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The National Industrial Recovery Act in Comparative Perspective: Organized Labor's Role in American and British Efforts at Industrial Planning, 1929–1933

Published online by Cambridge University Press:  14 October 2011

Larry G. Gerber
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Extract

In both the United States and Britain, the Great Depression generated widespread interest in the possibility of utilizing state power to foster the development of corporatist institutions to restore order and stability to economic life. However, whereas Britian made only piecemeal efforts to implement corporatist mechanisms in a few selected industries, the United States proved willing, at least temporarily, to implement a far more thoroughgoing experiment in corporatism—he National Recovery Administration (NRA). This article seeks to explain this divergence in American and British policy responses to the depression. While considering the extent to which differences in state capacities, ideology, political contingencies, and the structure of economic organization may have contributed to America's greater willingness to attempt a comprehensive experiment with corporatism in the early 1930s, this article focuses on the importance of the weakness of organized labor in the American—as opposed to the British—political economy as an explanatory factor in the divergent experiences of the two nations.

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Articles
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Journal of Policy History , Volume 6 , Issue 4 , October 1994 , pp. 403 - 438
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Copyright © The Pennsylvania State University, University Park, PA. 1994

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References

Notes

1. In his comparative study of the depression, Gourevitch, Peter observes that in all industrialized nations the crisis “greatly extended state activism in the economy … in 'corporatist directions.' ” Politics in Hard Times: Comparative Responses to International Economic Crises (Ithaca, 1986), 231.Google Scholar

2. Scholars attempting to place America's response to the depression in comparative perspective have focused on the emergence of Keynesian measures of demand management and relief measures for the unemployed while generally ignoring the NRA. See Gourevitch, Politics in Hard Times; Weir, Margaret and Skocpol, Theda, “State Structures and the Possibilities for 'Keynesian' Responses to the Great Depression in Sweden, Britain, and the United States,” in Bringing the State Back In, ed. Evans, Peter B., Rueschemeyer, Dietrich, and Skocpol, Theda (New York, 1985)Google Scholar; Skocpol, Theda and Ikenberry, John, “The Political Formation of the American Welfare State in Historical and Comparative Perspective,” Comparative Social Research 6 (1983): 87–148Google Scholar; Patterson, James J., “Comparative Welfare History: Britain and the United States, 1930–1945,” in The Roosevelt New Deal: A Program Assessment Fifty Years After, ed. Cohen, Wilbur J. (Austin, 1986)Google Scholar; Levine, Daniel, Property and Society: The Growth of the American Welfare State in International Comparison (New Brunswick, 1988)Google Scholar; Hill, Kim Quaile, Democracies in Crisis: Public Policy Responses to the Great Depression (Boulder, 1988)Google Scholar; Garraty, John A., “The New Deal, National Socialism, and the Great Depression,” American Historical Review 78 (1973): 907CrossRefGoogle Scholar; Unemployment in History: Economic Thought and Public Policy (New York, 1978)Google Scholar; and The Great Depression (New York, 1987).Google Scholar

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9. For Baruch's proposal for the establishment of a “supreme court of business,” see New York Times, 2 May 1930; the Harriman plan, “Planning Proposals of the Committee on Continuity of Business and Employment of the United States Chamber of Commerce,” appears in America Faces the Future, ed. Beard, Charles A. (Boston, 1932), 196–264Google Scholar. At its annual meeting in 1931, the United States Chamber of Commerce adopted a resolution favoring legislation to empower the Federal Trade Commission “to receive, approve, and enforce under judicial review, agreements on the part of business men seeking to eliminate wasteful practices and trade abuses in the course of their competitive relations, provided such agreements do not tend unreasonably to restrain trade or to create monopoly.” Nation's Business 19 (June 1931): 30Google Scholar. See also Harriman's, testimony in Hearings Before a Subcommittee of the Senate Committee on Manufactures,Establishment of National Economic Council, 71st Cong., 1st sess., 188(26 October 1931).Google Scholar The text of Swope's plan is reprinted in Beard, America Faces the Future, 160–73. See also Frederick, J. George, ed., The Swope Plan: Details, Criticisms, Analysis (New York, 1931)Google Scholar; and Swope's testimony in Senate Hearings, Economic Council, 300–317 (28 October 1931).

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11. In 1931 unions enrolled less than one out often potential members. George Sayers Bain and Price, Robert, Profiles of Unions Growth: A Comparative Statistical Portrait of Eight Countries (Oxford, 1980), 88.Google Scholar

12. Beard, America Faces the Future, 165–67. See also Radosh, Ronald, “The Development of the Corporate Ideology of American Labor Leaders” (Ph.D. diss., University of Wisconsin, 1967), 275.Google Scholar

13. Himmelberg, Origins of NRA, 124–62. In Wisconsin, Governor Phillip LaFollette offered a plan to guarantee adequate representation of nonbusiness interests in a statesanctioned scheme of industrial self-government. He proposed state legislation to authorize groups of employers in the same industry “to associate themselves with a board of trade for the purpose of stabilizing employment,” if every such organization established “a public policy committee” consisting of representatives of consumer and employee interests. This public policy committee, as well as the governor and each house of the state legislature, would retain a veto power over the operations of an industry's system of self-government. Message to Wisconsin legislature, 24 November 1931, in Beard, America Faces the Future, 366–69. LaFollette's proposal failed to win legislative approval before he was defeated for reelection in 1932. Miller, John E., Governor Philip F. LaFollette, the Wisconsin Progressives, and the New Deal (Columbia, 1982), 21.Google Scholar

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15. Donald Richberg, Memo for D. B. Robertson (1931?), Donald Richberg Papers, Chicago Historical Society. Norman Thomas expressed similar concerns about the Swope Plan, as did M. H. Hedges, research director of the International Brotherhood of Electrical Workers. Frederick, Swope Plan, 94–95; Radosh, “Corporate Ideology,” 258–60.

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17. Johnson, James P., The Politics of Soft Coal: The Bituminous Industry from World War I Through the New Deal (Urbana, 1979), 123–33Google Scholar; New York Times, 12 February 1933. The operators' views are expressed in a Coal Age editorial cited by Johnson. W. Jett Lauck, former secretary to the National War Labor Board and later a close adviser to John L. Lewis, urged Lewis to support not only an industry-specific plan for reorganizing the coal industry, but also a more comprehensive proposal to establish tripartite boards composed of employer, labor, and public representatives for all industries. Lewis rejected Lauck's advice, arguing that “it is debatable that I could undertake, with propriety, to act as a spokesman for industries other than coal.” Dubofsky, Melvyn and Van Tyne, Warren, John L. Lewis: A Biography (New York, 1977), 175–77Google Scholar. See also Brody, David, “Labour Relations in American Coal Mining: An Industry Perspective,” in Workers, Owners, and Politics in Coal Mining: An International Comparison of Industrial Relations, ed. Feldman, Gerald D. and Tenfelde, Klaus (New York, 1990), 94–99.Google Scholar

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25. 232 H.C. Deb., col. 666 (21 November 1929).

26. 240 H.C. Deb., col. 545–47 (18 June 1930). As of 1930 approximately one and a quarter million workers were covered by the system. Allen, Trade Unions and the Government, 59–60; Seymour, Whitley Councils, 40.

27. Minister of Labour Margaret Bondfield contended that it was “in the interests of all concerned in industry that matters affecting conditions of work should be the subject of … voluntary arrangement” between representative organizations of employers and employed. 232 H.C. Deb., col. 1595 (28 November 1929).

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33. Supple, “Political Economy of Demoralization,” 579.

34. Kirby, British Coalmining, 124.

35. Supple, “Political Economy of Demoralization,” 584.

36. According to Dubofsky and Van Tine: “By 1932 most bituminous operators desired some sort of federal legislation to liberate coal from the antitrust laws and to sanction pricefixing and joint marketing arrangements,” but they opposed the Davis-Kelley bill because it recognized collective bargaining rights. John L. Lewis, 177. Brody, “Labour Relations in American Coal Mining,” 100–105; Johnson, Politics of Soft Coal, 135–36, 217–20.

37. In Britain's coal industry, though union density fell subsequently after reaching a peak of 77 percent in 1921, union membership at no time during the depression went below 50 percent. Union density in the American mining, quarrying, and oil industries, which stood at 36 percent in 1920, fell to 23 percent in 1930. Bain and Price, Profiles in Union Growth, 45, 95.

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67. Liberal M.P. Geoffrey Mander offered the amendments. See 261 H.C. Deb., col. 2041–64 (19 February 1932).

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70. Turner, H. A., Trade Union Growth Structure and Policy: A Comparative Study of the Cotton Unions (London, 1962), 357–58.Google Scholar

71. Bamberg, “Rationalization of British Cotton,” 88. Slaven reaches the same conclusion regarding Norman's motives in his discussion of the shipbuilding industry, “Self-Liquidation,” 129.

72. 289 H.C. Deb., col. 1961–63 (17 May 1934); Lowe, Rodney, Adjusting to Democracy: The Role of the Ministry of Labour in British Politics, 1916–1939 (Oxford, 1986), 118–19.Google Scholar

73. Turner, Trade Union Growth, 363–64; Bamberg, “Rationalization of British Cotton,” 94–96; 308 H.C. Deb., col. 87–95 (4 February 1936); 310 H.C. Deb., col. 1839–41 (31 March 1936).

74. Howson and Winch, EAC, 107.

75. Bernstein, Lean Years, 397–415. The Norris-La Guardia Act entailed an endorsement of the idea that organization by workers was a necessary complement to the growth of large-scale industry, but its primary purpose was to limit, not extend, the role of government in industrial relations. Ernst, Daniel, “The Yellow-Dog Contract and Liberal Reform, 1917–1932,” Labor History 30 (Spring 1989): 251–74CrossRefGoogle Scholar; Horowitz, Ruth L., Political Ideologies of Organized Labor: The New Deal Era (New Brunswick, 1978), 77–80.Google Scholar

76. The NIRA was an omnibus piece of legislation that gained widespread support from various groups because it combined several different and even conflicting ideas of how the state might bring an end to the depression. Hawley, The New Deal and the Problem of Monopoly; Himmelberg, Origins of NRA.

77. Bernstein, New Deal Collective Bargaining Policy, 34.

78. Skocpol and Finegold, “State Capacity and Economic Intervention.” Skocpol and Finegold contrast the NRA's failure with the relative success of the Agricultural Adjustment Administration, which, they argue, was able to institutionalize state intervention in agriculture by building on the organizational base that had developed since the Agriculture Department's creation in 1889.

79. See, for example, Crouch, Class Conflict and the Industrial Relations Crisis; and Williamson, Varieties of Corporatism.

80. Skidelsky, Politicians and the Slump, 390.

81. Baldwin observed that he “dreaded Roosevelt's experiments” and thought they would quickly produce “an appalling mess up in America.” Adusting to Democracy, 26. See also Skidelsky, Politicians and the Slump; and Middlemas, Keith and Barnes, John, Baldwin: A Biography (London, 1969).Google Scholar

82. Brand, Corporatism and the Rule of Law, 94–95.

83. Bernstein, Lean Years, 481–83.

84. Himmelberg, Origins of NRA; Galambos, Competition and Cooperation.

85. For a comparative analysis, see Tony Freyer, Regulating Big Business.

86. Willoughby, Raymond, “The Trade Associations Are Ready,” Nation's Business 21 (July 1933): 35.Google Scholar

87. Editorial on NIRA, Nation's Business 21 (June 1933): 29.Google Scholar

88. Hearings of Senate Committee on Finance,National Industrial Recovery, 73d Cong., 1st sess., 221(22 May 1933).Google Scholar The one senator who explicitly raised the prospect of amending the NIRA to guarantee labor representation was Robert LaFollette, Hearings, Senate, National Industrial Recovery, 26–27 (22 May 1933)Google Scholar. FDR's speech is reprinted in American Federationist 40 (July 1933): 683. Rexford Tugwell, who was more suspicious of business than FDR, also said little about the role organized labor might play in the NIRAlike proposal for a “national plan” he put forward in The Industrial Discipline and the Governmental Arts (New York, 1933).Google Scholar

89. Felix Frankfurter suggested that Richberg join the group responsible for drafting the NIRA so that someone with close contacts with organized labor would be involved. Bernstein, Irving, A History of the American Worker, 1933–1941: Turbulent Years (Boston, 1970), 28–29Google Scholar. W. Jett Lauck, a close associate of John L. Lewis, also played an important role in pressing for Section 7a's inclusion in the NIRA. Dubofksy and Van Tine, John L. Lewis, 182–83.

90. Hearings, Senate, National Industrial Recovery, 26–27 (22 May 1933)Google Scholar. Frankfurter expressed concern to Robert Wagner, the chief legislative sponsor of the NIRA, about the possible lack of protection for labor interests in the proposed law. However, instead of arguing that the bill be amended to require direct representation of organized labor, Frankfurter suggested to Wagner an amendment providing that the Secretary of Labor be assured “real authority in the initiation and conduct of negotiations on all proposals affecting labor in the development of industrial codes.” Felix Frankfurter to Robert Wagner, 30 May 1933, Frankfurter Papers, Library of Congress.

91. Editorial, American Federationist 40 (July 1933): 679.

92. Lyon, Leverett S. et al. , The National Recovery Administration: An Analysis and Appraisal (Washington, D.C., 1935), 459Google Scholar. Labor was represented in the coal and clothing industries, but not in such mass-production industries as autos, steel, rubber, or electrical manufacturing.

93. See, for example, the testimony of James Emery, head of the National Association of Manufacturers, and E. L. Michael, fomer business representative on the National War Labor Board, in Senate Hearings, National Industrial Recovery, 288–89; 379–81 (29 May 1933; 31 May 1933). Shortly after the NIRA went into effect, Nation's Business observed: “The apprehension that the Act would be a vehicle for unionization of industry through the power of Government seems to have been largely unfounded.” “Industry Tries the New Deal,” 21 (August 1933): 59. Levine, Rhonda F., Class Struggle and the New Deal: Industrial Labor, Industrial Capital, and the State (Lawrence, Kan., 1988)Google Scholar; and Vittoz, Stanley, New Deal Labor Policy and the American Industrial Economy (Chapel Hill, 1987)Google Scholar, both discuss the internal divisions in the business community concerning the NIRA.

The AFL successfully lobbied Congress to modify Richberg's original version of Section 7a by adding wording taken from the Norris-La Guardia Act banning “interference, restraint, or coercion” by employers in their workers' designation of collective bargaining agents, and by changing wording that initially prohibited employers from requiring workers to join “any organization” as a condition of employment to a ban applying only to compulsory membership in a “company union.” Bernstein, New Deal Collective Bargaining, 33–37; William Green's testimony before Hearings of the House Committee on Ways and Means,National Industrial Recovery, 73d Cong., 1st sess., 117–18(19 May 1933).Google Scholar

94. “‘;The New Deal’ in Industry,” Coal Age 38 (June 1933): 173.

95. Vittoz, Neu Deal Labor Policy, 93.

96. “The ‘New Deal’ in Industry,” 174; Johnson, Politics of Soft Coal, 150–64.

97. Bernstein, New Deal Collective Bargaining Policy.

98. Gospel, Markets, Firms and the Management of Labour.

99. Colin Crouch, “The State, Capital, and Liberal Democracy,” in State and Economy in Contemporary Capitalism, 27.

100. Throughout the early 1930s the American Federationist consistently proclaimed an underconsumptionist interpretaion of the nation's economic woes as a means of justifying the need for increased unionization. Robert Wagner also cited the contribution higher wages resulting from unionization would make to economic stability. Huthmacher, J. Joseph, Senator Robert F. Wagner and the Rise of Urban Liberalism ([1968] New York, 1971).Google Scholar

101. In addition to Middlemas, Politics in Industrial Society, see Beer, British Politics in the Collectivist Age; and Taylor, Robert, “The Trade Union 'Problem' Since 1960,” in Trade Unions in British Politics, ed. Pimlott, Ben and Cook, Chris (London, 1982).Google Scholar