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Lecturer revisits controversial FDR decision

| Sunday, December 7, 2014

Lisa Phillips, associate professor of history at Indiana State University, gave a historical account of President Franklin Delano Roosevelt’s wartime takeover of retail store Montgomery Ward, as part of the Higgins Lunchtime Labor Research, Advocacy & Policy series in the Notre Dame Room of LaFortune Student Center on Friday.

Many of FDR’s New Deal initiatives curbed the power of corporations, which Phillips said partially led to the stock market crash of the 1920’s. This check against big business created tension between corporations and government, especially after World War II.

Leading an anti-regulatory effort against FDR’s policies was Sewell Avery, then chairman of Montgomery Ward, Phillips said.

“What we’ll see after the war is a huge pro-business attack on New Deal regulation,” she said. “I think Sewell Avery represents the first line of that pro-business crusade against this New Deal regulation.”

Avery’s refusal to acknowledge union representation for thousands of Montgomery Ward’s employees drew the ire of FDR, who Phillips said had supported union growth throughout his presidency.

“What Sewell Avery was protesting here was not only abiding by the War Labor Board’s recommendations, but he also simply didn’t want to recognize the union representing Montgomery Ward’s employees,” she said. “He was refusing the union’s existence at all.”

Avery’s resistance to employee unionization and his further refusal to cooperate with FDR’s administration led to his forceful removal from Montgomery Ward, Phillips said.

“FDR’s logic here is that we need to have stability in the industry, and whoever is causing the instability … [must be removed],” she said. “In this case, FDR orders the U.S. Army to remove Sewell Avery physically and take over the operations of Montgomery Ward.”

Phillips said FDR had enough presidential influence and there was enough disapproval of big business to justify such extreme measures.

“The reason that FDR decides to do this is because it’s war time,” she said. “FDR had enough power, and there was enough public outcry to generate this regulatory machinery.”

FDR’s decision to exert presidential power through Sewell Avery’s removal from office demonstrated his fear of business interference with regulatory policies, Phillips said.

“[FDR] feels that if Avery defies what the National War Labor Board’s recommendations are, then every other business owner will become emboldened as well,” she said.

Despite the president’s strong message, Phillips said business owners nevertheless began to express their dissatisfaction.

“They can’t run the business in a way they see fit,” she said. “They have to adhere to what the union says, and they have to agree to what the government is telling them to do in terms of regulating the conditions of wages and work.”

Phillips said businessmen challenged FDR’s New Deal policies by launching public campaigns and lobbying efforts.

“Part of what the business community was doing was to convince the American public that business was the epitome of American democracy in that it needed to spread worldwide,” she said. “[The business community] literally took on an ad campaign through advertising to convey this particular message.

“Campaign finance reform, taxes, tax structure, all of these things, I think, were bolstered through these networks of businessmen.”

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