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Despite the setback on the Landrum Griffin Act and corporate talk about union responsibility for cost-push inflation, the labor movement appeared to be politically robust at the end of the 1950s, in part due to a merger of the AFL and CIO in 1956. The visibility and strike successes of several big unions that had major contracts with the large companies in steel, auto, rubber, and other major industries contributed to this impression, as did the activism and calls for greater government spending by the UAW. Appearances to the contrary, unions were in fact in a defensive and declining position in the overall power structure. To begin with, less than a majority of union members were registered to vote, and not all of them voted Democratic (Boyle 1995, Chapter 5). Further, the number of workers in unions had stagnated at about 17 million between 1954 and 1960, and the percent of wage and salary workers in unions had declined from its near-high point of 34.8% in 1954 to 30.9% in 1960 (Mayer 2004, p. 22, Table A1).

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While the Flint drama was unfolding, the chairman of U.S. Steel decided for several reasons that it was time to make a deal with the unions, starting with the fact that New Deal Democrats controlled Pennsylvania, where the company had many of its mills (Bernstein 1969, pp. 466-473; Gordon 1994, p 229). Furthermore, the CIO's Steel Workers Organizing Committee was in any case winning over many members of the company's employee representation plan. In effect, union organizers were building an industrial union at U.S. Steel, and elsewhere, through the employee representation plans (Jacoby 1997, pp. 158-159; Zieger 1995, pp. 54-59). As a result, the steel company's chairman began secret meetings with Lewis that led to a signed agreement shortly after the United Auto Workers' victory over General Motors. The agreement saved Lewis from expending resources on what could have been a very long and tough battle, kept the many Communist organizers from rising to important positions in what was basically a top-down union, and provided a visible symbolic victory because U.S. Steel was still the largest industrial company in the United States. Change came easily and more completely at General Electric, where Gerard Swope and Owen Young, a director of Industrial Relations Counselors since the 1920s, were still in charge. When the workers voted to unionize, Young and Swope recognized the union immediately and began bargaining. The fact that the union was the largest of the Communist-dominated unions in the CIO made the bargaining all the more notable, but the fact that the leaders were Communists made no difference in terms of the company's willingness to deal with the union. As a result of these and other victories, the percentage of the nonagricultural workforce in unions rose from 6.9% in 1933 to 19.2% in 1939 (e.g., Cohen 2009, p. 304).

By 1937 the IRC was keeping its distance from labor conflicts. As Rockefeller said in a letter to King, the creator of his employee representation plan, in late April, 1937, just a few days after the Supreme Court ruled that the National Labor Relations Act was constitutional, he thought that employee representation plans "were generally doomed." Rockefeller went on to note that "the Harvester Company, the Goodyear Company, and now the subway company in New York City, have given up their industrial relations plans, which have worked successfully for many years, and are carrying on collective bargaining with the union, while the Steel Company has recognized the unions, which I assume is tantamount to the same thing." Although he did not look forward to unions "in our own companies," he did not think it "either wise or possible to withstand the pressures from outside for union recognition even though the employees themselves may prefer the present plan" (Rockefeller 1937). As it turned out, and as mentioned earlier in this account, Standard Oil of New Jersey and several other Standard Oil companies were among the relative handful of companies that were able to maintain their employee representation plans at least into the 1960s.


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The unions were particularly concerned about a possible Republican victory because of the highly visible but ultimately futile efforts of the American Liberty League. The du Pont family and their close allies, the Pew family, which owned Sun Oil, gave nearly one million dollars to the Republicans (that's $16.1 million in 2010 dollars) and one-third of the Republican National Finance Committee was identified with the Liberty League (Wolfskill 1962, pp. 205-206). The du Ponts also gave another $350,000 and the Pews an additional $20,000 to the Liberty League and other extremely right-wing groups, with names like the Crusaders, the Sentinels of the Republic, and the Southern Committee to Uphold the Constitution (e.g., Webber 2000, p. 27). This money was used to supplement the Republican campaign in a variety of ways.

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Third, Lewis and Hillman knew that they could not successfully organize large corporations run by ultraconservatives unless Roosevelt won reelection in 1936 and non-Southern Democrats retained enough seats in Congress to fend off a potential pro-employer alliance between Southern Democrats and Northern Republicans. Labor leaders also wanted to elect sympathetic governors and local officials in key industrial states such as Pennsylvania, the home of the steel industry, and Michigan, the center of the automobile industry.