Economics: The Stakes of Power
Initially, the upstart industrial unions were seriously frustrated in their efforts during the latter half of the Depression decade because none of the corporate giants were particularly anxious to give in to union demands, sign binding contracts, or agree to the closed shop. 1 Then came two pivotal victories for the CIO early in 1937, first at General Motors and soon thereafter at the U.S. Steel Corporation—each of which occurred before the Supreme Court's validation of the Wagner Act. In both cases, certain fundamental competitive considerations at a particularly crucial juncture in the continually evolving circumstances that combine to determine a company's overall business prospects appear finally to have made "capitulation" to organized labor a much more practical, economically sound management decision than one that might have entailed a long and costly work stoppage, involving large losses in production and sales. Even so, no other major corporate figure during the period acquiesced to industrial unionism as readily as Gerard Swope of General Electric. With the possible exception of a less frequently noted display of "constructive accommodation" 2 by U.S. Rubber's similarly inclined director of industrial relations, Cyrus S. Ching, Swope's celebrated willingness to reach a quick, companywide agreement with the United Electrical Workers in April 1938 may have been the purest manifestation of management's general, if usually rather vague and uncertain, preference throughout much of the durable and capital goods sector of the economy for the vertical form of labor organization. Any effort to uncover some overall pattern amid the various forces and events that led to one or another company's recognition of "big labor" from roughly 1936 to the beginning of World War II, however, need not stand or fall solely on the basis of that tenuous explanatory link. A much more fruitful, if largely circumstantial, body of evidence points to the probable significance of a natural inclination among the managers of such establishments, once the moment of truth was reached, to accept the lesser of two evils and take the course of action that would allow them to escape the potentially disastrous effects of a major strike.