American Labour and the Great Depression

Steve Fraser. International Journal of Labour Research. Volume 2, Issue 1. 2010.

“We are in a new era to which I do not belong.” So confided ex-President Calvin Coolidge to a close friend on a cold December day in 1932. He punctuated that melancholic thought a few weeks later by dying (Schlesinger, 1956, p. 457).

Coolidge ‘s premonition proved to be uncannily accurate. The Great Depression was, except for the Civil War, the most traumatic moment in the history of the United States. Nothing was quite the same after it. In an American culture that normally lives in the windowless room of the current event, the economic devastation of the 1930s and the New Deal which tried to repair it remain to this day deeply imprinted on the national psyche. Indeed, the current global financial meltdown and “Great Recession” are constantly and inevitably compared to what befell the country and the rest of the world 75 years ago.

A watershed event, the Great Depression lives on in memory. The national income was halved in three years beginning with the stock market crash in 1929. One-quarter of the workforce (about 15 million people) was unemployed by 1933 (Leuchtenburg, 1963). Joblessness had tripled in those same three years. In fact, if we leave out of account people employed in one way or another in agriculture, unemployment amounted to an astounding 37 per cent. In industrial cities like Toledo, the number was a surreal 80 per cent. Of the 75 per cent of the national workforce actually employed, onethird could only get part-time work, so in reality only one-half of the active labouring population did so on a full-time basis (Alter, 2006).

The payroll of full-time workers at United States Steel went from 225,000 in 1929 to zero in early 1933. Industrial construction practically evaporated, plunging from US$949 million to US$74 million in 1932. Manufacturing output dropped 39 per cent between 1929 and 1933. Thirteen million bales of cotton went unsold in 1932, while food crops rotted in the fields and cattle were slaughtered by the millions (Leuchtenburg, 1963). Five thousand banks had failed by the time Franklin Roosevelt took office in March of 1933. Exports had bottomed out at a level not seen since 1904. The money supply, thanks in part to mass hoarding by ordinary people terrified by the banking crisis, had fallen by one-third between 1929 and 1933, aggravating what was already a crushing price deflation that affected everything from home prices to wages. So, for example, 80 per cent of the stock market’s values in 1929 had volatilized into thin air by 1933. Six hundred thousand properties, including not only farms but also urban and rural residences, were in foreclosure. In early 1933, 36 of 40 key economic indicators had arrived at the lowest point they were to reach during the whole 11 grim years of Great Depression (Alter, 2006).

Not until war in Europe stimulated a huge demand in America for war and war-related materials did employment and general economic wellbeing pick up rapidly. To many people, the depth and the length of the Great Depression suggested that capitalism itself had entered a systemic and perhaps terminal crisis.

Because the breakdown was so severe and total, many looked for underlying problems to explain why everything fell apart. Stark indeed was the presence of plenty amidst poverty. And even starker was the apparent organic connection between the two: poverty not only lived alongside abundance, but it seemed to be caused by it. The output of capitalism’s productive machinery had outgrown the capacity of the market to absorb it. Thanks to that insufficient effective demand, the dynamos of industrial and agricultural abundance shut down, only worsening the dilemma.

The Old Order Called Into Question

Observation of this grotesque cycle of plenty begetting poverty led to a deeper indictment of the old order. Gross inequalities in the distribution of wealth and income (at levels not matched again until the turn of our own new century) were clearly at fault. Those inequalities were partly the consequence of a tax system favouring the wealthy. More fundamentally, they stemmed from the low wage policy—at least when compared to the dramatic increases in worker productivity of the 1920s—that had characterized American industry since the consolidation of corporate control in the late nineteenth century. Meanwhile, farm income dropped precipitously with the revival of European agriculture after the war. Oligopolistic corporate control of major industrial sectors generated artificially high prices. Capital resources were pooled, coagulated and idled in the hands of an investment banking elite—what, during the Progressive era, had been identified by Louis Brandeis and Woodrow Wilson as the “money trust.” Determined to defend the fictitious paper values associated with its ageing investments, the “trust” locked down access to capital and credit to fund newer, competitive enterprises and new technological innovations, especially in emerging mass consumption-oriented industries. Systemic under-consumption and a dearth of new, productive investment were the twin evils (abetted by the power of a rentier class of speculative coupon clippers) identified by Keynes and others as the prime factors behind the collapse and stagnation.

Government intervention was essential, many critics agreed, and should be diverse. By 1933, who could any longer believe that the free market was self correcting? With private and local forms of relief exhausted, who could any longer believe the federal government should stand aside? By that time, the most august financiers had been paraded before congressional investigating committees where their helplessness, ignorance and multifarious schemes of self-enrichment had been made public and excoriated.

So too by 1933, the first signs of extra-parliamentary direct action signalled that it might be possible, even necessary to break new ground. Twenty thousand veterans from the First World War gathered on Anacostia Flats in the nation’s capital to demand an early instalment of their war service pensions. The “Bonus Army,” as it came to be called, only dispersed at the point of federal bayonets ordered into action by President Hoover and commanded by Douglas McArthur. Four thousand farmers occupied the Nebraska statehouse and 5,000 people crowded into a Seattle County building demanding government help. Political leaders were chased through the streets by crowds crying, “When do we eat? We want action” (Alter, 2006, p. 18). A demonstration of unemployed marching past Henry Ford’s auto plant in Dearborn, Michigan was violently driven away and some demonstrators were killed by the auto tycoon’s private police. Coal miners seized food from company stores and on some occasions even seized the closed mines to sell the ore. Some of the jobless who had been cut off by utility companies tapped into gas and electric lines with the help of unemployed workers in those industries; nor would local juries convict them of trespassing or theft when the coal companies sued. The governors of Minnesota and North Dakota declared moratoriums on mortgage foreclosure sales (Leuchtenburg, 1963, pp. 25-26). On city streets, neighbours gathered to forcibly prevent the evictions of their friends. For those who yearned to overthrow the past and directly confront the structural and institutional dilemmas that had run the economy into the ditch, these were promising if also anxiety-producing signs that it just might be possible.

The New Deal

Looking back at those times there is a popular tendency today to romanticize Roosevelt and the New Deal. Actually, however, he was in some ways a prisoner of the past, at least when he first entered office and continuing through the first two years of his Administration. Some historians have identified that period as the “first New Deal,” to distinguish it from the more audacious and social-democratic minded reforms of the “second New Deal.” For instance, the President believed in the orthodox wisdom of the balanced budget and never entirely abandoned that faith, even when he was later convinced to depart from it in Keynesian fashion by using deficit spending not only for relief but also to prime the pump of recovery. Roosevelt shared the traditional repugnance for what was then called “the dole” or welfare. Moreover, he feared, as much as Hoover did, parting company with the country’s business and financial elite. He tried instead, until it proved unworkable, to forge a partnership with that community in much the same way Hoover had. The two key pieces of recovery legislation passed during the first 100 days—the National Industrial Recovery Act and the Agricultural Adjustment Act—were premised on the idea of business-government collaboration. Given these conservative-minded philosophical maxims and cautious political calculations, a decisive rupture with the past might have seemed highly unlikely.

Yet that is just what happened. And it had begun to happen even during the legendary first 100 days of the new Administration. The creation of the Tennessee Valley Authority (TVA) was a stunning venture into the realm of economic planning and regional development, which included the government’s creation and ownership of a major electrical power-generating facility. Regional electrification was in turn designed to sweep the whole Tennessee Valley into the orbit of a modern mass consumption economy, inspiring satellite industrial and urban settlements, and making the whole region a new market for the output of American industries. The private sector electrical power industry bitterly opposed the TVA, resenting its “unfair” competition. But the TVA prevailed.

Other key pieces of legislation were introduced during those formative days. The Securities Act passed during the first 100 days and the second such Act, introduced a year later, created the Securities and Exchange Commission to regulate the markets. Neither Act called for draconian measures. But the very idea that Wall Street’s old guard would be a bit more open to public inspection, and would have to obey rules against insider trading and the like, was obnoxious to an arrogant milieu long grown accustomed to making their own rules and to their own advantage. They embarked on permanent and poisonous opposition to the New Deal and to its presidential architect, whom they thought of as a “traitor to his class.” Even more germane when it came to dismantling the “securities bloc” of older investment banks and infrastructural heavy industry was the passage of the Glass-Steagall Act, another product of Roosevelt’s first 100 days. The law separated commercial from investment banking, whose merging had been particularly extensive and rapid during the 1920s and had consolidated the power of the “money trust.”

Finally, it is critical to note that these preliminary days of the New Deal included the first hesitant steps in the direction of what we would today consider Keynesian fiscal innovation, social welfare and labour reform. Legislation included a Public Works Administration whose mission was to undertake large-scale public projects to boost employment and spark capital goods investment. Simultaneously, the government created the Civilian Conservation Corps, a sizeable if limited federal venture into work relief and the precursor of more ambitious undertakings. The Industrial Recovery Act called for wage minimums, hour maximums, and the end of child labour. It also included a provision—one hated by the tycoons of heavy industry—that seemed to place the authority of the government behind the right of workers to form unions and appeared to oblige employers to negotiate with them. Over the next couple of years, it became clear that in fact the government was not yet ready to enforce its own laws, whether on wage and hour standards or on the right to organize. Nonetheless, it was a premonition of things to come.

Labour’s Role

Looking at the lay of the land in 1932, no one could have expected much of anything from the labour movement. Like the rest of the country, it was flat on its back, leading a ghostly existence. Never commanding much of a presence, except in a restricted set of crafts and industries, it had at least represented 12.1 per cent of the labour force in 1920. By 1930, that share had shrunk to 7.4 per cent—even less than it is today (Hirsch and Macpherson, 2003). Most of that membership belonged to the craft unions that dominated the American Federation of Labor (AFL). These institutions hung on by virtue of their leverage, albeit a dwindling one, over the markets for skilled labour. Even here, though, the Depression threw hundreds of thousands of construction trades craftsmen, skilled tool and die makers, mechanics and others onto the breadlines. Where the AFL did enjoy a broader reach over industrial labour generally, as in coal mining, the railroads or the garment and textile industries, mass bankruptcies placed unions like the United Mine Workers and the Amalgamated Clothing Workers on short rations. Not only did they lose numbers in droves as mines and shops closed up, they were also forced to cut back severely on the resources devoted to organizing, internal education and other matters. Whole union locals folded. In the case of the clothing workers, much of their innovative work on negotiating unemployment insurance plans with management ended in insolvency. The United Mine Workers had already lost 80 per cent of its members during the 1920s, a sorry state of things repeated in sectors like meatpacking, textiles and paper-making. Where unions continued to cling to life, wage and hour standards deteriorated irresistibly. When strikes did take place to organize at new sites, as for example in the southern textile industry, to hold on to existing ones or resist wage cuts, they almost invariably failed in the years leading up to Roosevelt’s victory. Not surprisingly, between 1929 and 1930, the number of strikers fell by 80 per cent.

Most inauspicious of all was the brute fact that the heart of American industry—steel, auto, glass, rubber, electrical, farm machinery, meatpacking, maritime, and more—was completely unorganized or virtually so. In 1930, 90 per cent of the auto workforce was unorganized. The same was true of rubber, farm equipment, electrical appliances, and other core industries (Zeiger, 1995). And to make matters worse, the craft elite that ran the AFL displayed a real aversion to confronting this world. After all, American heavy industry was deeply hostile to unions, and was armed and ready to use all measures, legal, extra-legal, and violent, to stop their incursion. Just as problematical was the fact that the workers in heavy industry were largely first- and second-generation immigrants, hailing from south-eastern and eastern Europe. Their ethnic, cultural and religious backgrounds, along with the fact that they performed unskilled and semi-skilled labour, left the nativeborn, skilled and Protestant milieu in the AFL suspicious and even contemptuous of their abilities, including their ability to organize.

Politically, the labour movement’s situation seemed nearly as unpromising at the outset of the New Deal. True, it had enough friends in Congress to pass the Norris-La Guardia Act in 1932 while Hoover was still in office. The law sharply restricted the use of the court-ordered labour injunction to break strikes, an enormously effective weapon in the arsenal of anti-unionism for at least two generations. The provision in the National Industrial Recovery Act (NIRA) proclaiming the right to organize was likened to labour’s Emancipation Proclamation. It was deployed by union organizers to convince workers that “the President wants you to join a union.” But soon enough, the NIRA became known in labour circles as the “national run around.” It was an apt sobriquet, as the Labor Board set up to enforce those good intentions failed to do so. Indeed, less than 10 per cent of the code authorities set up to administer the Act in specific industries even had labour representatives (Rauchway, 2008).

What did change was the reality in the field, beginning with the state of the economy. During Roosevelt’s first two terms, the United States economy grew at an annual average rate of 9-10 per cent. Durable goods expenditures and the value of construction rose substantially. Unemployment dropped in each year, except during the calamitous recession of 1937-38, due both to publicly created jobs (about 3.6 million) and an uptick in private manufacturing. Agriculture picked up thanks in part to price supports and crop restrictions. Home foreclosures abated as well, due to the mortgage subsidies made available through the Home Owners Loan Corporation. Stabilization and regulation of the financial system, including the creation of the Federal Deposit Insurance Corporation to guarantee bank deposits, stopped the hoarding and helped open up the arteries of commercial credit. Most of all, the stimulus provided by federal spending, even haltingly applied, seems to have encouraged investment in the private sector.

Consequently, the political and social psychology of the nation shifted seemingly overnight. Common sense might suggest that popular insurgencies arise as a function of mass misery. Often enough, however, the opposite is the case. Many, although certainly not all, of the expressions of resistance and outrage that occurred in the earliest years of the Great Depression were momentary pleas for help without any sustained organizational momentum. By the end of 1934, however, the picture looked entirely different. It is reasonable to think that the economy’s improvement gave people the courage, the optimism and the material leverage with which to fight back.

Something was already stirring in 1933 when the number of strikes doubled from the previous year. Then 1.5 million workers went on strike in 1934 (Zeiger, 1995). Some of the most notable of these conflicts had the character of mass strikes; that is, they rapidly spread beyond the borders of a conventional trade union dispute with a particular employer and instead swept into their orbit whole communities. At the same time, other forms of working class based mobilization—rent strikes, demonstrations by leagues of the unemployed, consumer protests, tenant farmer mobilizations—made the air electric with possibility.

Political Impact

This sort of combativeness left its imprint on the political atmosphere, and in turn the heating up of the political environment further encouraged grassroots militancy and broadened its social aspirations. One might call the relationship symbiotic. At the national level, the mid-term elections of 1934 were a telling case. Not only did the Democratic Party substantially increase its congressional majority but, more importantly, that majority was far readier to contemplate major reform—readier than the President himself—than the one elected in 1932. The edgier and more demanding popular mood had registered. Some measure of that change in the complexion of the legislative branch was undoubtedly due to the gathering challenge to the rule of industrial autocracy in the workplace. By 1936, Roosevelt himself would be condemning “tories of industry” for their selfishness and anti-democratic behaviour. A Senate sub-committee formed that year began a systematic exposure of the lengths to which the country’s leading industrial corporations were willing to go—including the use of spies, heavily armed private police, and the stockpiling of lethal munitions—to crush all attempts at union organizing. Even earlier, by the end of 1934, the National Labor Relations Act—which would create a statutory right to organize and make it the legal obligation of an employer to engage in collective bargaining with the freely chosen representative of his employees—was retrieved from the bottom of the President’s in-box pile and soon enough became a top priority of the Administration.

State and local politics and extra-parliamentary activity, much of it powered by the “labour question,” accelerated this drift to the left. In California, the famous novelist and socialist Upton Sinclair won the Democratic primary in 1934 and campaigned for the governorship under the slogan of “End Poverty in California.” Sinclair’s platform was avowedly anti-capitalist and talked about replacing the older system with one based on production for use. Similar language informed Floyd Olson’s Farmer-Labor Party in Minnesota and Phillip Lafollette’s in Wisconsin and led to their electoral triumphs after earlier defeats in 1932. Down South, the firebrand Senator from Louisiana, Huey Long, inspired a multi-million member populist “Share Our Wealth” outcry. “Share Our Wealth” clubs sprang up all over the country, calling, among other things, for confiscatory taxes on the superrich, minimum wages, and government ownership of public utilities. Father Coughlin, the “radio priest” from Royal Oak, Michigan, mesmerized millions of listeners on a weekly basis as he condemned Wall Street speculators and supported the right of workers, particularly his auto worker audience in nearby Detroit, to organize unions. (Only later would Coughlin’s antiSemitism and Christo-fascism supplant his earlier Catholic corporatism and its criticisms of tooth- and-claw capitalism.)

As the country’s social and political centre of gravity shifted in this way, the labour movement in turn grew bolder, both on the shop-floor and in the political arena. But this new audacity came with a price. Fissures within the upper echelons of the trade union hierarchy had been widening for some time. The labour upsurge of 1934 included hundreds of thousands of workers in heavy industry practically demanding that the old labour federation organize them. Although the AFL established new “federal locals” to accommodate this initial rush, soon enough it began parcelling out members in haphazard fashion into existing craft unions, which then did nothing. The Federation was reluctant, as it always had been, to entertain a new strategy of mass industrial unionism; one aimed at creating universal unions encompassing all the workers in particular industrial sectors. All of its nativist cultural prejudices, its fear of confronting the country’s largest corporations, its nose-in-the air snobbery regarding the unskilled, came into play.

Politically, the craft-dominated Federation adhered to a tradition of voluntarism that also aggravated relations with rising elements of the labour movement, which looked to the state and public policy as a way out of labour’s cul de sac. The role of the judiciary in “enjoining” (prohibiting) strikes—a practice stretching well back into the nineteenth century—along with the remarkable frequency with which state and national governments had resorted to armed force to quell labour uprisings, left the AFL wary of any government involvement in labour relations. The Federation at first opposed social security legislation for fear that it would compete with long-established trade union welfare and pension funds and leach away the loyalty of its members. Until 1932, it even opposed government unemployment insurance. This arms-length suspicion of the State ran headlong into the contrary strategy developing within the ranks of industrial unionism, which increasingly came to see the New Deal Administration and its allies in Congress as not only useful, but essential.

And then there was the question of radicalism. The strikes and organizing drives that lit up the industrial landscape beginning in 1934 were not spontaneous eruptions, popular folklore notwithstanding. In virtually every case, they were prepared for and led by a menagerie of radicals: socialists, communists, Trotskyists, remnants of the Industrial Workers of the World (the “Wobblies”), anarcho-syndicalists and others. Moreover, the leadership of the industrial union faction within the AFL often included similarly minded people. John L. Lewis of the mineworkers, who became the public face of the new industrial union movement, did not fit this profile; in fact he had been a Republican, never shy about purging his union of radical oppositionists back in the 1920s. But as the movement grew in the mid-1930s, he was more than willing to make use of radicals as key organizers and strategists. Others, like Sidney Hillman of the Amalgamated Clothing Workers and David Dubinsky of the International Ladies Garment Workers Unions, were Russian-immigrant Jewish socialists. The new industrial union movements that began to emerge in auto, rubber and electrical goods, among the West Coast longshoremen, the seafarers, packing house and tobacco workers and the teamsters, were invariably led by political radicals of one variety or another. For these cadres, more was at stake than the creation of effective new institutions of collective bargaining or even than the triumph of industrial unionism as a form more appropriate to modern mass production. They sought to address the “labour question” more broadly and envisioned the Congress of Industrial Organizations (CIO) as a social movement prepared to champion the needs of working people generally, whether members of unions or not, whether black or white, whether skilled or unskilled, whether men or women, whether immigrant or native born.

Simmering divisions within the house of labour finally came to a head with the creation of the Committee on Industrial Organization in 1935, which was soon purged from the ranks of the AFL and emerged as an independent labour organization, the Congress of Industrial Organizations. The CIO immediately embarked on a multi-pronged strategy—simultaneously political and industrial—that not only ended the reign of industrial autocracy in basic industry, but also provided the social energy that made possible the Keynesian social welfare state with which the New Deal is most enduringly identified. In the industrial arena, this meant the pooling of resources (organizers and money first of all) into joint, quite risky campaigns to organize basic industries like steel, meatpacking and textiles. But even as the CIO put together the steel workers’ organizing committee and analogous multi-union undertakings, it assiduously pursued its political options.

Senator Lafollette’s sub-committee not only exposed the intimidating and violence-prone anti-union machinations of companies like General Motors and Republic Steel, its staff also met regularly with CIO organizers to coordinate the release of the committee’s most damning revelations with the tactical manoeuvres of the union’s campaign. The Wagner Act establishing the National Labor Relations Board (NLRB), which was empowered to enforce the right to organize and the obligation on the part of employers to engage in collective bargaining, had been passed in the spring of 1935. Once the CIO got under way, the NLRB, heavily staffed by sympathizers of the new movement, again and again ruled in its favour, making the CIO affiliated union the sole bargaining agent and effectively eroding industry’s attempt to skirt around the law by setting up multiple or company unions.

Early in 1936, the CIO formed Labor’s Non-Partisan League to mobilize for the upcoming presidential election. The League established local offices all over the country in working-class cities and towns. Programmatically, it did not confine itself to union issues narrowly conceived. It depicted Roosevelt and the New Deal as a bulwark against reaction, as a foe of the plutocracy, and as a muscular champion of wide-ranging reform. After all, the years between 1934 and 1937 not only witnessed the enactment of the Wagner Act and Social Security (including government-funded pensions, unemployment insurance and aid to families with dependent children), but also the Wealth Tax Act, the Public Utility Holding Company Act (designed to break up the combines of holding companies that had dominated the power industry and saddled it with enormous, enervating debt), avast expansion of public works under the auspices of the Works Progress Administration, and a low-income housing programme, among other socially minded innovations. Some of these reforms looked better on paper than they did in practice; the Wealth Tax Act did very little to redistribute income, and the housing programme was severely limited. But to one degree or another they represented ruptures with the self-reliant individualism, gross inequalities and laissez-faire political culture of the past.

Roosevelt, for his part, became increasingly willing to collaborate with and even instigate this transformation in the country’s political chemistry. By the middle of 1934, he had little to lose as the old elites had deserted him. For example, the DuPonts, Morgans, and other leading business circles from the “securities bloc” established the American Liberty League whose animus for the New Deal and for Roosevelt personally knew no limits. Class polarization, a rare phenomenon in American political life, increasingly coloured public rhetoric. If in the eyes of the American Liberty League the President was a “communist,” he in turn was prepared to identify them as “economic royalists” and to proudly announce that if they hated him, he “welcomed their hatred.” Such language was cheered and mimicked by the CIO in the 1936 campaign and thereafter. Meanwhile, the temporary coalescence in the run-up to the 1936 election of the Huey Long movement with Father Coughlin’s followers and those of the Francis Townsend movement demanding universal old-age pensions, made Roosevelt wary of losing constituencies to the populist left, a further incentive to realign his campaign against the “captains of industry.”

Syncopation of political and industrial initiatives culminated in the path-breaking Flint sit-down strike against General Motors by the fledgling United Auto Workers (UAW) that began hardly more than a month after Roosevelt’s landslide re-election. That smashing victory was a real tonic to the CIO, and to millions of working people all over the country. Once the confrontation ended with the company’s reluctant recognition of the UAW (at least in certain plants), an epidemic of sit-down strikes erupted all across the country that lasted into the middle of 1937.

Roosevelt’s overwhelming triumph of 1936 inspired the high point of CIO strategic ambitions. It was the moment when the New Deal Administration felt most beholden to the labour movement for its contribution to that victory. Together, they embarked on a daring attempt to reconfigure the two-party system, to make it reflect more clearly than the loosely patched together, semi-coherent coalitions that customarily defined the political order, the distinct class interests and outlook that the Great Depression had made so transparent. By American standards it was an audacious undertaking. In the end it turned out to be a fateful failure.

Everything depended on upending the ancien régime in the South. While the New Deal faced its natural antagonists in the Republican Party, it was more hobbled internally by the very considerable power of southern Democrats in the Congress. To move ahead with bolder plans of social reform, there needed to be a day of reckoning, one that would confront the political overlords who ran the South and defended its racially inflected political economy resting on low-wage peonage. Ever since the late nineteenth century, the South had been a one-party region. As a result its Democratic Party representatives in Washington enjoyed disproportionate seniority in the power-wielding committees that helped determine the fate of New Deal legislative initiatives. Thanks to its inordinate influence, New Deal provisions were systematically rewired in the South to exclude African-Americans, tenant farmers and sharecroppers. Moreover, so long as the South remained a bastion of low-wage labour, so long as it hardened its hostility to unionization, and so long as it maintained its segregated caste system, it would continue to undermine labour and social welfare standards throughout the country.

Together, New Deal political operatives and the CIO embarked upon a three-pronged strategy to take on the Old South and in the process transform the internal chemistry of the Democratic Party. First of all, beginning in 1937 the CIO launched a major drive to organize the southern textile industry, the site of runaway textile manufacturers since the turn of the century and the region’s primary industrial enterprise. The Textile Workers Organizing Committee inundated the South with organizers and money. Complementary efforts by other elements of the CIO made simultaneous forays into the tobacco sheds and steel mills of the Carolinas and Virginia. In many, although not all of these instances, these were racially integrated undertakings and where unions managed to get started they often sustained that flagrant challenge to Southern mores. Secondly, the Roosevelt Administration in close cooperation with the labour movement doggedly campaigned for the passage of a minimum wage/maximum hour law. Although designed to cover the whole country, it was particularly targeted at the South where bare subsistence wages were the rule, even in industry, but especially among agricultural and domestic workers. The third leg of this strategic démarche made the unprecedented attempt to purge the Democratic Party of its conservative, mainly Southern elements, during the primary campaigns leading up to the 1938 off-year elections. This was initiated by the President, but he relied on the CIO to provide the shock troops.

All three undertakings failed to one degree or another. Concerted resistance by the whole Southern oligarchy, including a storm of red- and racebaiting, along with the frailty of what amounted to southern liberalism, doomed the textile organizing campaign. The minimum wage law—the Fair Labor Standards Act (FLSA)—did get passed in 1938. But before it did, it was subject to a thousand amendments, the thrust of which for all intents and purposes exempted much of the Southern labour force—agricultural and domestic workers particularly—from its coverage. And finally, so too did the purge of the party go down to defeat as most of the Democratic Party old guard in the South fought off the primary challenges mounted by the Administration. For this reason, 1938 and the passage of the FLSA marks the end point of the “second New Deal.” After that, and especially as attention shifted to the war in Europe, there would be no more social and economic reform of the sort that we now think of as the heart of the New Deal.

Did the New Deal work?

How to assess the whole experience? First the question is fairly asked whether the New Deal cured the Great Depression. The answer is yes and no. So long as the Administration kept up its courage and adhered to robust deficit spending, along with other measures designed to shore up demand, there was real recovery. However, because Roosevelt himself was never entirely convinced this was right and proper and because conservative forces within both the Republican and Democratic parties mounted effective opposition to this kind of Keynesianism, the New Deal oscillated between spending and retrenchment. So, for example, the Civil Works Administration set up in 1933 created 4 million public works jobs, but the agency was dissolved less than a year later. The even more ambitious Work Progress Administration created in 1935 suffered serious cutbacks by 1937 (Rauchway, 2008). The latter arguably led to what was called at the time and since “the Roosevelt Recession” of 1937-38, a very severe one that nearly matched the declines of the earlier part of the decade.

In the realm of economic and social reform, the New Deal certainly accomplished much. Financial regulation, labour reform, social security, public works, relief, and regional planning together comprise no mean achievement, especially when measured against an American political tradition that had found most of this repugnant. But arguably more was possible and the failure to extend the reach of the social-democratic welfare state had consequences that haunt America to this day. Although the CIO mounted heroic efforts to confront the racism that impoverished and degraded African-Americans and that divided the working class, the New Deal never really

did. It was too intimidated by its conservative allies in the South and its opponents elsewhere. Moreover, fledgling efforts to extend social insurance to include health care and low-income housing were either abandoned or left on life support. The audacious foray into government ownership and social and economic planning represented by the Tennessee Valley Authority (and the “little TVAs” that sprang up elsewhere in the western United States) would never again make it onto the political agenda. Efforts at major income redistribution through the tax system never proceeded very far even during the height of the “second New Deal.” Anti-trust sentiments clung to life, but as bygone rhetoric that less and less informed public policy. By the end of the decade, the New Deal had run out of gas as a reform movement and had begun mending fences with the old business establishment; a process that would accelerate enormously during the Second World War when the war mobilization apparatus was honeycombed with corporate personnel from what President Eisenhower would later call “the military-industrial complex.”

Labour’s Mixed Record

How do we assess the role of the labour movement in this story of triumph and frustration? Without its social and political muscle, it is hard to imagine the New Deal evolving in the direction of social democracy even to the extent that it did. The reign of industrial autocracy that had terrorized workers since the Gilded Age was over. Industrial democracy, however flawed in execution, took its place. Moreover, industrial unionism was an extraordinary accomplishment, not just as a stunning piece of organizational architecture. It required overcoming, at least partially, a multitude of ethno-cultural, religious, racial and gender divisions. In that sense, it brought into life as a self-conscious actor the modern American proletariat, up until then a mere statistical artifice. At a time when race subordination was still an unquestioned axiom of American life, the CIO defied it and sometimes succeeded so that substantial numbers of African-American workers joined its ranks and enjoyed its victories. The labour movement left a lasting imprint on American culture. An ethos of social solidarity, a concern for and appreciation of the role and traditions of the ordinary working person remained a vibrant part of American life until a half century later when the Reagan era ushered in a new age of Mammon-worship.

Nonetheless, in the end the labour movement was never strong or determined enough—either ideologically or politically—to force matters beyond the reformed capitalism that distanced America from the more thoroughgoing social democratic innovations characteristic of post-war western Europe. Whatever real progress the CIO made in overthrowing the racial order could not measure up against the New Deal’s failure to even try, leaving behind, like a ticking time-bomb, the politics of race. It would detonate in the 1960s and help dismantle the New Deal order and renew deep fissures within the labour movement. The sit-down strikes of the mid-1930s, while inspirational, were also fear-inducing, setting off tremors about the threat to private property that registered with middle-class folk and made the Roosevelt Administration more inhibited about hitching its fate to the new labour movement.

The outcry against the sit-down tactic also led to reservations within the CIO itself as the leadership sensed, at least on this vital matter, its estrangement from popular opinion. And this signalled a deeper problem. True, the CIO was a kind of social miracle in so far as it managed to transcend all the more parochial identities that had crippled the labour movement for so long. But those fractious divisions still carried force. If the leading cadre in many of the new unions was secular radicals willing to imagine real alternatives to capitalism, that was hardly the case throughout the ranks, where old loyalties to the church, ethnic traditions, private property, patriarchal and racial hierarchies, not to mention good old-fashioned American individualism, endured and constrained more daring social and political ambitions.

At the same time, the CIO in particular became so enamoured of, and dependent on, its relationship with a friendly government that it was reluctant, when times changed, to shift gears and rely on itself. The Second World War brought matters to a head. At the outset of the war, the labour movement still exercised real influence within the economic mobilization bureaucracy. It even lobbied for tripartite councils of labour, business and government to run the economy and particular industries. Very soon, however, big business assumed all the major levers of power. Evicted from its more influential enclaves in the war mobilization bureaucracy but afraid to challenge the administration, the CIO found itself enforcing a regimen of patriotic sweating that would increasingly widen the distance between the leadership and the ranks. Dreams of extending the welfare state after the war were scrapped. Friends of labour became scarcer and scarcer within the inner councils of the national government, especially after Roosevelt died.

Social democratic Keynesianism was inexorably supplanted by its commercial variant which left the basic institutions of the free market in a commanding if no longer omnipotent position. In one last spasm of social and political upheaval, the whole industrial labour movement went on strike during 1945-46 (although not all at one time), and made one last heroic effort to organize the South. Simultaneously, it vigorously campaigned for national health insurance, for a widening of what today is called the “social safety net,” for a commitment by the national government to use its fiscal powers to guarantee full employment, and for a national incomes policy to prevent the kind of unequal distribution that had helped cause the Great Depression. Although Truman squeaked to victory in 1948 by mending his damaged relations with the labour movement, by the end of the decade much of the visionary momentum of the movement had dissipated. The Cold War and domestic anti-communism soon enough took their toll; an intimidated CIO purged its ranks of some of its most militant and socially conscious unions, and the country grew accustomed to thinking of things like racial justice and national health insurance as sneaky forms of communism. After that, the labour movement reconciled itself to defending its bastions of power in the private sector through the mechanisms of collective bargaining and assumed its position as a junior member of the new power elite.