Chapter IX 2 Blackguards and Blacklists
“We see no reflection in any way in the employment of detectives,” an attorney representing the Michigan Manufacturers Association told the members of the Senate Civil Liberties Committee in 1937. “‘Detective’ and ‘spy’ are two names that are used in a derogatory sense, but even a spy has a necessary place in time of war.”
In the war against trade unionism in America, labor espionage had long been regarded by big business as a weapon of vital importance. For more than half a century, secret battalions of professional labor spies, detectives, agents-provocateurs and paid informers had been waging clandestine warfare against the labor movement. But it was not until the advent of the New Deal, and the outmoding of the crude strikebreaking tactics of the Bergoff era, that labor espionage operations reached their peak offensive.
By 1936 there were more than 200 labor espionage agencies doing a land office business in the United States.
Three of the largest and most successful of these agencies, with branch offices functioning in dozens of cities, were the Pinkerton’s National Detective Agency, the Railway Audit and Inspection Company and the Corporations Auxiliary Company.
Among the approximately 500 clients serviced by Corporations Auxiliary Company during 1934-1936 were these concerns:
Aluminium Co. of America; Kellogg Co.; Chrysler Corp. (23 plants); Kelvinator Corp.; Diamond Match Company; Midland Steel Products Co.; Dixie Greyhound Lines; New York Edison Co.; Firestone Tire and Rubber Co. ; Radio Corp. of America; General Motors Corp. (13 plants); Standard Oil Co.; International Shoe Co.; Statler Hotels, Inc.
Here is a partial list of the firms with which the Pinkerton Agency had accounts:
Bethlehem Steel Co.; National Cash Register Co.; Campbell Soup Co.; Montgomery Ward & Co.; Curtis Publishing Co. Pennsylvania R.R. Co. General Motors Corp.; Shell Petroleum Corp.; Libbey-Owens Ford Glass Co.; Sinclair Refining Co.
The Railway Audit and Inspection Company included these companies among its clients:
Borden Aiilk Co.; Frigidaire Corp.; Carnegie-Illinois Steel Corp.; Pennsylvania Greyhound Bus Co.; H. C. Frick Coal and Coke Co.; Western Union; Consolidated Gas Co. of New York; Western Electric & Mfg. Co.
“The known total of business firms receiving spy services from these [labor espionage] agencies is approximately 2,500,” the Senate La Follette Committee investigating violations of free speech and rights of labor reported in December 1937. “The list as a whole reads like a bluebook of American industry.”
The labor espionage expenditures of General Motors alone amounted to approximately $1,000,000 from January 1934 to July 1936.
According to statistics compiled in 1936 by Heber Blankenhorn, industrial economist on the National Labor Relations Board, the total operating costs for that year of labor espionage agencies in the United States exceeded $80,000,000.
“The main purpose of industrial espionage,” writes Leo Huberman in The Labor Spy Racket, “is union-prevention and union-smashing.”
To accomplish these aims, labor espionage agencies depended chiefly on the systematic promotion of disunity and dissension among employees, particularly through the use of Red-baiting; the widespread distribution of anti-union propaganda; and the compilation of extensive blacklists of union members and sympathizers.
As privately advertised by Robert J. Foster of the Foster Industrial and Detective Bureau, these were the services offered by his firm:
FIRST: — I will say that if we are employed before any union or organisation is formed by the employees, there will be no strike and no disturbance. This does not say that there will be no unions formed, but it does say that we will control the activities of the union and direct its policies provided we are allowed a free hand by our clients.
SECOND: — If a union is already formed . . . although we are not in the same position as we would be in the above case, we could— and I believe with success— carry on an intrigue which would result in factions, disagreement, resignations of officers and a general decrease in membership.
The Corporations Auxiliary Company used a more genteel approach in the solicitation of business:
We start on every operation with the idea of making our operative a power in his little circle for good, and, as his acquaintance grows, the circle of his influence enlarges . . .
Wherever our system has been in operation for a reasonable length of time. . , the result has been that union membership has not increased, if our clients wished otherwise. A number of local unions have been disbanded. We eliminate the agitator and the organizer quietly, and with little or no friction.
Some of the duties of labor spies were outlined in these instructions from the Railway Audit and Inspection Company to one of its hundreds of undercover agents:
It will be necessary that you mingle with the employees so that you can win their confidence to such an extent that the men will confide in you, as to just what they are doing, etc.
It will be necessary that you render a good, detailed, lengthy report each and every day covering conditions as you find them, reporting in detail the conversations you hold, those you overhear, etc.
Report . . . whether there is any union agitation, etc.
On Sundays and when not working in the plant it will be necessary that you render a report, and in order to do so, so that the client can be billed for the day, it will be essential that you associate with some of the employees, i.e., visit them, so that you will be able to obtain from some of the employees information that you may be able to secure in no other way, for much information of value to the client is gained in this way.
Of all information gathered by labor spies, the identification of active trade unionists was generally considered most important. Each week lengthy lists of such employees were compiled by labor espionage agencies and turned over to their clients. Employees thus designated were promptly fired and their names added to confidential blacklists. Describing a typical instance of the use of such blacklists, Edwin S. Smith, a member of the National Labor Relations Board, stated:
I have never listened to anything more tragically un-American than stories of the discharged employees of the Fruehauf Trailer Co., victims of a labor spy. Man after man in the prime of life, of obvious character and courage, came before us to tell of the blows that had fallen on him for his crime of having joined a union. Here they were— family men with wives and children— on public relief, blacklisted from employment, so they claimed, in the city of Detroit, citizens whose only offense was that they had ventured in the land of the free to organise as employees to improve their working conditions. Their reward, as workers who had given their best to their employer, was to be hunted down by a hired spy like the lowest of criminals and there- after tossed like useless metal on the scrap heap.
Another service featured by labor espionage agencies was the forming of company unions. Created with the aim of preventing employees from joining bona-fide unions, and secretly controlled and financed by the employers themselves, these company unions were frequently officered by professional labor spies.
“Where it is desired that company unions be formed,” stated a brochure published by the labor-espionage Butler System of Industrial Survey, “we first sell the idea to the workers and thereafter promote its development into completion. Hundreds of such organizations have been formed to date.”
By 1935, according to a survey conducted by the Twentieth Century Fund, approximately 2,500,000 workers in the United States were covered by company union plans . . .
In addition, labor espionage agencies made a special effort to get their operatives placed as leading officials in bona-fide unions.
Posing as diligent trade unionists and sedulously cultivating popularity among their “fellow workers,” scores of labor spies manoeuvred their way into executive positions in the CIO, AFL and Railroad Brotherhoods. Once in these posts, they vigorously applied themselves to the task of undermining the unions through a variety of disruptive devices.
So successful were the efforts of one Corporation Auxiliary agent, who managed in 1935 to get elected as secretary of an AFL Typewriter Workers Local in Hartford, Connecticut, that the local was reduced from 2500 to 75 members within less than a year. In Flint, Michigan, another local with labor spies among its officers dropped from 26,000 members in 1935 to 122 members in 1936.
“It is very effective,” reported the Pinkerton agent, Lawrence Baker, regarding the labor espionage campaign for General Motors at the Fisher Body factory in Lansing, Michigan. “One time at Lansing-Fisher they were almost 100 per cent organized. And finally it went down to where there were only five officers left.”
In its preliminary report to the U. S. Senate on February 8, 1937, the La Follette Committee investigating violations of free speech and rights of labor stated:
It is clear that espionage has become the habit of American management. Until it is stamped out the rights of labor to organize, freedom of speech, freedom of assembly will be meaningless phrases. Men cannot meet freely to discuss their grievances or organize for economic betterment; they may not even express opinions on politics or religion so long as the machinery of espionage pervades their daily life . . .
The report added:
That private persons or interests should be allowed to maintain arsenals is surprising enough. That industry should be permitted to arm unscrupulous men under their own pay, gravely wearing the badge of the law is startling. That there is allowed to flourish a gigantic commercial enterprise in which employers collaborate with professional spies in assaulting citizens because they exert their lawful right to organize for collective bargaining, is shocking to any true defender of constitutional government.