More About Roosevelt's "New Deal" (1934)

From the August 1934 issue of the Socialist Standard

An important element in the N.R.A. is the provision in Section 7a;

   “That employees shall have the right to organise and bargain collectively through representatives of their own choosing, and shall be free from the interference, restraint, or coercion of employers of labour, or their agents, in the designation of such representatives or In self-organisation. . . .” 

The N.R.A. was, of course, framed in such a way as to seem to uphold the prevailing American myth that the interests of capitalists and workers are, at bottom, one and the same. Certainly, Roosevelt, in several broadcast speeches, has attacked certain unnamed, selfish capitalists, who wickedly exploited their workers, but he has made it clear that these are an insignificant minority, that the great mass of employers" are thoroughly fairminded, sound at heart and good Americans to the core. The American Federation of Labour has always officially accepted this absurdly false view of capitalism, and so its leaders saw nothing anti-working class in offering the N.R.A. the fullest co-operation. They openly gloried at the chance to obtain for the first time in American history a sort of quasi-official status for themselves and their organisations.

Under the stimulus of what seemed to be benign encouragement from the President himself, there began a period of intensified activity on the part of the labour unions, and a great drive for membership. Within a few months millions of workers had been recruited, raising the number of organised from about 2½ millions in January, 1933, to around 5 millions in May of this year. Optimism filled the breasts of the unionised workers and their sympathisers amongst the Liberal Radicals. However, within a few months it was dear that the “collective bargaining” guarantee was to have very different consequences from those expected by Roosevelt’s worshippers.

The interpretation of “Section 7a” has led to the bitterest conflict between the unions and employers, more particularly in the Steel and Automobile industries, which have for many years maintained an “open-shop,” anti-union policy with the strongest persistence. Alarmed at the great strides in unionism, and determined to brook no interference from outside organisations, the great capitalist concerns in these and other industries have insisted and acted upon the assumption that “company unions,” largely financed and controlled by themselves, properly complied with the provisions of the N.R.A.

The A.F. of L. has repeatedly urged the Government to come out uncompromisingly in support of the workers’ “rights” under the N.R.A. and against the “open-shop” and company unions. But, as was to be expected, the Government spokesmen, though making rhetorical speeches, apparently favourable to the workers, have sat on the fence on this question, neither daring nor desiring to break the power of the strongest industrial capitalist groups in the country. In the meantime the organisation of company unions has gone on apace, and they now embrace several millions of employees. It is certain that in granting their workers an unsolicited 10 per cent. wage advance recently, the Steel and Auto industries were motivated chiefly by the desire to win over their workers to the company union idea.

The N.R.A. has greatly strengthened the employing class for industrial conflict with the workers. The advantages which they normally possess have been enhanced by the almost complete organisation by industry which the N.R.A. automatically gives them. The workers, on the other hand, are for the most part unorganised. Even after their recent growth the labour unions only embrace about one-tenth of the total number of workers. For purposes of genuine collective bargaining the growing company unions are sheer fakes, having limited “rights” of negotiation, but no means of applying adequate pressure on the employers. In the April, 1934, issue of “The Nation’s Business,” issued by the United States Chamber of Commerce, the chief advantage of company unions over trades unions from the capitalist point of view was stated quite frankly: “The company union does not affiliate in any manner with organisations outside that industry, and generally not outside the operations of a single employer. The employers demand this aloofness or isolation, because its abandonment would mean the strength of alliance for his employees and the ability of his employees to have counsel not dependent upon that company’s pay roll.”

In the numerous strikes that have occurred during the last year a dominant motive has been the desire of the workers to enforce union recognition, which many had naively assumed to be settled once and for all with the coming of N.R.A. In the main, the A.F. of L. leaders have co-operated with the N.R.A. authorities through the Labour Boards in efforts to persuade strikers to return to work on the strength of promises. Where persuasion has been ineffective and the strikes have been prolonged, the State forces have, in the manner usual to pre-N.R.A. days, been used against the struggling workers. The following brief, vivid digest hardly suggests that the workers under the benign wings of the Blue Eagle are on the verge of a millennium:—

   “The New York Sun reported in November that 1,176 policemen were on continuous strike duty, the highest number on record in the department. In the Pittsburgh area the great steel, coal and automobile companies have struck back at their militant workers with the use of armed thugs, barrages of tear and bombing gas and lead. In the coal fields of central Illinois there have been beatings and lawless raids by armed men. In New Mexico the State militia was brought in to break the coal strike, led by the left wing National Miners' Union, and strike leaders were tried by drumhead court martials. In the fruit and cotton strikes, under radical leadership, in the San Joaquin Valley in California, night riders have terrorised Filipino workers; Mexican workers have been threatened with the bull pen and deportation; men have been kept in jail without trial for weeks and then their cases dismissed for want of evidence. The American Civil Liberties Union reports that more than 16 strikers have been killed. 200 injured and hundreds arrested since July 1st, and that more than 40 sweeping injunctions have been issued against workers.” (The Social Questions Bulletin, February, 1984.)

The source of the above quotation is interesting as indicating the intense interest in economic and especially in “labour” questions that four years of depression and the world situation have developed in this country even in the most unlikely quarters. The Bulletin is issued by The Methodist Federation for Social Service.

With the industrial improvement of the past few months has come a rising wave of capitalist criticism directed at the N.R.A. One business house after another has attacked the administration, claiming that its measures are strangling rather than helping recovery. A growing number of capitalists now regret their panicky stampede of a year ago. At that time, as Mrs. Roosevelt in a recent address put it with, shall we say, a little dramatic licence, “Industrial leaders were coming to the government at Washington and saying: ‘Take our business and run it for us.' ” Now, with the first whiff of revival, she complains of their eagerness to throw off all government interference. 

In a summary of the reports of over one hundred local organisations of the Chamber of Commerce throughout the country it is stated that, “There was a large group of complaints about unequal consideration for employers and employees, with so much favour to the latter as to cause disturbances, the effect of which upon recovery locally was feared.” (New York Times, May 1st, 1934.) We have indeed seen how thoroughly the philanthropic policies of the N.R.A. have “favoured” the workers!

The heads of the N.R.A. are wide awake to the rising tide of opposition, and prominent Democrats (who will have to fight the forthcoming elections on the strength of the "vast benefits” the recovery administration has brought to the "common man”) are replying to the attacks with vigour. One class of attack, as, for instance, the much publicised report of the committee headed by Clarence Darrow, claim that the N.R.A. is fostering monopoly and strangling the small business man. There is obviously much truth in this, for by their very nature the clauses in the codes limiting competition mean the virtual suspension of the so-called anti-trust laws. There is abundant evidence that many big industrial concerns which may have strong objections to the labour clauses in the N.R.A. very decidedly approve of the standardisation of trade practices under the control of self-goveming trade associations which the code system provides. From the first, prominent industrialists have been solidly behind the “New Deal,” and have held high official posts in its administration. Charles M. Schwab, head of the Iron and Steel Institute, has declared, “The action of the automobile, textile and other industries in formulating and executing their various codes is . . . the great practical result which has been accomplished thus far. The principles which they adopted are in line with what we have advocated and hoped for over these many years.” (N.Y. Times, May 25th, 1934.) The Nation, which dubs the Steel Code the Magna Charta of Monopoly, points out that “plural voting based upon volume of sales is such as to ensure control by two or three largest steel producers.” "Price cutting loopholes of almost every conceivable variety have been foreseen and corked up.” (May 23rd.)

By the usual irony of history the swarms of petty and middling capitalists who rushed to the support of Roosevelt during his campaign, and who were, according to the rousing speeches of the New Dealers, to be amongst the chief beneficiaries of the recovery programme, are now turning out to be its victims. Many of them must be bitterly wondering if after all they have been but pawns in the game of the powerful interests. They, along with millions of disillusioned workers, will be ready material for the next swing of the political pendulum.

In the old traditional manner, the New Deal is being attacked and defended by appeals to the historical sentiment of the electorate, to their supposed attachment to the ideal embodied in the “glorious constitution.” Ogden L. Mills, cabinet member with Hoover, thunders the awful warning that "the New Deal conflicts with the fundamental principles upon which our government is founded, and to the extent that its philosophy overrides or supplants them it is a revolutionary one.” (N.Y. Times, May 20th.) On the other side of the fence, Richberg, legal counsel for the N.R.A., glowingly proclaims the N.R.A. to be a ”counter revolutionary movement definitely and deliberately designed to perpetuate our American institutions and instrumentalities of individual liberty and self-government.” (N.Y. Times, May 13th.)

All signs point to the developing of a first-class political fight in the near future. Many conflicting capitalist interests are involved, and the form of industrial regulation eventually adopted will necessarily be a compromise between the differing sections. It is impossible to forecast the outcome with any assurance. Much depends on the degree of industrial recovery reached. To any considerable revival of foreign trade there are many obstacles, of which the great growth of artificial trade barriers is only one. Any serious attempt to reorganise American agriculture and manufactures on more nationally self-sufficient lines will entail vast and destructive conflicts, arousing readjustments including the scaling down by government aid of the industries built up primarily on an export basis.

The N.R.A. is involved in a tangle of antagonisms and contradictions. These are a product of the normal development of capitalism the world over. The Socialist does not say that the trends of capitalism cannot be hastened or slowed down by legislative measures, but he does emphatically declare that such modifications are slight and that the general problems of the system can neither be overcome nor circumvented by such methods. This is not to say that America has not now reached a new stage in its evolution, an epoch of still more highly monopolistic and centralized and state regulated capitalism that will bring special problems of its own.

One thing can certainly be said of future developments—that, whatever they may bring, the workers will continue to get the worst of the bargain until they cease to be deluded by the red herring of reform, by attempts to patch up capitalism, and until they unite for the only programme that can solve their problems—the abolition of the whole rotten system itself and the establishment of Socialism.

Though there is abundant discontent, and though the Communists, with their usual cockeyed vision, profess to see “a revolutionary upsurge stirring the American masses,” there is in actual fact a lack of class-consciousness and an abundance of the most confused thinking amongst the workers. This, to a Socialist, is lamentable— but understandable. Economic developments are producing conditions that make the case for Socialism more strikingly clear than was possible in the past era of rampant individualism, and collectivistic ideas of sorts are floating around and being discussed in the most unlikely circles. But in the building up of a sound and powerful party of Socialists, for which The Workers' Socialist Party affords a nucleus, a very great amount of work remains to be done, and must be done. If you are interested, fellow worker, study our principles. If you are convinced, join our ranks.

R. W. Housley

Workers' Socialist Party of the United States