Chapter 1: Start-up of the Department and World
War I, 1913-1921
The bill establishing the Department of Labor was signed on March 4, 1913, by President William Howard Taft, the defeated and departing incumbent just hours before Woodrow Wilson took office. Although Taft had misgivings about creating a new Cabinet-level Department, he realized that the new Congress and new President would surely reenact it if he did apply a veto. A Federal Department was the direct product of a half-century campaign by organized labor for a "Voice in the Cabinet." Also, the Department was an indirect product of the Progressive Movement of the early 1900s which promoted the achievement of better working conditions, conservation of natural resources and a host of other goals through both private and government action.
In the words of the organic act establishing the Department of Labor, its main purpose is "to foster, promote and develop the welfare of working people, to improve their working conditions, and to advance their opportunities for profitable employment." Economic and social conditions have changed constantly since 1913 and new statutory responsibilities have greatly expanded the Department's scope and mission. The succinct statement in the organic act remains, however, as the vital core of the Department's activities and the measuring rod against which its accomplishments should be gauged.
Initially the Department consisted of four preexisting bureaus of the old Department of Commerce and Labor. In addition it was authorized to establish a conciliation function to mediate labor disputes. Total staff was 2000 with a budget of $2.33 million. The four bureaus were the Bureau of Labor Statistics, the Bureau of Immigration, the Bureau of Naturalization and the Children's Bureau. The Bureau of Labor Statistics was a well-established organization created in 1884 to collect social and economic statistics and report on matters affecting working people. The Bureau of Immigration, employing 1700 persons, administered laws relating to aliens and, of special importance to the new Department, included a division of information that helped immigrants find jobs. The Bureau of Naturalization administered laws for the naturalization of aliens through the courts. The Children's Bureau, established in 1912, investigated and reported on matters related to the health and welfare of children.
Woodrow Wilson's appointee as the first Secretary of Labor was William B. Wilson (no relation), Secretary-Treasurer of the United Mine Workers of America and later a Congressman who led the legislative drive that created the Department of Labor. In his first annual report Secretary Wilson enunciated a philosophy echoed in various forms by many Secretaries since, namely that: the Department was created "in the interest of the wage earners", but it must be administered in fairness to labor, business and the public at large. After initially being somewhat less than impartial toward organized labor, and paying a heavy political price for it, Wilson made this philosophy the working policy of the Department.
Under Wilson's leadership the Bureaus functioned autonomously and effectively and the Department focused most of its remaining resources on the conciliation function. The Secretary organized a small conciliation service within his own office. Hindered by lack of funds, the service got off to a slow start. However, it built for itself a reputation for competence and impartiality. Requests to intervene in labor disputes around the country began to come in, increasingly so as labor disputes accelerated around 1915. By 1916 the Congress began providing funding specifically for conciliation.
Another early focus of the Department was unemployment. In 1915 the Secretary held a national conference of public employment officials. This resulted in the establishment of a national advisory committee. Siphoning staff and resources off of the Bureau of Immigration's information division and using the 80 or so immigration offices throughout the country as employment offices, the Secretary set up a national employment service. Gradually this gerry-built service, which placed only a few thousand workers in 1915, evolved into a productive national network, finding work for 283,799 in 1917. By that time President Wilson had become convinced of its value and, in the absence of strong congressional support, provided special funds from the Office of the President.
With the entry of the U.S. into World War I on April 5, 1917, adequate war production became a national necessity and labor questions assumed paramount importance. Adding to the crisis atmosphere, labor-management conflicts became widespread as labor shortages and swelling production needs placed organized labor in a strong bargaining position. The insurance of labor peace and adequate production became major national wartime goals.
After four years "on the job" the Department of Labor was prepared to contribute its share to the war effort. In fact, the Bureau of Immigration, in cooperation with several other agencies, took the first step for the U.S. in the war. When it was obvious that war was imminent, Secretary Wilson directed the Bureau to make plans to take custody of the crews of German ships lying in U.S. waters. While they were not to be considered prisoners of war, special provisions had to be made for these men. Everything was left in readiness to proceed at a moment's notice. As soon as the Secretary received word early in the morning of April 5 that the Congress had passed a declaration of war, he sent to the appropriate ports the prearranged message "Proceed instantly". Immediately the German crews were rounded up without incident and dispatched to internment camps.
From that small beginning the Department's role quickly evolved to assuming the major responsibility for implementing the nation's war labor policies and programs. Despite limitations in appropriations, the conciliation and employment services expanded their activities. Secretary Wilson persuaded the President to appoint a mediation commission to investigate labor problems and make recommendations. Wilson was chairman, aided by Felix Frankfurter, who later served on the Supreme Court. After a brief survey of conditions, the mediation commission recommended adoption of the following key elements of a national war labor policy: elimination of war profiteering; recognition of the right of workers to bargain collectively; establishment of machinery to adjust grievances, and; sanctioning of the 8-hour day with overtime pay for any time worked beyond 8 hours.
To implement this policy, a War Labor Administration (WLA) was set up that put the Secretary of Labor in charge of most of the government's war labor programs. The principal component was the War Labor Board, established in April 1918. Composed equally of distinguished members from industry and organized labor, the Board advised the Secretary and adjudicated labor disputes not resolved by the conciliation service. The Board generally followed the mediation commission's recommendations. This policy was dubbed the Magna Carta of labor by Samuel Gompers, president of the American Federation of Labor. Another important component of the WLA was the War Labor Policies Board, headed by Felix Frankfurter. This Board worked with government contract agencies to formulate consistent policies on wages, hours, working conditions, and so on. The Board helped eliminate organizational confusion that was impeding the war effort.
The Department's fledgling employment service assumed a major role in the WLA. It gained support from the President and from organized labor. In a burst of activity the service initiated an ambitious program that included starting a clearing house for female labor, bringing 110,000 workers into the country from Puerto Rico and the Virgin Islands, and enrolling one million workers in a reserve labor force. In early 1918 it began the enormous task of mobilizing 3 million workers for agriculture, ship building and defense plants. In addition, federal war production offices were instructed to hire workers through the service and the President issued a proclamation urging employers to recruit their unskilled laborers in the same way.
A host of other agencies were established within the WLA. A Woman in Industry Service promoted effective employment of women while safeguarding their health and welfare. The WIS was so effective that after the war, at the Secretary's urging, the Congress established a permanent Women's Bureau in the Department. A Division of Negro Economics looked into the problems that resulted when large groups of black workers sought jobs in northern defense plants. The division concentrated on employment questions but also sought to encourage better race relations across the country. This innovative program foreshadowed later federal efforts to promote equal rights for blacks. The Farm Service Division directed thousands of farm workers to areas of labor shortage and included a Boys' Working Reserve to help in local harvests. The Training and Dilution Service helped devise ways of "diluting", i.e. simplifying, skilled jobs so they could be filled by less skilled workers. It then assisted industry in training workers to perform these jobs. A Working Conditions Service promoted workers' safety and health. A Housing and Transportation Bureau was established to help local communities accommodate the influx of war workers. Other agencies promoted worker morale and helped the Department identify and investigate urgent problems as they came up.
It took time to put the whole operation together and achieve any effectiveness. It was the spring of 1918 before the WLA was in full swing. After that point it began to bring coherence to the war labor picture. By the time the war ended in November 1918 the accomplishments of the WLA's brief existence were impressive. A significant period of industrial peace had been achieved. Almost 4 million men had been placed in jobs. Much had been done to raise living standards and improve working conditions. The WLA provided many ideas and models for the New Deal and for the World War II labor program. Furthermore, the Department of Labor, as parent organization of the WLA, had proved its worth and had firmly established itself as an essential element of the Federal Government.
When the war ended, wartime agencies were immediately dismantled. The Nation wanted to put the war, with its sacrifices, privations and violence, quickly behind it. Unfortunately, the aftermath of war, both in the U.S. and in Europe, led to two major labor-related problems that the Labor Department had to deal with. Fortunately, unemployment was not one of them. Despite fears of having millions of job-hungry veterans swamping the labor market, after a brief recession the economy picked up and there were jobs aplenty.
The first big problem was an upsurge in labor-management conflict, which had been suppressed during the war. A strike wave caused great public alarm and threatened to paralyze the rebounding economy. To deal with this Secretary Wilson persuaded the President to call a National Industrial Conference. The conference was held in October 1919. Employer groups, labor unions and the public were equally represented. Unfortunately for labor peace, management refused to agree to a provision endorsing the right of collective bargaining. The labor representatives then withdrew from the conference. A second, smaller conference was held in 1920. At it Secretary Wilson proposed a comprehensive plan to ensure industrial peace, but rejection by Samuel Gompers doomed its chances of success.
The second problem was a nationwide "Red Scare" fanned by fears of revolutions abroad and radical agitators at home, as well as by unscrupulous politicians. Many believed that the strike wave was caused by communists and alien agitators. Ignoring civil rights, Attorney-General A. Mitchell Palmer conducted a series of raids in which he rounded up thousands of "dangerous" aliens. He demanded that they be deported by the Bureau of Immigration. During the war Wilson had fought political pressures to deport various militant labor leaders and now he and his lieutenants resisted, not always successfully, giving in to Palmer's demands. The most spectacular of the "Palmer raids" occurred in January 1920 when more than 4,000 alleged communists were arrested after Palmer obtained warrants from a reluctant Secretary Wilson.
When illness forced Wilson out of the picture for a while, assistant secretary Louis F. Post supervised deportation proceedings. Applying strict legal standards and seeing that defendants' rights were observed, Post began to dismiss most of Palmer's cases against Communist Party members. Post was threatened with impeachment for his pains and when Wilson came back he stoutly defended his assistant. The threat, and the Red Scare hysteria, soon passed and most of those rounded up were set free. Five hundred and fifty six proven Communists were deported.
Ending with the "Red Scare" bang, the Department's first eight years were ones of great accomplishment. Starting as a fragile coalition of bureaus and a spark of a promise to the nation's wage earners, the Department had grown into a stable and essential arm of the Federal Government. Further, it had proven that it could perform well in time of national crisis and that it could stand up for human rights.