by Robert G. Rodden

Rising Prices and the Little Steel Formula

With so much of America's production going to the military, shortages of consumer goods developed at a time when many people had money for the first time in years. Despite government efforts to cool the consumer economy prices began to soar. In many communities, especially in and around aircraft factories and war plants, housing shortages became critical and rent became outrageous. In crowded defense town, stories were heard of beds in rooming houses and apartments rented by the shift, with a night shift worker crawling between still warm sheets as a day shift workers left for the plant.

Rising rents and prices ate away the purchasing power of worker dollars and unions had no alternative but to insist on wage increases to offset rising living costs. After months of deliberation the War Labor Board came to grips with this issue in a bargaining impasse involving steel producers collectively know as "Little Steel." The Little Steel formula recognized that rising prices justified wage adjustments, but limited inequity increases to no more than 15% of the January, 1941 wage rate.

During the war years almost every single IAM family regularly bought War Bonds and every issue of the Journal carried such exhortations as "For Victory and Peace Buy U.S. War Savings Bonds and Stamps Now!" Despite long hours of overtime on the job, many IAM members served as neighborhood air raid wardens. Almost everyone had someone--a son, daughter, brother, father, or close relative--in uniform in one or more of the theaters of operation. The patriotism of America's workers was self-evident. And yet tensions and frustrations sometimes boiled over into strikes and near strikes.

The IAM and the War Labor Board

When the War Labor Board (WLB) was created in January, 1942, IAM leaders quickly recognized that the rules of the game had been changed: for the duration the WLB would be a party to every agreement negotiated between labor and management. T assure the IAM members received the best possible representation in Board proceedings, the Executive Council decided to train certain staff members to handle WLB cases in the twelve cities with regional boards. A carefully selected group of GLR's and special reps were brought to Grand Lodge and put through a cram course in preparation of WLB cases. Through out the war they assisted business reps, GLR's and local lodge officers in presenting wage cases.

As an organization with many skilled craftsmen, relatively few IAM members worked at substandard wages when the war began. This meant the IAM had more difficulty than other unions in justifying wage increases under the Little Steel Formula. In 1943, however, the board ruled that wage adjustments would be permitted if they were necessary "to the effect prosecution of the war." Both before and after the 1943 interpretation the IAM's WLB representatives fought to maintain equity for IAM members.

The WLB's final postwar report showed that the IAM brought more cases than any other union--more the 8,000 altogether. These included some of the largest cases handled by the board, such as one affecting 56,000 Consolidated-Vultee employees in plants at Ft. Worth, Nashville, Allentown, New Orleans, Miami, Elizabeth City and Tucson. In another noted case involving 42,000 IAM members at Curtiss-Wright plants in Buffalo, St. Louis and Louisville the record filled more than 4,000 pages.

WLB work was in addition to cases handled by IAM reps before the NLRB and other government agencies. A few months after the Japanese surrendered, the Journal reported that during the war years IAM reps filed an average of one NLRB case a day.

Protest March in Seattle

In January, 1943 a monstrous mass meeting of IAM members at Boeing erupted into a spontaneous march protesting repeated WLB delays in long-promised wage adjustments. The officers called the meeting to give a progress report on the Board's long awaited decision. Separate meetings were planed for the different shifts, but so many members left the plant to come to the first meeting the production line had to be shut down.

Some 15,000 agitated IAM members crammed into every corner of the large specially-rented hall to hear a report from the directing business representative (and later GVP), Harold Gibson. In a carnival spirit someone made a motion from the floor to march on City Hall. Clad in white coveralls, "Gibby" led 15,000 flag, placard and banner carrying Machinists in an impromptu parade through the streets of downtown Seattle. When hizzoner the mayor looked out of his third floor window he saw the largest demonstration in Seattle history, with traffic blocked in all directions. City Hall was surrounded by Machinists as far as the eye could see.

After the mayor made some friendly and properly sympathetic remarks Gibson called upon everyone to return to work--which they did. Although the crowd was good natured and orderly the press denounced the demonstration as sabotage, sensationalizing it in flaming headlines from coast to coast. From Washington a desk-bound Air Force general added his two cents worth of inflammatory rhetoric with a wire to Gibson characterizing the protest as near treason. In his return wire Gibson told the general where he could go. The War Labor Board got the message. The award finally handed down for the Boeing workers broke the Little Steel formula ceiling for the first and only time.

Slowdowns and Strikes in San Francisco

Throughout the war members of Local 68 outraged public opinion with a series of strikes and slowdowns affecting war production. Lodge 68's business representatives were Harry Hook and the Ed Dillon who had challenged Wharton and the Executive Council at the 1936 Grand Lodge Convention. Oldtimers recall Hook as a talkative, two-fisted tough who could belly up to the bar with the best. His sidekick Dillon was a loner, a non-smoking, non-drinking, church-going bachelor who seemed to have no friends or interests outside the union hall. When Dillon mounted the rostrum at union meetings he would slam his coat to the floor, snap his suspenders and unleash a stream of fir-eating, boss-baiting oratory, bringing the members to a pitch of frenzied fury. Together Hook and Dillon were a formidable team. Hook was the muscle, Dillon the brains.

Local Lodge 68 was crucial to the war effort in San Francisco and Northern California. Its 5,000 highly skilled machinists were not only essential to many metalworking companies in San Francisco--the "up town shops"--but Lodge 68's maintenance machinists wee the key to uninterrupted production in so-called "fringe shops"--can companies, sugar refineries, clothing factories, newspapers and food processors.

Working as a team Hook and Dillon negotiated some of the highest pay scales in the nation for San Francisco's machinists. When West Coast shipyards began to gear up for all-out production early in the war, Hook and Dillon got most of the employers to accept a master contract that provided Lodge 68 members with still better wages and benefits.

One large shipyard, Bethlehem, refused to go along. After more than a month of futile negotiations Hook and Dillon asked for, and received, strike sanction from the Grand Lodge. Since Bethlehem was producing shipping bottoms critically needed at that particular moment in history, Lodge 68's walkout set off a nationwide furor in the press. In Washington the Senate set up a special panel headed by a little known Senator from Missouri, Harry Truman, to investigate the situation.

Hook and Dillon flew to Washington but the committee refused to hear Dillon because of suspected Communist connections. According to the Journal, Hook was given a hard time when he tried to explain the union's position. The committee also subpoenaed Harvey Brown and AFL President William Green. Characteristically, Green poured gasoline on the fire by describing these working men, striking one of America's most notoriously anti-union corporations, as "outlaws entitled to no consideration at the hands of organized labor."

Neither the Senate's investigation nor the committee's browbeating was enough to get Lodge 68's members back to work. With a crisis building in the shipyards, Roosevelt appealed directly to Harvey Brown. Under such pressure the Executive Council withdrew the strike sanction and ordered Lodge 68 to call off the strike. In a highly charged meeting a majority o the members defied both the government and the Grand Lodge, voting 385 to 370 to stay out until Bethlehem accepted the master agreement. The strikers finally did return to work but only reluctantly and not until they got assurance from the federal Office of Production Management that a list of unresolved grievances would be taken care of . And not before Emmet Davison himself went to San Francisco to personally appeal to their patriotism.

The walkout at Bethlehem set a pattern that continued through the rest of the war. Hook and Dillon violated the IAM's no-strike pledge in 1943 by pulling the pin on a company that refused to agree to a cost-of-living escalator on the ground that it would violated federal wage policy. Since the walkout involved production essential to the war, the Navy eventually seized the plant, fired the strikers and barred Hook and Dillon from the premises. The two retaliated by announcing that no Bay Area machinist would work more than forty-eight hours a week no matter how dire the emergency. Hook and Dillon also advised their members to slow down with such tactics as "spreading out" vacations. This directive came when most plants in the area were struggling to catch up with backlogs of war orders.

Both the War Labor Board and the Executive Council ordered Hook and Eillon to drop the ban on overtime, but they thumbed their noses at the government and the Council. The FBI was brought in to investigate reports of members harassed for defying "arrogant union bosses." As expected, adverse findings were extensively reported and widely circulated in the press. Ultimately the Navy seized 102 metalworking plants in San Francisco area. Other federal agencies mopped up remaining resistance by applying penalties developed a year earlier against striking coal miners. Workers who refused overtime were fired an blacklisted from wartime industries, had their gasoline ration cards lifted and often found their draft status reclassified. Lodge 68's closed shop certifications were cancelled.

Temporarily beaten, Hook and Dillon warned employers they would return after the war. When the showdown cam in 1946, Hook and Dillon were ready to act as a law unto themselves. In addition to the employers they took on Harvey Brown and the Executive Council, a mistake that proved to be their undoing.


Notes on A Union in Wartime,
Jack and Heintz: "The Workers' Paradise",
Nibbled by Minnows,
The End of an Era


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