On April 25, 1944, President Franklin D. Roosevelt issued Executive Order 9438. The order directed the Secretary of Commerce to seize control of one of the nation’s most prosperous retail businesses: Montgomery Ward. This controversial step was a prime example of the federal government’s use of the Smith-Connally Act during World War II.
After the attack on Pearl Harbor and the United States’ subsequent entry to the war, President Roosevelt called for a “no-strike pledge” to ensure manufacturing efforts essential to the war effort would continue running. Despite the pledge, instances of strikes increased as the war demanded more production, which meant longer hours and price increases for working-class Americans. In 1943, the United Mines Workers of America went on strike, posing an immediate threat to war production. Roosevelt responded by issuing an executive order allowing the government to seize production themselves. Roosevelt also signed legislation making it illegal to interrupt essential war production through strikes. Moving one step further, two Congress members, Senator Connally and Representative Smith passed a bill (the Smith-Connally Act) giving the president power to seize production of any company that was seen as important to the war effort in any way. This was not a popular bill, even with the president. Roosevelt vetoed it when it came across his desk, arguing that the bill would increase tensions between management and workers. The veto was overturned by Congress.
In 1944, trouble started with Montgomery Ward, a retail company second only to Sears Roebuck in mail-order sales. The company’s CEO, Sewell L. Avery, who was no great fan of the president, refused to comply with agreements made with the United Retail, Wholesale, and Department Store Union. Avery was reprimanded and ordered to comply by the National War Labor Board, as Montgomery Ward supplied parts used in military aircraft and agricultural machinery. Avery refused, claiming that Montgomery Ward’s business was mostly not war related, though the company had certainly taken advantage of grants of priority status from the War Production Board, giving them access to materials that were difficult to source during wartime. Finally, in April 1944, Roosevelt issued an executive order to seize Montgomery Ward’s Chicago facilities. Sewell refused to stand down and had to be carried from the building by members of the National Guard, resulting in an iconic photo (be sure to look it up; it doesn’t disappoint). The move was not popular. A Gallup poll showed that 60% of Americans thought the seizure was a mistake and an instance of government overreach. The government yielded control two weeks later.
In December that year, Montgomery Ward was seized by the federal government for a second time for the same reason. In a statement given by Roosevelt about the seizure, he said, “The Government of the United States cannot and will not tolerate any interference with war production in this critical hour . . . Strikes in wartime cannot be condoned, whether they are strikes by workers against their employers or strikes by employers against their Government.” The government held control of the company until the war ended the next year.
Learn more here:
- https://www.lawfaremedia.org/article/remembering-montgomery-ward-seizure-fdr-and-war-production-powers
- https://www.history.com/this-day-in-history/fdr-seizes-control-of-montgomery-ward
- https://www.nationalww2museum.org/war/articles/smith-connally-act-and-labor-battles-home-front
- https://www.presidency.ucsb.edu/documents/statement-the-seizure-montgomery-ward-co-properties
