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Early Bureaucracies

Large Employers of Office Workers

Introduction

Until the late 19th century, few organizations employed large numbers of clerical workers. Until the Civil War, U.S. "businesses required very little in the way of administrative networks. Mercantile, commercial, and financial enterprises usually involved only a few partners and a handful of clerks who had a knowledge of bookkeeping and could write in formal business penmanship. The small manufacturing shops peopled by an artisan-entrepreneur and a few workers or apprentices likewise required little in the way of administration. Even the factories which arose before the Civil War involved only a manager, a few foremen, and a group of workers who normally all labored in the same building. Under such circumstances, it was easy for an owner or manager to oversee personally almost all the operations in his business. Similarly, because businesses seldom operated in more than one location, there were almost no problems of controlling distant operations." (Glenn Porter, The Rise of Big Business, 1860-1910, 1973, pp. 17-18)

By way of illustration, in the private sector:

  • In the 1820s, "the Equitable Society of London--then the largest life insurance office in the world--was entirely managed by an office staff of eight clerks." (Martin Campbell-Kelly and William Aspray, Computer: A History of the Information Machine, 1996, p. 16)

  • "As late as the 1830s, the [Second] Bank of the United States, then the nation's largest and most complex institution with twenty-two branch offices, was managed by just three people."  (James R. Beniger, The Control Revolution, 1986, p. 14)

  • "As late as the 1840s, the staff of one of America's largest importers consisted of the owner, his son, two or three clerks, and a porter." "Middle managers had not appeared anywhere in the United States as late as the 1840s."  (Beniger, pp. 256-57)

  • In 1840, in the office of a leading mercantile firm in New York City, typically "There were two or three copiers, a bookkeeper, a cash keeper, and a confidential clerk who handled business when the partners were not in the office." (Alfred D. Chandler, Jr., The Visible Hand, 1977, p. 37)

  • In Britain, "In the mid-nineteenth century the normal work environment of the great mass of clerks engaged in commerce, and to a lesser extent in banking and insurance, was the small counting house."  "B.G. Orchard, writing in 1871, estimated that the number of clerks employed in Liverpool's 4,000-5,000 offices was on average probably four."  "B.G. Orchard....estimated there were 8,335 clerks, 3,952 apprentices and 3,043 office lads employed in over 3,000 Liverpool firms."  (Gregory Anderson, Victorian Clerks, 1976, pp. 9, 10, 53)

Regarding the public sector, it has been reported that in 1800 the Treasury Department had 50 clerical workers. (Mary Clemmer Ames, Ten Years in Washington, 1876, p. 293) "In 1831 President Andrew Jackson and 665 other civilians ran all three branches of the federal government in Washington." (Beniger, p. 14) In 1835, the U.S. Patent Office had six employees, including a messenger. (Kenneth W. Dobyns, The Patent Office Pony: A History of the Early Patent Office, 1994) According to another source, in 1836 the Patent Office consisted of nine people: a commissioner, a chief clerk, an examiner, a draftsman, and five clerks. "In 1841 there were only sixty-four employees in the [U.S.] Treasury Department, and the Pension Office was run by four clerks and one messenger." (Mrs. John A. Logan, Thirty Years in Washington, 1901, p. 468) Before the Civil War, the only American data-processing bureaucracy of any importance was the Bureau of the Census in Washington, D.C.  In 1840, the Census Bureau had 28 clerks.  That number grew to 184 in 1860. (Campbell-Kelly and Aspray, pp. 20-21)  

England

Campbell-Kelly and Aspray trace the early development of large-scale data processing organizations. The earliest such organizations were clearing houses that handled transactions among companies in the banking, railroad, and telegraph industries.  In the 1770s, banks in London began using a clearing room to settle checks.  In the 1830s, about 30 clerks worked in a large room at the Bankers' Clearing House.  The Railway Clearing House, which was founded in 1842, "rapidly became one of the largest data-processing bureaucracies in the world.  By 1870 there were over 1,300 clerks."  By 1875, the Central Telegraph Office, which was founded in 1859, "was employing 1,200 male and female clerks. By the turn of the century, the Central Telegraph Office employed no fewer than 4,500 clerks."  For an 1859 illustration of a large telegraph office in London, see "The Great Telegraphing Room at the New Offices of the Electric and International Telegraph Co.," Illustrated London News, Dec. 31, 1859.  For a similar 1874 illustration of the London Central Telegraph Office, see Illustrated London News, Dec. 12, 1874.

In the 1860s, large data-processing organizations also existed in British savings banks and industrial insurance companies. Campbell-Kelly and Aspray report that by 1876 the Prudential industrial insurance company in London, which sold small policies to members of the working class, had 300 clerks.

According to Anderson (1976, p. 9), in Britain, "Even by the first world war, when the large-scale departmentalised office was very much a reality, most commercial clerks continued to work in small offices."

United States ~ Private Companies

Railroads were the earliest large U.S. corporations. The first railroad began operating in 1830.  In 1856, the railroad industry ranked first in the US in terms of value of publicly traded securities. (Robert Sobel, The Big Board, 1965, p. 58)   Beginning in the 1850s, railroad and telegraph companies were the first to create hierarchies of business units controlled by salaried managers. (Beniger, p. 255)  "In the 1850s, large railroads were already employing from forty to sixty salaried managers." (Olivier Zunz, Making America Corporate, 1870-1920, 1990, pp. 40-41, 130)  "By 1860 the railroads probably employed more accountants and auditors than the federal or any state government." (Chandler 1977. p. 110) "Of all the economic institutions on the American scene in 1860, only the railroads qualified as big business."  (Porter, p. 31)  

Zunz reports that in 1880 the Chicago, Burlington, and Quincy railroad employed 148 executives and several hundred clerical workers. The railroad employed 271 clerical workers at its Chicago headquarters. The headquarters purchasing department had five middle-level executives and over 100 clerks. The general auditor's department had six executives and about 30 clerks. The freight auditor's department had two executives and 66 clerks. In 1883, the C. B. & Q. moved into a new six-story office building, where approximately 300 of its employees were located.  In order to provide natural lighting from at least two sides, the building (like other buildings of the period) had large rooms with windows facing both the exterior and an interior court.

An 1881 illustration of Western Union's New York office shows a large room filled with telegraph operators. ("Western Union Operating Room, New York, 195 Broadway, in 1881," National Museum of American History, Smithsonian Institution, Washington, D.C. )  In 1883, Rayne reported that "At the headquarters of the Western Union Telegraph Company, New York City, one hundred and twenty young women are employed as operators."  (Mrs. M. L. Rayne, What Can a Woman Do: Or, Her Position in the Business and Literary World, 1883, p. 136)  

The development of railroad transportation and telegraph communications caused important changes in the way consumer goods were distributed.  Small merchants operating on commission were replaced by large wholesalers that purchased from manufacturers and resold to retailers. During the late 1860s and the 1870s, wholesale houses developed multi-unit bureaucracies with specialized departments for purchasing, sales, advertising, orders, traffic and shipping, credit and collections, and accounting.  In the 1870s, Alexander T. Steward, a major dry goods distributor, had two thousand employees in the US and abroad. (Beniger, pp. 254-57)

The number of U.S. companies employing large numbers of clerical workers appears to have grown rapidly after the mid-1870s.  The earliest illustrations showing the interiors of large U.S. offices that we have found date from the mid-1870s. ( See the Museum's exhibits of illustrations of early office interiors by clicking here and then clicking on the chronological links at the top of page.)  Sobel's discussion of the rise of Wall Street investment banking companies during 1873-1884 is consistent with this. The largest of these investment banking companies, which marketed new securities issues, were Drexel, Morgan & Co. and Kuhn, Loeb & Co.  "The large investment concerns employed small armies of clerks, runners, recorders, bookkeepers, and salesmen, a marked contrast to the days when brokerages operated with a half-dozen clerks and the partners." (Sobol, pp. 111-12)

Insurance companies were among the largest early employers of clerical workers. "By the 1890s, insurance firms began to open branch offices operated by salaried employees and centrally managed through functionally specialized divisions like sales, operations, and investments." (Beniger, p. 392)  In 1896, the Metropolitan Life Insurance Co. of New York's audit division alone had 550 clerks. The central filing system was maintained by 61 employees. Checks were processed by 32 clerks. In 1914, the company had 3,659 white collar workers at its headquarters building. The audit division had 1,000 clerks. The actuarial division had about 490. (Zunz, pp. 113-16)

In the meat packing industry, in 1905 "Swift's Chicago headquarters employed a clerical force of over a thousand."  (Chandler 1977, p. 392)  For a photo of a large Swift office, click here. In 1906, more than 9,000 people worked at the Sears, Roebuck mail order company in Chicago.  Of this total, about 2,500 were managers and clerical workers.  Clerical workers received the mail, entered orders and dispatched them to the merchandise building via pneumatic tubes, determined the most economic routings for shipments, handled correspondence, and kept records.  The number of clerical workers included: order entry department, 500-600 (all in one room); stenographic department (where typists transcribed letters from dictating machine cylinders), 150-200; and card index filing department, 153. ("A Trip Through Sears, Roebuck & Co." (boxed set of 50 stereographs), 1906.)  For photos of the Sears, Roebuck order entry and stenographic departments, click here and scroll down.

Unites States ~ Federal Government

In 1800, the State Department had eight employees. The first patent clerk was hired in 1802, and it was not until 1810 that an assistant was hired.  Around 1836, the Patent Office had 17 employees. (Charles J. Robertson, Temple of Invention, 2006, p. 11) According to Ames (1876, p. 300), the number of clerks in the Treasury Department increased from 383 in 1861 to 2,000 in 1864.  The number of clerks at the Census Bureau increased from 184 in 1860, to 438 in 1870 and 1,495 in 1880. (Campbell-Kelly and Aspray, pp. 20-21)  By 1870, a large number of clerks were employed in a number of federal government offices in Washington, D.C.  However, President Rutherford B. Hayes (1877-1881) had only a small White House staff.  "Hayes's staff of nine, which was headed by a private secretary, performed prosaic tasks, such as receiving visitors, sorting incoming correspondence, assembling files on potential appointees to office, answering routine mail, and copying letters and papers that Hayes, who usually did not dictate to the stenographer on his staff, had written out."  (Ari Hoogenboom, The Presidency of Rutherford B. Hayes, 1988, p. 58)

 

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