by Robert G. Rodden

Repression And Retreat 1920--1930

During the Great War 1914-1918 the Wilson Administration gave unions more recognition than they ever had before. From Colonial times state and federal governments usually helped employers fight unions. But President Wilson, seeking to grease the wheels of war production, believed unionized workers, with grievance procedures would be more productive than individual workers with grievances

This unprecedented government encouragement, together with the rapid buildup at arsenals, armaments and ammunition plants, shipyards and other metalworking operations, swelled IAM membership to previously unimagined heights. By the end of 1918, the IAM was America's largest union.

Wages and working conditions were good and getting better. The future never looked so rosy. And when the government took over operation of the nation's railroads the outlook seemed even brighter. The IAM had advocated public ownership of public utilities since 1899. Now Johnston and other top IAM officers were confident that government operation would prove so efficient the railroads would never be turned back to private ownership.

The newly appointed Railroad Commissioner, William McAdoo, was Wilson's son-in-law and one of the leading progressives of his time. As railroad commissioner he banned discrimination against railroad workers because of union membership and established a system of National Adjustment Boards to settle grievances and disputes. With this protection the IAM's membership soared in the nation's railroad roundhouses. Even the most stubbornly open shop railroad in the county--the rich and powerful Pennsylvania--was organized. By 1919 IAM membership went over the 300,00 mark, almost triple what it had been when the 1916 Grand Lodge Convention was held in Baltimore.

At the war's end the IAM waged a vigorous but fruitless campaign to keep the railroads under government control. The union sponsored, and persuaded the rest of the AFL to support, a plan known as the Plumb Plan to transfer ownership of the railroads permanently to the federal government. Union spokesmen argued that railroads should be operated for the public interest rather than for private profit.  Congress, in its infinite wisdom, voted for "normalcy." In January 1919, rail properties were returned to their private owners. At the headquarters of the American Association of Railway Executives, the first order of business was to roll back the gains won by unions during government operation. Industry chiefs began preparing for the showdown that cam in 1922.

As shipyards and munitions factories closed one after another in 1919, the IAM's membership began a long, steady slide from the wartime high. Even so the organization entered the decade that has come to be known as "The Roaring Twenties" in a spirit of optimism. Johnston told delegates  to the 1920 Convention in Rochester that despite increased employer opposition he was confident the membership would reach 400,000 or even 500,000 in the next four years.

In 1920 railroad unions still held the gains made during the war. Standard agreements had been negotiated and were in effect in both the United States and Canada. They provided for union recognition, training and seniority.

In October, 1920 the IAM resolved a long-standing jurisdictional dispute with the Amalgamated Society of Engineers (ASE).  This was primarily a union of British machinists with headquarters in England. In the early years immigrating British journeymen brought their union with them and stuck with it even after the AFL gave the IAM exclusive jurisdiction over all employed in the machinist trade. The IAM and ASE crowded one another from the start. A temporary peace was established in 1904 but over the years bitter and continuing clashes made it clear the North American continent only had room for one union of machinists.

In 1919, Journal editor Fred Hewitt and the Canadian GVP, J. A. McClelland, traveled to Manchester, England to meet with delegates to and ASE Convention. Following this meeting the Amalgamated Society of Engineers (today called the Amalgamated Engineering Union) agreed to withdraw entirely from the North American continent and cede its American and Canadian "branches" to the IAM. This agreement helped to slow, but could not stop, the postwar erosion of IAM membership.

With the dedication of a new headquarters on Mt. Vernon Square in 1920 the IAM achieved a long sought goal. In place of leased office space in the headquarters of the American Federation of Labor the members finally had a home of their own. After years of talking and dreaming of a "Machinists Building" the union erected a seven-story structure near the heart of the Nation's Capital. It cost less than $375,000 including land.*
*After the "Old Machinist Building" served as Grand Lodge Headquarters for thirty-six years it was sold to AFSCME for $525,000.
The Grand Lodge staff, which now numbered about seventy, including officers, bookkeepers, stenographers, mail handlers, stock clerks, the strike desk, file clerks and the Journal staff, took over the two top floors. The rest of the building was rented out, mostly to other unions. The ground floor was leased to the Mt. Vernon Savings Bank and a printing plant. Both were owned by the IAM.

Business Unionism and Union Businesses

According to Johnston the IAM established the Mt. Vernon Bank so that the hard-earned wages of working men would not have to be bankers who would use them against unions. In addition to the dignity (and rent) Mt. Vernon Bank gave the Machinists Building, it was also intended to assure a higher return on the union's investments and to provide a source of loans for employers willing to deal fairly with the union. Loans were made to machine shops that other bankers blackballed because they were unionized at a time when the NAM was leading a concerted national campaign of union-busting.

The IAM was the first of many unions to enter what became known as "labor banking" in the 1920's. By 1926, thirty-five unions had established banks with total assets of more than $126 million. In addition to the bank the IAM bought and operated a printing plant, various machine shops and a ship repair yard in Virginia. The printing plant was set up to take care of the union's own printing needs which were considerable by this time. The machine shops and shipyards were meant to give jobs to machinists who were out of work because of strikes or blacklisting.

The IAM's business ventures proved more idealistic than profitable. The machine shops, shipyard and printing plant all went broke within a few years. Few of the thirty-five labor banks in existence in the mid '20's survived the economic catastrophe of the 1930's and the Mt. Vernon Savings Bank was no exception. It never re-opened after the four-day "Bank Holiday" which President Roosevelt declared after taking office in March 1933. Assets were taken over by a successor entity, the Mount Vernon Mortgage Corporation. Following some rather complicated legal maneuvering in the mid and late '40's the IAM disposed of all interest and was freed from further liability. According to the 1948 Officers' Report, "All of those having had money on deposit with the Mount Vernon Savings Bank at the time of its closing have now been taken care of in full payment of dollar for dollar."

In the early 1920's the IAM tried to attract and hold members by offering benefits outside of collective bargaining. In addition to raising the maximum death benefit from $200 to $300, delegates to the 1920 Grand Lodge Convention mandated inexpensive life insurance for all IAM members. This was at a time when few working families could afford such protection, when workers in many hazardous industrial jobs often could not get insurance at any price. Although premiums for IAM policies were low and members did not have to pass a physical few new members were attracted and only a small fraction of the existing membership purchased the insurance.

The union also tried to get members involved in a "sales" campaign by offering a $1.00 commission for every new member recruited. This netted a grand total of 4,000 members.

In another unorthodox effort to strengthen the membership base Johnston got the President of Mexico, and IAM member, to agree to channel all orders from his government through the union. Whenever possible Mexican orders went only to companies agreeing to union shop contracts with the IAM.

In a more traditional effort the Grand Lodge distributed two-million pieces of organizing literature and mailed out thousands of letters to try to build interest. More than 300 volunteers followed up with house calls.

Class Warfare in the 1920's, 
The NAM and The American Plan



Comments or Suggestions? E-mail the Communications Officer
of Siouxland Lodge 1426 IAMAW
Greg Enright