Horizontal v. Vertical

A protracted quarrel over NRA's labor policy, still the reddest-hot issue in Washington, last week cost Administrator Johnson the services of his right-hand man for industry and seriously breached his recovery organization for the first time. Tall, well-groomed Dudley Gates, who left the vice-presidency of Marsh & Mc-Lennan (large Chicago insurance firm) to serve without pay under General Johnson, his longtime friend, resigned as Deputy Administrator for Industry. His chief praised his loyalty, honesty and ability but admitted that their differences over interpreting the law's collective bargaining provision were irreconcilable. The Gates resignation was widely regarded as a significant milestone in NRA's trend toward a complete unionization of industry.

From the start General Johnson's position has been that NRA should be strictly neutral on the union issue, leaving workers free to choose their own methods of collective bargaining. Enthroned at NRA headquarters, the American Federation of Labor has worked night & day to induce them to choose its existing unions organized horizontally throughout industry on the basis of crafts. Deputy Administrator Gates viewed this system of unionization with alarm, thought that craft organizations were obsolete. His rationalization of the problem was as follows:

To bargain effectively workers must unionize. Industries are organizing from top to bottom as trade associations. Workers should scrap the old craft unions and organize vertically on the basis of industries. There should be one union for steel, another for automobiles, a third for coal, and so on. Each plant would be organized as a solid unit of its respective industrial union. For example, plumbers, bricklayers, electricians, carpenters and steel constructors, instead of belonging to separate trade organizations, should form one compact building union for that industry. Likewise typesetters, pressmen, engravers and binders should join forces for one vertical union in the printing industry. Each industrial union should pick its own leaders from among its own shop workers.

Deputy Gates' proposal sounded like a death threat to the A. F. of L. and its national leaders, who saw red at mention of his name. Within NRA he did all he could to buck the A. F. of L. tide for horizontal unionization. Several weeks ago he filed with General Johnson a memorandum:

"The company union appears to be doomed. . . . An effort to harmonize existing attitudes of open-shop employers and Federation leaders is futile. To force the issue would precipitate a national crisis. . . . The conventional types of trade unions and employers' associations are both essentially provocative. . . . The industry should be the unit in establishing the field of collective bargaining. . . . This means a vertical union in each industry, free of domination or control by employers or outside labor leaders. . . . The A. F. of L. seeks to force unionization throughout industry and persists in mis- representing the NRA to achieve that end. . . . Forced unionization by intimidation, violence or misrepresentation will lead to strikes and maybe civil war. Their program ought to be stopped!"

General Johnson was inclined to agree with his deputy in theory but not in practice. He held firmly to the idea that workers must do their own union choosing without any NRA promptings, even intimated that Deputy Gates was breaking the law by trying to "stop" the A. F. of L. from organizing its horizontal unions.

Upon his resignation Deputy Gates returned to his Winnetka home where he has what is believed to be the finest collection of Currier & Ives fire prints. Even these looked cooler than the labor issue he left behind in Washington.

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