Lehigh Valley

History's Headlines: Lehigh Valley Dairy

The former dairy has a link to Nixon and Watergate

WHITEHALL TWP., Pa. - It is not unusual for long-established American cities to have industrial ruins. A hundred years ago or so it was a symbol of the age to have a town of smoke stacks employing vast numbers of people. It was what the technology of the time called for.

Then things changed with robots replacing people. Companies were merged out of existence. The factories closed. Too expensive to redevelop or even to tear down, they were simply abandoned.

The Lehigh Valley has many of these. Bethlehem Steel has been hailed as one that has survived as something else. But perhaps the most visible is Whitehall Township’s Lehigh Valley Dairy building. Unlike some of the region’s industrial outcasts, it is not hidden in an old neighborhood but rests prominently on a hillside for all to see its desolation.

In the two decades the Lehigh Dairy building has been abandoned, Whitehall Township commissioners had hoped that a private developer would come along and decide to re-develop the property for another use. Last year, Howard Lieberman, executive director of the Whitehall Township Industrial and Commercial Development Authority, proposed the township apply to the state for a $5 million redevelopment loan. Commissioners rejected the idea, fearing it would saddle the community with debt.

“We need these places developed, but we should not have to sell the souls of the people of Whitehall to get it done,” township Commissioner Linda Snyder said.

“This is the end of the road. I don’t have any more answers,” Lieberman responded.

The Lehigh Valley Dairy building was born in tough times. With its distinctive Art Deco façade, it has been a feature of the local landscape since 1934.

Created in the depths of the Great Depression by the Lehigh Valley Cooperative Farmers by renovating a silk mill, 820 farmers had joined over the next 10 years, and the plant had increased production from 3,400 of milk to 148,000 pounds.

In 1952, the dairy was featured in a series of local photos as one of the leading industries of the region. Along with milk, it turned out cheese and ice cream. Just as no one at that time could have imagined a Lehigh Valley without Bethlehem Steel, no one could have imagined one without that dairy building.

In 1956, the Lehigh Valley Dairy even brought cowboy star William Boyd, aka Hopalong Cassidy, to lead Allentown’s Halloween Parade.

A lot of things were responsible for the closing of the dairy building, but, looking back, some sources suggest that the start of its decline had nothing at all to directly do with the Lehigh Valley. It flowed from that mother of all political scandals, Watergate.  As Deep Throat told Woodward and Bernstein, to get to the bottom of it you had to follow the money.

In 1971, a number of large dairy co-ops that had traditionally given money to the Democratic Party and Democratic politicians were fearful that the Nixon administration would take actions that would lower the price of milk. In order to prevent this and actually raise milk support prices, they decided to make contributions to the Nixon campaign.

J. Anthony Lukas - in his book “Nightmare: The Underside of the Nixon Years” - gives a detailed account of how they went about giving corporate money, a practice that was illegal, to the 1972 Nixon election committee. Emerging from discussions about this, top Nixon White House aide, John Ehrlichman, was heard to quip, "Better go get a glass of milk. Drink it while it is still cheap.” Laughter rippled across the room.

The Lehigh Valley Cooperative Farmers was not involved in this part of the milk money scandal. But it, like many other corporations, faced some kind of government regulation that they feared would be used against them, if they didn’t “pony up.” Lukas says contributions to the Nixon campaign include $55,000 from American Airlines, $40,000 from Goodyear Tire and Rubber and $100,000 from Ashland Oil.

In its May 18, 1974, edition, The Washington Post described things this way:

Richard L. Allison, 40 year old president of the Lehigh Valley Cooperative Farmers, working with Frank Carroll, the co-op’s Washington lobbyist, promised to give $100,000 in the form of a speaker’s honorarium if Vice President Spiro Agnew spoke to the group at its annual meeting on April 20, 1972. But Agnew’s schedule was changed and Earl Butz, the Secretary of Agriculture, was sent in his place and the contribution was reduced to $50,000. Carroll gave $25,000 of it in $100 bills on the day of Butz’s speech. The other $25,000 was donated a few days later.

In mid-1972, the Lehigh Valley Cooperative Farmers money found its way to the secret campaign slush fund that was turned over to Fred LaRue, a top aide to Attorney General John Mitchell. When the Watergate break-in of June 16, 1972, was uncovered, some of the Cooperative Farmers money was used to buy the silence of the original Watergate defendants.

On May 17, 1974, Allison, who was fired a month before as the co-op’s president, appeared before U.S. District Court Chief Judge George L. Hart Jr., who gave him a suspended fine of $10,000 and put him on unsupervised probation for one month.

As his wife sat beside him in tears, Allison in a wavering voice told reporters, “It has been a horrible ordeal.” The Washington Post noted that Allison had been the most remorseful of the Watergate defendants that had appeared so far.

From 1974 to 1977, the Lehigh Valley dairy reported losses of $5 million. In 1980, the stockholders voted to dissolve the Lehigh Valley Cooperative and sell its assets to a new company named Atlantic Processing.

By 1985, the dairy had assets that exceeded $200 million and was employing 950 workers. Johanna Farms purchased Atlantic the following year and changed its name to Lehigh Valley Dairies. By then Johanna had been purchased by John Labatt Ltd, the Canadian brewer. Bob Daily, a shop steward at the Lehigh Valley Dairies was later to say that Labatt did not repair the equipment.

“We began losing contracts,” he recalled.

On January 13, 1989, 220 of the 270 employees at the Whitehall plant were laid off. From that day on the end was near.  Nearly 30 years later, a solution for the ruin on the hill has yet to be found.

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