Until the nineteenth century, in both the United States and Europe there were many more large-scale enterprises in agriculture than in industry. In Europe the large landed estates with their salaried land agents or managers had some influence on the evolution of industrial management.45 In the United States this was not the case.
One reason may have been that the great majority of southern planters directly managed the property they owned. They were not absentee land- lords, as was so often the case in Europe.46 They hired overseers to assist them and not, as did many Europeans, to replace them in managing their estates. And as Robert Fogel and Stanley Engerman have argued, many owners of large plantations did not employ a resident salaried overseer.47
The managerial tasks of the planter were not complex. Close supervision of the work force was necessary only during the planting, initial cultivation, and harvesting. Between December and March, before the planting, and in the summer when the crops were maturing, planters often left the plantation in charge of trusted slaves. In fact the social seasons in southern towns were arranged with this calendar in mind.
Moreover, the plantation work force was small by modern standards. Indeed, it was smaller than in contemporary New England textile mills. As late as 1850 the census reported that only 1,479 plantations had more than 100 slaves. Of these, 187 had more than 200, 56 more than 300, 9 more than 500, and 2 more than i,ooo.48 Normally a third of the slaves on a plantation were either children under ten years of age or too old for regular field work; a few did only housework. Therefore, less than a dozen plantations in the south in 1850 had a work force of 300 full-time field hands, in other words, a work force comparable in size to that of the first integrated textile mill in New England. And few had capital assets (excluding the value of slaves) of $300,000, the capitalization of the Boston Manufacturing Company when it began production in 1815.
Nevertheless, as the first salaried manager in the country, the plantation overseer was an important person in American economic history. The size of this group (in 1850 overseers numbered 18,859) indicates that many planters did feel they needed full-time assistance to carry out their man- agerial function.40 Where they did not have white overseers, many may have relied on black “drivers” to carry out these tasks. Such tasks remained almost wholly the supervision of workers. The overseer rarely handled money or accounts and had little acquaintance with complex machinery. The written rules that the planters issued to the overseers “for the gov- ernance of a plantation” dealt almost wholly with the handling of slaves and the working of crops. Even though plantations usually had a mill or gin on them, for use in the first step of processing the crop, the instructions say little about machine maintenance. These rules called for, as William K. Scarborough has written, “firm discipline, tempered with kindness, and a uniform, impartially administered system of justice.”50 The overseer was expected to know the strengths and weaknesses of his foremen, or “drivers,” and even of many of the field hands themselves.
The organization of the work force that planters and overseers super- vised followed a traditional pattern. On the older tobacco and sugar plantations and the newer cotton ones, the slaves worked in gangs led by a “driver.”51 Each gang was assigned an allotted task to be completed during a day or even a week, and particularly during planting the work of these gangs was carefully coordinated. In rice growing and often in the harvesting of cotton, where teamwork and coordination were less necessary, the planters used the “task system,” under which each hand was assigned a daily task and could leave the field when it was completed. Whether done by piece (task) or by day (gang), the sowing, tending, and harvesting of crops followed time-tested procedures. Only at those critical periods of planting and harvesting, or when a storm or flood endangered the crops, did the work of the planter, the overseer, and the drivers become more than routine.
Neither the overseer nor the planter himself kept detailed financial accounts. They maintained a “plantation book” that recorded births, deaths, and as one guide for overseers put it: “the daily picking of each hand; the mark, number, and weight of each bale of cotton, and the time of sending the same to market; and all other such occurrences, relating to the crop, the weather, and all other matters pertaining to the plantation, that he may deem advisable.”52 The plantation book was similar to a ship’s log. As in the case of a log, its contents were only occasionally transcribed or summarized in a systematic way. The overseer or owner was rarely able to make a comparative analysis of the output of different hands, gangs, or fields over an extended period of time.
On most plantations, account books were usually kept by the planter’s factor, and not by the planter himself. Some planters, however, did keep fairly accurate consolidated books when they had accounts with more than one storekeeper, factor, or banker. These double-entry accounts, like those kept by factors and merchants, were only records of external transactions. In accounting for their income and outgo, the planters included their own personal expenses and those of their families—as did the merchants. At the annual balancing of the books, or for an evaluation of property for taxes or sale, a planter drew up inventories that provided a rough estimate of the value of his property including slaves. A few even computed a 7 percent charge on these estimates, and recorded them as an expense. Such accounting sophistication was, however, rare. Planters made little effort to analyze their overall cost or the unit cost of raising a bale of cotton or a hogshead of sugar. Indeed, one student of plantation operations has written that an analysis of cost must be “hypothetical, and cannot be ascertained from surviving records. It was seldom taken into consideration by the planters themselves who usually were content with the simplest records and figured profits or losses on the basis of cash income and expenditure.”53
This lack of concern for costs did not mean that the plantations were mismanaged. As in the case of contemporary mercantile enterprises, financial success or failure hardly depended on accurate cost accounting. The factors’ abilities to market the crop and the overseers’ to grow it were far more important. The planter had as little control over the drought, rain, and frost that affected the size and quality of his crops as he had over forces of supply and demand that set the prices he received in the international market. Even if costs could have had been accurately estimated, the planter could do little with the information except to shift to the production of other crops. When prices dropped, he might plant less of a staple crop and more food. He was, however, rarely in a position to shift from one staple cash crop to another. If he had surplus to invest he almost always put it into land and slaves.
Thus the southern plantation, although it required some subdivision of labor and some coordination of the activities of the work force, had little impact on the evolution of the management of modern business enter- prise.54 In agriculture, as in commerce, the use of traditional tools to carry out traditional tasks meant that the traditional ways of organization were wholly adequate. There was little the planter could do to increase productivity or to speed up the processes of the crop cycle.
Only after 1850 were the processes of agriculture to be altered by the application of new technologies. Then, instead of adding more manpower to increase output per acre, farmers turned to using mass-produced farm machinery, new types of fertilizers, and new strains of crops and cattle. Once the Civil War brought the abolition of slavery, the family farm using the new machines and techniques remained the basic unit of enterprise in American agriculture. The processes of agricultural production long remained the prerogative of personally owned and personally managed enterprises.
Source: Chandler Alfred D. Jr. (1977), The Visible Hand: The Managerial Revolution in American Business, Harvard University Press.