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Knight, Simon A.
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University of British Columbia
The relationship between government and business during the New Deal can best be understood as one based on mutual dependence rather than endemic hostility. This is demonstrated with reference to the Northwest lumber industry and its response to New Deal labor standards and labor union legislation. The Northwest lumber industry during the 1920s and 1930s was beset by the problems of overproduction and cut throat competition which plagued much of American industry during the Great Depression. Industry leaders strove for ways in which to regulate a fiercely competitive marketplace. Attempts to foist higher production standards on marginal competitors through the promotion of voluntary trade associations failed because of the absence of enforcement mechanisms within the associational structure. The National Recovery Administration (NRA) similarly failed to provide a disciplined framework for competition in the region because the federal government failed to fulfill its role as an enforcement agent, although the experience of the NRA did suggest to the industry the potential benefits of stabilizing the marketplace through the regulation of labor costs, which were such a significant and vulnerable item in the business calculations of lumber operations. The problem of enforcement, however, remained. Labor unions had a record under the NRA and in the coal and clothing industries as an effective regulator of labor standards, but the memory of radical unionism in the early lumber industry combined with a concern for managerial prerogatives to forestall any voluntary support on the part of Northwest lumber leaders for unionisation in the region. The elevation of unions under the National Labor Relations Act, however, prompted versatile lumber executives to use the empowered unions for their own regulatory purposes. Never entirely comfortable with the potential costs of strong unions, the Northwest lumber industry turned to the federal regulation offered under the Fair Labor Standards Act as an additional, effective and less risky method of securing much needed stability in the industry.
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RELUCTANT REALISTS: THE PACIFIC NORTHWEST LUMBER INDUSTRY,FEDERAL LABOR STANDARDS AND UNION LEGISLATION DURING THENEW DEALbySimon Andrew KnightB.A., Oxford University, 1991A THESIS SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTSFOR THE DEGREE OF MASTER OF ARTSinTHE FACULTY OF GRADUATE STUDIES(Department of History)We accept this thesis as conformingto the required standardTHE UNIVERSITY OF BRITISH COLUMBIAAugust 1993© Simon Andrew Knight, 1993In presenting this thesis in partial fulfilment of the requirements for an advanceddegree at the University of British Columbia, I agree that the Library shall make itfreely available for reference and study. I further agree that permission for extensivecopying of this thesis for scholarly purposes may be granted by the head of mydepartment or by his or her representatives. It is understood that copying orpublication of this thesis for financial gain shall not be allowed without my writtenpermission.(Signature) Department ofThe University of British ColumbiaVancouver, CanadaDate 2fo Aucivs-r tqc13DE-6 (2/88)ABSTRACTThe relationship between government and business during the New Deal can best beunderstood as one based on mutual dependence rather than endemic hostility. This isdemonstrated with reference to the Northwest lumber industry abd its response to New Deallabor standards and labor union legislation. The Northwest lumber industry during the1920s and 1930s was beset by the problems of overproduction and cutthroat competitionwhich plagued much of American industry during the Great Depression. Industry leadersstrove for ways in which to regulate a fiercely competitive marketplace. Attempts to foisthigher production standards on marginal competitors through the promotion of voluntarytrade associations failed because of the absence of enforcement mechanisms within theassociational structure. The National Recovery Administration (NRA) similarly failedto provide a disciplined framework for competition in the region because the federalgovernment failed to fulfill its role as an enforcement agent, although the experience of theNRA did suggest to the industry the potential benefits of stabilizing the marketplacethrough the regulation of labor costs, which were such a significant and vulnerable item inthe business calculations of lumber operations. The problem of enforcement, however,remained. Labor unions had a record under the NRA and in the coal and clothingindustries as an effective regulator of labor standards, but the memory of radicalunionism in the early lumber industry combined with a concern for managerialprerogatives to forestall any voluntary support on the part of Northwest lumber leaders forunionisation in the region. The elevation of unions under the National Labor RelationsAct, however, prompted versatile lumber executives to use the empowered unions for theirown regulatory purposes. Never entirely comfortable with the potential costs of strongunions, the Northwest lumber industry turned to the federal regulation offered under theFair Labor Standards Act as an additional, effective and less risky method of securingmuch needed stability in the industry.iiTABLE OF CONTENTS Abstract^ i iTable of Contents^ ii iIntroduction 1Competition in the Northwest Lumber Industry^ 5Finding Solutions: Tax Reform, Standardization, and the Pitfalls ofAssociationalism^ 8Salvaging the NRA: Labor Standards and Federal Law^ 16The Price of Labor Standards: Regulatory Unionism 24Retreat to Federal Standards: The Fair Labor Standards Act^ 42Conclusions :Private Organisation, Federal Labor Standards and RegulatoryUnionism^ 49Bibliography 51iiiIntroductionFor historians of the American New Deal, interpretation and analysis revolve aroundperceptions of the relationship between business and politics. Most have characterized thisrelationship as one of persistent conflict over the management of the American politicaleconomy: The business community, stressing the efficiency of the marketplace and theinefficiency and inappropriateness of governmental intervention, opposed all attempts bythe New Deal to take a more active role in the economy. In this view, the NationalIndustrial Recovery Act of 1933 is presented as the product of a transient and anxiousalliance between government and business leaders at a time of emergency, an alliancewhich rapidly disintegrated when the atmosphere of crisis eased and it became clear thatthe two social constituencies had fundamentally different agendas for the future. Theclashes over the Social Security Act and the National Labor Relations Act, both in 1935, arecited as examples of the tension and bitterness which more commonly defined therelationship between business and government agents across the period.1The interaction between government and business during the New Deal can be more fullyunderstood, however, by starting from an assumption of mutual dependence rather thanhostility. This assumption reflects the way in which power is organized under any systemof "democratic capitalism". Government action is significantly constrained by businessdemands; politicians cannot afford to implement legislation which is odious to significantbusiness constituencies. Those adversely affected would simply withdraw theirinvestment from the new and uninviting economic environment with dire consequencesfor both the economy - unemployment and a reduced standard of living - and for the1 Arthur M. Schlesinger Jr., The Coming of the New Deal (Houghton Mifflin: Boston,1958), 85-118, 421-488; Ellis W. Hawley, The New Deal and the Problem of Monopoly(Princeton University Press: Princeton, 1966), 35-71, 130-146.1government - electoral defeat. The disproportionate influence of economic interests inpolitics is exacerbated by patterns of party finance and by the myriad of ways in whichthose with the resources to do so are able to define the terms of political debate and dominatethe subsequent discourse.2Implicit, nonetheless, in this demonstration of pervasive business influence in politicaldecision-making is the dependence of business on governmental authority for theordering of the social and economic environment. Business groups lobby governments,offering the incentive of campaign contributions and threatening withdrawal ofinvestment, simply because they recognize the crucial importance of governmental actionand attitude in determining success or failure. This is particularly pertinent when oneconsiders that "business", far from being a unified entity, is riddled by competitivedivisions based on short-term strategic interests.3 Different business sectors, according totheir immediate strategic position in the economy, support different political groups anddepend upon them to minister to their particular needs. The web of relationships andallegiances which enmeshes political and economic actors in a capitalist democracyrepresents not simply an array of choices for social action, but also vividly demonstratesthe intimate and mutual dependence of business and politics.2 On the symbiotic relationship between government and business, see C. Lindblom, "TheMarket as Prison", Journal of Politics 44; Joel Rogers and Joshua Cohen, On Democracy: Toward a Transformation of American Politics (New York: Penguin, 1983), 47-87.3 The emphasis here will be on divisions within the business community and the effect thatthis has on political choice and the relationship with politics, but divisions withingovernment are also significant, especially in the United States where the federatedgovernment structure further extends the range of relationships which are possible betweenbusiness and political agents. For a discussion of the federal structure and its effect onNew Deal politics see Colin Gordon, New Deal Old Deck: Business, Labor, and Politics,1920-1935 (Ph.D. University of Wisconsin-Madison, 1990), 23-33.2The United States during the interwar period provides a stark example of this symbioticrelationship. Business interests increasingly turned towards the federal government forhelp in managing their economic problems before and after 1929. The origins of theDepression - overproduction, cutthroat competition and shrivelling consumer purchasingpower - were already present in some industrial sectors in the 1920s. Textiles and coal, inparticular, were plagued by excess production and intense competition early on in thedecade.4 These industries were at the forefront of calls for federal regulation of theirmarkets once it became clear in the late 1920s that private organizational solutions wereunsuited to controlling cutthroat competition in a depressed market.5 The establishment ofthe National Recovery Administration (NRA) demonstrated a mutuality of interests andobjectives which is perhaps too readily glossed over in many accounts of the New Deal.Equally it is not very useful to think of business opposition to the 'Second New Deal' - theNational Labor Relations Act, the Social Security Act and the Fair Labor Standards Act, inparticular - as a product of implacable opposition to government policies based on whollyantithetical ideological premises. This approach to the problem draws unquestioninglyupon an assumption of 'natural' business-government hostility. A more carefulconsideration of New Deal legislation emphasizes that the administration was consistentin many of its policies towards industry and labor throughout the 1930s - boostingpurchasing power to match productive capacity and forcing businesses to meet certainproduction and labor standards as an antidote to merciless cutthroat competition. The onlyreal shift was in the choice of agents to accomplish those policy goals. Government policiesfrom 1935 were less acceptable to some American industrial leaders not because of someinherent anti-government mentality within the business community, but because the New4Michael Bernstein, The Great Depression: Delayed Recovery and Economic Change inAmerica. 1929-1939 (New York. Cambridge University Press, 1987), 48-102, 144-206.5Robert F Himmelberg, The Origins of the National Recovery Administration (NewYork: Fordham University Press, 1976); Schlesinger, The Coming of the New Deal, 88-89.3Deal administration turned to labor unions and direct federal regulation rather thanbusiness self-regulation as more effective and reliable instruments for theimplementation of production standards and more ordered internal markets.While extremely wary of federal interference in the management of its operations,business constituencies especially resented the use of unions by the New Dealadministration to act as policing agents for stricter labor standards and higher wages.The National Labor Relations Act in particular represented an attempt to strengthen theposition of labor unions in the business enterprise so that they could enforce uponpusillanimous management the labor standards that were central to long-term recovery inthe U.S. economy. This kind of "regulatory unionism" was clearly based on economicstrategies and objectives shared by business, namely the eradication of cutthroatcompetition and the bolstering of the American consumer base. Business leaders howeverwere in many cases hidebound by a long nurtured anti-union mentality, and were highlysuspicious of any solution in which labor unions played such an important role. Theconflict over regulatory unionism was only intensified by competitive divisions withinand between industries. In sectors such as textiles and coal, some business leadersaccepted the logic of regulatory unionism; in others, anti-union sentiment was still rifeand managements fought the labor proposals fiercely. Different businesses responded toNew Deal labor proposals in different ways according to the historical context of theindustry and their strategic concerns. Because of its particular economic and socialhistory, the lumber industry in the Northwest was home to a chaotic range of suchresponses .66 Gordon, New Deal. Old Deck, 247-328.4COMPETITION IN THE NORTHWEST LUMBER INDUSTRY.The Northwest lumber industry occupied a distinctive place within the American politicaleconomy during the interwar period. During the 1920s and 1930s it suffered from the sameailments as the 'sick' coal and textiles industries, but the symptoms were not aspronounced. Consequently, while drawn towards federal and union-based solutions to itsorganizational problems, the lumber industry did not embrace them with the sameenthusiasm that other industries did; it maintained an element of confidence in its abilityto find private solutions to its problems. The industry certainly did its best to ignore theoption of regulatory unionism; this attitude was influenced by the radicalism of lumberunions during the early part of the century, most notably the Industrial Workers of theWorld (IWW). The presence of the IWW had made lumber barons extremely leery ofhanding over any form of influence to unions. Industry leaders chose instead to seek outsolutions in less radical measures such as tax reform, federal labor standards andconservation policies. The New Deal period would show that the Northwest lumberindustry was neither strong enough to make private solutions work, nor weak enough tofeel it necessary to hand over regulation to the unions.The weakness of the Northwest lumber economy was rooted in the heavy investments thathad been made by the early twentieth century in the enormous stands of Douglas fir west ofthe Cascades, and the pine on their eastern slopes. In part this substantial capitalinvestment had been a result of anxieties about future forest resources after the depletion ofthe industry's traditional reserves in the Northeast and Great Lakes regions. Governmentpolicies covering the alienation of forest lands and early market conditions encouragedthe movement of capital into the region; land prices, taxes and other maintenance costswere very low at a time that stumpage prices were high and rising. Intense capitalizationwas also a product of the capital demands of the Northwest forests. The Douglas fir stands5were characterized by big trees, dense forests and a rugged terrain, making large, capital-intensive mills a prominent feature of the Northwest industry; in 1929 there were 103 classeight mills (cutting 50,000 M feet or more annually) compared to only 10 in the South. Manyof the industry's problems throughout the 1920s and 1930s, related primarily to cutthroatcompetition, can be traced to excessive capitalization.7While the rush of capital into the region did establish "settled" lumbering operations, asearly as 1915 it became clear that the extent of investment was excessive and a source ofinstability. Spiralling fixed costs, most notably land taxes, became a liability forinvestors, encouraging large firms to liquidate timber stocks to service their fixed costs,regardless of market demands.8 Furthermore, although large, intensively capitalizedmills were a distinct feature of the Northwest landscape, the regional industry still had arelatively low degree of concentration in its organization. This only intensifiedcompetitive conditions and the readiness with which lumber companies liquidated theirstock. There were a significant number of small mills operating in the region. The largeoverhead costs associated with permanent logging operations in Washington and Oregonmeant that small mills rarely owned timber-land themselves, but instead operated withportable equipment, mopping up behind larger mills, working on isolated and left-overstands and in areas with sparser growth. Although confined to particular areas ofoperation, portability and low overheads allowed small mills ready entry into the market7 Vernon Jensen, Lumber and Labor (New York: Farrar and Rinehart, 1945), 15-17;Charlotte Todes, Labor and Lumber (New York: International Publishers, 1931), 27-28;William G Robbins, Lumberjacks and Legislators: Political Economy of the US LumberIndustry. 1890-1941 (College Station: Texas A&M University Press, 1982), 6. While largemills dominated the economy of the Northwest, small mills were the prominent unit in theSouth; the South had 5,944 class one mills, cutting 50-499 M feet annually, compared to only672 in the Northwest.8 Jensen, Lumber and Labor, 9, 101; Robert E. Ficken, The Forested Land: A History ofLumbering in Western Washington (Seattle, 1987), 56-72, 100-03; Robbins, Lumberjacks and Legislators, 21-22; Lee James, "Restrictive Agreements and Practices in the LumberIndustry, 1880-1939," Southern Economic Journal 13 (1946-1947), 117.6with a very competitive product when demand and prices were favorable, and a relativelypainless exit when a glutted market, to which they had contributed, depressed prices toomuch. The entry into the market of a significant number of small mills in the early 1930sincreased preexisting tensions between small and larger mills in the Pacific Northwest.9There were also tensions between the Northwestern and Southern mills As in many otherindustries, the lumber mills in the South benefited from very low wages, long shifts andpoor working conditions. A study for the Council of National Defense in March 1941suggested that there was competition for lumber markets between the Pacific and Southernregions in twenty states, at a time when sales of Pacific softwood in those states represented30% of all softwoods distributed from the Pacific Northwest. The competitive advantagesenjoyed by mills in the South were therefore a significant source of resentment amongtheir rivals in the Northwest. 10Competition with the South and disorganization and excessive levels of investment withinthe Northwest combined to create powerful competitive pressures within the regionalindustry. When stumpage prices fell and carrying costs became more burdensome afterabout 1910, lumber owners were increasingly sensitive to the fragility of their investmentposition. Many attempted to divest themselves of heavy investments that carried high risksby liquidating their forest stocks; initial investments in the region subsequently became a9 Jensen, Lumber and Labor, 15-17; Todes, Labor and Lumber, 29; Ficken, The Forested Land, 170-172; Gordon, New Deal. Old Deck, 156; James, "Restrictive Agreements andPractices," 120-121; West Coast Lumberman, April 1932, 21.19 James E. Fickle, The New South and the "New Competition". Trade AssociationDevelopment iilneInduA. (University of Illinois Press, 1980), 287-327;Dexter M. Keezer, T e ou s Fr mber n t An i ter-de^m t t dcond c e n er h •ir co if I r. •e t rM e z r for th Bure u o e^h a dStatistics of the Advisory Commission to the Council of National Defense.(Washington,March 1941), 58-59. The report stated that the area of competition was bordered on the south-west by Kansas and Oklahoma, on the north-west by Iowa, Illinois and Michigan, and onthe south-east by Ohio, West Virginia, Maryland and Delaware.7principal cause of overproduction. The industry consistently failed to match production todemand, a fundamental cause of depression in the 1930s. The case of the lumber industryis noteworthy because it exhibited the features of overproduction and subsequent depressedeconomic performance much earlier than many other industries. As far back as 1914 aForest Service study reported that growth in sawmill capacity vastly outstripped potentiallumber markets. Large mills faced with high, fixed running costs operated at full capacityin the face of a declining market and even added to their capacity during slumps indemand in an attempt to profit from their precarious investments. At a time of contractinglumber markets, static or declining lumber prices and fierce competition within andbetween lumbering regions, production for profit or even survival meant engaging in adangerous battle of cutthroat pricing.11FINDING SOLUTIONS: TAX REFORM. STANDARDISATION, AND THE PITFALLSOF ASSOCIATIONALISM.Faced with chaotic market conditions, elements of the lumber industry in the PacificNorthwest attempted to find solutions to the problems of overproduction and cutthroatcompetition. Immediate attention was focussed on alleviation of the industry's tax burdenand the enforcement of more rational production levels and standards. Yet the industrywas often caught in a dilemma in which it appreciated the need for effective organization toenforce proposed solutions, but took fright at the costs that such organization entailed.While lumber companies preferred private strategies such as trade associations thatmaintained managerial autonomy in decision-making, these lacked any means ofenforcing their standards or programs. Fierce, self-interested competitive rivalries made11 Robbins, Lumberjacks and Legislators, 6; Timberman, July 1930, 36, and see also WestCoast Lumberman, January 1930, 13 and August 1931, 25.8nonsense of a solution which lacked any form of compulsory membership or sanctions fornon-complying members. Governmental regulation, on the other hand, offeredguarantees of enforcing compliance with standards and quotas, but aroused fears withinthe business community in general that it would threaten managerial power and smotherthe entrepreneurial, competitive spirit of business.Direct governmental aid and political support without the accompanying interference inthe managerial decision-making process was, however, more acceptable. Lumbercompanies lobbied State governments intensively for a reduction in the amount of tax theypaid on their large land stocks. The burden was a heavy one because of the dependence ofthe Washington and Oregon State governments on receipts from forest lands, and thelikelihood that owners had overstocked in the initial speculative rush. Furthermore, Statetax laws made no distinction between cut and uncut forest land; faced with anindiscriminate and heavy tax burden, financially insecure lumber companies liquidatedtheir stock in the hope of reaping quick returns on investments and relieving themselvesof the tax burden.12Overproduction led not only to lower prices and profits, but also to a growing concern aboutrapidly dwindling Northwest timber reserves and the failure of the lumber industry toimplement any substantial program of reforestation. It was the confluence of these twothemes which provided lumber companies with a potential strategy for stabilizing themarket. They argued that the industry's failure to pursue conservation-oriented forestrypractices was a product of the unfair tax burdens it was forced to bear. Rescheduling of tax12 On the impact of State land taxes on the lumber industry, see: W B Greeley to House ofRepresentatives, Special Committee to Investigate Communist Activities in the UnitedStates, Seattle, Washington, Friday, October 3, 1930, 29; Statement in Transmittal, Code ofFair Competition for the Lumber Industry, Timberman, July 1933, 6; Robbins,Littaberia&B and Legislators, 10-11, 60-62; Ficken, The Forested Land, 121-122, 157-159;Gordon, New Deal. Old Deck, 157-164.9structures in the Pacific States, especially a movement towards a yield rather than landtax, would provide the financial strength necessary to pursue conservation measures suchas reforestation. Working through the Western Forestry and Conservation Association,formed in 1909, and supporting legislative initiatives such as the Clarke-McNary Act of1924 and Article X of the Lumber Code under the National Recovery Administration (NRA)in 1933, Pacific Northwest lumber interests persisted with their attempts to secure federaland state tax reform by making a crucial identification between the health of the industryand concern for conservation measures. 13The lumber industry used concepts of conservation not simply to enlist directgovernmental aid but also as a means of bringing greater order and stability to theindustry. In the 1920s some Northwest corporations began to promote wood utilization andstandardization programs More prudent use of timber stocks and more uniformmarketing patterns would help to check the inefficient practices that contributed tooverproduction and the depressed market for lumber, as well as fulfilling conservationobjectives. It was also a potential method for imposing industry-wide productionstandards, involving costs which, if not already met by major producers, they could easilyabsorb. The same costs, however, would work to exclude from the market more marginalunits whose competitive standing depended upon trimming on such standards. TheNational Committee on Wood Utilization and the Timber Conservation Board were alldominated and guided by large lumber corporations, suggestive of the bias under which theconservation initiatives were conceived. 1413 Samuel P Hays, Conservation and the Gospel of Efficiency (Cambridge, HarvardUniversity Press, 1959), 2-3; Robbins, Lumberjacks and Legislators, 10-11, 121-125.14 Robbins, Lumberjacks and Legislators, 121-125. Conservation initiatives in the periodincluded the National Conference on the Utilization of Forest Products, November 1924,and Article X of the National Recovery Administration. On the corporate domination of theconservation initiatives in the 1920s, see Ellis W. Hawley, "Three Facets of HooverianAssociationalism: Lumber, Aviation, and Movies, 1921-1930", in Thomas K McCraw ed.,10Despite the focus on tax reform, conservation laws and more exacting productionstandards, the industry was more commonly distracted by the search for an effectivemethod for deploying any kind of common business strategy in a chaotic marketenvironment. The lumber industry struggled with a number of alternative enforcementmechanisms: mergers might organize the industry through the market; trade associationsattempted to organize the market by internal or private methods; various federallegislation, particularly during the New Deal, represented external or political methods.1898-1902 and 1926-1930 witnessed the height of formal mergers among lumber companiesin the Pacific Northwest which were clambering for the benefits and efficiency ofeconomies of scale in times of depression. Larger economic units would not only provide"the cohesiveness and strength that is possible only through large units" but might alsorepresent a more compelling force for the enforcement of common business strategies suchas new and exacting standards in production. Even temporarily successful mergers,however, failed to secure any lasting organizational achievements because they could notbar the entry of new mills or marginal competition. Moreover, the sheer costs ofintegration exacerbated pressures to cut lumber and service fixed costs.15An alternative organizational form was the trade association, based on strategy of sharingprice, production and marketing information in an attempt to bring stability to theregional market. Trade associations in the Northwest dated to 1901, while the West CoastLumbermens' Association, the most prominent organization of the period, was formed inRegulation in Perspective (Boston, Harvard University, 1981), 105-107, and Gordon, NewDeal. Old Deck, 163.15 Walter J Mead, Mergers and Economic ^in hDouglas Fir LumberIndustry (Portland, Oregon, Forest and Range Experiment Station, 1964), 4; Timberman,September 1930, 79; Four L Lumber News, (4LLN), March 1930, 48; Robbins, Lumberjacks and Legislators, 140, 145, 148-152.111911. The association movement received ample support from Herbert Hoover'sDepartment of Commerce which saw industrial self-government as the most effectivemethod of both stabilizing and promoting the growth of the industry. The standardrhetorical line was that trade associations promoted order, predictability and efficiency,and discouraged "unfair" or "cutthroat" competition. The more earthy reality was,however, that larger mills used trade associations to enforce higher production,conservation and marketing standards on small, marginal units. One industry journalclaimed that "Improving the small mill product is lumber industry's problem", urgingmore precise and sophisticated production methods already employed by larger mills, butwhich could "be achieved only by the investment of more capital than is required by theaverage small mill in merely cutting logs into boards". The capital investment that wasrequired for higher conservation and production standards threatened to send many smallmills out of business, a fact clearly recognized by the larger lumber interests whoenthusiastically supported trade associations and their conservation and productioncodes)-6Hoover and other supporters of the association movement stressed that businessstabilization was best achieved through "economic government by enlightened privategroups" rather than legislation or "political government". While important sections of theindustry used trade associations and self-interested interpretations of conservationobjectives in order to enforce production standards upon certain competitors, theinstitutions themselves proved to be ineffective for the task in hand. In part, anti-trust suitsconducted by the Federal Trade Commission and the Justice Department discouraged16 Robbins, Lumberjacks and Legislators, 7, 36; Ficken, The Forested Land, 108, 112, 177,187; Ellis Hawley, "Three Facets of Hooverian Associationalism"; Gordon, New Deal,Old Deck, 370-77; American Lumberman, 29/3/1930, 31; 2/5/1931, 28, 46-7. An example ofan association production code was the "Code of Lumber Trade Standards" adopted by theNational Lumber Manufacturers' Association in 1931.12associational activity.17 More crucially, the failure of associationalism and conservationpolicies in the 1920s lay in the inadequacy of the voluntarist ethic under competitiveconditions. While the problems of the lumber industry demanded some form oforganizational solution, it was the nature of the problem - intense and diverse competitiveself- interest - which made cooperative schemes futile. 18Trade associations lacked any form of effective enforcement mechanism. No finessystem was ever developed and the associations' standards were not enshrined in law.There was no altruistic commitment to long-term, objective industry goals; when the costsof association membership became too great or the temptations of free-riding on the back ofassociation activity too strong, especially when it was one of only a few strategies ofsurvival, individual members left. So intense was the individualistic impulse forcompetitive survival in the early 1930s, the National Lumber Manufacturers' Associationstruggled for members and the West Coast Lumbermen's Association survived only aftera concerted and national campaign for renewed subscriptions. Such fragile institutionscould hardly have enforced standards on an industry wracked by competitive tensions)-9Indeed, there was a growing realization within significant sections of the Northwestlumber industry that a more rigorous and mandatory form of regulatory control wasnecessary, especially in the context of the savage depression of the 1930s. All mills had to becompelled to play by the rules that others had until then only volunteered to follow. In 193217 The Hardwood Manufacturers' case in 1921 found trade associations and mergers in thelumber industry to be in restraint of competition, a decision which had repercussionsthrough all of American industry.18 For general discussion of trade associations, and their weaknesses, see Mancur Olson,The Logic of Collective Action (Cambridge, 1965), 16-21, 58-9, 144-148; Gordon, New Deal,Old Deck, 328-379.19 Hawley, "Three Facets of Hooverian Associationalism", 95-97, 108; James, "RestrictiveAgreements and Practices", 117; Timberman, April 1932, 15; American Lumberman,1116/32, 24, 50.13plans were sketched for a central corporation for legalized control of lumber production,fixing a basic production cost below which subscribing members were not allowed to selltheir product without incurring fines. By 1933 the rhetoric and plans were more forthright,invoking metaphorical and literal dictators: one lumberman advocated a plan for"economic dictators for industry", while the editors of one trade journal came out insupport of Mussolini's strong-arm legislation against "over-exuberant industries",apparently resigned to the fact that "before business is again on an even keel, we may haveto accept many restraints not heretofore dreamed of, but necessary to restore ourequilibrium".20While sections of the lumber industry were magnanimously braced for new restraintsunder the terms of any industrial recovery package proposed by the New Dealadministration, the eventual form of the National Recovery Administration (NRA) was infact more reminiscent of Hooverian business self-government. To be fair, the proposedregulation of prices, production levels, working hours and wages under the lumber code offair competition was a radical one requiring real and symbolic shifts in attitudes amongbusiness communities. The act, however, shied away from a truly substantialrestructuring of the American economy by endorsing the principle of "partnership inplanning", or "self government under federal supervision". The interests and prioritiesof well organized, economically strong groups within the lumber industry, most especiallythe trade associations, dominated both the formation and administration of the codes. TheNLMA was at the heart of the initial code-drafting procedure and the general oversight ofits administration as the Lumber Code Authority; the regional trade associations, such asthe West Coast Lumberman's Association, were effectively the administrators of the codeon the ground. The federal government did not threaten managerial autonomy but instead20 Timberman, July 1932, 14-17; April 1933, 5; March 1933, 8; West Coast Lumberman, May1933, 9.14took on the role of an external policing agent in order to provide a more reliable means ofenforcing compliance with the terms of any code on "the small fringe of non-cooperators".21By delegating power to business, however, the organizational deficiencies of the tradeassociations of the 1920s were simply replicated in the NRA. Discretionary self-government did not lend itself to disciplined adherence to the long-term, objective orunpalatable regulatory standards necessary for recovery in the lumber industry. Thelarger mills of the Pacific Northwest simply used their strength within the Lumber CodeAuthority of the NRA to campaign vociferously and successfully for the abandonment ofprice controls which they had initially supported, but had since decided afforded unfairadvantages to their competitors. The tensions and intensity of competitive self-interestwhich had characterized the lumber industry on both a national and regional scale - Southversus Northwest, large mill versus small mill - were simply transferred to theadministrative arena of the NRA.22The NRA failed not simply because it absorbed rather than solved the dilemmas andweaknesses of associationalism, but also because the federal government did not have theconfidence or political will to fulfill its allotted function as an external enforcement21 On the origins and structure of the NRA, see Hawley, The New Deal and the Problem ofMonopoly, 3-52; Bernard Bellush, The Failure of the NRA, (Norton : New York, 1975),1-19;Gordon, New Deal. Old Deck, 416-423. On the organisational characteristics of the LumberCode, see Robbins, Lumberjacks and Legislators, 174-181; Timberman, April 1933, 5;March 1933, 8; West Coast Lumberman, May 1933; Ficken, The Forested Land, 205-209.22 Hawley, The New Deal and the Problem of Monopoly, 132-146; Bellush, The Failure ofthe NRA, 47; Robbins, Lumberjacks and Legislators, 190-195. On the campaign for theabandonment of price controls, see Timberman, May 1934, 9; June 1934, 9; September 1934,9-10; October 1934, 10; November 1934, 10-11; West Coast Lumberman, October 1934, 20. AW Clapp spoke against price controls, and in favor of the labor standards that had beenwritten into law, during a statement on behalf of western interests at a meeting of theLumber Code Authority, October 3, 1934. Quoted in' 1Lm.L)eioa-m , October 1934, 10.15agent. One prominent Northwest lumberman, D T Mason, had professed doubts at thebeginning of the NRA that the system would be able to provide adequate enforcement of thecode's provisions. The steady chorus from small operators against what they felt was thediscriminatory nature of the codes soon crystallized into active non-compliance with theoffending provisions, especially the price controls. It was at this point that the weakness ofthe enforcement mechanism was exposed; the Justice Department lacked the resources, thewill and the confidence in the constitutionality of the NRA to pursue blatant violations ofthe code's provisions. When in March 1935 the Justice Department withdrew the Belcherindictment, brought against a lumber operator from Alabama who had violated the wageand hour provisions of the lumber code, it was clear that the code would collapse. One editorwrote with a certain contempt that "men in high places were barking edicts on subjectsdiverse and sundry. Barking is the precise word, for little was ever done to bring'violators' to justice, in spite of the so-called teeth in the act." The federal government hadclearly failed to act as an external regulatory agent under the NRA as originallyenvisaged by businessmen and legislators alike Compliance was left dependent, as in the1920s, on the weak mechanisms of voluntarism and exhortation.23SALV I^E NRA: L R S AN^D FEDespite its failure to solve the problems of intense competition in the industry, theexperience of the NRA was instructive for certain fractions of the lumber industry. Evenduring the course of the NRA there was an awareness that the labor standard provisions ofthe code could be used as the foundation for a more permanent and effective system for the23 David T. Mason, quoted in R C Loehr, Forests for the Future: The Story of Sustained Yield, (St Paul: Minnesota Historical Society, 1952) 105; Timberman, April 1935, 9; June1935, 9; Gordon, New Deal. Old Deck, 445-454; Robbins, Lumberjacks and ^193-4; Ficken, The Forested Land, 205-208.16control of excessive production and ruinous cutthroat competition. One lumber executiverealized that the labor standards had been carved in legislative stone and had not been leftto the discretionary management of the code associations: "We could not, even if wewished, avoid the provisions of Article V [of the lumber code, guaranteeing the right tobargain collectively]. It is vain for us to talk of abandoning those provisions in the codewhich relate to maximum hours of labor and minimum wages." In the clear absence ofdiscipline within the industry itself, certain Northwest elements were ready to flirt withfixed, non-negotiable federal labor standards legislation, despite the implied threat tomanagerial autonomy.24Large Northwest lumber companies were sensitive to the place of wage cuts and long shifthours in exacerbating the problems of overproduction, cutthroat competition andplummeting prices in the region. A W Clapp of the Weyerhauser Corporation thought that"there has been no factor so disturbing in price competition within our industry, and thathas contributed so much to cutthroat competition, as the fact that wages were not maintainedat a fair level", while his boss, Phil Weyerhauser, protested the wage cuts recently enforcedin 1932 at the Klamath Falls branch, stating that he was "very anxious (that we) ... lendourselves to a movement vigorously to stabilize wages at some point, literally to my mind,the higher the better." Certainly wages were a "soft" item in the calculations of somelumber companies. Wages represented approximately 50 percent of overall productioncosts and were an obvious target for rationalization programs, especially in smaller unitswhich did not carry any significant fixed costs.25 A 1931 survey of leading Washington24 A W Clapp to the Lumber Code Authority, October 1934, quoted in Timberman, October1934, 10.25 A W Clapp to the Lumber Code Authority, October 1934, quoted in Timberman, October1934, 10; Charles E. Twining, Phil Weyerhauser. Lumberman (Seattle, University ofWashington Press, 1985), 96-99. On the place of wages in production costs, see W B Greeley,speaking to the House of Representatives, Special Committee to Investigate Communist17and Oregon firms showed that almost half of them had retrenched by cutting back on wagesby an average of 15 percent. 26The larger Northwestern mills identified small and Southern mills in particular as wagetrimmers and hoped to remove this competitive advantage by compelling higher anduniform standards on the industry. One anonymous West Coast lumberman wrote thatsince the wage item was so vulnerable in the calculations of the price chiseler, "if the wagequestion were made an industry problem and one wage paid by all mills, no mills wouldhave any wage advantage in his cost of production." Major E G Griggs of the St Paul andTacoma Company supported the Black-Connery Thirty Hour bill, suggesting that the wholeindustry should be brought under its terms since excessive production in the South was themost disruptive element in the industry. Clearly, though, firms were more likely to pursueuniformity in standards for their particular market; they were not motivated byhumanitarian motives but by specific strategic concerns which were usually focussed on aregional rather than national market. A W Clapp testified to the Lumber Code Authoritythat "the most valuable element of any mutual agreement between lumber men would bethe maintenance of fair rates of wages at a uniform level within each of the variousproducing regions", an attitude more alive to the political realities and sensitivitiessurrounding Southern differentials, but perhaps also reflecting the specific businessinterests of the Weyerhauser Corporation that he represented. 27The NRA seemed to provide a fine opportunity for challenging wage and hour differentialsin the industry. Southern operators recognized the implications of the labor provisions ifActivities in the US., Friday October 3, 1930; Dexter M. Keezer, The Douglas Fir LumberIndustry; West Coast Lumber Facts, (West Coast Lumbermens Authority, 1939).26 The survey was quoted in West Coast Lumberman, March 1932, 11, 45.27 West Coast Lumberman, March 1932, 11; August 1934, 3-4; Timberman, August 1933, 7,26.18they were enacted and enforced, and fought an aggressive political rearguard actionduring the code drafting process in defense of their wage and hour levels. Throughout theNew Deal Southern representatives emphasized the significance of the labor cost insouthern mills, the cheaper cost of living in the South and the difficulty of running double-shift operations in order to justify their employment conditions. Ultimately a forty hourweek was made mandatory nationwide under the NRA, but regional wage differentialswere only partly reduced; a 24 cent per hour minimum wage was established for the Southand a 42.5 cent per hour rate for the Northwest. A subsequent request in February 1934 by theNorthwestern operators for a 7.5 cent raise in the code rate met with fierce resistance fromthe South.28Although the South was able to mobilize itself politically in order to contain the assault onits labor standards, the code did nonetheless have a significant impact on wages and hoursin the Southern industry. Reports suggested that between July and September 1933 theaverage hourly wage in the lumber industry increased by 47 percent and the average lowestwage by 72 percent, with the bulk of the increase concentrated in the South.29 Northwestoperators recognized that the reduced differentials and increased costs for the South were atleast a helpful start and they attempted to manipulate the administration of the code to reapfull advantage of the regulatory mechanism; by October 1933 the Western Pine Divisionhad proposed amendments to the lumber code imposing the Northern Pine scale of wageson the Black Hills region and extending the jurisdiction of the Western division well intothe traditional Southern Pine Division as far south as El Paso, Texas. Nor did the28 American Lumberman, 12/07/33, 12; 5/08/33, 16. The arguments in defense ofdifferentials, deployed by the South during the drafting of the lumber code, were thosewhich were also used in opposition to the Fair Labor Standards Act: see AmericanLumberman, 19/6/37, 26-7; 9/10/37, 30-1; West Coast Lumberman, August 1938, 24. Gordon,New Deal. Old Deck, 434-5; Ficken, The Forested Land, 198; Jensen, Lumber and Labor,154.29 American Lumberman, 23/12/33, 14-15.19Northwestern operators derive simply material advantages from the NRA. It was also ofvalue for the education it provided on the industry's political economy: "Southern operatorsare having it forcibly impressed upon their minds that the government does not considertheir ideas of wages as adequate .... Whatever may be the final result of Roosevelt's boldeconomic experiment, the clarifying and illuminating comparisons between Southernwage scales and those of the Pacific Coast will be a helpful beacon in illuminating themental horizon in future discussions regarding the differences in wage scales in thevarious competing lumber-producing sections of North America."30Large Pacific lumber companies also used the NRA to force uniform labor standards onthe smaller mills of the Northwest region, in much the same way that they had used tradeassociation production and conservation codes to force more sophisticated, and thereforeexpensive, production standards on shoestring operations. Small mills maintained theirmarket position by offering low prices which were made possible only through sometimessavage trimming of production, safety and labor standards. In the Coos Bay area ofOregon, James A "Jimmy" Lyons and Bill McKenna both operated marginal units,moving in and out of the market as prices rose and fell; this strategy was only possible byconstantly hiring and laying off the workforce and often withholding wages. In 1930 theLoyal Legion of Loggers and Lumbermen (more commonly known as "the 4L"),representing some of the larger employers and their employees, protested that "smalllogging operators and sawmill operators are to blame for approximately 70% of the claimsfor unpaid wages in the state of Oregon." 3627 wage claims had been filed with the OregonBureau of Labor between October 1928 and September 1930, amounting to $136,061. Theorganization went on to endorse a State law compelling all employers to supply a bondguaranteeing employees their wages. Dismissing criticisms that the bond system would30 American Lumberman, 28/10/33, 16; Timberman, August 1933, 7.20bankrupt businesses, the 4L maintained that it wouldn't "drive any but incompetent andcrooked employers from the State."31Some in the Pacific lumber industry obviously hoped that the NRA labor standards wouldhave a comparably purifying effect, driving out "crooked" mills, a strategy that thesmaller units were very aware of. One struggling operation complained that the big mills"saw a chance to break the men that owned the little mills and believe me they surelyhave made a good job of it."32 The small Northwest mills made efforts to resist theoverwhelming logic of the large mills during the drafting and administration of thelumber code; A W Fairhurst, representing 123 small mills from the region, submitted aseparate code during the hearings, and in December 1933 small sawmill operators met inSpokane to organize the Pine Belt Lumbermen's Association to campaign againstdiscrimination under the lumber code which "virtually means the extermination of theunorganized units." There is indeed strong evidence to suggest that the Lumber CodeAuthority, dominated by larger firms, was a far from sympathetic counselor to the smallmills C Arthur Bruce, executive officer of the Lumber Code, responded to the complaints ofsmall mills with an emphasis on the benefits of stabilization for the entire industry underthe code; small operators could be a "cooperative or constructive part of the lumber industry... only ... by putting them on an equitable basis in respect to cost production and productionquotas with the large mills." The hidden agenda of the large mills was barely concealedbehind its rhetoric of efficiency and equity.3331 William G Robbins, "Hard Times in Paradise". Coos Bay. Oregon_ 1850-1986,(University of Washington Press, 1988); 4LLN, November 1930, 5, 12, 52.32 Quoted in Gordon, New Deal. Old Deck, 436.33 American Lumberman, 5/8/33, 32-33; 23/12/33, 14-15.21The establishment and administration of the codes was dominated by larger units whoused their position to undermine the economic strategies of the small mills. At a WCLAmeeting in April 1934, W B Greeley recognized the disadvantage of small mills in notbeing able to sell at the same price as large mills under the conditions imposed by the code;but rather than awarding the right to price differentials on the basis of mill capacity, thecode committee instead chose to interpret the problem as the product of deficient equipmentand sales facilities at small mills engaged in the rail shipping trade, effectivelydismissing the principal grievance of the small mill operators.34The effect of these manoeuvres on small mills was clear. High minimum wages struckthem at the very point in their operations where they enjoyed a competitive edge over theirlarger rivals. One mill reported with bitterness that "we are compelled to raise wages from20 to 30%." They resented the imposition of external rates and felt that mutual employer-employee conferences would be the most effective means "to determine on the wage scale amill of this type is best able to maintain, without disturbing matters all around."Reminiscing on the 1920s and 1930s, C W Frase of Alpha, Washington spoke of havinghired half a dozen men until "the doleful days that hatched the Blue Eagle [the NRA logo],with much of its well planned and gay feathered benefits molting into pin-feathery34 W B Greeley, WCLA annual meeting, quoted in American Lumberman, 28/4/34, 19 andTimberman, March 1934, 40. Wilson Compton, general manager of the National LumberManufacturers' Association, made sympathetic noises in early 1934 about the plight of thesmall mills, recognizing that increased costs associated with the new, high minimumwages and reduced working hours were at the root of complaints and closures. Far fromoffering any concrete help, however, Compton merely reflected that the high minimumwages were part of a wider plan to restore purchasing power and living standards withinthe economy, so that "mills cannot be expected to continue operating which cannot recoverthe increased costs involved under the code." Compton attempted to deflect criticisms thatlarge mills were suffocating smaller enterprises with the argument that the problem wascaused by the NRA's failure to solve the problem of funding the higher wages necessary forimproving standards of living; the cost of wage increases could not be passed on to theconsumer when the lumber industry was already suffering such damaging competitionfrom substitute materials. W B Greeley, American ^20/1134, 17, 47.22bedevilments. 'I continued to hire men...although NRA wages and lumber prices could notbe forced so suddenly into the lumber industry that had taken years to build.. .It finally hadme straightened out where I couldn't pay my bills and men's wages."35While the collapse of the lumber code provided small and southern mills with a temporaryrespite, large Northwest lumber companies persisted with their attempts to stabilize theindustry by elevating labor standards to uniform levels. An NLMA executive meeting inJune 1935 resolved that the industry should not "drift away from its provisions concerningminimum wages and maximum hours... . The collapse of the NRA has put theresponsibility for maintaining the essentials of fair dealing with employees squarelyupon industry itself."36 Significant elements of the industry clung to the labor provisionsof the NRA, despite the failure of all other features of the experiment. In the immediatewake of the Schechter decision, however, efforts to maintain labor standards were pursuedon a private basis; the Western Pine Association, for example, resolved to continuevoluntary adherence to the Code's standards.37 One lumber manufacturer admitted thecentrality of policies on wages and hours but rejected the "meddling impracticalinterference of the NRA" and diagnosed the problem as "one that challenges thebusinessmen of this country to prove that they are equal to the responsibility that confrontsthem."38 Some interests within the industry were therefore intent on pursuing the agendaof uniform labor costs, but resistant to any further federal intrusion into the industry'saffairs, and blind to the inconsistency and futility of such a stance.35 West Coast Lumberman, August 1933; Timberman, August 1937, 88.36A W Clapp, Timberman, October 1934, 10.37 Timberman, June 1935, 9.38 TimberiTwLi, June 1935, 10-11.23The experience of the 1920s and early 1930s, however, had made it clear to others thatlumber companies were not "equal to the responsibility", and that left to their own deviceswould simple engage themselves once more in mutually damaging cuts in laborstandards and prices. It is significant that only the Western Pine Division, of all thelumber associations, volunteered to maintain the code's labor provisions; the anxieties ofthe Northwest lumber leaders were sincere enough, but these anxieties rarely motivatedpositive, voluntary action, a fact well recognized by significant sections of the industry.The industry's general realization that solutions based on private organizational methodswere too weak helped to generate support for more robust alternatives. The post-NRAscramble to rationalize labor costs led to a hesitant flirtation and pragmatic acceptance of"regulatory unionism" under the Wagner Act, and enthusiastic support for the Fair LaborStandards Act (FLSA) of 1938, a measure firmly rooted in the NRA, but free of itsparalyzing weaknesses.THE PRICE OF LABOR STANDARDS: REGULATORY UNIONISM. In their attempts to harmonize regulatory conditions and thus stabilize the industry duringthe 1920s and 1930s, some lumber interests had found it increasingly necessary to considerlabor unions as potential regulators of common labor standards. They felt that therelationship of unions to the individual enterprise made them better suited than the federalgovernment to the role of enforcing standards: unions were intimately engaged with theindustry on a day to day basis and were therefore a well informed inspectorate; theirobvious concern about the standards they regulated made them highly motivated; themarket strength of unions could be harnessed by corporate managers to enforce standardswhere the federal government had abjectly failed during the abortive NRA. Certainly theexperience of some industries under the NRA codes had shown that unions could be used asa constructive regulatory tool; strengthening the ability of unions to bargain with all24employers through legislative fiat would ensure that labor standards of some form wouldbe imposed on all business sectors rather than just on those who had been compelled bystrategic necessity to bargain with unions voluntarily. There was indeed a suggestiveexample of unionism within the Northwest industry itself - the Loyal Legion of Loggersand Lumbermen (the 4L) - which dramatized the potential utility of unions as a regulatoryelement. Despite the logic of regulatory unionism and the positive demonstrations of itspotential in the 4L and under the NRA, events and ideas in the history of the Northwestregion at the same time suggested to lumber owners that unionism was a terrible threat tomanagerial autonomy and business prosperity; the costs associated with using unions as amechanism for organizing the industry far outweighed the potential benefits in the mindsof lumber leaders during the debate over the National Labor Relations Act of 1935 (NLRA,also known as the Wagner Act).39The early union movements in the lumber industry grew out of protests at working andliving conditions that were almost universally condemned as inhumane. Whileconditions marginally improved when the industry became less peripatetic and settled inthe Northwest, lumberworkers were still characterized as "homeless, womanless andvoteless." The IWW first emerged in the Northwest lumber industry in 1907 as a result ofgrowing resentment at working conditions.4° The union presented a radical critique ofcapitalism and mobilized its members for direct economic action, eschewing politicalcritiques, in many senses reflecting the disenfranchised nature of its early members. Itsstrike activity between 1907 and 1917, its disruptive "on the job" tactics and involvement inthe shootings at Everett in 1916 and the Centralia massacre of 1917 earned for them the39 Gordon, New Deal. Old Deck, 455.40 The IWW organised a strike in Portland in March 1907 over wages and hours in thelumber industry there; see Jensen, Lumber and Labor, 119.25unmitigated hostility and suspicion of mill and camp owners. The wife of PhilWeyerhauser reported in 1917 that his concern over war with Germany seemed "far lesseminent to him than Civil War between Capital and Labor." The IWVV became, andremained into the 1930s, a potent symbol of what employers saw as an assault on theirproperty rights and managerial autonomy; even during the frantic search for anorganizational solution to the industry's instability in the Depression, the memory andlegends of the IWVV contributed to the reluctance of lumber leaders to consider unions asresponsible agents within the economy.41While employers did respond to the perceived threats of the IWW with belligerentstrategies, such as the employment of company detectives and scab labor, on a moresophisticated level lumber owners also pursued the benefits of "welfare capitalism". Theyidentified the crucial link between working conditions and industrial peace and grewmore confident in their ability to manipulate the working environment according toimmediate goals of industrial efficiency rather than humanitarian concerns.42Progressive technicians identified unions as self-interested and offered scientific plans,such as the Bedaux method43, as an antidote to that threat. One owner felt that "there is a41 On conditions in the camps see: F A Silcox, 'Forestry and Labor,' Journal of Forestry,1920, 317; Charlotte Todes, Labor and Lumber, 70-4; Jensen, Lumber and Labor, 106-110.On the IWW and its direct economic action, see Robert Tyler, Rell.he__Woods: theIWW in the Pacific Northwest (Eeugene: University of Oregon Books, 1967), 23-5; Jensen,Lumber and Labor, 119-122, 137; Ficken, The Forested Land, 134-141. On the fearsurrounding the IWW, see, Robert Ficken, Four Generations of Management: the Simpson-Reed Story (Santa Cruz, California Forest History Society, 1977), 39; Twining,Phil Weyerhauser, 19.42 The tendency to tackle labor problems because of motives of industrial efficiency andcosts rather than humanitarian imperatives, can be seen in the furor in the 1930s oversafety in the workplace, a concerted campaign in the lumber industry inspired not so muchby a desire to stop the dreadful waste of life, but rather to stop the dreadful waste of money inindustrial insurance premiums; see West Coast Lumberman, January 1931, 34; January1932, 25.43 On the Bedaux method see Timberman, January 1931, 22-24, 50.26better feeling among the men in the mill, too, since we put in Bedaux. They are morecontented and take a greater interest in their work." This fitted in neatly withcontemporary concepts of employer paternalism in workplace relations; William G Reedspoke of his memories of the 1920s at Simpson Reed as a time when "the concept ofemployee-management relations .... was almost a father-son relationship. My fathersomehow gave the employees the feeling that we were one big happy family." Bothscientific control and the paternalistic philosophy promised employees a wholesomeenvironment, but one directed entirely at the behest of the autonomous owner-manager.44The formation and development of the Loyal Legion of Loggers and Lumbermen (the 4L)exemplified the threat that lumbermen felt from union activity around World War One. Itwas created in 1917 by the War Department, with the full support of the lumber companies,in order to thwart the IWW.45 It also demonstrated, however, the confidence that lumbercompanies eventually drew from their ability to undercut independent unionism andshore up managerial legitimacy with a prudent mixture of improvements in workingconditions and the frequently trumpeted concept of mutual interest and cooperationbetween employer and employee. The 4L constitution identifies the predominant thoughtsof employers on industrial relations in the 1920s and, in many cases, the 1930s: "to promotea closer relationship between the employer and employee .... to standardize and coordinateworking conditions ... to improve the living environment in the camps and mills ... [andto] stamp out sedition and sabotage in the Pacific Northwest." The 4L drew much of itssense of self-worth from its non-confrontational, cooperative stance. In the early 1930s it44 S P Hays, Conservation and the Gospel of Efficiency, 126-127; West Coast Lumberman,January 1931, 31-33; Ficken, Four Generations of Management, 92.45 For the origins and early development of the 4L, see: Claude W Nichols, Brotherhood int e Wo ds. T eLs .1 L • of o•ers nd umber en. At e t e rat mindustrial cooperation (Phd. Dissertation, University of Oregon, 1959), 1-98; Harold M.Hyman, Soldiers^ (Los Angeles, 1963); Robert L Tyler, "TheUS Government as Organizer: The 4L", Mississippi Historical Review, 1960.27claimed to have "substituted reason for violence, confidence for misunderstanding, andthe cooperation of employee and employer to avoid labor trouble, wasteful strikes andlockouts." Employers clearly held the initiative despite claims of mutual cooperation.Employees had no recourse to independent action, since if an employer decided towithdraw from the organization, the local collapsed.46Employers, however, came to see the 4L not simply as a regulator of working conditionswithin individual enterprises but as a potential regulator of labor standards across thewhole industry; in the words of its constitution, "to standardize and coordinate workingconditions." In this sense the 4L served as a precursor for the regulatory unionism thatsome lumber executives flirted with during the 1930s. The secretary-manager of theWCLA felt that the 4L and its principle of mutual representation had "dominated thesawmills and logging camps of the West" during the 1920s.47 It was because of thisdomination that some lumbermen felt that the 4L could be used to regulate employmentconditions and therefore stabilize the industry. In 1930 one lumberman ascribed to its sizeand strength the fact that "its policies are followed by, and have considerable influenceupon, the majority of the mills in this Pacific Northwest," and focusing on the problems ofthe industry the 4L could "lend its influence in the industry to help correct theoverproduction evils by adopting as one of its basic principles of operation that five and onehalf days a week is the maximum employment for any such period." The 4L undoubtedly46 Jensen, Lumber and Labor, 133-4; 4L Lumber News (4LLN), June 1931, 9, 48; Ficken,The Forested Land, 162. As well as the common theme of cooperation, the 4L also hookedneatly into the efficiency drive of the period. Not simply did the 4L check the independentunion movement in the cause of industrial efficiency, but in its concern for workingconditions it set itself an agenda to provide "maximum efficiency to the employer." The1920s saw the organization move closer to the declared objectives of its employer members;the new president elected in 1926, William C Ruegnitz, originally trained and employedas an efficiency expert.47 W B Greeley, to the House of Representatives, Special Committee to InvestigateCommunist Activities in the United States, October 3 1930, 29.28became aggressive in its advocacy of a floor for wages and a ceiling for hours. By 1932Ruegnitz, the 4L president, believed that "without the 4L, it is safe to say, there would be atpresent a lower and more chaotic wage situation than there is."48Events during the NRA at first seemed to confirm and strengthen this view of the 4L as aregulatory agent within the industry. The 4L's membership, which had been fallingduring the 1920s and early depression period, trebled between May and November 1933.49Admittedly much of this increased employer support was the cynical fulfillment of theterms of Section 7a; where other industries had to create company unions, the Northwestlumber industry simply had to pay lip-service to the merits of 4L as a union and sign up. InMay 1933 the Weyerhauser Executive Committee abandoned its earlier reservations aboutthe 4L and rather ironically conceded that it "may be a valuable medium through which tosecure cooperation between employers and employees."50 The 4L, however, was not quitethe lame duck that company unions created under 7a proved to be. Trade associations inthe Northwest rallied behind the 4L, to fulfill not simply the clause relating to collectiveorganization, but also those clauses setting labor standards for wages and hours. Both theWestern Pine Association and the West Coast Lumbermen's Association decided that the4L should be the mechanism for helping to enforce the labor standard sections of the act. DT Mason, a progressive forester involved with the drafting of the lumber code, met withSecretary of Labor, Frances Perkins, and was able to convince her to accept the 4L underthe terms of section 7a on the strength of its record in the industry. The 4L wage schedule48 4LLN, June 1930, 12, 38-9. For the campaign for the eight-hour day, see 4LLN, February1930, 6, 7, 23, 45, 48; June 1930, 5; December 1930, 5. For the wages campaign, see 4LLN,December 1930, 5, 48; June 1931, 9; January 1932, 5.49 4LLN, November 1933, 3.50 R W Hidy, Timber and Men: The Weyerhauser Story (New York: Macmillan, 1963),423-6.29became inextricably linked with the wage schedules set in the lumber code. By February1934 the 4L was attempting to lead the industry by its nose, setting its minimum schedule2.5 cents above the code minimum. 51Despite its fighting rhetoric and substantial efforts and achievements as a regulator oflabor standards in the Northwest lumber industry, the 4L was, nonetheless, unmatched tothe task of enforcing standards on such a competitive industry. In the same breath thatRuegnitz boasted that the 4L had raised its minimum wage scale over that of the NRA healso admitted that "too many non-4L plants have held back." Even at the beginning of theNRA code experience, despite the recommendation of the trade associations that the 4Lhandle the wage clauses of the code, "some operators ... are disposed to handle the laborproblem themselves just as they have always done." 52The 4L incorporated many of the weaknesses of the association movements of the 1920s: onone level it had no way of compelling mills, often crucial ones, to become members, as wasto be seen from its frequent membership drives; on another level it had no means ofenforcing compliance to labor standards even among those mills that did voluntarily takeup membership. Although during the earlier stages of the 4L it had operated an employerbond system to encourage adherence to its policies, the system was abandoned in 1922leaving the 4L dependent on the conference system, exhortation and the self-defeatingpunishment of expulsion. Without a significant number of complying members the 4Lminima became irrelevant: in December 1932, the 4L voluntary minima had collapsed inthe face of falling membership and fierce competitive conditions; 4L exhortation was51 Ficken, The Forested Land, 203-4; Loehr, Forests for the Future, 113, 118. On the role ofthe 4L in the NRA see Jensen, Lumber and Labor, 154-159; West Coast Lumberman, June1933, 5; August 1933, 5; 4LLN, February 1934, 3.52 4LLN, 1/4/34, 3; West Coast Lumberman, July 1933, 3.30equally hopeless at maintaining standards in the wake of the Schechter and Belcher cases.Regulatory unionism required independence from employers; independence wasnecessary to compel "membership" among employers and ensure disciplined adherence tostandards that employers often attempted to evade when short-term, individualisticmotives intruded. Because the 4L was clearly not independent it was unable to fulfil itsfrequent promises to help organize the industry around uniform labor standards.53In this way the NRA code experiences educated industry in the basic criteria and benefitsof effective regulatory unionism. At a time when the code authorities responsible foradministering the provisions of the act were barely disguised trade associations,industries which were party to vibrant, independent unionism were the only ones whichenjoyed any semblance of discipline in the maintenance of standards. One report on theNRA stated that "Codes in which the labor provisions reflected or grew out of collectivebargaining were generally more detailed and better formulated and set higherstandards," and that "the status of these agreements was made more certain." The reportemphasized that "in some instances (the codes) not only became enforceable, but could bemade binding upon non-assenters," in contrast to the "complicated compliancemachinery established by the NRA."54 An aide to Senator Wagner went so far as to claimthat unions were "fighting the decent employer's battle ... by forcing the undercutters toobserve code provisions, or by forcing them out of business."55The ability of labor unions to "fight the decent employer's battle" was strengthened bySection 7a, and then again by the National Labor Relations Act, both acts attempting to53 Nichols, Brotherhood in the Woods, 108,131; Henry Theodore Buechel, Labor Relationsin the West Coast Lumber Industry (M.A., State College of Washington, 1936), 70.54 President's Committee on Industrial Analysis, Report on the National RecoveryAdministration, 109, 111.55 Quoted in Gordon, New Deal. Old Deck, 457.31enshrine the right of workers to bargain collectively.56 In the lumber industry, theSawmill and Timber Workers' Union (STWU), which was made an affiliate of the AFLin 1935, received a significant boost to its organizing drive from the NRA's endorsement ofcollective bargaining; by 1935 it had 10,000 members within the Northwest region. At thisstage it still faced obstacles in the form of employer favoritism for the 4L and the continuedresistance of employers to any form of independent unionism, but these were also removedwith the Wagner Act's ban on company unions. By 1936 it was estimated that the STVVUorganized up to 70,000 workers in the Northwest. Unions deployed their newly acquiredpower to force recalcitrant lumber companies into recognition of unions and the adoption ofunion labor standards, most significantly through the use of boycotts. The Kimble LoggingCompany found its logs rejected by the unionized workforce at the Olympia Harbor andTumwater mills until the Kimble management recognized the Shelton local of the Loggersand Sawmill Workers' Union and agreed to abide by the labor standards and workingpractices negotiated by the local.57Phil Weyerhauser of the Weyerhauser Corporation recognized the likelihood that therewould be a general organization of labor in the lumber industry under 7a and itsadministration by the National Labor Board. He was far from being an unflinchingadvocate of unionism; he spoke rather testily of the NLB's willingness "to assist the AFL toorganize our industry," and ignored the results of plant elections when they were called atLongview and White River Lumber Company. But he did typify at an early stage the56 On the politics and details of Section 7a and the National Labor Relations Act see SVittoz, New Deal Labor Policy and the American Industrial Economy, (Chapel Hill:University of North Carolina Press, 1987), 137-152; Bellush, The Failure of the NRA, 88-135; Joseph J. Huthmacher, Senator Robert F. Wavier and the Rise of Urban Liberalism,(Atheneum: New York,1971); Peter H. Irons, The New Deal Lawyers, (Princeton, 1982),203-89.57 Buechel, Labor Relations in the West Coast Lumber Industry, 33; Hidy, Timber andMen, 424. Account of the Kimble Company boycott in Box 195, St. Paul and Tacoma LumberCompany records, University of Washington Archives.32willingness on the part of some lumber executives to respond in a positive fashion tochanging conditions in the status of labor in the industry. Aware of the increasingstrength of the AFL, P W Weyerhauser reported to his uncle F E Weyerhauser that "I do notthink we can refuse recognition of the union in some way in the future. One thing whichseems very definite is that the 4L has done us no good whatsoever, and is completely dead atour plants with no members at Snoqualmie or Longview." The conservative 4L failed torepresent employees' views at the Weyerhauser plants and the 4L initiative on raisingwages in January 1934 to 45 cents had been too timid 58Phil Weyerhauser was clearly willing to consider union-powered regulation as anorganizing force in the industry, reflecting his own eagerness "to stabilize wages at somepoint ... the higher the better." But even his acceptance, ambivalent though it was, of a newunion role in the regional economy was far from representative of general opinion in theindustry. According to Weyerhauser there were "many who have not yet their tail in thegate who still advocate the methods which refuse to recognize the union or have anything todo with it." In part this reference was to generation gaps within the Weyerhausercorporation itself; his uncle Frederick Edward thought that "we are merely lettingourselves in for a lot of trouble when we invite ourselves into the AFL as it exists on thePacific Coast." Al Raught at the Weyerhauser's Longview mill reported that for some "itwas just considered heresy for an operator to give any consideration to talking to a unionabout wages or working conditions or anything like that. They were wild-eyed about it."Despite the experiences of the Northwest lumber industry in the period from 1920 - thefailure of private and federal regulation to ameliorate chaotic and damaging marketconditions in the lumber industry - the majority of the industry were unable to accept orunderstand the potential for harnessing a resurgent union power-base in the service of its58 Hidy, Timber and Men, 428; Twining, Phil Weyerhauser, 88, 96-100.33organizational crisis. While at least some prescient industry leaders acknowledged,albeit in a very qualified manner, a new role for unions in the political economy of thelumber industry, a more significant number were hidebound by more traditionalconceptions of union power and intent.59Anti-union sentiment drew much of its strength from the memory of the IWW and themore recent radicalism of the longshoremen on the West Coast, but grievances amonglumbermen boiled down to an acute concern about loss of managerial control at the handsof a selfish and radical labor movement. F E Weyerhauser believed that while it wasnecessary to give employees "all they are entitled to, and more, we cannot allow them torun our industry." It was in this context that the closing of the open shop was the most vividfear of many industrialists. John Wallace, president of a Seattle-based employers'organization stated simply in 1934 that "it needs no logic or discussion to prove to you thatthe closed shop is industrial suicide." The closed shop undermined employer policies of"divide and rule" through which they had previously diluted the potential strength of aunified, organized labor force by insisting on the recognition of all organized groups ofemployees.60Confrontations on the issue of the closed shop took a number of distinct forms through theperiod. Both managers and unions recognized, for example, the strategic importance ofhiring practices in determining relative power within lumbering enterprises, sinceunions could simply pack companies with loyal union men; union campaigns for theirown hiring halls were occasions for particularly fierce management resistance.61 Section59 Twining, Phil Weyerhauser, 118-119, 147-149; Hidy, Timber and Men, 426.60 Twini-ng Phil Weyerhauser, 147; Box 99, Folder 22, Merrill-Ring Company records,University of Washington Archives.61 The WCLA was vehemently opposed to any preference for union members in the hiringof new employees and a Seattle-based employers' organization warned that radical labor347a and, more especially, the National Labor Relations Act were the cause of particularlyfrantic anxiety within the lumber industry. During the passage of the NIRA John Wallacedespaired that, if enacted, section 7a "would destroy with one stroke all the efforts of openshop employers of many years to keep industry free from union domination."62 Because ofits unambiguous intent and because it did not come diluted with other provisionssupporting industrial self-government, the Wagner act met even fiercer opposition.Corydon Wagner, vice-president of the St Paul and Tacoma lumber company, felt that the"present fight against unionization is merely one phase of an attack which is beingdirected against all open shop industries in the country." In all these confrontations on theclosed shop issue, the lumber industry tried to soften its demand for open shop managerialautonomy with a professed concern for the rights of "a great body of unorganized workers... who have not elected to place themselves under the domination of labor czars andracketeers."63 The WCLA declared in 1935 that "at no time, and under no circumstances,leaders were "out to gain complete job control of the industry", citing in particular themovement of recently hired loggers in Seattle through the union rather than loggers'clearing office - they predicted ominous consequences for the industry's open shop. TheTimberman led with an editorial in May 1936 which bemoaned the willingness of unionsin the Columbia River logging camps to strike over the right to dictate hiring practices,even when the union acknowledged that the offer on wages and hours was satisfactory; thestrategic importance of hiring practices was clearly recognised by both parties;Timberman, May 1936, 9-10. See also Boxes 195 and 199, St Paul and Tacoma LumberCompany records, University of Washington Archives.62 Merrill-Ring Company records, Box 93, Folder 14. Although 7a proved to be less of a boonto unionism than first anticipated, C C Crow, owner of a Pacific lumber journal, celebratedthe Schechter decision with his own verdict that it "returns to all lumber men and loggersthe right to again run their own businesses without outside interference", a remarkdirected both at unions and the federal government; C C Crow, quoted in Buechel, LaborRelations in the Pacific West Lumber Industry, 173.63 Corydon Wagner to Walter Nettleton, Nettleton Lumber Company, May 24 1935, Box 195,St Paul and Tacoma Lumber Company records; W B Greeley to E G Griggs, president of StPaul and Tacoma, Box 195, St Paul and Tacoma Lumber Company records; AmericanLumberman, 25/5/35, 16, 60.35will the West Coast lumber industry submit to rulings based upon the principle involvingdenial of representation of any minority groups of employees in collective bargaining .,64Many lumbermen also objected to Section 7a and the Wagner act because they had placedundue restraints on the capacity of companies to challenge union prerogatives. Section 7a,D T Mason believed, had not captured "the even balance between employer, employee andconsumer interests which is so essential to the prevention of disaster." W B Greeley waseven more explicit on the bias within the Wagner bill, which he felt "hedges the employerabout with 'unfair labor practices' enforced by federal courts, but leaves labororganizations free from any legal responsibility." Combined with the movement towardsthe closed shop it put "American industry and its workers under almost completedomination by professional labor organizers."65These grievances reflected a more general concern about the federal-labor union axiswhich lumber interests saw emerging in industrial relations. One trade editorialcriticized the Wagner act for giving "federal sponsorship and encouragement to the closedshop." C C Crow, less restrained in his editorial comments, lambasted President Rooseveltin an open letter for having personally "bound and gagged the capable leaders of industryand set the enemies of law and order upon them to exercise their despotic influence." Theclosed shop and the suffocating restraints on managerial action written into federallegislation were alarming enough, but administration of those acts was reckoned to haveperpetuated the bias against employers; C C Crow continued in his inimitable fashion thatRoosevelt had "conducted a travesty on justice by sending from governmental64 Merrill-Ring Company records, University of Washington Archives, Box 99, Folder 22.The WCLA claimed that the bill would destroy the most fundamental conception of laborrelations in the West Coast industry, "namely the right of men to work in accordance withtheir individual qualifications without coercion."65 D T Mason, in R C Loehr, Forests for the Future, 162-3; W B Greeley to E G Griggs, May 41935, Box 195, St Paul and Tacoma Lumber Company records.36departments alleged arbiters to settle disputes when as a matter of fact you know that theyare but master minds of this great revolutionary movement you have clothed withauthority, and their mission is not to arbitrate but to bludgeon." The Industrial Relationsofficer of the WCLA summarized the perceptions of many lumbermen of federalintervention in industrial relation when claiming that "the government aided in thecollecting together of the discontented and provided them with an arena for their antics." 66The lumber industry did not in any sense enthusiastically or unconditionally embrace theprospect of unionization in the industry during the 1930s. Their responses were dominatedby a fear of the closed shop, intrusions upon managerial autonomy, and the radicalism ofthe emergent unions. Only rarely can one detect among lumber executives, notably PhilWeyerhauser, an appreciation of the regulatory potential in an emboldened andcomprehensive union movement. The 4L offers a further suggestion that lumbercompanies understood the concept of regulatory unionism, but the timidity of lumbermenin supporting even such an emasculated version of a labor union made the mostundemanding of regulatory goals unrealizable and highlights the anxieties thatunderpinned attitudes towards more independent unionism.Despite their concerns, lumbermen in fact responded flexibly to changes in the relativeposition of the union movement. This was partly because some lumber executives didappreciate the dangers of blindly defending the open shop when it was merely a makeshift66 American Lumberman, 25/5/35, 16; C C Crow, quoted in Buechel, Labor Relations in theWest Coast Lumber Industry, 104-05; The 4L also thought that "politically active labororganisers, by gaining the ear of administrative agencies," had wrung favorableinterpretations of 7a from the National Labor Board, an assessment with which CorydonWagner of St Paul and Tacoma Lumber Company agreed: see 4LLN, October 1934, 3, 10;Corydon Wagner to Walter Nettleton, Box 195, St Paul and Tacoma Lumber Companyrecords; J B Fitzgerald, in charge of labor relations under the West Coast Lumber Code,interviewed April 20 1936, quoted in Buechel, Labor Relations in the West Coast LumberIndustry, 72.37dam behind which swelled a growing body of radicalism; Phil Weyerhauser's belief by1933 that support of 4L was futile owes itself, in part, to this view. Other lumbermen soonagreed, in part out of an intuitive sense of when resistance to the closed shop was futile, andin part out of a need to accept majority unionism as the only sure way in which to chart itsotherwise unpredictable course. Once it became clear that the Wagner act was a permanentfixture in industrial relations, Northwest lumber interests redirected their energies fromopposition to the open shop towards ensuring that unions in their region were conservative,based on industrial rather than craft lines and, most importantly, were represented at allPacific mills.Laird Bell of the Weyerhauser corporation recognized the perils of unswerving hostility tounions and was among those who tried to direct the union movement along moreconservative paths by drawing a self-interested distinction between responsible unionismand the radicalism of racketeers. Another lumber manufacturer professed a belief in "thefundamental principles expressed in the act, and the right of workers ... to organize andbargain collectively," but went on to bemoan the fact that "some of our unions ... haveradical leadership, which does not want peaceful relations."67 There was also anidentifiable movement within the industry to avoid the jurisdictional confusion of craftunionism, even if it meant aligning the industry with the industrial unionism of theCommittee of Industrial Organizations •6867 Twining, Phil Weyerhauser, 88, 160-1, 181 - both Phil Weyerhauser and Laird Bell wereleery of the radicalism of the communist influenced National Lumber Workers, andangled for the more conservative AFL; US Senate, Committee on Education and Labor,National Labor Relations Act and Proposed Amendments, 1939, statement of John J Long,957. See Gordon, New Deal. Old Deck, 525-40, on efforts in other industries to encourageconservative unionism.68 For the suggestion of a preference in some quarters for industrial rather than craftunionism, see Twining, Phil Weyerhauser, 186; Minutes of WCLA Legislative Committeefor Washington, 2111137, page 3, Box 199, St Paul and Tacoma Lumber Company records.See also footnote 71 below.38Once lumber companies had accepted the imminence of some form of organization of laborin the industry, they did not simply rally behind a conservative and more manageablevariety of unionism but they also promoted union organization of the whole industry.Unions would by their nature bring with them demands for higher wages and improvedhours and conditions of work Lumber companies, especially those that had been the targetof 'guinea pig' membership and trade agreement campaigns by labor unions, wereanxious to ensure that they would not be operating under any competitive disadvantage andso encouraged a union movement of maximum possible coverage in the Northwest region.This was similar in motivation to the campaign that the larger mills would wage againstproposed exemptions for small mills under the Fair Labor Standards Act, and emphasizesthe importance that large Northwest mills attached to a level playing-field in their region.With the process of unionization within the industry underway and consideredirreversable, lumber corporations simply set about establishing a new set of prioritieswithin their industrial relations policy. This is most plainly seen in responses to thejurisdictional disputes between the CIO and AFL in the late 1930s. Not only did the bitterinter-union wrangling disturb the industrial peace and lead to a debilitating series ofboycotts on rival union products, but it also retarded the rapid and comprehensiveunionization of the regional industry, leaving a hodge-podge of employment standardsacross different lumbering enterprises.69 Resigned to unionization of the industry, butdismissive of what they saw as an unnecessarily distracting jurisdictional dispute, somesections of the industry called for a "coalition union". "Let's have a new SawmillWorkers' Federation", argued one trade journal, "open to both AFL and CIO members,limiting the membership strictly to western lumber states and keep control in the West."69 Gordon, New Deal. Old Deck, 515-525. For details of the CIO-AFL jurisdictional disputesee Margaret Glock, Collective Bargaining in the Pacific Northwest Lumber Industry,(Institute of Industrial Relations, University of California, Berkeley, 1955).39The intention was not just to restore a proper environment for production but also to buildunion strength on an even, regional basis to ensure the equalization of labor costs withinthe Northwest."Lumber leaders in the Northwest also articulated a new brand of rhetoric with which tojustify their changed position on patterns of union development in the industry. Havingspent considerable energy on the defence of the open shop and minority rights, newstrategic considerations necessitated defence of majority rule. This was no more brazenlyillustrated than in the attempts to endorse the NLRB's authority in plant elections betweenthe two main unions in the late 1930s. One journal editor, in particular, found himself themouthpiece for some rather foreign sounding concepts when lambasting the AFL for notrespecting NLRB election verdicts: the AFL's conduct attempted "to substitute minority formajority rule ... This country will not tolerate indefinitely flaunting an open disregard ofthe principles of majority rule upon which its very existence as a free people rests." 71A tentative movement towards joint employer negotiations with the unions in settlingworker contracts was also evidence of a shift in attitudes concerning labor relations. Eventhe more enlightened elements of the industry had been wary of "entangling alliances",but pattern agreements gradually came to be seen as a more reliable method of equalizinglabor costs through collective bargaining. Certainly the St Paul and Tacoma LumberCompany was anxious that union demands on wages and hours would not affect theirmarket position, and from 1937 onwards displayed an eagerness for the formation of some70 The plan for the coalition union was mooted in Timberman, September 1937, 9. Thedeconcentrated nature of the southern industry made unionisation of the regionunrealistic, and lumbermen had to wait for the FLSA for a movement towards nationallabor standards.71 Evidence of the rapid conversion to concepts of majority rule can be found inTimberman, December 1937, 9-10. The grievance with the AFL discussed here was alsorooted in the battle of some Northwest sectors with craft unionism and its perceived threatsof disruptive multipie representation and greater implied threat to managerial authority.40kind of employer organization that would negotiate blanket agreements and therebyremove labor costs from competition. Other sectors of the industry agreed that anemployers' council for the purposes of collective bargaining was a positive step. It did notsimply stabilize industrial relations and strengthen the organization of managementwithin negotiations, but it might also "band the employers together in a mutuality ofinterests ... and frankly set itself up in the interest of employers free from camouflage andprejudice."72This was all more than a little reminiscent of the trade association rationale of the 1920s;compelling all mills to subscribe to an organization that established certain standards ofproduction, supposedly in a mutuality of interests, but clearly in an attempt to enforce highstandards on marginal firms. The strategy had been given an ironic twist in thatpreviously disparaged labor unions became the instrument for setting those standards. Itwas a clear demonstration, however, of the flexibility and determination of certainlumbermen in their attempts to reduce the level of competition in the region and therebystabilize the industry. Once their strength in the regional economy had been accepted,unions were seen to offer a robust alternative for the enforcement of labor standards onchiseling mills. The strategy came with risks and was therefore taken on board only whenfederal legislation such as Section 7a and the Wagner act had been used to force structuralchange within American industry. Elements in the industry proved versatile in adaptingthe new union strength to their own ends. In response to union strike activity, one editorpondered:72 Phil Weyerhauser was wary of employer alliances for the purposes of collectivebargaining; see Twining, Phil Weyerhauser, 191. On increasing warmth to the idea ofemployer alliances, see: E G Griggs in correspondence with other Northwest lumberexecutives, Box 199, St Paul and Tacoma Lumber Company records; Tirnberrnan,December 1938, 10-11.41.. if the great lumber industry of the Pacific Coast shall have to pass into the hands of theCarpenters and Joiners Union, and the Douglas fir, western pine and redwood operationsmust concede radical changes in wages and hours, then there ... must be a counter demandupon this union of carpenters and joiners. We can brand our lumber with the union labelin great big letters, and demand that no lumber be used by union carpenters and joiners onany job, anywhere in this fair land, where the mill producing it does not guarantee to itsworkers comparable wages and comparable working conditions.The acceptance of unionism among lumbermen was at best reluctant, but the labordemands and market strength that New Deal unionism carried with it were nonethelessswiftly used to enforce otherwise elusive regulatory standards upon chiselers andmarginal enterprises.73RETREAT TO FEDERAL STANDARDS: THE FAIR LABOR STANDARDS ACT.Northwest lumber leaders demonstrated versatility and common-sense in their use ofresurgent union power to move closer to strategic goals which for a long time had been kepttantalizingly out of their reach. But it did not necessarily follow that they should abandonsupport for effective federal labor standards, whose potential for restructuring the lumberindustry had been hinted at during the NRA. The appeal of federal labor standards to theNorthwest lumber industry was apparent during the debate over the Fair Labor StandardsAct (FLSA) of 1938. On one level, the FLSA offered labor standards without recourse tounion power and the risks which that carried. On another, it provided a ready loadedweapon with which to launch an assault on wage differentials between the South and theNorthwest; the union power-base in the South was insubstantial and could not be reliedupon to enforce significantly higher standards on recalcitrant Southern mills, even giventhe immediate effects of the Wagner Act.73 Timberman, May 1935, 9-10.42The appeal of the NRA labor standards to Northwest lumber leaders has already beendiscussed. The FLSA not only incorporated the rationale of the NRA labor standards, butalso benefitted from a more simple agenda of objectives compared to that of the NRA, whichhad entangled itself in more thorny issues of price controls and production quotas. The actwas also more robust than the NRA in terms of its constitutionality74 and its subsequentenforceability. The dubious constitutional status of the NRA and the poor enforcementrecord of the federal government initially made the industry wary of unconditionalsupport for a new federal excursion into industrial regulation. 75 The FLSA, however, wasbased on more solid constitutional foundations, an asset which encouraged more rigorousadministration on the part of the federal government. It soon became clear that the FLSAhad "teeth" where the NRA had simply "barked".76Labor unions were also perceived as having a bite to match their bark when it came toenforcing common standards in the Northwest region, but despite their versatility inexploiting the regulatory potential associated with union growth, lumber leaders remainedwary of the net benefits of union empowerment Anxieties which had been on full displayduring the passage of the Wagner Act still plagued the calculations of lumber executives. Itseems possible that the industry's support of the Fair Labor Standards Act (FLSA) of 193874 The West Coast Hotel v. Parrish case of 1937 had found federal regulation ofemployment conditions to be a reasonable exercise of police power and the Jones v.Laughlin decision of May 1937, upholding the National Labor Relations Act of 1935, restedon a new and broadly defined role of the commerce clause which left the way clear forwages and hours legislation. The US. v. Darby Lumber Company case of 1941 wastestimony to the constitutional resilience of the FLSA. For discussion of the constitutionalbackgrouund to the Fair Labor Standards Act, see Vittoz, New Deal Labor Policy, 132, andPaul H Douglas and Joseph Hackman, 'The Fair Labor Standards Act of 1938,' Political Science Quarterly, 1938, 492-3.75 Wilson Compton had been particularly skeptical about the ability of the government toadminister the act, while D T Mason and a colleague had met with the first administratorof the act "to express our sympathy ... based on our own lumber code experience";American Lumberman, 5/7/37, 25; D T Mason quoted in R C Loehr, Forests for the Future,209.76 Timberman, May 1939, 9; June 1935, 10-11.43was a further way of registering its unease at labor unions operating as the sole arbiter oflabor standards throughout the Northwest region. The opposition of the AmericanFederation of Labor to the FLSA was based on the organization's fear that a federalmeasure enforcing minimum wages and maximum hours would sharply curtail thepotential appeal and power of labor unions in the workplace. It seems very likely that theNorthwest lumber industry based some of its support for the act on precisely the samecalculation. The FLSA promised labor standards without dependence on, orencouragement of, union power. 77Low levels of unionization in the South, however, made even post-Wagner labor unionsappear inadequate for the enforcement of production standards in the South. The ability ofthe FLSA to penetrate the South immediately was probably its most attractive feature forNorthwest lumber barons. The Northwest region was already paying well over theminimum wages registered in the act and had for the most part operated under the eighthour day, forty hour week since 1917, so that the effects of the FLSA were to be felt primarilyin the low-wage South. Indeed, a 1941 study for the Council of National Defense reportedthat although the period 1934-37 had seen the Douglas Fir region experience largerincreases in wages than the South, "the minimum wage provisions of the Fair LaborStandards Act ... caused a large increase in wages on the Southern lumber region, whilethey left the Douglas Fir region virtually unaffected." 43 percent of the common laborers inthe Southern lumber mills earned less than the 25 cents per hour minimum rate established77 West Coast Lumberman, June 1938, 39; the editorial predicted that if government carriedthrough plans for federal control of working conditions in the forests, then unions would"become subserviant to government bureaus and officials, lose their power and finallytheir free existence." This gives a clear sense that lumber interests understood theconnection between federal intervention in the industry and the relative influence of laborunions.44by the act for the first year of its administration, so that some lumber companies closedtheir operations rather than attempt to reach the standards laid out in the legislation.78Not surprisingly, many Southern mills protested strongly at what they saw as the unjustbasis of the FLSA, citing traditional arguments in defense of their lower wages and longerhours and predicting that "unreasonably high labor rates can have but one effect, and thatis to close down the vast majority" of small mills in the South, adding greatly tounemployment problems and the burden on the relief rolls. Certain Southern lumberowners were also incensed by the prospect of more governmental regulation; they found thelegislation "more far-reaching than they had contemplated; that it goes deeply into actualregulation of business."79Lumber interests across the nation, including Northwestern ones, appeared to echo manyof these Southern grievances; in response to the threat contained within the legislation,there were calls from one national trade publication for "complete unity in this effort toguide legislation along proper lines and to save a great industry." Invoking thebusinessman's concern about loss of managerial control at the hands of government orunions, the editor called upon members of the industry to "See Your Congressman. Tellhim how you feel about hours and wages legislation, and more regulation of business."One report suggested that the Northwestern industry had in fact responded to this clarioncall; in a letter from W B Greeley to Congressmen, the secretary of the WCLA had opposed78 On the predicted and actual effects of the FLSA on the South, see Keezer, The Douglas FirLumber Industry; Fickle, The New South and the New Competition, 300-305; Timberman,September 1938, 10.79 American Lumberman, 19/6/37, 22. For the traditional arguments of the South againstremoval of regional differentials, see American Lumberman, 19/6/37, 26-7; 9/10/37, 30-1;2115/37, 51; West Coast Lumberman, August 1938, 24.45the "unwise and unsound law fastened onto the entire industry," and the furtherestablishment of "government control over the whole industrial fabric of the country...80Greeley's letter, however, should be regarded more as lip-service to the policy line of theNLMA rather than as a sincere sacrifice of foregoing advantages it would enjoy under theact. The article quoting Greeley's letter recognized itself that the WCLA had "taken thehigh ground in its opposition to the act ^ Insofar as wages and working hours areconcerned, the West Coast lumber industry would benefit greatly from this legislationthrough the removal of a handicap under which it now labors."81 While making somepublic shows of opposition to the act, Northwestern interests privately welcomed the act andthe competitive advantages it provided for the regional economy. While there had beenconsiderable discussion of the FLSA within the southern industry, the Northwesternindustry was conspicuously reticent at the time of the bill's prolonged passage, punctuatingits contented silence with demands that it be administrated fairly and efficiently. Clearlythe Northwest identified the advantages the act would bring to their competitive position.All other responses of the Northwest to the act demonstrated acceptance, if not outrightenthusiasm, for its provisions. They tended to express their support for the act in terms ofits benefits for the working man and the need to raise living and educational standards inthe South rather than be so crude as to admit their material motivations. Walter Lippmancharacterized this strategy neatly when he claimed that the Fair Labor Standards Act was"in truth a sectional bill disguised as humanitarian reform."82One curious aspect of the political maneuvering around the FLSA, however, was thetentative alliance that developed between the large mills of the Northwest and those of the8° American Lumberman, 19/6/37, 22; 17/7/37, 22.81 American Lumberman, 17/7/37, 23.82 American Lumberman, 19/6/37, 26-27; Fickle, The New South and the "NewCompetition", 305.46South. The simple categorization of South versus Northwest does not match with thedemands made from large mills in both regions for "fair" and "impartial"administration of the act. This shared rhetoric was a thinly veiled assault on proposals forexempting small mills from the provisions of the legislation.83 Representing the NLMA atthe FLSA hearings, but echoing demands being heard from large Southern mills, WilsonCompton argued that "if standards are to be applied, no competitor should be exempt ...Congress should not pass any law which the Government cannot administer and cannotenforce promptly, impartially and uniformly." The demands for uniform application ofthe act's provisions were clearly targeted at small mills. Compton pulled few punches:"There is an important place for small lumber enterprises. But their place should bedetermined naturally by their efficiency and by their local advantages, not by statutorypreferences or exemptions set up by federal law." The political maneuvering within theindustry during the passage of the FLSA suggests that while there were two competitivefault-lines in the national industry - North versus South and large mill versus small mill- size rather than location was more significant in determining corporate strategiesduring the New Deal period.84It is interesting to note that the large Southern and Northwestern mills resolved theirpublic and private positions on the FLSA by emphasizing issues of efficiency andconservation in the operations of the lumber industry, a policy line more than faintlyreminiscent of the associationalism of the 1920s; Compton made it clear that a mill'smarket position "should be determined naturally by (its) efficiency," while one southern83Testimony was submitted by Wilson Compton which showed that the original intentionof exempting businesses employing up to 25 employees would exclude between 86 and 88% ofmills nationally, accounting for 20-22% of total production; in the Southern regions therespective totals reached as high as 90 and 36%; American Lumberman, 3/7/37, 25, 42.84A ei_m_km1_,um eib_2man, 3/7/37, 25, 42. Trade journals identified the same fault-line inthe industry: One editor claimed that "the outstanding question in the minds of the lumberoperators, especially among the larger operators, is, will the new law be enforced fairlyand impartially on all alike" American Lumberman, 22/10/38, 28.47lumberman corresponded with a Northwestern trade journal, citing the case of smallsouthern mills that would close when the act came into force in October 1938; "Now that isas it should be, because their timber is the poorest on earth .... just 'seaweed' lumber whichshould never be used in anyone's home." This approach enabled them to hold rank withthose elements that felt threatened by the act and yet at the same time rid themselves of anyresponsibility for helping those mills that sank under the act's provisions. After all, millsfolded because of their inefficiency rather than because of the unfairness of the FLSA.85For large mills in both of the major producing regions, the FLSA was the culmination of along search for suitable mechanisms for the organization of the industry, in particular forthe control of marginal, price-chiselling small mills. Private associations had beenfounded on hopelessly idealistic premises; the NRA had promised a more rigorousapproach to the issue of regulation, but was eventually too constitutionally weak to fulfill itsallotted role; labor unions were clearly a significant element in the business plans oflarge Northwest mills, but could never constitute a unilateral strategy because of thehistory of unionism in the American political economy in general and the lumberindustry in particular. The FLSA both covered weaknesses in earlier strategies andquelled fears arising from the apparently unchecked growth of labor associated withregulatory unionism.85 American Lumberman, 3/7/37, 25; West Coast Lumberman, August 1938, 24;Timberman, September 1938, 10; American Lumberman, 5/7/37, 25. In a closely relatedargument, Compton unabashedly drew upon the issue of forest conservation to justify hisopposition to exemptions for small mills under the act: "For reasons of economy andefficiency, fa conservation policy] requires producing units of substantial size. If, by alegislative policy, you put the larger and moderate-sized mills under a substantialcompetitive handicap, you will retard the progress of forest conservation", AmericanLumberman, 5/7/37, 25.48ONCLUSIONS: P IVATE I R A ISA JO FEDERAL L BO S ,^I . R S REGULATORY UNIONISM. Regulated labor standards were a central element in many of the plans formulated tostabilize market conditions in the Northwest lumber industry during the New Deal period.Owners of large mills with more substantial fixed costs and a permanent, well-paid work-force saw the logic of labor standards, and their ability to force debilitating wage rates onthose establishments which they blamed for damagingly low prices and cutthroatcompetition. High and uniform wages and controlled hours struck marginal mills at theprecise point in their operations where they attempted to cut costs and undercut marketprices. On this point, the New Deal administration and Northwest business leaders shareda very clear objective - stabilization of the economy through greater regulation and controlof an otherwise chaotic marketplace. Their relationship was based on a closeidentification of interests rather than hostility.Fluctuations in the relationship between the government and the Northwest lumberindustry can be traced to negotiations on the narrower issue of how labor regulatorystandards should be formulated and implemented. Significant sections of the industrywere aware that the chaotic nature of the Northwest market made voluntary associationsan inappropriate mechanism for enforcing standards of any sort. It was against thisbackdrop that the federal government was welcomed in as a policing agent to enforceproduction standards set by the industry itself under the lumber code. Indeed, misgivingswithin the industry about the NRA centered not on the inappropriateness of governmentintervention, but on the inability of the government to fulfil the crucial function ofenforcement. The rationale for high and uniform labor standards survived the Schechterdecision intact, and had in fact been reinforced in the minds of the larger mill ownersthrough the NRA experience. This paved the way for the Northwest industry's support of the49Fair Labor Standards Act which resolved the problems of inadequate coverage andenforcement.While the lumber industry was sickly enough to cast aside doubts about federalmanagement of the economy, it was not so sick that it would allow in labor unions as somekind of paramedic task-force in the same way that textiles and coal leaders were willing todo. This was in spite of the fact that the potential for using labor unions to enforce high anduniform labor standards was recognized within lumber circles: the 4L, for example, hadbeen pencilled in for a regulatory role during the late 1920s and early NRA. The speed andfrightening agility with which lumber leaders moved to support union drives across theentire region, once union strength had been accepted as a significant and permanent force,further suggests that the lumber industry accepted elements of the strategic thought behindeven the National Labor Relations Act. This is not to claim that the act did not raise seriouspoints of difference between government and business in New Deal America, or that thelumber industry had not been vocal in its defence of existing open-shop labor relations, butit is important to recognize also the substantial points of agreement between Northwestlumber and the New Deal administration on the logic of all the acts relating to laborstandards. One lumber manufacturer at a conference in 1939 adopted a slogan whichcaptured the sense of something having been lost in the struggle over labor relations, butalso of something very substantial having been gained: "Yesterday is Gone. Forget it!Today is Here. Use It!"8686 Timberman, February 1939, 9.50BIBLIOGRAPHYSECONDARY SOURCES Bellush, Bernard. The Failure of the NRA, (Norton : New York, 1975).Bernstein, Michael. The Great Depression: Delayed Recovery and Economic Change inAmerica. 1929-1939 (New York: Cambridge University Press, 1987).Douglas, Paul H. and Joseph Hackman, 'The Fair Labor Standards Act of 1938,' PoliticalScience Quarterly, 1938.Ficken, Robert E. The Forested Land: A Historyin Western Washington(Seattle, 1987).Ficken, Robert E. Four Generations of Management:th_e_ampsoji-R e tor (Santa Cruz,California Forest History Society, 1977).Fickle, James E.^ South and the "New Comnetition". Trade AssociationDevelopment in the Southern Pine Industry (University of Illinois Press, 1980).Glock, Margaret. Collective Bargaining in the Pacific Northwest Lumber Industry,(Institute of Industrial Relations, University of California, Berkeley, 1955).Hawley, Ellis W. The New Deal and the Problem of Monopoly (Princeton UniversityPress: Princeton, 1966).Hawley, Ellis W. "Three Facets of Hooverian Associationalism: Lumber, Aviation, andMovies, 1921-1930", in Thomas K McCraw ed., Regulation in Perspective (Boston,Harvard University, 1981).Hays, Samuel P. ClkuLenrAtiAi amd_fligap_elnif_ELcienc (Cambridge, HarvardUniversity Press, 1959).Hidy, R. W. Tinber and Men: The Weyerhauser Story (New York: Macmillan, 1963).Himmelberg, Robert F. The Origins of the National Recovery Administration (NewYork: Fordham University Press, 1976).Huthmacher, Joseph H. Senator Robert F. Wagner and the Rise of Urban Liberalism,(Atheneum: New York,1971).Hyman, Harold M.^ Spruce: Origins of the 4L ^Angeles, 1963).Irons, Peter H. The New Deal Lawyers, (Princeton, 1982).Jensen, Vernon. Lumber and Labor (New York: Farrar and Rinehart, 1945).James, Lee. "Restrictive Agreements and Practices in the Lumber Industry, 1880-1939,"Southern Economic Journal 13.Loehr, R.C. Forests foy the Future: The Story of Sustained Yield, (St Paul: MinnesotaHistorical Society, 1952).51Lindblom, C. "The Market as Prison", Journal of Politics 44.Mead, Walter J. Mtrgers&_miEconomicIndustry (Portland, Oregon, Forest and Range Experiment Station, 1964).Nichols, Claude W. Brotherhood in theLoggersLumbermen. A twenty year attempt at industrial cooperation (Phd. Dissertation,University of Oregon, 1959).Olson, Mancur. The Logic of Collective Action (Cambridge, 1965).Robbins, William G. "Hard Times in Paradise", Coos Bay. Oregon, 1850-1986,(University of Washington Press, 1988).Robbins, William G. Lumberjackscks anc_ h_i I,mn of the US LumberIndustry, 1890-1941 (College Station: Texas A&M University Press, 1982).Rogers, Joel and Joshua Cohen, opplituj. (New York: Penguin, 1983).ra Toward a Tr sform o of Ame ica Schlesinger, Arthur M. The Coming of the New Deal (Houghton Mifflin. Boston, 1958).Silcox, F. A. 'Forestry and Labor,' Journal of Forestry, 1920Todes, Charlotte. Labor and Lumber (New York: International Publishers, 1931).Twining, Charles E. Phil Weyerhauser. Lumberman (Seattle, University of WashingtonPress, 1985).Tyler, Robert. Rebels of the Woods: ^ the Pacific orthwe (Eeugene:University of Oregon Books, 1967).Tyler, Robert. "The US Government as Organizer The 4L", Mississippi Historical Review, 1960.Vittoz, S. New Deal Labor Policy and the American Industrial Economy. (Chapel Hill:University of North Carolina Press, 1987).Theses and Dissertations Buechel, Henry Theodore. Labor Relations in the West Coast Lumber Industry M.A.thesis, State College of Washington, 1936.Gordon, Colin. New Deal, Old Deck: Business. Labor. and Politics. 1920-1935 Ph.D.,University of Wisconsin-Madison, 1990.Periodicals American Lumberman. 1930-1939.Four L Lumber News. 1930-May 1937.Timberman. 1930-1939.52West Coast Lumber Facts. 1941.West Coast Lumberman. 1930-1939.Public Documents Keezer, Dexter M. The Douglas Fir Lumber Industry. An inter-departmental studyconducted under the directon of Dr. Dexter M. Keezer for the Bureau of Research and Statistics of the Advisory Commission to the Council of National Defense. March 1941.House of Representatives, Special^ l theUnited States, October 3 1930.President's Committee on Industrial Analysis, Report on the National RecoveryAdministration, February 1937.Manuscript SourcesMerrill-Ring Company records, University of Washington Archives.St Paul and Tacoma Lumber Company records, University of Washington Archives.53
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Reluctant realists: the Pacific Northwest lumber industry, federal labor standards and union legislation during the New Deal
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