March/April 2013
A century ago, waste dealers overcame significant dissention in their ranks to form a national association, a momentous achievement that elevated the industry and ultimately led to the creation of ISRI.
By Kent Kiser
March 24, 1913, was a seminal day for the “waste trade” in the United States—what we today would call the scrap industry. On that day, about 40 waste dealers assembled in Boston and voted to form the National Association of Waste Material Dealers, the first nationwide organization for those who buy, sell, or process scrap commodities. Getting to that historic decision was neither quick nor easy, given the independent mentality of that era’s dealers and the disorganized state of the trade. That vote was the crucial first step in bringing order to this business, and it planted the seed that later would become ISRI. The centennial of the vote that created ISRI’s oldest predecessor association gives us an opportunity to look back at the industry’s humble origins.
In the Beginning
In the early 1900s, Buffalo, N.Y., was the center of the waste material dealers’ universe and the leading market for such materials in the United States. At that time, dealers of woolen rags and scrap rubber were the aristocrats of the trade. “The scrap [nonferrous] metal dealer came next, and at the lowest rung of the ladder was the scrap iron dealer,” wrote Charles Lipsett, publisher of Waste Trade Journal (New York), in 1955. In that “era of the general dealer,” however, many operators handled everything: rags, metals, rubber, waste paper, and scrap iron, he noted.
Despite the presence of some large, progressive companies, the waste material industry was chaotic compared with other industries at that time, Lipsett reported. It had one foot firmly in its “horse and buggy stage,” and those in the business routinely called the materials they handled “junk.” Looking back on that era in 1923, one dealer condemned the business as nothing more than “a despised, haphazard haggling street trade” that was “utterly unorganized and of no standing.” Lipsett observed that “dealers’ operations were conducted in a manner that was 100 percent speculative,” while “standards and ethics in those days were not always of the highest.” Others pointed out it “had no basic standards by which to operate and it had no association to give it a voice,” Scrap Age magazine reported in a 1963 history of the industry. “There was almost a complete lack of communication between dealers. Individual action was the rule of the day—even in the most important developments facing the trade,” the magazine stated. “A few dealers in various parts of the country cooperated at times on the larger problems, but generally speaking, each preferred to go his own way and handle his own problems. The industry was just beginning to emerge from the lowest rung of the economic ladder.” Given this market environment, waste dealers had no power to “prevent discriminatory freight classifications or legislative acts detrimental to the industry,” NAWMD noted in its 10th anniversary Blue Book in 1923. Further, “there was no such thing as a classification covering any grade of waste material.”
Voices in the Wilderness
As the waste trade muddled along in the early 1900s, “only a very few could see [its] tremendous potentials,” Scrap Age wrote. Journalist Charles Lipsett was one who did. When he launched Waste Trade Journal in 1905, his first editorial called on dealers to join forces in an association. To stimulate interest in that concept, he convened meetings of dealers in Chicago, Philadelphia, New York, and Buffalo, but his efforts met significant resistance. For his first meeting in Chicago, Lipsett recounted in 1955, “one of the leading firms of that city refused to attend on the ground that he could not see the logic of helping to organize his competitors and raise their trade ethics and standards. He claimed that his firm was successful by getting preference because of the low ethics of its competitors. That was the type of thinking that we had to combat in those so-called good old days.”
At least one dealer agreed with Lipsett, however: Theodore Hofeller. His company, Theodore Hofeller & Co., was the largest waste firm in Buffalo and one of the biggest general dealers in the United States, handling every commodity except scrap iron. According to Lipsett, Hofeller’s company “was the most progressive firm in its time, up-to-date in every phase of its business methods and in its equipment.” Unlike most of his colleagues, Hofeller recognized the advantages of organizing the trade. “For many years it seemed to me that conditions in the waste material business could be improved if dealers would get together and adopt uniform standards of merchandise,” he wrote in 1930. “Furthermore, if they would have meetings three or four times a year, get acquainted and exchange views, it would be of great benefit.”
Hofeller promoted the idea of an association by submitting a guest column to the Boston-based Commercial Bulletin, which covered the waste trade, every January for several years. His efforts spurred the 1912 founding of the Scrap Rubber Dealers’ Club, which he described as “an association of a small group of dealers in scrap rubber.” Working with other stakeholders in the rubber market, this group helped establish “mutually satisfactory standards” for the rubber niche, Hofeller said.
This small association’s success was a powerful argument for calling “a meeting of the leading dealers in all kinds of waste material for the purpose of forming an association upon a larger scale,” Hofeller said. That idea continued to face hefty opposition, however. “There were great misgivings as to whether it was possible to build up a powerful organization of dealers engaged in the waste material lines,” NAWMD noted in 1923. “Even those who were enthusiastic as to the needs of such an organization were doubtful if the object sought for could be realized.” Even Hofeller’s friends expressed their skepticism. “You have a job on your hands,” said Louis Birkenstein of S. Birkenstein & Sons (Chicago). “I have my doubts, but I will stand by you and help to the best of my ability.” Another friend, Henry Lissberger of B. Lissberger & Co. (New York), was less encouraging, stating flatly, “It cannot be accomplished.”
With Hofeller and Lipsett’s support, the Commercial Bulletin organized and sponsored a meeting of about 40 dealers, who came “from every section of the country except the Pacific Coast … representing every branch of the industry,” Scrap Age reported. The event, held March 24, 1913, at Young’s Hotel in Boston, began with a luncheon and segued into a meeting to discuss the idea of founding an association. “The overhanging clouds were dark and threatening, and skepticism was apparent from many quarters,” Scrap Age reported. “This attitude of caution was not surprising since these industry pioneers of a horse-and-wagon era were robust individualists—self-made men who depended upon their own ingenuity, men who had made their way through great individual efforts and sacrifices.”
Despite that skepticism, Hofeller and Lipsett’s vision came to pass. By day’s end, the dealers voted to form NAWMD, electing Hofeller president and Charles M. Haskins—who oversaw the Commercial Bulletin’s waste materials section—secretary. In the end, the “stalwart group of men” at the meeting “felt that an association was the only way for the trade to gain dignity and prominence,” Scrap Age stated. “They left the meeting pleased with their accomplishments, but in many minds there still was uncertainty as to whether the new organization would survive.”
A Busy First Year
NAWMD promptly set up its first office on Summer Street in Boston, with Haskins—and one stenographer—at the helm, juggling both his position at the Commercial Bulletin and his new association duties. (He continued to do both until 1919, when he began working full time for the association.) Among his first tasks was planning the group’s first official meeting, which happened just three months later—June 24, 1913—at the Hotel Astor in New York. At that gathering, NAWMD members drafted the association’s constitution and bylaws, establishing its mission, or “object,” as follows:
The purpose of the organization is to foster the interests of those engaged in the waste material business and allied businesses, to reform abuses relative thereto, to secure freedom from unjust or unlawful exactions, to diffuse accurate and reliable information as to the standing of merchants and other matters, to procure uniformity and certainty in the customs and usages of trade and commerce and of those engaged in the waste material business and allied businesses; to settle differences between its members and to promote a more enlarged and friendly intercourse between business men.
In addition to outlining rules for arbitration, the attendees “plunged into standardizing [the industry’s] commodities and setting up trade customs, some of which it negotiated in cooperation with associations representing consumers,” Scrap Age wrote. According to Haskins, writing in 1955, NAWMD initially developed “classifications” for woolen rags and scrap metal, later doing the same for other commodities. This effort to establish specifications—long considered an impossibility in the trade—was a raison d’être of the new group and a critical step in bringing orderly, equitable transactions to the scrap trade. “No other single achievement ever had greater significance in our industry, and it was this that has made our organization a byword wherever secondary raw materials are traded,” Scrap Age said.
NAWMD established two main membership categories based on a company’s geographic location. Firms in the United States and Canada were active members; companies in all other countries were associate members. The association set its first-year membership dues at $100 for active members and $50 for associate members. It wasn’t an easy sell because “dealers were skeptical as to the returns they would get for their money,” NAWMD said in its 1923 Blue Book. Even so, 44 companies signed on as dues-paying charter members that first year (see “Brave New Members” on page 230 for the list of companies).
Work continued apace in the months following NAWMD’s first meeting, including preparations for the association’s first banquet. The group decided to hold this event March 17, 1914, and it again selected the Hotel Astor in New York as the venue. The banquet, which attracted 85 delegates and guests, was “one of the most successful affairs of this kind ever held by a trade organization,” NAWMD crowed. Curtis Guild Jr., a former governor of Massachusetts and U.S. ambassador to Russia from 1911 to 1913, served as the banquet’s keynote speaker, delivering an address titled “The Usefulness of the Unused.” Guild acknowledged waste dealers for their valuable work, stating, “If praise is to be given to those who conserve our water power, our forests, and our national deposits of minerals, praise should also be given to those who, by the prevention of waste of raw materials, add to our national wealth, reduce the cost of living, provide new national industries, and increase the prosperity of our country.” Guild’s address—which “was commented upon throughout the country,” NAWMD said—shined a positive light on the scrap industry, raised the profile of the fledgling association, and prompted other dealers to consider becoming members, according to Scrap Age.
In a surprise move, Theodore Hofeller announced at the banquet that he would step down as NAWMD president and pass the leadership reins to a younger man, Louis Birkenstein, who became the first president to serve a four-year term for the association. Hofeller made this transition confident that NAWMD was on “a sound footing” at the end of its first year, when “no more doubts were entertained about the success of the association.” Its membership ranks had grown to 46 companies, and it had “worked out plans for dividing the various lines of business into different divisions,” covering metals, paper stock, iron, woolen rags, and rubber, NAWMD reported, adding that “traffic committees had been appointed and the activities of the association were well defined.”
When NAWMD wrapped up its first convention and embarked on its second year, it was well established and firmly on its future course. The subsequent 99 years would see
dramatic changes, including two name changes—to the National Association of Secondary Material Industries in 1960 and the National Association of Recycling Industries in 1974—and, in 1987, a merger with the Institute of Scrap Iron and Steel to form ISRI. And the rest, as the saying goes, is history.
Kent Kiser is publisher of Scrap.
Brave New Members
These 44 companies paid dues during NAWMD’s first year as a trade association. U.S. and Canadian members paid $100 a year; members in other countries paid $50.
S. Birkenstein & Sons
Thomas Butler & Co.
Wm. S. Buxton
Caplan & Sall
C.E. Clapp & Co.
B. Cohen & Sons
L.J. Cohen & Sons
Wm. H. Cummings
& Sons
Forst & Wolfe
Henry K. Fort Co.
Frankel Bros.
Frankel Bros. & Co.
P. Garvan
R. Goldstein & Son
Grodin Bros.
E. Gross & Co.
Haskins & Montague
Theodore Hofeller & Co.
Hofeller-Loeser Co.
M. Kaufman
Lahn & Simons
Josiah Linton & Co.
The W.L. Loeser Co.
The Loewenthal Co.
G. Mathes Iron & Steel Co.
H. Meyer & Co.
Daniel I. Murphy
Mutnick Bros.
G. Nachman
Oppenheimer & Co.
Rosenberg Bros.
Felix Salomon & Co.
M. Salter & Sons
J.P. Scott & Co.
Security Steel & Iron Co.
Sherwin Wool Co.
S. Silberman & Co.
Sonken-Galamba
Iron & Steel
The J.H. Stedman Co.
Stone Bros.
Trenton Scrap Rubber
Supply Co.
Morris Weil’s Sons
White & Bro. Inc.
Woolford & Thomas
The Price Picture
Today’s scrap commodities and their prices differ significantly from those in 1913, when the waste trade established its first national association. Here’s a sample of what Waste Trade Journal, a prominent trade journal of the period, listed as annual price averages in 1913, with all figures rounded.
Heavy melting steel $12.73 a gross ton
Cast iron borings $8.49 a gross ton
Cupola cast $12.94 a gross ton
Heavy copper 13.2 cents a pound
No. 1 composition 12.1 cents a pound
Folded news 46 cents per 100 pounds
No. 1 mixed paper 34 cents per 100 pounds
No. 1 hard white shavings $2.13 per 100 pounds
Heavy book stock 83 cents per 100 pounds
Scrap rubber tubes $31.19 per 100 pounds
Scrap tires $9.59 per 100 pounds
No. 1 whites (cotton) $2.94 per 100 pounds
Satinet garments (cotton) 88 cents per 100 pounds
Thirds and blues (cotton) $1.37 per 100 pounds
Mixed softs (wool) 5.6 cents a pound
Rough cloth (wool) 1.6 cents a pound
Mixed worsted clips (wool) 7.4 cents a pound
A century ago, waste dealers overcame significant dissention in their ranks to form a national association, a momentous achievement that elevated the industry and ultimately led to the creation of ISRI.