Labor's Fight for Power




CAPITAL and labor face the beginning of the second year of the NRA embattled in a struggle for power and domination. This is to-day the primary political and economic problem facing the United States, from which it is difficult to recede because capital cannot afford to compromise and organized labor is unwilling to yield on the essential question of the form of collective bargaining. Organized labor, sensing the sympathy of President Roosevelt for the under dog, expected the American Federation of Labor to become established as the sole representative of the entire industrial and commercial working class. In effect, the A. F. of L. envisaged the NIRA as recognizing, in its collective-bargaining clauses, exactly this position, and girded its loins to make the most of its opportunity.

Nevertheless, for a year the United States was enjoying a honeymoon, an era of good feeling. As far as possible, responsible men sought to avoid embarrassing the President in his vast experiments. Although labor unions could not be prevented from calling sporadic strikes, none occurred which might have been of cataclysmic proportions until the honeymoon was tapering into a condition which a Chinese friend of mine once described as ‘all moon and no honey.’ During the current spring and early summer months strikes increased until the actual mass warfare in Toledo forced the government and the people to realize that the struggle between capital and labor in this country is not over hours or wages or division of profits, but over power, over domination. Organized labor now seeks to dominate industry through the NIRA.

Capital was at first nonresistant. The aftermath of the depression, the dehydrating of the principal capitalistic reputations in America, the Blue Eagle campaign, the failure to recover overnight, the stream of propaganda against bankers and financiers emitted by various agencies in Washington, produced a mass impression that the collapse of the capitalist system was inevitable. The average industrialist could not escape this almost universal mood; he became part of it. In his various conferences over NRA codes, it was impressed upon him constantly that a new day was dawning in which his rôle would have to be subordinated to the wishes of the state, and that collective bargaining was one of the state’s wishes. But, he asked himself, did collective bargaining force him, under the law, to accept the A. F. of L. as a partner in the management of his business?

Copyright 1934, by The Atlantic Monthly Company, Boston, Mass. All rights reserved.

In all countries in times of stress, most capitalists are easily cajoled into making drastic compromises, in the hope of preserving enough of their economic interests intact for the day when the pendulum swings backward. Italian and German Fascism represents just such a compromise — namely, an acceptance of the Marxian principle of the totalitarian state, while at the same time retaining private profit. The American capitalist was ready to adopt such a compromise under the NRA, but he did not realize that Fascism, no matter what its American derivative is called, involves the maintenance of a balance between capital and labor by the state, with the right of the state to intervene at its discretion in the interest of either class. When the American Federation of Labor assumed that it alone could speak for labor, only a minor fraction of which it represented, then capital began to fight back — not organized capital, for that does not exist in the United States, but individual employers of labor, in defense of their stake.

It is this struggle for power which is now taking place, complicated by the fact that some of the best field work for labor is being directed, not by the American Federation of Labor, but by Communist unions, which initiate strikes from which the Federation dare not recede. The conflict between the Federation and the Communists is historically as significant as the struggle between the Federation and John Weir.

In these articles I am seeking for the fundamentals in this struggle for power. To grasp the present characteristics of the battle, it is necessary to go back to the beginnings of organized labor in the United States, to that startling personality Sam Gompers, to the peculiarly American mobility of labor, to the unfeudalistic rise of a moneyed aristocracy from labor, and to the fact that in this essentially democratic country the lines between lord and serf, the manor and the cottage, the bourgeoisie and the peasants, have never been tightly drawn and are not so drawn to-day. A laborer may still become a capitalist, and vice versa, as surprising as that may seem. This adds a psychological factor to the struggle of organized labor for dominance which exists nowhere else.


Organized labor in every country except the United States recognizes the class struggle as the inevitable social phenomenon attending the capitalist system. No matter whether laborers outside the United States belong to unions which acknowledge the Socialistic Second International or the Communistic Third International, they all acknowledge the credo of Karl Marx and Friedrich Engels: —

‘Workers of the world, unite! You have nothing to lose but your chains.’

Samuel Gompers, who served as President of the American Federation of Labor from its inception in 1886 to his death in 1924, except for one year, did not believe this doctrine. He held that in the free soil of the United States, within the liberty guaranteed by the Constitution and the unusual economic opportunities attending the geographic and political characteristics of the land, labor could achieve equality with capital without revolution, without even the mild opportunism of reformist Socialism. Sam Gompers, the idealistic organizer of skilled labor into an upper stratum of bourgeois workers, fought Socialism at every convention of the Federation and defeated it.

In his autobiography, Seventy Years of Life and Labor, he tells how suspicious everyone was of Karl Marx’s International Workingmen’s Association, which had been established in London in 1864. He says: —

Our American press seized upon the custom of addressing its members as ‘citizen’ as proof of their identification with the French Commune. Later a more real basis for disfavor developed through the domination gained by a group of intellectuals who were more interested in the thrills of propaganda than in achieving practical industrial betterment. I watched the period not fully understanding and certainly not appreciating how the mistakes of those years were to help me in developing effective policies in later years.

The American Federation of Labor has not, at any time, made the mistake of permitting itself the thrills of propaganda even for very mild socialistic measures, such as the minimum wage, which Secretary of Labor Perkins has favored and the A. F. of L. opposed, lest the minimum might become the maximum. The Socialism in the minimum wage has always frightened the leaders of the American Federation of Labor, even during the current depression. From Sam Gompers to its present President, William Green, the A. F. of L. has been a capitalist organization, rigidly supporting ‘ rugged individualism,’ the union representing not the organ of a class-conscious struggling proletariat, but rather a mutual benefit society of craftsmen in a particular field of work, who unite for mutual betterment in the hope that before long they also may become capitalists. As long as American laborers assumed that they might in a reasonable time, by hard labor and thrift, become capitalists, they resisted the European conception of the class struggle.

The institution of organized labor cannot be understood in the United States without an appreciation of the mind and character of Sam Gompers. Born in the slums of London of an impoverished family of Dutch Jews, he knew hunger, disappointment, unequal opportunities for education and happiness during much of his life. Practical, unwavering in his loyalty to his job, which came to be the organizing of skilled labor, he hewed carefully to a pragmatic line. No distant vistas of human equality moved him; no thought of a dictatorship of the proletariat determined his policy. He wrote: —

My personal knowledge of Socialists extends over a period of six decades. My judgments have not been based upon secondhand information. . . . I know Socialists from practically every approach. I think I have met a representative of every one of the fifty-seven varieties. . . . According to my experience, professional Socialism accompanies instability of judgment or intellectual independability caused by inability to recognize facts. The conspicuous Socialists have uniformly been men whose minds have been warped by a great failure or who found it impossible to understand fundamentals necessary to developing practical plans for industrial betterment . These were Socialists who were profoundly pessimistic about existing society. They started many organizations to supplant trade-unions, and all failed.

And therein lies the whole of the philosophy of Sam Gompers and his associates. They must not fail. They must not work for causes that might fail. They must limit themselves to practical cures in which the capitalists themselves might join, as they actually have done since the turn of the twentieth century. That is still both the aim and the tactics of the American Federation of Labor.

An eight-hour day, high wages, better working conditions, a Bureau of Labor Statistics, and even an independent Labor Secretary in the Cabinet — these were desiderata to be worked for, even to strike for. But there must be no Socialism, no Labor Party, no recognition of labor as a class. Collective bargaining meant only recognition of the union and the union label in an industry.


It was Mr. Gompers’s conception that the worker came to have a vested interest in his job, not only as a protection against capital, but also against other laborers. He said, ’I held and hold that if a union expels a member and he is deprived of a livelihood, in theory or in fact, in so far as he and the dependents upon him are concerned, it is capital punishment.’

More than that, the theory of the vested interest of the particular member of a craft union in his job has led the Federation to adopt a policy of violent opposition to immigration, to limit union memberships and apprenticeships, to restrict output, so that workers in a union would protect other members by producing only an average quantity of goods based upon a general consideration of the relationship of total output to total union membership. It faced the fact that mechanization counteracted this tendency, and replied by a constant demand for shorter hours and higher wages to equalize the relationship between the worker and the machine.

Finally, it has led to terrific struggles between craft unions, often involving strikes — as, for instance, when metal replaced wood, displacing carpenters in the interest of metal workers. It was this conception, then, that drove the Federation to oppose the industrial union and to adhere strictly to the craft union; that is, woodworkers must belong to the carpenters’ union even if they make barrels for a brewery and thus are more concerned with the brewing than with the furniture industry. The emphasis upon craft unionism was in direct conflict with the characteristic and apparently inevitable development of industry in the United States, but the Federation adhered rigidly to the craft union, which is one of the reasons why it was never able to organize the steel or motor-car workers.

These policies of the American Federation of Labor prevented organized labor from including the whole of the American working class in its membership, for as new industries appeared the interests of the worker were not limited to one craft, but extended to embrace the entire industry. In 1930, 38,000,000 Americans, excluding farmers of all types, were engaged in gainful occupations. Say that this number has been reduced during the depression to about 28,000,000. The total membership of the American Federation of Labor, which does not include 500,000 railroad workers, is 4,000,000. In 1932 it was just half this number, but the impetus of the NRA doubled the ranks to a figure which cannot be accepted as representing voluntary membership. Even the highest total that organized labor can present proves indisputably that in the United States, after half a century of organized effort, the workers of the country remain predominantly not part of the Federation. In fact, whereas the United States is the principal industrial country, it is sixteenth in the list of organized labor.

The basic assumption of the capitalist craft union is that labor differs from capital only occupationally and that the personalities in either group are interchangeable. A stenographer, like Samuel Insull, might become one of the three or four leading capitalists of the country; he might, as he has done, lose his money; his son might become the engineer in a power house with a union card in his pocket. Or, a better example still, James Farrell might be a laborer and become the President of the United States Steel Corporation. He remains prosperous and important, and is an example to puddlers in Pittsburgh of what can happen to a man who ‘gets the breaks.’

Therefore, within the craft union, rugged individualism is strict doctrine, for each man sees himself as a Charles Schwab or a Henry Ford. Hope burns eternal in the laborer’s breast that he may become a boss. In the cloak and suit industry in New York, known colloquially as the ‘Yiddish hardware trade,’ men switch from cutter to boss and back again seasonally. Only the professional union worker, who has really become a ‘white collar’ capitalist, has a direct interest in keeping the union alive.

As long as the worker has hopes of becoming a boss, he dare not identify himself too positively with the labor movement. Therefore, except when Woodrow Wilson supported the Federation during the war and Franklin Roosevelt gave the appearance of supporting the Federation during the recovery, it has been a comparatively weak body.


Up to the time of the depression, then, organized labor in America consisted of a relatively small number of skilled workers in tightly controlled craft unions, which sought to protect the ‘aristocrats of labor’ in their jobs. Most of the workers, particularly the unskilled laborers and the ‘white collar’ groups, were unorganized, unprotected, and frequently were as bitterly fought by the craft unions as by the capitalists — most often more bitterly. Capital, on the whole, supported such progressive measures as labor favored when it could be proved that said measures (such as the eight-hour day and the sixor even five-and-a-half-day week) would increase the purchasing power of labor. It was assumed that there was no solidarity among the capitalists (compare the attitude of Gerard Swope or George F. Johnson of the Endicott-Johnson shoe company with that of John Weir or Henry Ford), therefore there need be no solidarity among the workers. In fact, the American Federation of Labor sought to win the good will of the capitalists through such an organization as the National Civic Federation, and even broke a strike (the steel strike) in the interests of the capitalists because it feared the rise of the Communists within the unions more than it feared capitalism.

The assumptions of Mr. Gompers and his associates — William Green, the present President, John L. Lewis of the Mine Workers, and Matthew Woll, the arch anti-Communist — were in many respects justified by the course of events. Wages for workers rose phenomenally in the United States; the hours of labor were reduced from the outrageous fourteen and sixteen hours a day which Gompers knew as a cigar maker to the proposed thirty-hour week of the New Deal; child labor, in ages below fourteen, has been eliminated in most industries and in most parts of the country; the skilled laborer, organized in his craft union, is actually earning more than a similarly stationed ‘white collar’ person and is socially a part of the middle class. During the period of prosperity, plumbers, for example, were better paid than schoolteachers.

From this pragmatic point of view, organized labor has, up to the depression, been in a strategic position to speak for all of labor. The American Federation, alone of all workers’ groups, projected a respectable, well-oriented, conciliatory philosophy which capitalism could understand — namely, that as long as the condition of labor improves there is no need for a revolutionary policy. The fact that the principal industries, such as steel or motor cars, remained unorganized did not matter so much, for the Federation could cripple the motor-car industry by calling out the makers of an essential part, who might be organized into, let us say, a carpenters’ craft union.

The Federation maintains its offices in Washington; it dominates the Department of Labor; its officers have been and are consulted by Presidents, and maintain a close relationship to Congress. The machinery of control of the so-called national or international unions (to include Canada) was purposely designed to be loose, so that each union might serve its own interests without involving the whole of organized labor in a general strike, which the Federation always opposed. The representatives of organized labor, well paid and adequately served with union funds for expense accounts and propaganda, maintain themselves in power, so that continuously since 1886 the American Federation of Labor has been dominated by one group, most of the present leaders being either appointees or associates of Samuel Gompers. During this long period, except for one year, the Federation has had only two presidents. Since the average worker in an organized trade is dependent upon his union card to get and hold a job, he dare not risk the ill will of union officers lest disciplinary measures deprive him of his livelihood. No new ideas, no new men, no changed attitude toward changing times, affect these labor leaders. By long experience they know what works, and to that they adhere. No philosophy of action moves them but the pragmatic test of past experience.


The depression, however, has directed thought to new problems. In the first place, the capitalist theory, held both by employers and by organized labor, was that all Americans enjoyed equal opportunities to better themselves. In no European or Asiatic country is such an assumption possible, for the vestiges of feudalism in social and economic systems function in such a manner that inequalities are recognized even when they have ceased to be realistically important. Free land was the basis of American equality. If a man could not earn a living in one place, he could move to another. He could even change his trade or craft easily. He might be a skilled cigar maker in New York, but he heard that a new town was developing in Colorado; so he went there and opened a grocery store. In time that grew into a department store. Thus he easily changed from an organized laborer to an unorganized small shopkeeper, to a capitalist.

Since the depression, this process has become impossible, and it may not be possible again after the recovery. There is no longer any free land; therefore the movement of workers is restricted, and their opportunities are, in this respect, limited.

Furthermore, there are a number of dying cities and dying industries. In each case there is an important displacement of labor, and a downward movement from an organized to an unorganized condition. For instance, the cigar maker who became a capitalist bettered himself, but the West Virginia coal miner who becomes a hillbilly is reduced socially as well as economically. Whereas, in the past, the movement has been upward toward the middle class, the depression and the slowness of recovery frighten workers into the assumption that in the future the movement will be in the direction of a lower standard of living.

This factor in the situation becomes increasingly important as mechanization displaces skilled labor. We have nothing to do with the interesting controversy between the scientists and the economists on the social effect of inventions and improvements. The fact remains that during the past year a dearth of skilled mechanics became so evident that General Motors opened a school for mechanics to protect itself against the universal movement in the direction of unskilled labor and a type of specialization which limits a mechanic to skill in a tiny fraction of a wholly mechanized industry. Actually, while labor fears the effects of mechanization and unemployment as imperiling its standard of living, capital fears the same causes as tending to reduce the number of really skilled workers and to dest roy the purchasing power of a very important element in the American market.

Furthermore, it is becoming probable, to state the case very conservatively, that civilization is approaching the crisis which technocrats, Communists, and many conservatives believe to be inevitable — namely, that the machine will finally produce more than can possibly be consumed, that there is a statistical limit to consumption but none to production. Economists decry this phobia as ridiculous, but workers fear its deadening effects upon their lives. They fear to become nursemaids to robots.

It is impossible for either capital or labor, after the experience during the depression, o ignore these fears, to disregard the possibility of their realization. It is still impossible to be sure that anything is altogether right. The fact remains that after four years of effort, including the amazing labors of President Roosevelt, at least 8,000,000 men are out of work who ordinarily would be gainfully employed. And of the 5,000,000 who have been put back to work many are employed in industries artificially stimulated by the government.

Labor cannot ignore this fact. It almost vitiates all the experience of the past. It almost makes the pragmatic sanction for the A. F. of L. policy a theorist’s dream. For clearly a programme involving the United States in a possible seven-billion-dollar deficit, and which aims directly at finding work for all the population, has not been successful.

The relationship of the NRA to the labor problem will be discussed in a subsequent article. Here it is sufficient merely to indicate that increased wages accompanied by an increased cost of living have already proved to be a wholly inadequate formula for solving the problem either of unemployment or of increasing the purchasing power of those who are employed.


Capital frankly feared the consequences of this failure. It has willingly submitted to the NRA as an alternative to revolution, which in 1932-1933 seemed to be imminent not only in the minds of politicians, who utilized this particular bogey to frighten capital and labor and the consumer into an acceptance of the emergency measures involved in the New Deal, but also in the minds of the larger capitalists, particularly the bankers, who were prepared to accept any compromise to avoid street fighting. Trifling so-called farmers’ revolts, a long series of smaller strikes in 1932-1933, the unmistakable breakdown of private relief agencies, colored the views of those in authority and of capitalist and labor leaders, so that for a while the word ‘revolution’ seemed to be on every tongue. Then the revolution did not occur, and capital and labor settled down to the task of determining their rights and relations under the new dispensation.

It appeared at first that the New Deal definitely recognized the American Federation of Labor as the sole body with which all American workers, the thirty-eight million of them, would be required to affiliate themselves, through one of the A. F. of L. craft unions. Business agents in the field actually spread the glad tidings that, just as collective bargaining had been recognized, so had the A. F. of L. been recognized as the sole agency for labor in collective bargaining. In consequence the A. F. of L. membership doubled in a year. If labor troubles in this country become unbearable, it will be important to determine whether the government, the NRA, or the Federation was responsible for this wholly inaccurate and meretricious interpretation of the labor clauses of the NIRA.

Resistance to the A. F. of L. rapidly developed in two sectors of the labor movement. At the extreme left stand the Communists who are opposed to craft unionism, who support the idea of the vertical union — that is, one union to include the total labor of a single industry, and all syndicates of labor to be joined into a single, classconscious soviet of the proletariat. All workers in a steel mill, whether steel workers or carpenters making crates, electricians or office help, chauffeurs or washerwomen — all would belong to one union which would speak for the whole industry.

On the extreme right are the workers who favor the ‘company unions.’ They prefer to join in a voluntary association of workers employed either by a single company or at a single plant. Under this system, the workers in Bethlehem Steel have no organic relationship to workers in United States Steel. Or a better example might be that of the Endicott-Johnson shoe company, where the conditions and profits of labor are so favorable to the workers that association with other shoe workers could in no way benefit them.

The American Federation of Labor has opposed the one big union, the vertical union, as syndicalistic. Syndicalism is Socialism. Syndicalism is in the United States allied to Communism. The early quarrels between Samuel Gompers and the Knights of Labor were over this question of vertical organization, for it does not differentiate between skilled and unskilled labor, between the higher and the lower brackets of labor. Furthermore, the Knights of Labor included all workers in their organization, except lawyers and saloon keepers, and this appeared to Gompers as impracticable, because it was his theory that, whereas it would be impossible to make gains for the whole of labor on some broad, abstract generalization, it would be possible to make small but specific gains from year to year in particular industries for special groups of workers.

In practice, up to the time of the depression, this theory proved to be correct. Whatever benefits labor won were the results of craft strikes. The general strike, which is inevitable in the ‘vertical union,’ has never been utilized by the American Federation of Labor. But the effect of this policy, although it kept the Federation respectable, was to withhold from workers in less important industries the support of the ‘aristocrats of labor.’ It drove workers who might otherwise have been in the Federation either into the company union, where capital protected them, or into Communism and the class struggle.

Long before the depression, the I. W. W. fought the American Federation of Labor on this issue. The I. W. W., under the leadership of Big Bill Haywood, Elizabeth Gurley Flynn, Tresca, and a large number of extremely radical workers and intellectuals, just before the Great War, was increasing its influence so rapidly that the Federation attacked it all along the line. The workers witnessed the spectacle of a labor organization standing shoulder to shoulder with capitalists in opposition to another labor organization. Although the war intervened to smash the I. W. W. because of its internationalism, its pacifism, its support of Soviet Russia, the idea of syndicalism, of the vertical union, never died. Furthermore, the American Federation of Labor came out of the struggle tarred as the enemy of unskilled labor.

The failure of the I. W. W. left the American Federation of Labor the only organized spokesman of American labor as a whole. Small leftist unions came into existence in large industrial cities, particularly in some of the needle industries, but no Communist union has yet developed the strength to challenge the authority of the A. F. of L. Within the A. F. of L. unions, however, the Communists planted ’cells’ who bored from within against the Federation’s craft unionism in the direction of ‘vertical unionism.’ And now the Communist unions, whenever they can, start a strike and then leave it to the Federation to see it through. This tactical trickery was particularly apparent in the recent motor-car strike in Detroit.


Whereas, to the American Federation of Labor, Communism and the vertical union are synonymous, the fact remains that Fascism, the strongest opponent to Communism, accepts the vertical union as the inevitable next step in the organization of labor. In the Italian Fascist corporation, the syndicates of labor are all organized vertically, in many respects on the basis and plan formulated by the I. W. W. The whole of labor is in one big union, controlled by the government and representing the point of view of the Dictator. In the United States, Fascism has made little headway as an organized political group, but there is a decided drift in that direction, and wherever Fascism is favored, under that name or by the implication of expressed ideas, the vertical union is favored.

Thus the paradox is apparent that the Communists and the capitalists agree that the vertical union is the next step in labor organization. From different points of view they both oppose the craft-union ideology of the American Federation of Labor. They both envisage the workers of an entire industry within one organization — the Communists in the world labor organization, the capitalists in the company union.

The principle underlying the company union is the community of interest between capital and labor in the prosperity of the particular company from whose enterprises particular capitalists and particular laborers expect to make money. Labor, in this instance, is not class-conscious but company-conscious. It seeks to protect, not the working class, but individuals on a single company’s pay rolls. It is not concerned with the general problems of the workingman, but with the specific welfare of those in one industrial unit. In most instances, openly or surreptitiously, the company union is supported and strengthened by the company itself. As its opponents put it, ‘the bosses sit on both sides of the table.’

If the laborers in the company unions were as opposed to them as the A. F. of L. and leftist labor leaders generally stipulate, they would have utilized the advent of the New Deal, particularly during its early phases when a play was made to strengthen organized labor, to swing into line with the A. F. of L. Actually the company unions have continued to function even in the automobile industry, which was to have been a test case involving the very existence of the company union.

As will be shown in another article in which the motor-car strike will be analyzed in detail, the A. F. of L. suffered a severe defeat and the company union was recognized as equal to the American Federation as an instrument for collective bargaining. The theory upon which this decision was reached emphasized the fact that the workers themselves had to determine what organization and what leadership would represent them in collective bargaining. This theory, the employment of which surprised capital as well as labor, is antagonistic to the existence of the American Federation of Labor and of any national syndicate of labor unions such as both the Communists and the Fascists advocate. For if the workers in each shop can decide questions affecting the whole of labor, on their own, without recourse to any national organization and without regard to the general interests of labor, then no national labor organization can survive. Thus the existence of the company union is a challenge to the whole theory of organized labor, and the recognition of the right of the company union to represent workers in collective bargaining will be fought by all sections of organized labor with increasing ferocity.


The question is often asked, why American laborers prefer the company union to national organized labor as advocated either by the craft unions of the American Federation of Labor or by the vertical unions of the Communists and Fascists. Many psychological as well as economic factors influence the views of the workers, particularly the total lack of classconsciousness on the part of the average American. He does not feel that he is very different from his boss, except that he has less money. Why, then, should he organize as a ‘laborer’? He prefers to organize as an element of an industry in which the boss gets more money than he does, but in which he hopes some day to get more money too — or even to become a boss himself.

Furthermore, many bosses feel that they are essentially laborers, but get more compensation because they do a different type of work. Gerard Swope, for instance, has proposed a plan for dealing with the problem of capital and labor which fits rather accurately into the category of guild socialism. The General Electric Company has a company union in which labor and management function together in the interest of all, capital receiving its reward in dividends because of the competence of both labor and management. In practice this is an improvement upon Mr. Ford’s methods, for under the Swope plan labor has an important voice in policy, whereas Mr. Ford functions as a benevolent dictator, providing higher wages and lower hours as he sees fit. Under such plans as those in operation in General Electric or the Dennison Manufacturing Company, the vested interest of the worker in his job is amply protected, while at the same time he directly benefits by the success of the company for which he works. He is, then, a capitalist participating in the profits resulting from operations.

As capitalists, such workers do not wish to be involved in the difficulties of other workers. They have a good thing, and they don’t want it to be imperiled. They fear that if they permit decisions to be made for them by ’outside’ labor-union officials their own advantages may be reduced. For instance, if there were a paper workers’ union with international officers and they called a strike in that industry, the Dennison workers might find that they were striking to establish conditions less favorable than those they already enjoy. They might be striking against their own interests.

Again, the American Federation of Labor has never won the confidence of the highest grades of American labor. The railroad brotherhoods, the most exalted stratum of American labor, have consistently kept out of the Federation. ‘Many workers dislike the internal politics of the Federation, the swift logrolling in the unions and at the annual conventions which has kept the same crew in office year after year since its organization in 1886. It would appear that only death can separate an A. F. of L. official from his job. Younger and ambitious workers find themselves up against the stone wall of Sam Gompers’s contemporaries. They sometimes feel that the officers of the Federation are more anxious to be recognized as the spokesmen of labor than to make gains for labor. They come to conventions, and the steam roller keeps them subdued. Such younger men find that their special abilities bring them to the fore in the company union. Furthermore the close relations between company-union officials and the management brings in its wake certain personal advantages, even to the extent of making it possible for a really competent man to step into management.

Finally, the element of racketeering has terrified and disgusted many decent men who find themselves subject to the will of the business agent of the union. Labor racketeering is as old as organized labor. Back in the days of the Knights of Labor, the Home Club was a racketeering labor organization which, disguised as labor, worked in the interests of the bosses. Gompers tells how certain labor leaders were actually working in the interest of the street-railway companies instead of the workers. The building trades have always been involved in racketeering, business agents of the union slowing or speeding up work as it might be to their advantage. It is not always possible to prove racketeering by labor leaders, but the problem is so serious that the American Federation maintains a bureau to exterminate it.

In New York City in recent years, labor racketeering has become a scandal. In a conflict between two unions in the motion-picture industries, theatres were bombed, men were beaten, and huge sums of money disappeared. This particular row led to court action. Municipal officials are constantly at odds with teamsters’ unions and watchmen’s unions in the markets, where the farmer becomes a prey to the union business agent, food products being destroyed if the union officials are not being taken care of by the market men. These cases also come into court. In connection with the delicatessen workers’ union, a man was actually ‘bumped off,’ and the union, fully chartered by the A. F. of L., was shown to be a corrupt and brutal organization.

In labor racketeering, the most advantageous crime to the union officials is the ‘kick-back.’ This device is very generally employed, and although it is often exposed, it is always tried again because it is so profitable. The kickback operates in the following manner.

A wage scale is set either by law, as in government contracts, or by agreement between capital and labor. The worker assumes that he is to get so much per day or per hour for his work. At the end of the week, he is required to return or kick-back part of his wages to a designated person, often a foreman or a bookkeeper. It is the function of the business agent of the union to see that labor agreements with regard to wages and hours are enforced. He knows that on a particular job the kick-back is in operation. He ignores it. He condones it. The workers assume that he gets his share. If they complain, they are thrown out of the union on some disciplinary charge. When a worker loses his union card, he cannot get a job. He is dependent upon the officers of the union for his daily bread, and they can deprive him of his livelihood without trial, without any due process of law. Usually, therefore, he is silent.

Here is a specific and typical case which actually occurred in New York. Charles Nelson was employed as a bricklayer by the C. and W. Construction Company which held a contract for part of the work in the erection of the 369th Infantry Armory. Nelson testified that on his first pay day he was told by the timekeeper to kickback part of his wages at the rate of $3.40 a day. The stated wages for this work was then $15.40 a day. He gave the timekeeper $13.60. On the next pay day he refused to kick-back. On the third and fourth he also refused. So he was laid off and could not get reëmployment. His union did not protect him.

This story has been repeated many times, but most workers do not lose their jobs. They pay the kick-back and are silent. They are afraid not only of losing their jobs, but of being hit on the head by gangsters employed to maintain discipline.

It must be repeated, in fairness to the American Federation of Labor, that it wars upon labor racketeering constantly, but its loose organization, the virtual autonomy of a union once it is chartered, the necessity of maintaining a political machine in the Federation so that its officers may not be voted out at an annual convention, its struggle with Communist cells within the unions — all these factors weaken the effectiveness of its endeavors in this direction.

Another form of labor racketeering is the special assessment, described in one union as being for the ’invisible government’— that is, for gangsters and racketeers. In this particular union no records were kept of expenditures and when a worker asked, ‘What is the reason for this new assessment?’ he was hit on the head with a gavel. The laborer has no recourse, for if he is disobedient he loses his card and he cannot get a job.

The constant presence of labor racketeering has lessened the respect of laborers for the A. F. of L. unions and for the labor leaders. Decent workers are not anxious to become the prey of the union business agent or the shop steward. They do not want the risk to life and happiness that racketeering involves. And the racket is inevitable in the craft union as it is to-day organized because it is so easy. Occasionally the workers make trouble, but most of the time they are too frightened; they take the bitter with the sweet. In all the scandal over the kick-back and extra assessments and racketeering in general, no charges have been brought against either a company union or a Communist union.


The American Federation of Labor, basing its policy and tactics upon craft unionism, — loose, irresponsible, unharnessed, subject to sporadic strikes, to racketeering in the unions, — is unrelated to the necessities of American labor. Its theory of craft unionism is a deterrent to the solution of special problems in particular industries. It can produce no evidence that its members work under better conditions or gain better wages than the workers in company-union enterprises. No organized workers are better paid for the same kind of work than in Mr. Ford’s factories; no workers enjoy better conditions than in the Endicott-Johnson factories. Unless some emergency, such as the war or the recovery, provides a political recognition of the Federation, most Americans who are gainfully occupied avoid the Federation, because they do not directly benefit by membership in it.

The period of recovery has reopened the fundamental question of the process by which labor in this country is to gain the greatest possible reward for its services. During prosperity, labor’s benefits were so comparatively large that labor problems practically disappeared from political consideration. During the depression, more than one third of all American workers found themselves without employment, in a condition of dependence upon relief agencies, disheartened, frightened, almost fugitive. Recovery brought high hopes of another prosperity, but it was accompanied by an emphasis upon the exclusive rôle of the American Federation of Labor as the spokesman of labor. Early in the New Deal, it was assumed that a way had been found to reëstablish prosperity by shorter hours, higher wages, the abolition of child labor, and by government protection of collective bargaining. But prosperity did not come. Instead, the cost of living rose to vitiate the benefits of higher wages. Desperate, workers struck for still higher wages, still shorter hours.

Here we are caught in a vicious circle, for the cost of these benefits must be taken up in the price of commodities, thus increasing the cost of living, and incidentally making it difficult for the farmer to purchase manufactured goods. As the cost of living goes up, the demands of labor will increase. The textile strike is a case in point. Production had to be curtailed to relieve an oversupplied market. Labor immediately demanded a wage increase which would provide it with an income equal to its present income in spite of reduced productivity. Capital could not meet this demand on any calculable basis. The strike settlement was wholly inadequate because it dodged this question. Unless textile prices come down to a ratio with farm prices so that that large consumer of manufactured goods, the farmer, can buy, then labor cannot hope to get 1929 wages out of an industry which cannot sell 1929 quantities at 1929 prices. There must be a logical and economic ratio between prices and wages. Thus far we have only been provided with political opportunism.

The vertical labor union, whether a company or a Communist union, is the only union system which conforms with the current organization of mechanized industry. The craft union was suitable for piece workers. Sam Gompers could always imagine himself sitting at a bench rolling cigars while someone read a German pamphlet or sang a melody to entertain these highly skilled workers. In his autobiography he grows quite sentimental at one point when he finds that, after years of being a labor organizer, he can still roll a cigar.

But the present-day worker is not really a skilled laborer. He tends a machine. He might be put to tend another machine. The machine is skilled, not the worker. The machine is the producer, the worker its assistant. Watch the belt in the Ford Plant or the A. O. Smith Plant in Milwaukee! How much skill does a worker require there? What apprenticeship does he need to oil a robot or to turn a single screw all his working days? In the Machine Age he is no longer the artisan of the mediæval guilds. He is a direct product of mechanization. He is easily replaced because he has become unskilled.

From that point of view, he is either interested in the working class as a whole because universal betterment involves the betterment of his condition and he becomes a Communist, or he is interested in the welfare of his particular company because that is where he gets his money — the more money the company gets, the more he gets. So he supports a company union. Whichever it is, his safety lies in industrial syndicalism, in the vertical union, in an organization which includes all the workers in his industry no matter what work they do. For, if there is to be unity in labor, it can only be within a particular industry.

The company union is faulty only when the capitalist insincerely and dishonestly uses it as a weapon for the exploitation of labor. When capital and labor unite, within the American capitalistic structure, to profit mutually from the success of an enterprise, as is apparent in such enterprises as Dennison and Endicott-Johnson, then the craft union, nationally organized, serves no useful purpose. The American industrialist, however, cannot always be trusted to realize that labor is entitled to a just share of the profits of industry, and the worker has to be vigilant lest he be exploited. The American Federation does provide a national defensive weapon for labor; but the A. F. of L.’s insistence upon craft unionism, and its opposition to the company union solely on the ground that it does not join the Federation and pay dues to it, are harmful to industry.

During the coming months the Federation will wage war in every industry on the sole principle that it alone must be the agency for collective bargaining between capital and labor. If, as I have tried to show, the principles of the Federation are not consonant with the organization of American industry, then there can be no justification for accepting the Federation as this sole agency. Nevertheless the fight will be waged, and both capital and labor will have to protect themselves against the dominance of labor — and, for that matter, of industry as well — by a comparatively small but politically effective minority.

(Other papers on the American Federation of Labor will follow)