Labor History

On October 24, 1940, the Fair Labor Standards Act, passed two years earlier, went into effect in the United States. A sweeping reform bill that included provision for a federal minimum wage, weekly limits on working hours, and heavy restrictions on child labor, the act changed the labor market, setting the standards that we abide by now. There has been a call in the last few years for labor reform to adjust the workplace to the world we live in now. So, how did they make it happen in 1938?

A change in labor standards was an election promise by President Franklin D. Roosevelt. Roosevelt began his first term under the shadow of the Great Depression. He signed the National Industrial Recovery Act, hoping to raise wages and create jobs. There were provisions for a shorter work week, a $12 per week minimum wage, and child labor restrictions. Unfortunately, most parts of the bill, including restrictions on child labor, were struck down as unconstitutional by the Republican-dominated Supreme Court at the time. This sentiment trickled down through the circuit courts as well. One judge said, “the so-called Child Labor Amendment . . . will result in the filing, by the coming generations, of the reformatory institutions and prisons beyond their capacity. The failure of parents to teach and compel children to perform reasonable and proper labor while yet young is the prime cause of the wave of crime in this country.”

In 1936, Roosevelt campaigned on labor reform as the basis for his second term. He won the election 523 electoral votes to 8. He felt that this proved the country’s commitment to labor reform. To encourage change, Roosevelt suggested that he might add seats to the Supreme Court to be sure the three branches of legislature were on the same page. Shortly after, conservative Justice Owen Roberts sided with the liberal judges in a case regarding minimum wage. This opened the gate to more legislation moving through the House and Senate regarding minimum wage, child labor, and weekly hour ceilings. Frances Perkins, Roosevelt’s Labor Secretary and the first female member of the cabinet, worked tirelessly to put together labor reform packages that would accomplish what they wanted while still appealing to the Republican members of Congress. What finally convinced Republicans to move the bill through were two Senate seats in Republican strongholds that were lost to pro-labor reform candidates. At this point, many Republican congress members seemed ready to make a deal. The bill that finally made it through in 1938—the Fair Labor Standards Act—provided for a 40-cent-per-hour minimum wage, a 40-hour work week, and a restriction on hiring children under the age of 16.

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In fairness to Franklin D. Roosevelt, he didn’t want to do it. But, Sewell Avery, the CEO of Montgomery Ward, was refusing to work with labor unions, and the US was a country at war.

Montgomery Ward & Co.S Building, Chicago Source: Wikimedia Commons

At the time, Chicago-based Montgomery Ward was equivalent to Amazon today. According to Matthew Waxman, a law professor at Columbia University, “By 1943, Montgomery Ward served 30 million customers not only through mail-order deliveries but also via 600 stores and 78,000 employees in 47 states. Two-fifths of U.S. mail-order business went through Montgomery Ward, as did one-fifth of all manufactured products purchased by American farmers.”

Avery had capitulated to Roosevelt once in 1942, but by the beginning months of 1944, he was not having it. Roosevelt’s fear was that a labor strike would interfere with the war effort, and according to the War Labor Disputes Act of 1943, the National War Labor Board could get in the middle of anything that might lead to a “substantial interference with the war effort.”

According to Waxman, Montgomery Ward’s attorneys maintained that Roosevelt was overstepping in the matter. On April 25, 1944, Roosevelt issued Executive Order 9438, where he proclaimed “that there are existing and threatened interruptions of the operations of the plants and facilities of Montgomery Ward and Company, located in Chicago, Illinois, as a result of labor disturbances arising from the failure of Montgomery Ward and Company to comply with directive orders of the National War Labor Board.”

Roosevelt ordered his then Secretary of Commerce, Jesse H. Jones, who hailed from my hometown of Houston, Texas, to seize control of Montgomery Ward’s headquarters, retail store, mail order house and warehouse in Chicago and to operate them for the “successful prosecution of the war.”

When a federal dispatch consisting of US Marshalls, deputies and soldiers visited Avery at the headquarters they were not only met with verbal resistance, but Avery refused to leave his office chair leading to the amusing photo that headlined throughout the country at time showing him being literally carried out of his office.

Sewell Avery being forced from his office
Source: Iconic Photos

Waxman, who made the extraordinary effort to read and summarize for us the very best part of Attorney General Francis Biddle’s memories on the incident who noted that Secretary of War Henry Stimson had pleaded unsuccessfully with Roosevelt that “[E]very man was needed in the war effort; it is a great army, Mr. President, it must not be sent to act as clerks to sell women’s panties over the counter of a store.”

As a woman, I take exception to the fact that Stimson found our under-clothing the furthest possible thing from a successful prosecution of the war, but I get his point, rude as it may be.

Avery fired back in several ways including a statement released to the Associated Press on May 10, 1944 and reprinted in the New York Times where he called the seizure illegal and demanded that the matter be resolved in court. “Ward’s has been deprived of its property by force and bayonets,” he wrote.

According to Waxman, due to public disapproval, the government released Montgomery Ward back to Avery two weeks later, but then seized the company again, and this time they seized control in nine cities including Chicago after a labor strike broke out at the end of 1944. Litigation ensued and it looked like the government would win, but the end of the war brought an end to the matter.

To learn more about the Montgomery Ward Seizures, visit these resources:

Lawfare: Remembering the Montgomery Ward Seizure: FDR and War Production Powers
War Labor Disputes Act of 1943
Executive Order 9438
In Brief Authority, the Memoir of Francis Biddle
The New York Times: Text of Avery’s Statement

Transforming the Workplace: The Fair Labor Standards Act

April History Hits: When FDR Seized Montgomery Ward