere
radical, Nader was thorough and precise in col-
lecting data, and exacting in his presentations. In
1967, his revealing investigation of the
MEAT
PACKING INDUSTRY
resulted in the new Wholesome
Meat Act of that year.
The thrust of Nader’s evolving political the-
sis was that American business was too
obsessed with profit to give consumer safety

more than lip service. In time he extended simi-
lar accusations against the government as a
silent and willing partner in these transgres-
sions. His message resonated strongly with the
public, and legislators were pressured to invoke
new and stricter health and safety laws.
Throughout the decade of the 1970s, Nader
expanded his litany of complaints and his host
of public supporters to investigate pesticides,
food additives, color televisions, and X-ray
machines. With few exceptions his endeavors
resulted in a bevy of new laws to protect the
average citizen. In time he acquired consider-
able renown and controversy as the nation’s
293
N
294 National Association of Securities Dealers
most outspoken consumer advocate and a
relentless proponent of corporate accountability.
He also surrounded himself with a new genera-
tion of consumer activists, Nader’s Raiders, to
keep the pressure upon elected officials. But hav-
ing failed to stop the N
ORTH AMERICAN FREE
TRADE AGREEMENT of 1993, which he felt imper-
iled both American jobs and consumer safety,
Nader decided to take his crusade to the next
level by entering politics.
While closely allied to progressive causes,
Nader was no friend to the Democratic Party, and

he accused it of having sold out to corporate
interests, like the Republicans. To that end he
received the Green Party’s nomination for the
presidency in 1996; he won considerable public
sympathy but only 700,000 votes. In fact, neither
major party ever took him as a serious contender.
However, circumstances subsequently forced
Nader into the headlines during the 2000 presi-
dential election between Democratic vice president
Al Gore and Republican challenger George W.
Bush. When polls predicted an extremely close
race, Democrats pleaded with Nader to withdraw
his candidacy in competitive states lest he siphon
off badly needed votes from Gore. Nader defi-
antly and unapologetically refused, declaring
that the two parties were so close philosophically
it did not matter which side won—consumers
were sure to lose. In November 2000, the Green
Party amassed 2.6 percent of votes cast. However,
this included a tally of more than 90,000 votes at
Gore’s expense in Florida, enough to tip the bal-
ance to the Republicans and assure Bush’s victory.
Nader, formerly the darling of left-wing causes,
was now publically lambasted as a spoiler. But the
former consumer crusader shrugged off such
complaints and continued railing against the gov-
ernment’s alleged capitulation to corporate Amer-
ica. His legacy as an advocate is secure, but his
future with the Green Party—still roiled over its
indirect role in Bush’s election—remains less cer-

tain. “You have to keep up the pressure, even if
you lose,” Nader declared. “The essence of the
citizen’s movement is persistence.”
Further reading
Graham, Kevin. Ralph Nader: Battling for Democracy.
Denver, Colo.: Windom Pub., 2000.
Mar
tin, Justin. Nader: Crusader, Spoiler, Icon. Cam-
bridge, Mass.: Perseus Pub., 2002.
Nader, Ralph. Crashing the Party: T
aking on the Corpo-
rate Government in an Age of Surrender. New York:
Thomas Dunne Books/St. Mar
tin’s Press, 2002.
John C. Fredriksen
National Association of Securities Dealers
(NASD) A professional trade group of securi-
ties dealers, originally organized during the NEW
DEAL. It is a self-regulating body that oversees the
Ralph Nader (GETTY IMAGES)
National Bank Act 295
activities of the over-the-counter bond markets
and also conducts the NASDAQ stock market,
short for National Association of Securities Deal-
ers Automated Quotations system.
The predecessor of the NASD originally was
formed in 1933 as a response to the New Deal’s
call for professional associations to be formed in
order to fight the Depression. The securities
industry responded quickly to the idea that trade

groups could help pull their economic muscle
together and fight the economic slowdown, an
idea originally charged to the N
ATIONAL RECOVERY
ADMINISTRATION, an agency created by the
National Industrial Recovery Act. Even after the
NIRA was declared unconstitutional by the
Supreme Court in 1935, the investment banking
industry favored the idea of a national trade
group that would oversee what at the time was
known as the over-the-counter, or unlisted, secu-
rities market—the place where stocks not listed
on one of the exchanges traded. Since the
National Industrial Recovery Act encouraged
trade group associations, the Investment Bankers’
Conference organized itself as a competitor of the
older Investment Bankers’ Association.
Congress obliged by passing the Maloney Act
in 1937, which created the NASD. Introduced by
Senator Francis T. Maloney, a Democrat from
Connecticut, the act was an amendment to the
Securities Act of 1934, allowing securities dealers
to form national groups to better regulate them-
selves and arrange codes of conduct and trading.
The Maloney Act provided for organization and
basic trading rules to apply to the vast member-
ship of what became the NASD. More than 6,000
brokers and securities houses joined, and the
organization was originally responsible for over-
seeing trading in more than 3,000 securities. The

group remained self-regulating but was still only
a trade group as opposed to the Securities and
Exchange Commission, which had the power of
law behind it.
The NASD expanded its authority and repu-
tation considerably by organizing the over-the-
counter market into the NASDAQ in 1972.The
market was computerized, with dealers linked
through a central computer over which they
could enter quotations and trade securities
among themselves and with the public. Once
operating well, the new market drew many new
listings to the NASDAQ marketplace since
more efficient trading of stocks could be
ensured.
In 1998, the NASDAQ announced a merger
with the AMERICAN STOCK EXCHANGE in order to
compete for business with the NEW YORK STOCK
EXCHANGE. NASDAQ’s trading system of using
market makers linked by computer is in direct
competition with that of the NYSE, which still
employs the specialist system for selling securi-
ties on the exchange floor.
The market suffered when 30 member firms
were fined more than $1 billion in 1997 for
manipulating prices and maintaining spreads
between bid and offer prices favorable to market
makers, not customers. As a result, the market
announced that it was shifting to quoting prices
in decimals rather than fractions in an attempt to

provide cleaner prices for the public. The market
shared in the success of the market rise in the
later 1990s. It rose dramatically during the
1990s, and its major index rose to over 5,000
before falling 80 percent when the overall market
bubble burst in 2000–01.
See also STOCK MARKETS.
Further reading
Geisst, Charles R. Wall Street: A History. New York:
Oxford University Press, 1997.
Ingebretsen, Mark. NASDAQ: A History of the Market
That Changed the W
orld. New York: Forum, 2002.
National Bank Act (1864) Legislation passed
during the Civil War designed to provide some
structure to U.S. banking and currency. The law
created a national currency for the country, mak-
ing it more difficult for state banks to issue their
own money, as had been the case in the 19th cen-
tury. National banks were created that became
296 National Labor Relations Act
note issuers, replacing the state banks. The law
was, in fact, a currency act, although it did create
a new class of bank.
The act also created the office of comptroller
of the currency, which became responsible for
overseeing banks that registered with it, allowing
them to use the name national bank. The banks
had capital requirements and other regulations
that they had to observe in order to meet the new

designation. The new national banks took over
the function of issuing currency under the aus-
pices of the comptroller. They were also required
to hold one-third of their assets in T
REASURY
BONDS, which had to be deposited with the comp-
troller, who in turn issued national banknotes,
using the bonds as collateral.
The act helped the United States consolidate a
sloppy currency situation and helped reduce
fraud in the old payments system. In the past,
when the state banks issued money, a great deal
of fraud occurred, and many merchant banks
made a specialty of helping customers detect
counterfeit notes. Detecting bogus BANKNOTES
was an art prior to the Civil War. After 1864, the
situation improved dramatically since the note
issuance process now was more uniform and had
a central regulator for the first time.
But the act fell far short of developing a cen-
tral bank for the United States because there was
still no lender of last resort in the country. The
actual supply of money could become less than
what was needed, especially if the economy
required a dose of extra money and credit. This
would be referred to as inelasticity in the money
supply, and it became a political issue before
World War I.
Between 1865 and 1913, the major New York
banks usually decided among themselves the

proper course of remedial action to be taken
when the stock market collapsed or a large bank
failed. But for all the shortcomings, the comp-
troller of the currency remained the only regula-
tor of banking until the FEDERAL RESERVE was
created in 1913.
See also GREENBACKS;MCFADDEN ACT.
Further reading
Friedman, Milton, and Anna Schwartz. A Monetary
History of the United States. Princeton, N.J.:
Princeton University Pr
ess, 1963.
Myers, Margaret. A Financial Histor
y of the United States.
New York: Columbia University Press, 1970.
National Labor Relations Act (NLRA) A
major, revolutionary labor act passed during the
NEW DEAL and signed into law by President Roo-
sevelt in 1935. The NLRA’s major sponsor was
Senator Robert F. Wagner of New York. The law,
also known as the Wagner Act, was predicated on
the principle that in an industrial democracy
workers must be allowed to organize and bargain
collectively with management through their own
representatives. In the year following its passage,
the act became known as the Magna Carta of
organized labor.
The major difference between the atmosphere
the act created and that which preceded it was
significant. Labor and management were now to

bargain with each other in an atmosphere in
which the fundamental rights of labor were rec-
ognized. Although organized labor already was
well developed in the United States, employers
often disciplined and blacklisted union mem-
bers, causing a great deal of industrial strife in
the early 1930s. In order to offset these problems
and discourage even more problems in the
future, the act was passed during the New Deal.
The NLRA guaranteed workers the right to
join unions without fear of reprisal or dismissal.
The National Labor Relations Board (NLRB) was
created to ensure that the provisions of the act
were carried out. It has three members who are
charged with interpreting the act. The NLRB is
an independent judicial administrative agency
that has the power to enforce its own rulings.
After the TAFT-HARTLEY ACT was passed in 1947,
the NLRB was overshadowed to an extent, limit-
ing its ability to interpret the Wagner Act.
The law nevertheless gave employees the
right to organize, to engage in strikes when nec-
National Negro Business League 297
essary, and to bargain collectively. Employees
were also given the right to participate in the
negotiation of their wages, working conditions,
and number of hours worked per week. After the
act was passed, many of the large industries
became unionized and recognized the collective
needs and demands of their workforces. Success-

ful campaigns were launched in the automobile,
steel, electrical, manufacturing, and rubber
industries to sign workers up in unions. As a
result, by 1945 union membership reached 35
percent of the workforce.
The Wagner Act was similar in tone to the
National Industrial Recovery Act of 1933, which
later was declared unconstitutional. However,
the constitutionality of the Wagner Act was
upheld in 1937, and it has become the corner-
stone of labor relations in the United States along
with the Taft-Hartley Act.
See also L
EWIS, JOHN L.; MEANY, GEORGE;
NATIONAL RECOVERY ADMINISTRATION.
Further reading
Derber, Milton. The American Ideal of Industrial
Democracy, 1865–1965 Urbana: University of Illi-
nois Press, 1970.
Gr
oss, James A. The Making of the National Labor Rela-
tions Board: A Study in Economics, Politics and the
Law. Albany: State University of New York Pr
ess,
1974.
National Negro Business League (NNBL)
A professional and political organization that was
first convened in 1900 at the Tuskegee Institute
by Booker T. Washington (1856–1915). Next to
Washington’s educational endeavors and role as

an African-American political boss, the NNBL
was arguably the most important contribution
the Tuskegee principal made toward institutional
and organizational self-help activities in the
black community.
From the NNBL’s inaugural meeting of more
than 300 aspiring and established African-Amer-
ican business men and women, the organization,
during Washington’s lifetime, held annual gath-
erings in northern and southern American cities
to allow black entrepreneurs to network and
share success stories. About 3,000 like-minded
black capitalists attended the 1915 anniversary
Boston gathering, representing 600 chapters
from 36 American states and West Africa. On this
occasion, the NNBL claimed major success in
stimulating black capitalism in America as it
cited the growth in African-American businesses
from l900 to l9l5: banks from two to 51; drug-
stores, 250 to 697; mortuaries, 450 to 1,000;
wholesale companies, 149 to 240; and retail out-
lets, 10,000 to 25,000. The NNBL, moreover,
spawned many other significant business entities
and commercial associations such as the
National Bankers Association, the National Asso-
ciation of Negro Insurance Companies, the
National Association of Funeral Directors, and
the National Association of Real Estate Dealers,
all of which met in tandem with annual NNBL
meetings.

Booker T. Washington and his followers con-
tinued to sustain the organization, despite using
it for political purposes and relying on both
Andrew CARNEGIE and Julius Rosenwald for sup-
port in order to keep the NNBL afloat. With
Washington’s death, the next 85 years were diffi-
cult ones for the NNBL as internecine leadership
struggles for control of the organization
extended into the l920s; hard times came during
the Great Depression; and the NNBL never quite
consummated the revivalism begun in the l950s
under the leadership of Ohio businessman
Horace Sudduth, Tennessee physician Dr. James
E. Walker, and North Carolina insurance mag-
nate C. C. Spaulding. A brief moment of opti-
mism came in the l960s as the organization
changed its name to the National Business
League and, from its headquarters in Washing-
ton, D.C., under the leadership of businessman
Berkeley Graham Burrell, developed a “Project
Outreach” to provide management and technical
assistance to African Americans and other
minority business firms and companies. Burrell
298 National Recovery Administration
received support from the Nixon administration,
the Department of Commerce’s Office of Minor-
ity Business Enterprise, and the Office of Eco-
nomic Opportunity.
The NNBL was unable to hold its centennial
anniversary at the turn of the 21st century. One

member explained the developmental problem as
one of having “politicians trying to run a busi-
ness organization.” The remnants of this once
important African-American business organiza-
tion are evident today in many southern cities,
and the NNBL is now quartered in New Orleans,
Louisiana.
Further r
eading
Kijakazi, Kilolo. African-American Economic Develop-
ment and Small Business Ownership. New York:
Garland Publishing, 1997.
W
alker, Juliet E. K. The History of Black Business in
America: Capitalism, Race, Entrepreneurship. New
York: Macmillan, 1998.
W
ashington, Booker T. The Negro in Business. Boston:
Hertel Jenkins, 1907.
Maceo C. Dailey
National Recovery Administration (NRA)
A federal agency created by the National Indus-
trial Recovery Act of 1933 (NIRA). The agency
was designed to combat the intense and destruc-
tive competition between American businesses
and replace it with a consensual self-government
of business and industry. The agency was mod-
eled on the War Industries Board (WIB), an
agency operating during World War I that had a
similar mission.

The NRA was headed by General Hugh JOHN-
SON, formerly a member of the War Industries
Board. The NRA had as its symbol a blue eagle,
and that became the nickname for the agency.
The eagle decal was displayed on many business
windows and became an unofficial symbol of the
country’s efforts to emerge from the Great
Depression. Detractors referred to it as the “Roo-
sevelt buzzard.”
As part of the NRA program, the Roosevelt
administration suspended the antitrust laws for
two years and authorized industry to form
government-recognized trade organizations that
would reduce internecine competition, devise
codes of competition, and dictate fair labor prac-
tices. More than 500 codes were drawn up,
although many were not adhered to. One positive
by-product of the codes was the elimination of
child labor.
Another organization, created by the securi-
ties industry under the guidelines, was known
originally as the Investment Bankers Conference
and today survives as the NATIONAL ASSOCIATION
OF
SECURITIES DEALERS after being formally estab-
lished by the Maloney Act in 1937. The basic
assumption made by the NRA was that competi-
tion between companies was actually hindering
economic recovery during the Depression rather
than helping, and antitrust laws were put in a

state of suspension so that the new, larger trade
organizations were not accused of breaking the
laws. The suspension of the antitrust laws sug-
gested to some that the NEW DEAL was attacking
the basic structure of American business.
In May 1935, the NIRA was declared uncon-
stitutional by the Supreme Court and with it the
NRA as well. In the case of Schecter Poultry Cor-
poration v. United States, the Supreme Court
ruled that congressional authority had been
usurped to the executive branch and that the law
was unconstitutional as a result. Even severe eco-
nomic conditions did not warrant the transfer of
power to the presidency. The NRA was not reor-
ganized and passed out of existence the same
year. Although generally considered a failure, the
NRA experience provided a foundation for other
reforms and better-designed regulatory agencies
during the years that followed.
Further reading
Bellush, Bernard. The Failure of the NRA. New York:
W. W. Norton, 1976.
Brand, Donald R. Corporatism and the Rule of Law: A
Study of the National Recover
y Administration.
Ithaca, N.Y.: Cornell University Press, 1988.
New Deal 299
Johnson, Hugh S. The Blue Eagle from Egg to Birth.
Garden City, N.Y.: Doubleday, Doran, 1935.
New Deal The name given to the first admin-

istration of Franklin D. Roosevelt, covering the
period 1933–37. The term was used to suggest
that legislation and social programs would be
enacted to address the needs of working and
middle-class citizens, not just those in upper-
income brackets. It was first used in Roosevelt’s
nomination acceptance speech before the Demo-
cratic National Convention in 1932. Social and
economic legislation was passed, especially
before 1936, encompassing a wide spectrum of
programs ranging from securities legislation to
social security programs.
During the first 100 days of Roosevelt’s
administration, the White House proposed and
Congress passed sweeping legislation concerning
the financial markets and banks. The objective
was to pass legislation that would end the
Depression and help stimulate the economy
while proscribing practices, especially in the
securities business, that many believed were
responsible for the economic slowdown. Among
this legislation were the SECURITIES ACT OF 1933,
the BANKING ACT OF 1933, the Agricultural
Adjustment Act, and the National Industrial
Recovery Act, all passed by June of 1933. The
SECURITIES EXCHANGE ACT was passed in 1934,
regulating stock exchanges for the first time.
After the first round of legislation was complete,
the second 100 days began, and Congress passed
the National Labor Relations Act and the Social

Security Act and created the WORKS PROGRESS
ADMINISTRATION. All were designed to either regu-
late sectors of the economy or create jobs for the
unemployed.
The legislation also created a myriad of new
government agencies, all known by their initials.
They ranged from the AAA (Agricultural Adjust-
ment Agency) to the WPA (Works Progress
Administration). They become known as the
“alphabet agencies,” and some eventually were
dismantled. Others, like the Social Security
Administration, became permanent. Others
would follow, such as the F
EDERAL NATIONAL
MORTGAGE ASSOCIATION in 1938, during Roo-
sevelt’s second administration.
A serious blow was dealt to the New Deal
when the National Industrial Recovery Act,
passed in June 1933, was declared unconstitu-
tional by the Supreme Court in 1935. The agency
it created, the N
ATIONAL RECOVERY ADMINISTRA-
TION (NRA), had been instituted to develop a
code of fair practice for various businesses,
which were voluntarily participating in the pro-
gram. The companies participating in the process
were writing codes of conduct for their respec-
tive businesses, including specific standards of
quality, working hours, minimum wages, and
price floors for goods they produced. When it

was declared unconstitutional it was generally
assumed that the NRA was benefiting business
and that many businesses were in favor of it.
The AAA was declared unconstitutional in
1936, joining the NRA. After the Supreme Court
packing controversy in 1937, only a few signifi-
cant pieces of legislation were passed, including
the Housing Act of 1937 and the Fair Labor Stan-
dards Act in 1938. Reform slowed when it
became apparent that the Depression was contin-
uing, especially when a severe RECESSION
occurred in 1937.
While not successful in ending the Depres-
sion, the New Deal nevertheless provided a great
deal of social legislation that became part of the
bedrock of society, especially Social Security.
Much of this legislation, when combined, is
referred to as the “safety net” erected to prevent
economic institutions and society in general
from crashing again. It also helped establish a
firmer hand of government in public affairs than
had been the case previously, leading to more
REGULATION in general. Much of the apparatus
established by the New Deal became useful as
World War II approached, and many government
agencies began to direct their attention toward
the war effort, especially the Reconstruction
300 newspaper industry
Finance Corporation, actually founded in 1932,
that helped many companies finance and build

facilities to aid the war effort.
Further reading
Leuchtenburg, Willam E. Franklin D. Roosevelt and the
New Deal, 1932–1940. New York: Harper & Row,
1963.
Loucheim, Katie, ed. The Making of the New Deal: The
Insiders Speak. Cambridge, Mass.: Harvar
d Uni-
versity Press, 1983.
Rosenof, Theodore. Economics in the Long Run: New Deal
Theorists and Their Legacies, 1933–1993. Chapel
Hill: University of North Car
olina Press, 1997.
Schlesinger, Arthur M. The Coming of the New Deal:
The Age of Roosevelt. Boston: Houghton Mifflin,
1959.
newspaper industry Over the course of three
centuries, the newspaper industry has served two
disparate—and sometimes conflicting—roles: It
has been a bulwark of American democracy and
grown into the $55 billion industry that it is
today. The tension between these two roles has
given rise to a key question that has dominated
newspaper publishing since the colonial era:
How can the industry balance its civic responsi-
bilities as a quasi-public institution in a democ-
racy with the profit-making motives of a business
enterprise?
Since the days of the Massachusetts Bay
colony, the nascent newspaper business was at

the center of the struggle over the political and
religious character of the colonies. Benjamin
Harris, who had established a bookstore and cof-
feehouse in Boston, printed the first colonial
newspaper, Publick Occurrences both Forreign and
Domestick, in 1690. The paper, which was not
licensed by the colonial authorities, was shut
down after just one issue. Two items in particular
had annoyed the authorities: one of them a refer-
ence to a sexual scandal in the French royal fam-
ily, the other involving mistreatment of prisoners
by Indian allies.
Like Publick Occurrences, many of the earliest
“newspapers” wer
e little more than newsletters
published by proprietors of coffeehouses and
pubs, which became centers of political debate—
and eventually dissent—in colonial America.
The second colonial newspaper was pub-
lished by John Campbell, the postmaster of
Boston. Campbell, who launched Boston News-
Letter in 1704, began a colonial tradition
whereby the postmaster also ser
ved as publisher.
The colonial post office was a center of news,
with first access to European newspapers—much
as it would be in small-town America for years to
come. The postmaster enjoyed “francking privi-
leges” and could send his newsletters throughout
the colonies free of charge. He was also “a safe”

choice as a publisher, since he owed his job to
the colonial authorities. Moreover, the colonial
government often awarded printing jobs to
newspapers. Thus, Campbell submitted his
paper, which was available only through sub-
scription sales, for “precensorship” to the
authorities.
By the 1720s, there were three competing
newspapers in Boston. The best of these papers,
The New England Courant, was published by
James Franklin, whose brother Benjamin
Franklin was an apprentice printer and the
author of satirical essays under the pseudonym
“Silence Dogood.” The Courant was launched
during a period of growing dissent—focused on
religious, rather than political, freedom. James
was jailed in 1722 for publishing a series of
attacks on the government, which was led by
Increase Mather and his son Cotton, leaving the
publication of the paper to his teenage brother
Benjamin. Silence Dogood wrote “an eloquent
plea for freedom of the press.”
The Franklins successfully resisted repeated
efforts by the Mathers, themselves religious pub-
lishers, to censor their paper, thus effectively
ending censorship in Massachusetts. Benjamin
Franklin later bought the Pennsylvania Gazette.
By the 1720s, newspapers were being pub-
lished in several major colonial cities, including
newspaper industry 301

Philadelphia and New York. It was in New York
City that another major battle in the war for a
free press was fought. In 1733, opponents of
Governor William Cosby, one of the most cor-
rupt administrators in the colonies, launched the
New York Weekly Journal. When the paper
attacked the local authorities and demanded a
more representative government in New York,
Cosby asked a grand jury to indict the Journal’s
editor, John Peter Zenger
. Though the grand jury
refused, Cosby had Zenger arrested and jailed.
When Zenger came to trial in 1735, he was
defended by Andrew Hamilton, a famous
Philadelphia lawyer, who admitted that Zenger
had published articles critical of the govern-
ment—a crime under colonial law. But Hamilton
argued that to be found guilty “the words them-
selves must be libelous—that is, false, scan-
dalous, and seditious—or else we are not guilty.”
In an eloquent speech, Hamilton asserted the
right for “the liberty—both of exposing and
opposing arbitrary power . . . by speaking and
writing truth.”
The jury, which was composed of ordinary
citizens, returned a verdict of not guilty.
Although truth was not accepted as a defense in
seditious libel cases until after the passage of the
Sedition Act of 1798, Zenger’s vindication
demonstrated that the “average colonialist” was

opposed to authoritarian government.
Eventually, the British authorities gave up try-
ing to license newspapers, and by 1750, there
were 14 weeklies in the six most populous
colonies. Colonial papers, weeklies generally,
were accepting advertising and had grown suffi-
ciently in circulation to enrich a few publishers.
Colonial newspapers were radicalized by the
Stamp Act of 1765, which imposed a tax on
paper, a burden that fell particularly hard on
newspaper publishers. While such taxes had
long been levied on English papers, in the
colonies the tax sparked calls of “taxation with-
out representation.” Although the Stamp Act was
repealed a year later, by then most newspapers
were committed to revolution.
Newspapers were highly partisan during the
prerevolutionary and postrevolutionary period
and were generally more interested in commen-
tary than in news. Isaiah Thomas, who became
one of postrevolutionary America’s greatest pub-
lishers, founded the Massachusetts Spy in an
attempt to cr
eate one of the few moderate, non-
partisan publications. Eventually, even the Spy
went underground and became anti-British.
In the years after the Revolution, newspapers
r
emained an important forum of debate, with
most papers representing either a Federalist or a

Republican point of view. The Federalist Papers,
for example, were first published in newspapers.
Another major debate between the Republicans
and the Federalists centered on guarantees of
individual rights, including freedom of the
press, which the Republicans supported and the
Federalists found “impracticable.” Out of this
struggle grew the Bill of Rights and the First
Amendment, which states: “Congress shall make
no law. . . . abridging the freedom of speech or of
the press.”
Freedom of the press—and its precise defini-
tion—has been debated since the passage of the
Bill of Rights. On a number of different occa-
sions, especially the passage of the Sedition Act
in 1798 during the administration of Theodore
Roosevelt, the government has sought to rein in
the freedom of the press. The press also, espe-
cially in wartime, often has exercised self-censor-
ship. Significantly, the concept of press freedom
predated by decades the notions of “fairness” and
“responsibility” that became canons of journalis-
tic ethics only in the 20th century.
Until the late 18th century, most newspapers
were read primarily by the educated elite; these
early papers sold for as much as eight cents or for
an annual subscription fee that was out of the
reach of many ordinary Americans. The partisan
press reached its peak during the presidency of
Andrew Jackson, who was known for actively

manipulating the press and rewarding sympa-
thetic journalists and editors by giving them
political appointments.
302 newspaper industry
Ironically, by the early 19th century, the
newspaper industry began to serve as a force of
democratization. Though the industry was cen-
tered in Philadelphia and New York, by 1820
there were more than 500 newspapers in the
United States; of these 24 were dailies. And the
1830s also saw the rise of the penny press and a
more independent cadre of newspaper publish-
ers. In 1833, Benjamin Day began publishing the
New York Sun, the first daily paper that was
designed to appeal to the urban working class.
The Sun was sustained more by circulation and
advertising than by political patr
onage. It also
emphasized human interest stories, rather than
the political and economic stories that had been
the mainstay of earlier papers. Day introduced
formatting changes such as large type and wider
column widths to make the paper more legible.
Most importantly, from a marketing perspective,
Day sold his paper for just a penny.
Other papers, especially in New York City,
followed the Sun’s example. James Gordon Ben-
nett’s New York Herald was another journalistic
path breaker. For one thing, the Herald com-
bined the sensationalism of the Sun with the

political and commercial coverage of more tradi-
tional papers. Bennett also became the first pub-
lisher to announce his paper’s independence
from political affiliations and his determination
to “record facts, on every public and proper sub-
ject, stripped of verbiage and coloring . . .” After
the development of the TELEGRAPH in 1844, the
Herald became the first newspaper to use that
technology to gather reports from other cities. By
1860, the Herald was selling 60,000 papers daily.
Bennett’s Herald, as well as two other New
York papers, Horace Greeley’s New York Tribune
and Henry J. Raymond’s New York Times, were all
institutions run by strong-willed and eccentric
men who established the American newspaper as
a capitalist, moneymaking business. Greeley’s
Tribune employed a large editorial staff with cor-
respondents in six American cities, as well as
Europe and Latin America. Greeley’s paper
mounted a slew of editorial campaigns, including
a fight against
SLAVERY. The New York Times was
considered one of the new breed of higher qual-
ity newspapers from its founding in 1851,
though it did not become the “paper of record”
until the 20th century. While the penny press did
not always live up to its promise of dispassionate
coverage, it established a new culture of aggres-
sive, deadline-driven reporting.
In 1848, six New York papers banded

together to form the Associated Press of New
York, the nation’s first wire service. Because the
AP was funded by several papers of different
political bents, the AP itself sought to present
“objective” reports to which its client papers
could add their own slant. Partly to defray their
rising editorial costs, by the mid-19th century
the mass market papers cost two pennies instead
of just one.
While the newspapers of the mid-1800s
eschewed political affiliations, they espoused the
views of their owners. Perhaps the starkest ideo-
logical fault line in the newspaper industry in the
years before the Civil War involved editorial poli-
cies on slavery. Many papers took sides for or
against slavery. The abolitionist movement also
spawned a number of journals, including a few
black-owned newspapers. The most well known
of these was the North Star, which was published
by Frederick Douglass.
The Civil W
ar sparked a number of important
changes in the newspaper industry. Washington,
D.C., became the center of political coverage.
Feature syndication started during this period.
The Civil War was the first war to be covered by
photographers. However, it was not until the
development of screen printing in the 1890s that
photographic images could be reproduced in
newspapers and magazines. Toward the end of

the Civil War new printing innovations did
enable newspapers and magazines to duplicate
illustrations economically for the first time.
(During the Gold Rush of 1899, the Seattle Times
printed extensives graphic guides and maps on
the gold fields. And in 1901, the Chicago Daily
News pioneered the use of color.)
newspaper industry 303
Because battlefield reporters were worried that
the new telegraphic technology used to transmit
dispatches might fail, they began packing the
important news into the top of their stories, leav-
ing the details for last. Thus, the old chronologi-
cal news reporting style was replaced by what we
now think of as the “inverted pyramid.”
Following the Civil War, the growth of the
RAILROADS opened the West to settlement, and
the spread of heavy industry fostered a boom in
both immigration and urbanization, which
fueled ever greater demand for mass-market
newspapers, while industrialization and the
beginnings of a consumer culture (in particular
the advent of the department store) fostered the
growth of advertising.
The industry and the news gathering process
also benefited from a number of technological
advances that not only speeded printing but also
made it possible to file stories from remote loca-
tions. Until the beginning of the 19th century,
printing and the production of paper were hand-

icraft businesses. Paper was produced literally
from rags, not wood, and type was set by hand.
The years after the Civil War saw a revolution in
technology, including the invention of paper
made from wood pulp in a paper-making
machine. Other innovations included the lino-
type machine, which tripled the speed of typeset-
ting, halftone photoengraving, which made it
possible to print photographs for the first time,
and the telephone and the telegraph.
A new generation of newspaper tycoons
sought to appeal to the growing cadre of working-
class readers with a renewed focus on sensa-
tional, crusading news stories. Publishers such as
Joseph Pulitzer and William Randolph Hearst
would become leading pioneers of what became
known as yellow journalism.
Pulitzer, a Hungarian immigrant who got his
start in the newspaper business by founding the
St. Louis Post-Dispatch, bought the New York
World in 1883. Pulitzer’s mission, he said at the
time, was a paper that would “expose all fraud
and sham, fight all public evils and abuses.” The
World embraced diverse crusades ranging from
the Standar
d Oil monopoly to the conditions of
tenement housing in New York City. Pulitzer
commissioned R. F. Outcault to draw the first
cartoon comic, and he devised and published the
first opinion poll. He is credited with adding

sports news and so-called women’s news.
Pulitzer, who would found both the eponymous
journalism prizes and the Columbia University
School of Journalism, also exhorted his editors to
“always tell the truth, always take the humane
and moral side . . .” William Randolph Hearst,
whose family owned the San Francisco Examiner,
bought the New York Morning Journal in 1895 to
compete against Pulitzer’
s World. Mounting a vig-
orous campaign to steal both readers and adver-
tisers from the World, Hearst spent lavishly to
attract star talent, many from the World, and
undercut the World’s advertising rates. By the
turn of the century, both papers were publishing
morning, evening, and Sunday editions.
In their frenzied competition, the World and
the Morning Journal pushed the boundaries of sen-
sationalism and journalistic ethics, giving rise to
the term yellow journalism. As tensions between
Cuba and its colonial ruler escalated, Hearst and
Pulitzer exploited—some say they even fueled—
the impending crisis to boost circulation. Hearst
dispatched writer Richard Harding Davis and
artist Frederic Remington to Cuba. When they
arrived to find things quiet and asked to be sent
home, Hearst is said to have replied: “Please
remain. You furnish the pictures and I’ll furnish
the war.” When the battleship Maine exploded
mysteriously in Havana harbor, sparking the

Spanish-American War, both papers pinned the
blame on the Spanish and splashed the story
across their front pages. Within days, Hearst
launched a subscription campaign to raise money
for a memorial, which was eventually built at
Columbus Circle. Not to be outdone, Pulitzer
built a statue to Pomona at the east end of 59th
Street and Fifth Avenue. A similar subscription
campaign by the Hearst newspapers helped fund
Mount Rushmore. To whip up support for both
304 newspaper industry
the war and the memorial, Hearst’s papers also
published distorted accounts of Spanish atroci-
ties. Hearst’s tactics prompted former president
Grover Cleveland, who had resisted intervening
in Cuba during his presidency, to charge Hearst
with exploiting the deaths of the men who had
died on the Maine as an “advertising scheme for
the New York Journal.” Indeed, within days of the
explosion, circulation of both papers exceeded 1
million readers.
In 1900, advertising as a percentage of rev-
enues jumped to 55 percent, up from 29 percent
in the 1830s (today, ads account for 70 to 80 per-
cent of newspaper revenues). The development
of newspaper chains was another major trend in
the early 20th century, led by Edward Wyllis
Scripps. Scripps launched the Cleveland Press,
the first paper in what was to become a cross-
country chain of newspapers that numbered 23

by the start of World War I. The Scripps chain
pioneered a number of innovations: Editors were
often offered stock. Scripps wrote the editorials
for his papers himself. He also launched a wire
service, United Press Association. Like Pulitzer,
Scripps saw himself as something of a crusader
for the working class. He even experimented
with ad-free newspapers as a way to resist the
pressure of advertisers.
The years between World War I and the end
of the Great Depression marked a period of mas-
sive consolidation in the newspaper industry. For
example, inspired by Scripps’s success, Hearst,
too, began to buy newspapers—more than two
dozen by 1934. Hearst also launched a news
service, International News Service. The merger
of the Hearst news service and the Scripps news
service in 1958, resulted in United Press Interna-
tional, which was the major competitor to the
Associated Press.
Three other newspaper chains were launched
in the early 20th century: the Newhouse News-
papers, founded by S. I. Newhouse; Gannett
Newspapers, founded by Frank Gannett; and the
Knight-Ridder chain, which got its start when
John Knight rescued his father’s Akron Beacon
Journal from near-bankruptcy during the Depres-
sion and began buying a slew of midwestern
papers.
The turn of the centur

y also saw the rise of
the Wall Street Journal, which would become the
first national newspaper. The business press—in
the form of so-called price currents, which were
little more than pamphlets that reported on com-
modity prices, the movement of ships, and
exchange rate fluctuations—dated back to the
founding of the colonies. General interest news-
papers, which had catered to the colonial elite,
had recognized the importance of business sub-
scribers and issued supplements, often for free,
that listed information on commodity prices,
insurance premiums, and shipping news. The
William Randolph Hearst (LIBRARY OF CONGRESS)
newspaper industry 305
most successful and influential of the shipping
papers, the General Shipping and Commercial List
(which eventually became the New York Shipping
and Commercial List) was launched in 1815 and
was published until the early 20th century, when
it was merged with the Journal of Commerce.
On Wall Street, the first financial newsletters
began soon after traders began selling stocks and
bonds under a sycamore tree at the corner of
Wall and Broad Streets in 1789. By the late 19th
century, a number of hand-written financial bul-
letins were hand-delivered to subscribers every
day. The Wall Str
eet Journal, which quickly
became the premier business journal, was

founded on a technological innovation intended
to improve the production of these bulletins. In
1882, Charles Bergstresser convinced Charles
Dow and Edward Jones, two of his colleagues at
the Kiernan News Agency, a leading financial
publisher of the day, to defect and form their own
company. He did so after Kiernan had refused to
give Bergstresser an equity interest in one of his
inventions, a stylus that could record the news
onto 35 bulletins simultaneously. Dow Jones &
Co. soon bought the first financial printing press
on Wall Street. The company was also first to use
the telegraph to transmit financial news from
London and Boston to New York. In 1889, Dow
Jones introduced the Wall Street Journal, Wall
Street’s first afternoon newspaper. (A paper by
the same name had ceased publication a decade
earlier.) The same year, the company introduced
the original DOW JONES INDUSTRIAL AVERAGE; of
the first 12 companies on the list, only GENERAL
ELECTRIC survives. By that time the company was
already producing both bulletins and a financial
ticker that transmitted the latest stock prices.
Success also fostered a battle between the
business side and the editorial side of the paper.
As the Wall Street Journal became more and more
successful, Edward Jones, who was in charge of
advertising, filled the front page with ads. Dow,
who was in charge of editorial content, objected.
In 1899, Jones sold his interest in the company

to Dow, beginning a tradition whereby the edito-
rial department would function independently of
the financial side of the paper.
By the start of the 20th century, the newspa-
per industry had become big business. At the
same time, journalists and newspaper publishers
thought of themselves as a profession with
responsibilities to the reading public. When
Adolph S. Ochs bought the near-bankrupt New
Y
ork Times in 1896, he stressed accuracy, objec-
tivity, and depth. This new “objectivity” was also
synchr
onous with the spirit of progressivism,
rationalism, and professionalism that gripped the
rapidly industrializing nation of the early 20th
century. In 1922, the major dailies organized the
American Society of Newspaper Editors, which
adopted a professional code of ethics known as
the “Canons of Journalism.” Similar codes had
been adopted by regional publications beginning
in 1910. Though the canons were voluntary, they
stressed fairness, impartiality, independence, and
“fidelity to the public interest.” Newspapers did,
indeed, sometimes have a substantial impact, as,
for example, when coverage of the Triangle Shirt-
waist factory fire helped to highlight unsafe
working conditions and inspired changes in
municipal laws.
But sensationalism was not dead. During the

roaring 20s, cities saw the rise of a new breed of
newspaper, the tabloids, which countered the
sobriety of mainstream papers such as the New
York Times and the Wall Street Journal with a new
era of sensationalism. The tabloids were smaller
in size than conventional papers, so they could
easily be read on bus and subway, and used large
headlines and photography. The archetype of the
new tabloid was the New York Daily News, which
was founded by Joseph Patterson in 1919.
The 1920s also saw the rise of broadcast
media. Radio began to threaten the department
store advertising base of the newspapers. Compe-
tition and financial pressure led to a further con-
solidation of the newspaper industry that
continues to this day.
Interpretive journalism emerged, in part, as
the print media’s response to the spot-news
306 newspaper industry
advantage enjoyed by broadcasters. Interpretive
journalism also was an answer to the Achilles
heel of objective reportage. A nothing-but-the-
facts approach to journalism failed to lend mean-
ing to complex news events; it also left journal-
ists open to manipulation by public officials who
could garner headlines merely by holding a press
conference. Columnists pioneered interpretive
Pressroom of the New York Times, 1942 (LIBRARY OF CONGRESS)
newspaper industry 307
journalism in the 1910s and 1920s. The serious-

ness of the Depression also bolstered interpretive
journalism; President Roosevelt, for example,
made his economic advisers available to journal-
ists to help explain new economic policies. Sena-
tor Joseph McCarthy’s success in manipulating
the postwar press further discredited “objectiv-
ity.” (Indeed, it was interpretive reporting by
Edward R. Murrow on his Hear It Now broadcast
that was cr
edited with helping to bring down
McCarthy.)
By the second half of the 20th century, com-
petition from new forms of broadcasting and
new technology combined to undermine regional,
independently held newspapers. Computer and
satellite technology fostered a boom in regional
printing and the first national newspapers. The
Wall Street Journal began printing regional edi-
tions in the mid-1970s, and Gannett launched
USA Today in 1982.
The gr
owth of the national papers, chains,
and eventually publicly held companies signaled
the decline of independent regional newspapers.
Just after World War II, Walter Lippmann trav-
eled to Iowa on the occasion of the 100th
anniversary of the Des Moines Register and Tri-
bune. In his remarks to an audience of Iowa pub-
lishers and editors, he said: “There is I believe, a
fundamental reason why the American press is

strong enough to remain free. That reason is that
the American newspapers, large and small and
without exception, belong to a town, a city, at
the most to a region.”
At the time of Lippmann’s address, three-
fourths of all American dailies were independ-
ently owned. But by the turn of the 21st century,
a handful of media corporations had come to
dominate the news media, and all but a few daily
papers had gone public. By selling shares to the
public, newspaper companies were able to raise
much-needed capital. However, the strategy also
gave newspaper editors (and managers) a new
focus: shareholders and profit margins, rather
than readers.
To resist being swallowed up by chains, a
number of newspapers formed joint operating
agreements, and in the 1950s, one-newspaper
towns began to flourish. The Newspaper Preser-
vation Act of 1970 provided some protection
against antitrust prosecutions and was intended
to protect weak newspapers by allowing two
publications to share advertising, management,
and printing resources, while maintaining sepa-
rate editorial staffs. Some newspapers also
bought local television stations. However, in
1975 the F
EDERAL COMMUNICATIONS COMMISSION
banned future purchases by media companies
that would result in a company owning both a

newspaper and a television station in the same
market; the rule has come under fire in recent
years as media conglomerates have sought to
weaken FCC rules governing ownership.
By the late 20th century, the most successful
newspapers were highly profitable businesses,
garnering net profits of 15 to 25 percent, sub-
stantially more than many U.S. businesses,
which rarely see double-digit margins. A handful
of prominent family-controlled newspapers,
including the Washington Post and the New York
Times, also went public, but used large blocks of
shares to retain family contr
ol and to blunt the
pressures of the stock market.
The pressures of public ownership sharpened
the debate about the watchdog function of news-
papers. “News has become secondary, even inci-
dental, to markets and revenues and margins and
advertisers and consumer preferences,” note the
authors of Taking Stock: Journalism and the Pub-
licly Traded Newspaper Company. Significantly,
the biggest—and riskiest—stories of the late
20th century
, Watergate and the Pentagon
Papers, were broken by the Washington Post and
the New York Times, which are still controlled by
family members.
See also
ADVERTISING INDUSTRY;BARRON,

C
LARENCE W.; MUCKRAKERS.
Further reading
Auletta, Ken. Backstory: Inside the Business of News.
New York: Penguin, 2005.
Bezanson, Randall P
., Gibert Cranberg, and John
Soloski. Taking Stock: Journalism and the Publicly
308 New York Stock Exchange
Traded Newspaper Company. Ames: Iowa State
University Press, 2001.
Meyer, Philip. The Vanishing Newspaper: Saving Jour-
nalism in the Information Age. Columbia: Univer-
sity of Missouri Pr
ess, 2004.
Andrea Gabor
New York Stock Exchange In the 18th cen-
tury, stock traders conducted an outdoor market
on Wall Street in lower Manhattan to trade
stocks and commodities. The market was very
limited both by location and by weather, and
when it became impossible to trade outside, the
traders often moved indoors to coffeehouses,
also located on Wall Street. This general locale
became the site of stock trading in New York
City.
In 1791, the early stock market suffered a seri-
ous setback because of speculation by William
DUER, a former finance official during the Conti-
nental Congress. Duer speculated heavily in land

and became overextended in his dealings, causing
the market to collapse. As a result, the traders
realized that they needed to form an organization
to control their own membership and organize
the market. A meeting was held under a button-
wood tree and was known as the Buttonwood
Agreement. It became the foundation for the New
York Stock & Exchange Board in 1817 and its
successor, the New York Stock Exchange.
The post-Buttonwood brokers would meet
daily to transact business in the securities of the
day—mostly government bonds. From those
humble beginnings emerged one of the world’s
largest marketplaces, home to more than 3,000
listed securities and a daily volume in excess of a
billion shares. With 1,366 seat-holders (member-
ships), the New York Stock Exchange (NYSE)
has attracted most of the world’s largest corpora-
tions to its listings and counts among its mem-
bers firms representing most of the financial
capital in the securities industry. The NYSE’s
marketplace is built upon a specialist system of
executions. Each security listed is assigned to a
specialist unit that is charged by the exchange to
maintain a “fair and orderly market.” Over the
years this has come to mean that the specialist
must buy securities from sellers when there are
no public bids and sell to buyers when there are
no public offerings in a method that maintains
the continuity of the marketplace. In fact, the

specialist is involved in less than 20 percent of all
transactions, with the balance involving cus-
tomer meeting customer at the prevailing market
price. As the industry has grown, these specialist
units formerly numbering more than 100 have
merged to about two dozen in recent years as the
supply of capital for these functions are available
only to the largest entities in the industry.
The NYSE has grown exponentially since its
founding. Stock tickers were first used in 1867,
and the exchange experienced its first million-
share day in 1886. Although it experienced many
panics in the 19th century, the 1929 crash was
the worst day in its recorded history. After World
War II, individual investors began returning to
stock investments, and volume and activity
began to increase. In 1972 the first salaried full-
time chairman, James Needham, took office, and
in 1975 the first consolidated
TICKER TAPE was
introduced along with negotiated commissions.
Technology has greatly changed the structure
of the floor and the method of order entry.
Whereas once all orders were delivered by hand
to the trading posts and either executed or left on
the specialist book for later execution (for which
the specialist received a small fee), today most
orders arrive electronically. The NYSE has devel-
oped a Dot System for automatic delivery of all
small lot orders directly to the specialist post and

a Super Dot for large-size orders to follow the
same route. As a result of these changes, the role
of the retail floor broker, that individual who
walks around the floor executing orders, has
been vastly diminished. The role of the broker
who has the ability to handle or execute profes-
sional large-size institutional orders continues to
be an important part of the daily volume on the
floor of the NYSE.
New York Stock Exchange 309
In recent years, with the growth of electronic
entities that look like stock exchanges but have
none of the mandated regulatory functions of an
exchange, the New York Stock Exchange has
been the target of more and more competition. In
fact, many of these electronic networks (ETNs)
have applied to the Securities and Exchange
Commission for status as exchanges. Expanded
trading facilities have also led to increased vol-
ume. By the late 1990s, volume was well over a
Trading floor of the New York Stock Exchange, 1955 (LIBRARY OF CONGRESS)
310 Norris, George W.
billion shares per day, greatly fueled by the
increased number of MUTUAL FUNDS doing busi-
ness and the increased volume generated by
hedge funds.
The New York Stock Exchange has also indi-
cated a desire to demutualize (go public) to put
itself in a better position to compete in the
quickly changing financial services industry.

Under the current structure, the NYSE is run by
the votes of 1,366 members, and all decisions go
through an arduous path of committees, boards,
and staff. As a public corporation, decisions
would be made and implemented quickly, a very
necessary requirement in today’s changing
world. The question of going public does not
resolve the question of the role of the NYSE as a
regulator of the firms in its membership and as
the organization charged with overseeing the
business principles of its members. Many feel
that a publicly owned NYSE cannot be both a
competitor and a regulator in the securities
industry at the same time.
See also A
MERICAN STOCK EXCHANGE; NATIONAL
ASSOCIATION OF SECURITIES DEALERS; STOCK MARKETS.
Further reading
Clews, Henry. Fifty Years in Wall Street. New York: Irv-
ing Publishing, 1908.
Eames, Francis. The New York Stock Exchange. New
York: Thomas G. Hall, 1894.
Geisst, Charles R. Wall Street: A History. New York:
Oxford University Press, 1997.
Sobel, Rober
t. The Big Board: A History of the New York
Stock Exchange. New York: Weybright & Talley,
1975.
Lee Korins
Norris, George W. (1861–1944) politician

Norris was born on a farm in Sandusky County,
Ohio, and attended local public schools. He
graduated from Baldwin University in Ohio and
Valparaiso University’s law school in 1883. He
taught school for two years before moving to
Nebraska, where he began practicing law. He
then became a county attorney and a district
judge before being elected to Congress as a
Republican in 1903. He served in the House of
Representatives until 1913, when he successfully
ran for the Senate, beginning a 30-year career in
the upper house.
Norris became best known as a liberal
Republican while serving in the Senate, carry-
ing the torch as one of that body’s last Progres-
sives. He became known during and after World
War I as an ardent opponent of big business on
many occasions, criticizing bankers for the
profits made during World War I. He also
became an opponent of many of the large UTILI-
TIES combines assembled during the 1920s,
especially those of J. P. Morgan Jr. He opposed
selling the Muscle Shoals power production
plant on the Tennessee River to Henry FORD in
1921, maintaining that the project should
remain in the public sector.
His greatest contribution to the NEW DEAL,
with which he was ideologically aligned, came
when he led the movement, at the behest of
Franklin Roosevelt, to create the TENNESSEE

VALLEY AUTHORITY (TVA) in order to keep Mus-
cle Shoals permanently in the public realm.
Norris had been opposed to private ownership
of utilities, especially in rural areas, since many
of them had higher operating costs than pub-
licly owned utilities. As a result of his sponsor-
ship, the first of the TVA’s dams built was named
the Norris Dam.
During his terms in the Senate, Norris held
many important committee assignments and
chairmanships. Among them were chairman,
Committee on the Five Civilized Tribes of Indians,
Committee on Patents, Committee on Agriculture
and Forestry, and Committee on the Judiciary.
As he drifted further from the Republican
Party, Norris won a seat in the Senate as an Inde-
pendent in 1936. He served until 1943, when a
reelection bid failed. Known as the “Father of the
TVA,” Norris died in McCook, Nebraska, in
1944.
See also MORGAN, JOHN PIERPONT, JR.
North American Free Trade Agreement 311
Further reading
Lowitt, Richard. George W. Norris: Persistence of a Pro-
gressive, 1913–1933. Urbana: University of Illinois
Pr
ess, 1971.
Norris, George W. Fighting Liberal: The Autobiogra-
phy of Geor
ge W. Norris. New York: Macmillan,

1946.
North American Free Trade Agreement
(NAFTA) A comprehensive trade agreement
that will eliminate TARIFFS and remove many non-
tariff barriers in trade among Mexico, Canada,
and the United States. By 2004, most tariffs were
phased out. By 2009, tariffs on the previously
exempted products, mostly agricultural, will be
eliminated. Most trade between the United States
and Canada has been tariff-free since 1998 due to
the Canada-U.S. Free Trade Agreement (CUFTA).
Negotiations began in 1991, and NAFTA was
passed by Congress in November 1993. The
agreement went into effect on January 1, 1994.
The three countries have a combined GDP of
$9.5 trillion and a population of 396 million, cre-
ating a trade block that rivals the population and
economy of the European Union.
Early economic analysis predicted gains for
all three countries. However, since the United
States and Canada already had a free trade
agreement prior to NAFTA, most of the spectac-
ular gains have been made in the trade with
Mexico. According to the Dallas Federal
Reserve Bank, exports to Canada increased 56
percent, exports to Mexico were up 89 percent,
and U.S imports from Mexico and Canada
increased 137 percent and 56 percent, respec-
tively, by 1998. Total U.S Mexico trade
increased 141 percent from 1993 to 1999. With-

out the agreement, U.S. exports to Mexico
would have declined, and U.S. imports would
have barely grown. Foreign direct investment,
especially from the United States, in Mexico has
increased as a result of this agreement. Approx-
imately 80 percent of U.S Mexican trade is
intraindustry. For example, the United States
imports Volkswagens from the plant in Puebla,
Mexico, and exports Cadillacs to Mexico. In
addition, the trade agreement has facilitated
production sharing, as in the maquiladora
industry at the border. Certain industrial sec-
tors experienced the most change. For example,
the U.S. computer and tractor industries bene-
fited greatly, and the Mexican textile industry
boomed.
In current U.S. trade policy making, the
president is required to obtain permission to
negotiate from Congress, and the agreement
must be approved by Congress. Historically,
permission to negotiate was readily obtained.
However, NAFTA created concern among many
groups, especially unions and environmental
groups. To receive permission, President George
H. W. Bush promised to address some of the
environmental and labor concerns. In 1993, a
moderate Democrat, President Bill Clinton, cre-
ated a pro-NAFTA coalition and moved away
from the labor wing of the Democratic Party to
gain congressional approval of the agreement

with the following additions and side agree-
ments. To address environmental concerns, the
Border Environment Cooperation Commission
was formed to encourage a clean-up of the bor-
der. The North American Development Bank
was created to provide assistance for communi-
ties adjusting to the effects of NAFTA. The
North American Agreement on Environmental
Cooperation was designed to strengthen envi-
ronmental cooperation and enforcement of
domestic laws. These commissions are designed
to promote a development that is sustainable,
robust, and competitive.
In addition, the North American Agreement
on Labor Cooperation was signed to improve the
working conditions and living standards in the
three countries, to ensure the enforcement of the
respective labor laws, and to provide a venue for
problem solving and dispute settlement. In the
NAFTA text, under chapter eight of the agree-
ment, parties can impose trade restrictions if
increased imports harm a domestic industry. To
312 North American Free Trade Agreement
implement this possibility, they created the
Understanding on Emergency Action. Represen-
tatives from each country compose the Working
Group on Emergency Action. This working group
reports to the Free Trade Commission. The
NAFTA secretariat provides technical support.
See also

FOREIGN INVESTMENT; MULTINATIONAL
CORPORATION.
Further reading
Mayer, Frederick W. Interpreting NAFTA: The Science
and Art of Political Analysis. New York: Columbia
University Pr
ess, 1998.
Orme, William A. Understanding NAFTA: Mexico, Free
T
rade and the New North America. Austin: Univer-
sity of T
exas Press, 1996.
Jennifer Holmes