6. THE PROBLEM WITH LAISSEZ-FAIRE

The economic crisis had exposed grotesque disparities between the rich and poor. There were two Americas, and they were vastly different. The assets of the rich had swelled to unbelievable levels during the boom of the late 1920s. One percent of the people owned 59 percent of America’s wealth by 1929, yet simultaneously more than half the country’s population of 123 million struggled in poverty, trapped below a minimum level of subsistence.

These millions had little recourse if they had no work. There was nothing of what would later be called a “safety net.” In this Darwinian struggle for survival, there were always more workers waiting to take the place of those who dropped from illness, frayed nerves, or exhaustion. There were a few rules governing child labor, life-threatening working conditions, job safety, and workdays that stretched human endurance: Oregon had passed a law limiting women in laundries and factories to a ten-hour workday, Massachusetts set a minimum wage for women, and all but nine states barred factory workers under the age of fourteen. But laws such as these specifically applied to women and children, and even so, they often worked for less than $2.50 a week. There were no such protections for men, nor was there job security or insurance against unemployment. In the view of John E. Edgerton, the longtime head of the National Association of Manufacturers, attempts to impose social goals through legislation were nothing more than meddling jealousy: “Society in general continues through political processes to unload its obligations upon industry, penalizing at every opportunity the silently rebuking superiorities of accomplishment.”

Edgerton owned woolen mills in Tennessee, which like other industries were working below capacity and had slashed the hours of employees. Testifying before a committee of the U.S. Senate, he said it concerned him not at all that families could not live on one or two days’ wages a week. “Why, I’ve never thought of paying men on the basis of what they need. I pay for efficiency,” he said.

Efficiency meant work practices such as the speedup and the stretch-out. On the Ford production lines, where men made $4 for a ten-hour workday, it was common practice for supervisors to increase the speed of the belts that moved the cars past the men assembling them. This made their jobs a trial of endurance, a whirlwind of bolting, riveting, and welding that left workers shaken and spent at the end of the day. Those who couldn’t keep up were fired. Henry Ford believed that “the average man won’t really do a day’s work unless he is caught and cannot get out of it.”

The stretch-out was favored by textile mill owners in New England and the South. Its essence was the same as the speedup—making workers do more work in less time for the same amount of money. Textile workers were paid even more poorly than autoworkers, and their numbers included children physically too small to work in the heavier industries. Whereas Ford’s security force monitored the time workers spent on bathroom and lunch breaks, in the textile mills the enforcer was the stopwatch. Weavers, carders, and strippers were timed doing their jobs. Then they were told to do a little more. Before long, weavers—many of them teenage girls—worked two and four looms for every one they had worked before, yet received the same meager wage. Like the auto workers, they paid the price in elevated stress levels and deteriorating health.

Since the turn of the century, the Supreme Court of the United States had helped business withstand almost every effort to reform practices such as these. Following its 1905 ruling in Lochner v. New York against a New York State law limiting bakery workweeks (for men) to sixty hours and workdays to ten hours, the Court cited liberty of contract under the Fourteenth Amendment to strike down state minimum wage laws. Liberty of contract meant that employers and employees were free to engage in working arrangements without government interference, a relationship that obviously favored the employer. The commerce clause of the Constitution gave Congress authority to regulate aspects of the production of goods sold in interstate commerce. But after the 1916 Keating-Owen Act used the clause to ban the sale of goods produced by factories that employed children under fourteen, mines that employed children younger than sixteen, and any facility where children under sixteen worked at night or more than eight hours daily, the court ruled in Hammer v. Dagenhart in 1918 that Congress had overstepped its bounds. Justice Oliver Wendell Holmes dissented in the five-to-four ruling. “[I]f there is any matter upon which civilized countries have agreed…'it is the evil of premature and excessive child labor,” he wrote. “I should have thought that…'this was preeminently a case for upholding the exercise of all its powers by the United States.” Another child labor law, passed in 1918, was also declared unconstitutional. Under Chief Justice William Howard Taft, the former president and fellow Republican appointed by President Harding in 1921, the court’s pro-business stance solidified. Among the consequences were shop clerks working for 10 cents an hour, brick and tile makers for 6, and lumbermen for a nickel; as many as 7 million children between the ages of ten and fifteen were still in the labor force.

Labor was seen as an annoying and easily abused necessity not only by industry but also by the highest levels of the government. When a cut in the prime interest rate spurred a brief rebound in the stock market early in 1930, treasury secretary Andrew Mellon forecast a recovery. “Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate,” he advised. “People will work harder, live a more moral life. Values will be adjusted, and enterprising people will pick up the wreck from less competent people.”

Yet it hadn’t happened quite as Mellon had predicted. Liquidating labor, by which he meant wholesale layoffs as industries cut production, forced perfectly competent millions out of their jobs and onto breadlines. Union leaders and reformers increasingly questioned the unrestrained laissez-faire capitalism that had allowed this to happen. They questioned tariffs that protected American manufacturers from cheap imports but prompted foreign governments to throw up tariffs of their own that halted U.S. exports, especially of farm products.

As the crisis worsened, and as the impoverished farmers and the unemployed and their advocates grew more outspoken, there was unheard-of talk of revolution. Frustrated officials kept warning Washington that people were running out of patience. As A. N. Young, the president of the Wisconsin Farmers Union, said when he appeared before the Senate Agriculture Committee in January 1932: “The farmer is naturally a conservative individual, but you cannot find a conservative farmer today…. I am as conservative as any man could be, but any economic system that has in its power to set me and my wife in the streets, at my age—what can I see but red?” Edward F. McGrady of the American Federation of Labor (AFL) also told a Senate committee, “If something is not done and starvation is going to continue, the doors of revolt in this country are going to be thrown open.” In June, three weeks after the Illinois Emergency Relief Commission telephoned the White House to say that half a million people in Chicago faced starvation if its relief stations had to close, Mayor Anton Cermak told the Senate it would be less expensive to lend his city $150 million to provide relief and pay teachers and city workers who had gone for months without paychecks than to send troops later.

The anger and frustration were indeed rich ground for agitators. All across the country, Socialists and Communists looked for advantage among the jobless and hungry, a toehold for their radical political goals. They organized rent strikes, rallies, marches for jobs and against hunger. As the protests swelled, the forces of law and order struck back, their arsenals fully loaded with guns as well as words.

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