Thread by @ErikLoomis

This Day in Labor History: April 27, 1944. The Roosevelt administration effectively nationalizes Montgomery Ward due to its president refusing to bargain with unions. Let's talk about this very interesting moment!

Many corporate heads originally embraced the New Deal, in particular the National Recovery Administration, because it offered a government-led solution to the problem of overcompetition without really forcing them to give up most control over their daily decisions.

So the Blue Eagle, at least under the pro-corporate NRA chief General Hugh Johnson, was amenable to many corporations. But not all. The corporate fundamentalist ideology was that any government interference was a massive violation of liberty.

A minority of corporate leaders held to this position no matter how fall the economy had fallen. Even more outrageous to these people was the idea that organized labor had a role to play in the economy.

For men like Henry Ford or Montgomery Ward leader Sewell Avery, unions were organizations that sought to crush human liberty.

Avery was at the forefront of anti-New Dealers from the moment FDR took the presidency. He was a financier of the anti-Roosevelt forces, attempting to steer the nation back to Hooverism. This failed miserably in the 1936 elections, but that didn’t soften Avery’s opposition.

In 1942, Roosevelt created the National War Labor Board. The NWLB sought to build on government economic planning during World War I to, among other things, create smooth labor relations for the war’s duration so that workers could get out the materiel needed to fight the war.

This was a challenge for the NWLB. Much of the problem came from workers who had steady, good-paying work for the first time in more than a decade. The NWLB had to keep wages and prices fairly stable but prices did rise faster than wages. Workers wanted a bigger piece of the pie.

The NWLB had 12 members–four representatives of business, four of organized labor, and four named by the federal government. This theoretically even playing field brought unions into central economic planning. It also gave them incentive to keep their workers from striking.

The agreement that labor and corporations had to come to was that for the duration of the war, unions would not strike if corporations would agree to mandatory NWLB arbitration of all labor disputes and abide by those decisions.

Wildcat strikes however remained a consistent problem through the war, as workers desperately wanted to make good money, be consumers, and win the war at the same time.

But while most corporations went along with the NWLB, some resisted. Of course Sewell Avery led this opposition. He maintained a company union as long as possible, but those were ruled unconstitutional in 1937 when the Supreme Court upheld the National Labor Relations Act.

The Retail, Wholesale, and Department Store Union won the right to a union election under NWLB supervision in 1942.

Avery refused to negotiate with the union. He hated all unions, but the Mail Order union was affiliated with CIO, which Avery thought was a communist organization seeking to undermine America.

This election, which the union supporters won by a 3-1 margin, brought Montgomery Ward’s 7000 Chicago employees into the house of labor. He was most furious that labor won a maintenance of membership clause,

This meant that union members couldn’t withdraw from the union for the duration of the contract, i.e., the closed shop. Avery refused to sign the contract, but gave in reluctantly when Roosevelt personally intervened to order him to do so.

In 1944, the contract expired. Avery wanted the union out. He argued that the union did not represent the majority of the employees and that the NWLB had no authority over non-defense plants. This argument made little sense.

First, Montgomery Ward was a huge supplier to farmers, who absolutely were critical for American war efforts. Second, the company also supplied the federal government with a lot of goods.

The NWLB asked the NLRB to hold another election but also ordered Avery to sign the contract extension in the meantime, which continued the maintenance of membership clause. He said he wouldn’t sign it, “come Hell or high water.” So the workers went on strike on April 12.

During the war, this was a big no-no, but not in this case. The Teamsters started a secondary strike, refusing to make deliveries or pick-ups to Montgomery Ward stores around the nation.

Even the U.S. Postal Service pulled out their 30 employees dealing with the mass of mail to the company because they had no work to do.

Given Avery’s intransigence, Roosevelt intervened directly. He had Commerce Secretary Jesse Jones plan to seize the company. He dispatched a federal marshal and several government officials to ask Avery to leave his desk. He basically laughed at them.

So Roosevelt ordered Attorney General Francis Biddle to personally fly to Chicago to handle it. When Avery showed up to work on April 27, 1944, he found Biddle there with a group of soldiers. Biddle tried to reason with him and told him he was hurting the war effort.

Avery responded by saying “To hell with the government.” So Biddle ordered the soldiers to pick Avery up and carry him out of the building. Avery hurled the worst insult he could think of at Biddle, yelling, “You, you New Dealer!”

The legal case against the company quickly went into the courts, but the workers also immediately stopped the strike and voted in the new contract. So on May 9, Jones returned Montgomery Ward to private management.

But Avery then rejected the contract and refused to go along with its provisions. Workers went on strike in the late fall. On December 27, Roosevelt once again ordered the government to take over Montgomery Ward, both its Chicago office and its major regional centers.

Avery was allowed to stay in his office this time but was banned from any running of the company’s affairs, while the military set up in an office nearby.

The govenrment continued running the company until October 18, 1945. With the war over, they gave it back to Avery, who then purged any managers who had worked with the government.

His hatred of labor, which continued unabated, including refusing to offer a pension, combined with Avery’s poor business decisions to start the once dominant company on its long decline.

Back tomorrow for one of my favorite topics, OSHA.