April 27, 1944 In Labor History: FDR Seized The Sh*t Out Of Montgomery Ward
On April 27, 1944, Attorney General Francis Biddle arrived in Chicago to order Montgomery Ward head Sewell Avery to either extend his workers' union contract so they would not strike during the war, or have his company seized and run by the American government. When Avery refused, Biddle had the military physically remove Avery from Montgomery Ward offices, and the process began that led to the government seizing the workplace. This remarkable incident shows just how hostile some corporate heads were to unions, even to help win the war.
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 over-competition without really forcing them to give up most control over their daily decisions. 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 far 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 in1933. He was a major financier of the anti-Roosevelt forces, attempting to steer the nation back to Hooverism. This of course failed miserably in the 1936 elections, but that didn't soften Avery's opposition. He thought FDR was destroying America and that unions were a violation of his fundamental right to run his company however he wanted.
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 tough 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. So they would walk off the job for an hour or a day because of some mean foreman or to protest about their need for more money. 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, which gave workers no power at all, 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 them. He hated all unions, but this 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 7,000 Chicago employees into the house of labor.
He was most furious that labor won a maintenance of membership clause, which 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 reluctantly gave in when Roosevelt personally intervened to order him to do so.
In 1944, the contract expired. Avery wanted the union out. He argued that it 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 National Labor Relations Board 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 — because Avery hadn't held up his side of the bargain. The Teamsters started a secondary strike, refusing to make deliveries or pick-ups to Montgomery Ward stores around the nation. Even the US 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. Roosevelt ordered Attorney General Francis Biddle to personally fly to Chicago to handle it. When Avery showed up to work on the morning of 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." 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. 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 again 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 government 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 withAvery's poor business decisions to start the once dominant company on its long decline.
Why It Matters Today
In our popular imagination today, we often think of the mid-twentieth century as a time when corporations and Republican politicians respected unions. People often point, for example, to statements President Eisenhower made in favor of unions as a part of American life. But this is based on a misunderstanding of the past. When Eisenhower and others made those statements, they were responding to the fact that unions were a major part of American life and had to be taken seriously to win an election. That covered up the deep, unabashed, neverending hostility American employers have had toward unions.
Yes, Sewell Avery was something of an extreme. But he wasn't that extreme. The steel mills for instance did acquiesce to Roosevelt's labor plans and accept unions, as did Ford Motor Company. These were long models of anti-unionism, including using violence to keep workplaces union free. But the steel industry despised having a union and tried repeatedly to attack the union, forcing workers out on strike to defend their hard-won gains and bringing the American economy screeching to a halt.
From the time that the Roosevelt administration created the conditions for unions to succeed in the New Deal, corporate leaders such as Avery planned to defeat them. They started forming think tanks and other organizations to lay the groundwork to repeal the twentieth century's gains and return the nation to the bad old days of the nineteenth century. Over the decades, this movement grew and grew. Eventually, the descendants of people like Avery — the Koch Brothers, Art Pope, Sheldon Adelson, and other rightwing billionaire funders of Republican extremism — have built on the Montgomery Ward leader's legacy, tearing down so much of the labor movement that made America as great as it has ever been.
We saw earlier this month the consequences of this when the Retail, Wholesale, and Department Store Union returned to the headlines, now organizing the Amazon plant in Bessemer, Alabama. Unlike in the 1940s, they lost the Amazon campaign, even though President Biden spoke out in favor of it. The overwhelming anti-union propaganda that Sewell Avery could only dream of is part of his legacy. Once again, we live in a society with very few unions and where corporate heads can loudly proclaim that even the most mild regulations on their activities is anti-American socialism.
Kim Phillips-Fein, Invisible Hands: The Businessmen's Crusade Against the New Deal (inappropriately, an Amazon link. Wonkette gets a small cut).
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