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H. Allen

Confidential Company Letter Admits Western Electric
‘Is Making too Much Money,’ but --

Bosses and WLB Deny
Western Electric Workers 10¢ Increase

(August 1942)

From Labor Action, Vol. 6 No. 35, 31 August 1942, pp. 1 & 2.
Transcribed & marked up by Einde O’Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).

On August 18 the War Labor Board rejected the demand of 21,000 Western Electric workers, Kearny, N.J., plant for a general wage increase of ten cents an hour on the ground that such an increase would be “contrary ... to the national program for wage stabilization.” The WLB awarded increases of three to five cents an hour to a section of the workers.

A brief review of the struggles of the workers for the past period graphically exposes, first, the utterly baseless, iniquitous and fraudulent side of the bosses; and, second, the complete futility of workers placing their hopes on the WLB for a fair judgment of their demands.

In hearings which began on April 30 before a panel of the War Labor Board, the Western Electric Employees’ Association (an independent union) called for an over-all wage increase of ten cents an hour from the Western Electric Company in order to meet higher living costs and correct the company’s slow and one-sided method of adjusting wage rates. The company’s proposition was entirely unsatisfactory, with the result that the panel declared it would submit recommendations to the full War Labor Board, with a decision expected by May 20.

1. “Making Too Much Money”

The adamant attitude and “difficult” position of the Western Electric Co. in respect to the wage increase jumps at one as verbatim reports before the War Labor Board hearing are revealed.

As evidence regarding the company’s financial status, the union submitted a copy of the following letter to a private individual from H.B. Thayer, then president of the Western Electric Co., which an investigation by the Federal Communications had revealed:

The Western Electric Co. is making too much money, and at the present time it would be enormously harmful to that company and to our general interests if it were known what its profits were. I trust that there will be no information given out until matters are in better shape.

I think it well for you to destroy this letter.”

2. Taxation by Misrepresentation

In the face of its unquestioned and established ability to pay the proposed ten cents an hour wage increase, the Western Electric Co. had the brass to contend that it was better, more patriotic, to pay, taxes to the government in the “national emergency” than to increase wages. There are no limits, dear brothers, to the duplicity and gall of the PAY-TRIOTEERS when they want to avoid disgorging even a little of their swollen profits to the workers. A second letter of the aforesaid president of the Western Electric company to one of the company stockholders, introduced by the union, punctures holes in this “patriotic” taxation argument of the company, to wit:

The taxation situation in Illinois is getting to be almost impossible. The laws are not clear and the application of them takes the form of legalized blackmail, particularly on the large taxpayers. This law in the state of New York, under which we propose to incorporate, seems to be admirably suited for our purpose. We have wanted for some time to capitalize our surplus, BUT HAVE WANTED TO AVOID THE PUBLICITY OF ‘MELON-CUTTING.’ For obvious reasons we want as little publicity on this proposition as possible, either before or after the event, which is my reason for asking you to consider this in the light of a confidential communication from me.”

Presumably the company must think the workers are pretty gullible or naive, when, on the one hand, it opposes wage increases on the ground that these reduce taxes to the government and – on the other hand – it devises such elaborate schemes and plots to avoid paying taxes.

3. Job Insecurity

Workers cannot afford to forego wage increases in the name of wage stabilization, not only in view :of their present needs and requirements but also because they have no guarantee that they will not be thrown out of work next month or year. This is especially true in the case of the Western Electric workers, as an excerpt from the brief submitted by the union to the WLB on the matter of job insecurity and labor turnover at the Kearny plant of Western Electric demonstrates:

This company has the reputation of wielding as ruthless an ax with respect to jobs as does the headman in Germany who deals with marked victims. The labor turnover at the Kearny works has been greater than in any other manufacturing industry so far as. New Jersey is concerned, and this is the statement, not of the union but of the New Jersey State Department of Labor, The average labor turnover for 1938 in New Jersey was 18 per cent while at the Western Electric, Kearny works, it was 43 per cent.

“In 1930, 22,000 were employed at the Kearny works and in 1933 less than 4,000 were employed. In 1937, the payroll increased to 9,500 and in 1938 the payroll dropped to 5,000. Length of service or rate of pay is no guarantee that an employee will not be affected by the next or future layoff. The tragic implications involved in such discharges are emphasized by the fact that the skills developed by employees on jobs of the Western Electric Co. are of little or no use in outside industry.

“The short employment life of a Western Electric worker at the Kearny plant is an important factor to be considered in any wage adjustment. It would be shocking to one’s sense of justice for the company to be able to take off the cream of prosperous years and leave employees the skimmed milk (and very little of that) during the lean years.”

The Kearny union, is beginning to grasp the “to hell with the workers” attitude of Western Electric, which is only a more crass example of the attitude of the BOSS CLASS everywhere. That class will resort

to any measure – deceit, duplicity, crime – and will use might and main to hold what they have. Harsh experience will show to the Kearny workers, as it shows to other workers, that a strong union and the readiness to use that strength, is necessary to protect their interests to, the extent possible under the capitalist order.

The Kearny workers have just learned what “a sense of justice” means – (1) to the bosses and (2) to the War Labor Board (the government) so far as the workers are concerned. In the last analysis, when the basic economic and political interests of the employers are concerned, the bosses and the government stand together in opposition to the needs and interests of the workers. For the Western Electric workers at Kearny, the WLB’s policy of “wage stabilization” means the continuance of huge profits by the company and a continued low living standard and job insecurity for the employees.


As we go to press a news dispatch, carries the significant announcement by the Western Electric Employees Assn. of Kearny, N.J., that they have refused to participate in ceremonies awarding the Army-Navy “E” to the Western Electric Co. for its war production efforts. The union, in its statement, denounced and gave as a reason for its decision, the company’s failure to maintain fair labor standards. The anti-labor practices of the company, in the name of patriotism and “national unity,” have thus been dramatically exposed by 22,000 workers who demand their rights “at home.”

Simultaneously with this action the union, following a membership meeting, announced that it was petitioning the War Labor Board to reconsider its ruling for a meager 3–5 cents an hour increase to a part of the workers, in view of the unanimous recommendation of the board’s panel for a wage increase of 5–8 cents to a greater number of employees.

The union’s petition says directly that the views of the panel cannot be “so completely overruled by the board without precipitating disturbing feelings of restiveness, uneasiness and general dissatisfaction among so large a number of workers as are involved in this case.” This plain-spoken attitude of the union is a favorable omen. Western Electric workers, too, like increasing numbers of workers elsewhere, are taking note of the peculiar workings of the WLB; for example, where panels of the WLB have proposed more favorable rulings for the workers, only to have the WLB ignore the recommendations.

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