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    Big Steel, Little Steel, and C. I. O.

    By Benjamin Stolberg

    The Nation
    July 31, 1937
    Vol. 145, No. 5, p. 119-123

  1. On March 1, 1937, Big Steel, with a marvelous sense for dramatic publicity, recognized the union. It seemed that Myron C. Taylor, the strong, silent, far-visioned chairman of United States Steel, had successfully conspired with John L. Lewis to usher in a new age of industrial peace and statesmanship. Little Steel, on the other hand, is corrupting the authorities, is heavily subsidizing vigilantism, has turned its plants into arsenals, and has literally hired the organized underworld in its fight against organized labor. Obviously the House of Morgan, which is Big Steel, is enlightened. And obviously the Graces, the Girdlers, and the Purnells, who are Little Steel, are barbarians.

  2. Such is the picture today in the more or less intelligent public mind. And indeed, half of the picture is quite true: the Graces and Girdlers are glorified industrial toughs who stop at nothing. Since the strike in Little Steel began, eighteen unarmed workers have lost their lives, ten of them were shot in the back. Hundreds have been wounded, many seriously. The steel citadels in the Mohawk and Mahoning valleys, in East and in South Chicago, are more like concentration camps than industrial centers. The Little Steel towns are not merely under a psychological but actually under a legal reign of terror. But the other half of the picture is not quite true. For the fact is that Big Finance interpenetrates behind the scenes in the domination both of the United States Steel Corporation and of the large independent steel manufacturers. The powers which control steel form a club whose members more or less act together or split apart according to the dictates of strategy.

  3. United States Steel is controlled by the Morgans. But the Mellons and Kuhn, Loeb and Company are also large stockholders. The Mellons have also enormous stakes in Bethlehem; and through its relations with the Guaranty Trust Company and otherwise. Bethlehem Steel is also tied up with the Margins. The Pickands, Mather interests of Cleveland, whose dealings with the Morgans have been manny and close, arr heavily interested in the Republic Steel Company, on whose board sits J. F. Schoellkopf, Jr., of the Niagara Hudson Power Company, one of the largest utilities with which the Morgans maintain close relations. And Pickands, Mather completely controls the Youngstown Sheet and Tube Company. Obviously the enlightened gentlemen who dominate Big Steel are at Least on speaking terms with themselves and their cronies in Little Steel.

  4. All this of course does not mean that there are no authentic and bitter rivalries for the market between the two groups. Nor does it mean that the Graces and the Girdlers and the Weirs are not outraged at the "treachery" of the interests which dominate Big Steel. Big Finance is never clearly conspiratorial and is often at odds with itself, because its immediate interests and its long-range diplomacy are as contradictory as capitalism itself. But it is also true that Big Finance in steel, and elsewhere, is at present consciously operating on two fronts against organized labor. One front is watchfully awaiting the outcome of the struggle on the other.

    BIG STEEL

  5. The independent steel barons of course hate the "irresponsible" John Lewis and the Steel Workers Organizing Committee with murderous bitterness. Still, they hate Lewis as Capone might hate a hard-hitting district attorney. For it is impossible to hate John Lewis without respecting him. Their really rabid and foaming rage is reserved for Myron Taylor. He "betrayed" them. He is the Judas in the Garden of Bessemer, the Benedict Arnold of the Iron and Steel Institute. But the simple truth commands us to come to the defense of Mr. Taylor. for he really was nothing but a stooge in recognizing the union. To be sure, he signed the contract, but it was practically automatic writing. And here is the story of how the United States Steel Corporation recognized the union, a story which has never been told.

  6. Mr. Myron Taylor is on the eve of retirement from a long and successful career. He is impressive and handsome in the clean-cut, strong-weak sense. He is platitudinous—profound, inordinately vain, and none too bright. In short, he is a stuffed shirt. But his perfect linen is not stuffed with sawdust. It is stuffed with plaster of paris, which gives him both the sense and the appearance of unbending strength. Mr. Taylor can't be told. He must be patiently flattered into thinking that it is he who does the telling.

  7. The steel business was on the up-and-up all through 1936. It promised to be even better in 1937. The American market was excellent, and the foreign armament business was growing. Mr. Walter Runciman, president of the British Board of Trade, paid us a holiday visit this spring, calling for a weekend at the White House and pending much of his time with our international bankers and big business men. Mr. Runciman felt reasonably certain that the British rearmament program would bring a good deal of trade to the American steel makers, especially in armor plate. But the British wanted to be sure of continuous production.

  8. The most enlightened man in the House of Morgan, almost professionally so, is Thomas W. Lamont. By that I do not mean that Mr. Lamont could hold down, on his own intellectual merits, an ordinary instructorship in economics at one of our leading universities. I mean to say that Mr. Lamont is enlightened in the sense that he is shrewd, a clever strategist, and a man of wide worldly contacts. Above all, he knows what is good for the House of Morgan. He appreciated that the American steel trusts could not very well take on any British armament business and at the same time refuse to bid for our own naval construction because they objected to the labor provisions of the Walsh-Healy Act. He also knew that the Steel Workers Organizing Committee had a majority of the workers in United States Steel, especially in the Pittsburgh district; he also probably knew that the union had few members and would have much trouble in Little Steel. He wanted continuous production, and he was impressed with the fact that General Motors lost a whole season's business through the strike. He knew that the La Follette hearings were not doing big industry any good; and that if the hearings should ever get around to an exposé of Big Steel, the revelation of the number of gangsters and spies and personnel fakers employed by Big Steel would give him the shock of his life. He knew that the industry, in fighting the union, was messing up its entire productive process. Carnegie Steel, for instance, had 11,000 ratings for 100,000 workers. He knew that the intransigeant reaction of the Liberty League in the last campaign had enormously strengthened the Deal. And finally he knew that John Lewis had not changed overnight from a conservative labor leader to flaming revolutionary and that Lewis's record in the United Mine Workers—and Morgan dominates a lot of coal—has been highly responsible, indeed the most rationalizing influence in this most irrational of industries; Lewis is radical only in the sense that conservatism cannot organize the masses. And Mr. Lamont probably also suspected that the large independent steel companies, over which the House of Morgan has no immediate control, would keep the union worrying. All these factors decided Mr. Lamont and the House of Morgan to become far-visioned industrial statesmen. This attitude was shared by Edward R. Stettinius, Jr., the Morgan chairman of the finance committee of United States Steel. Their main problem was to make Myron Taylor believe that he had given birth to the big idea. The thing to do was to play on Mr. Taylor's vanity.

  9. Mr. Taylor held out for a long, long time—in fact, to the very last. But finally he became convinced that his recent trip to Europe had been for him a journey of deep personal meditation, and that under the gaze of Italian primitives in his Florentine villa he had discovered what emerged as the famous Taylor Formula, with a capital F. The Taylor Formula is what the average high-school boy calls union recognition. John Lewis valiantly helped to build up the myth of Mr. Taylor's industrial statesmanship; it was a cheap price to pay. The House of Morgan kept out of the picture. And there was even a suggestion, made on whose authority no one knows, that the Ambassadorship to the Court of St. James's might come Mr. Taylor's way.

  10. Accordingly, on March 1, 1937, Messrs. Taylor and Lewis were able to announce that United States Steel had recognized the Association of Iron, Tin, and Steel Workers of North America. Benjamin Fairless, president of United States Steel, learned about it for the first time on Sunday, the day before. On Monday Mr. Fairless began cleaning out all the stooges and spies from his various plants, put away the tear gas and machine guns, and started negotiations with Phil Murray and the other leaders of the S. W. O. C. On March 2 the agreement was signed. The corporation recognized the union as the sole bargaining agency for its workers. It raised wages, as of March 16, 10 per cent, with necessary differentials. It established the eight-hour day, a forty-hour week, and time-and-a-half for overtime. It laid the foundation for the machinery of bargaining. Within two months some 260 lesser steel companies followed in the wake of Big Steel, including the large independent Jones and Laughlin. Seventy-five per cent of the industry is now organized. Some 450,000 workers are in the union. And for the time being many of the Big Steel executives are cooperating with the union in rationalizing the industry.

  11. "You must talk to Edgar Lewis, president of Jones and Laughlin," my old friend Clint Golden insisted. Mr. Lewis is one of those paragon steel executives who want to produce steel in a state of industrial peace. Unfortunately Mr. Lewis was out of town, and so I talked with Mr. Mossman, for many years the publicity director of Jones and Laughlin and an uncle of Alf Landon. Mr. Mossman's attitude toward the Graces and Girdlers makes him sound very much like a union official. Jones and Laughlin is especially angry at Tom Girdler, for the Republic Steel Corporation tried to swallow up Jones and Laughlin last year. Girdler was superintendent and president of Jones and Laughlin for sixteen years, and when he left the company to join Republic Steel he knew all about Jones and Laughlin. Senator Joseph Guffey was correct in imputing the use of this knowledge to Tom Girdler, who feels that John Lewis is too "irresponsible" to live up to his contracts. Jones and Laughlin had developed an enormous business in making caps and stoppers for beer and soft-drink bottles. These caps are made, through a secret process, of soft metal for the Crown Cork and Seal Company. Today the Republic Steel Corporation does a lot of this business. It is this sort of cutthroat competition which divides the executive officers of Big and Little Steel. The interpenetrating financial powers behind the steel industry speak much more softly of each other.

    LITTLE STEEL

  12. In the middle of May the S. W. O. C. decided to tackle the four large independents in steel: Bethlehem, Republic, Youngstown Sheet and Tube, and Inland Steel. The union did not dare strike Weir's National Steel Corporation for fear of a wholesale massacre. Weirton is literally a little fascist principality, patrolled by notorious killers who keep the plants in a state of terror. The S. W. O. C. has sent a complete dossier on Weirton to the La Follette committee. Without a national exposé of the underworld at Weirton the place is too dangerous to ask the men to strike for their rights.

  13. From the very first Little Steel in weasel language refused to recognize organized labor, obviously defying the Wagner Act. And there can be little doubt that the independents were permitted by the large financial interests, who dominate American big industry, to test the strength of the C. I. O. The Youngstown Sheet and Tube and Inland Steel were not enthusiastic, and in the beginning were tempted to follow Big Steel in recognizing the union. But they were brought into line. Eugene Grace and Tom Girdler, on the other hand, are ideal men for the task of strikebreaking. Each combines the big industrialist and the congenital small-time vigilante in one and the same person. Grace is quiet and shrewd, a black reactionary. He achieved a national notoriety by paying himself almost $4,000,000 in salary and "bonuses" during the worst years of the depression. He is the General Franco of Little Steel, busily engaged in whipping up big industry to support a national vigilante movement. Tom Girdler is his chief of staff. Girdler is an open fascist, to whom Roosevelt, Miss Perkins, John Lewis are "Communists." He poses as an impulsive, plain-spoken, colorful, rough personality. But his colorfulness rests entirely on an unpicturesquely foul vocabulary. He is indeed plenty tough.

  14. On Mix 26 about 76,500 workers were called out on strike on a steel front which starts at Chicago, swings along the lake front to Indiana Harbor, Cleveland, and Buffalo, and down through the Mahoning Valley from Warren to Youngstown. On June 11 some 13,500 additional workers were called out of the Cambria plant of the Bethlehem Steel Corporation in Johnstown. These workers were called out in a sympathetic strike with some 350 trainmen on the Conemaugh and Blacklick Railroad, which is the transportation unit of the Cambria. This sympathetic strike was a rather senseless stratagem, for a strike on a small intra-plant freight service can be easily broken with 100 scabs. And so it was.

  15. As one looks back on the strike in Little Steel one is almost tempted to regret the easy victory of the S. W. O. C. over Big Steel. Though as yet not officially called off, the strike is lost. To deny it is plain silly. The strike has been lost for various reasons: the successful organization of the vigilante spirit; the corruption of the local authorities and the clever use of "incomplete" martial law; the incredible gall of Governor Davey's bold use of the National Guard in Ohio as a strikebreaking agency; the comparative isolation of the steel communities. But the strike has been lost mainly because it was called on too far-flung a front, without adequate preparation, and because it was conducted by people who have had no experience in steel.

  16. Much of the enthusiasm of the S. W. O. C., which precipitated the strike prematurely, was infectiously derived from the brilliant campaigns in the rubber and automobile industries. Unfortunately the situation in steel is very different. For one thing, in the highly automatic belt-line industries the sit-down is an immediate and paralyzing weapon, whatever its dangers may be to an established union. Also, both in rubber and automobiles the rank and file is young, enthusiastic, and militant. Thousands of them are hillbillies, many of whom only recently were in the Klan and even the Black Legion. But once their eyes were opened and they joined the union, they gave it the same militant allegiance they had formerly given to some know-nothing movement. Above all, during the last two years they had developed their own leaders, right from the belt line. The experience of these leaders is not wide or rich or deep. But it is relevant, immediate, and fearless.

  17. The steel workers, on the other hand, never had a chance to develop leaders out of their struggles. In the Pittsburgh district, the heart of Big Steel, the S. W. O. C. was very successful in its organization work. partly because in 1936 the New Deal politicians were still strongly "for labor," partly because in the old Homestead area there is a great tradition of crucified labor. But in the fastnesses of Little Steel—in Johnstown, Youngstown, Massillon, Warren, Niles, Canton, in East and South Chicago, in Indiana Harbor—there is no tradition of militant labor. And the New Deal governors have become wary of "public reaction" against the C. I. O., whipped up by the big press and small-town Babbittry. The Little Steel communities are isolated, backward, dependent entirely on busy mills.

  18. In Johnstown, for instance, most of the workers have worked for the Cambria for years; the turnover is small. Many of them own their homes, such as they are, and the mortgages are held by the local bankers. They have bought things on the instalment plan. Their families have been on starvation rations during the depression. And the women especially are not anxious for the men to strike. The worker in these Little Steel towns is half lower middle class, half labor. And under the pressure of vigilantism and the prospect of a long-drawn-out fight, the petty bourgeois in him is apt to win out—unless be and his wife have been thoroughly educated and organized by the union. And this has not been done. Newspapermen who were sympathetic to labor and knew the situation well told me that the majority of the workers in Johnstown would have voted at any time to join the C. I. O. and would also have voted against a strike. In short, the vigilante terror and the violence of the authorities were not entirely responsible for the "back-to-work" movement. A good deal of it was authentic. When in the course of three weeks 8,000 men out of 13,000 return to work it is foolish and insulting to call them all scabs. They return either because the strike is broken or because they have been prematurely called out, because they have not been sufficiently well organized. In my opinion the second is mainly what happened in Little Steel.

  19. The weekly pay roll of the steel workers in Johnstown varies from $400,000 to $500,000; practically all of it is spent among the local merchants. In such a community, unless the working class in it has a long proletarian background, as in the mining industry, the business elements are always potentially vigilante. Every merchant is ready to join a citizens committee. The church is incredibly backward, the civil authorities are invariably corrupt, the newspapers are both amenable and reactionary, for all community life is a reflection of company tactics. The most loud-mouthed fascist in Johnstown is the Reverend John H. Stanton. The mayor is Daniel J. Shields, a former federal convict and large-scale bootlegger. The secretary of the Chamber of Commerce and of the Citizens Committee, Lawrence W. Campbell, is openly a company man.

  20. Practically the same situation obtains in all the Little Steel towns. In Youngstown one of the leading politicians is Roy Thomas. He is a former district attorney of Mahoning County who left office some time ago under a cloud. He was called back by the Youngstown Sheet and Tube to be the attorney and leader of the "employees' representation" plan, which the company "recognized." "Give me 200 good, tough, armed men and I'll clean up them sons of bitches on the picket line in no time," he told me. Thomas and a bunch of gunmen, whom Sheriff Ralph Elser permitted the company to import, are responsible for a riot in which two workers were killed. The sheriffs and police chiefs in Warren, Canton, Massillon are all notoriously pro-company. In Massillon, a Republic Steel town, two workers were killed and one mortally wounded. The chief of police testified that he "deputized" company gunmen and accepted sawed-off shotguns, tear-gas guns, shells, and other munitions from Republic Steel.

  21. All this murder and violence was made possible because the local authorities, guided by the vigilante forces and egged on by the companies, found a new way to misuse the state authorities. Both in Pennsylvania and in Ohio the National Guards were called out soon after the strikes began. The troops were to maintain the status quo—that is, to keep plants open or shut as they found them when they moved in. But soon Governor Earle and Governor Davey discovered that the right to work is no less "sacred" than the right to strike. The closed plants were allowed to open, and the state police and troops were assigned only to the immediate vicinity of the plants; otherwise they "assisted" the local authorities, who interpreted the civil rights of the strikers to suit themselves and used the state police power to help them break the strikes. Governor Earle had really intended to use the state motor police for neutral patrolling purposes. But his representative, Captain William Clark, played in with the Bethlehem Steel and the local authorities, and actually helped frame two union men on a charge of trying to dynamite the Conemaugh and Blacklick Railroad. Governor Davey of Ohio simply used the National Guard to break the strike.

  22. In such isolated and terrorized communities an inexperienced, backward, and confused working class can be organized only through a thorough and patient process, by organizers who know the industry, the psychology of the workers, the whole social lay of the land. Unfortunately the easy victory over Big Steel and the overenthusiastic reports of the organizers, who seemed to see double all union activities, misled the top leadership of the S. W. O. C. This top leadership—Phil Murray, Van Bittner, Clint Golden, John Lewis himself—are extremely able men. But they are also desperately busy men. The incoming reports were optimistic. Little Steel was losing business. Big Steel was cooperating beautifully; and in its wake small firms were signing up right and left. And so the top leaders left the job of running Little Steel to the secondary tier of leaders, most of them officials in the United Mine Workers. In Johnstown the man in charge of the strike is James Mark, president of District 2 of the U. M. W. In Cleveland the two leaders are Bozo Damich and Lee Hall, both Ohio miners. In the Youngstown district, which includes most of the lesser steel towns, the leader is John Mayo, an Illinois miner. Most of their assistants are also miners. In the Chicago area the two most influential organizers under Van Bittner were Jack Russek and Joe Weber. These two gentlemen are political factionalists who were hell bent on a strike, reporting wonders from the field and seeing nothing but victory ahead.

  23. The American miner is the most proletarian of all American workers. He has an old tradition of unionism. The union is his whole social life. He does not need to be educated to stick in a strike. The secondary leaders in the United Mine Workers had not had to organize anybody these last twenty years in Pennsylvania or Ohio or Illinois. For the moment a mine is struck everybody quits, and that's that. Mark and Damich and Hall and Mayo have had a great deal of experience in adjusting grievances and signing local agreements. They have had none in coping with the situation they found in steel.

  24. I came into Johnstown on July 2. By that time over 8,000 workers had gone back to work. The atmosphere in the town was like that of a concentration camp. I went to see Mark. He is a man of sixty, quiet, kindly, fearless, honest, and obviously used to running things on a shoestring. He had no secretary, no publicity man, not even a typewriter.

  25. "We have things pretty well under control," he said. "Like hell you have," I answered. And then we talked. The strike was obviously petering out, though Jim refused to admit it even to himself. Practically the same situation existed in Youngstown, Canton, Warren, Niles, Cleveland. The leaders knew that the plants were operating at half or three-quarters normal capacity.

  26. Early in July the S. W. O. C. called off the strikes at the Youngstown Sheet and Tube in East Chicago and at the Inland Steel Company in Indiana Harbor. The union claimed victories in both cases. In the case of the Inland Steel Company there might be some highly theoretical claim of a far-fetched victory. Both the union and the company wrote letters to Governor Townsend of Indiana, leaving the whole issue to the National Labor Relations Board. In the case of the Youngstown Sheet and Tube the union was clearly defeated. The company sent a memorandum to the governor, repeating its willingness to recognize "collective bargaining." But it insisted that this memorandum must by no means be interpreted as a possible recognition of the S. W. O. C. And when the workers filed back the plants of the company were plastered with signs to the effect that "we signed no agreement with anybody."

  27. The position of the C. I. O. in steel is far from desperate. After all, 75 per cent of the industry is organized. Over 450,000 workers are enthusiastic, dues-paying members. The union in steel is here to stay. The loss of the strike in Little Steel may be considered as a tragic but not fatal overhead expense in necessary experience. But the lessons of the strike must be taken to heart. The C. I. O. must realize that Little Steel is a hard nut to crack. Each of the great independent steel companies must be tackled separately and the ground must be laid carefully. The top leadership must devote a great deal of personal attention to the job. It must ferret out ability and leadership among the steel workers. Miners cannot organize steel. Political factionalism must be rooted out mercilessly. Patience is essential. Money must be spent. An adequate publicity machinery must be provided to expose corrupt local authorities, the vigilante movement, the gangster tactics of the companies. And the leadership must not kid itself with imaginary "victories."

  28. Another year of hard and intelligent organization under the direction of people who know steel and its workers, and whose only interest is the union, and Little Steel may yet squeal for peace.

    [This is the first of three articles by Mr. Stolberg. The second will appear in an early issue.]