The Labor Spy

A Survey of Industrial Espionage

By Sidney Howard

First published in The New Republic in 1921


I. Nature and Scope of Industrial Espionage

II. Industrial Harmony

III. The Spy At Work

IV. Weights and Measures

V. Recruiting and Training

VI. The Character of the Spy

VII. Violence


The Labor Spy by Sidney Howard

The Labor Spy

A Survey of Industrial Espionage

By Sidney Howard

IV. Weights and Measures

In the espionage practice of a wise agency, these reports of the spy, such as the man of Racine made, never reach the eyes of the client. The agency chief prefers to extract what Mr. Sherman called "the substance and pith." This process obviously affords opportunity for coloration both protective and dramatic. There was a spy once in the Nonpartisan League organization in Nebraska.* Among other facts concerning his activity, it was shown that his reports had all to be rewritten by his chief because "they contained so little stuff." It is interesting, in a few quotations from these letters of the agency to the client to observe what added value the original has gained and how the original has been turned to meet the immediate requirements of the agency in terms of the client's psychology.

These quotations are, again, selected from the works of John Francis Sherman. They are excerpts from the ex-search Bureau by the Sherman Service, Inc., in the injunction hearings in Philadelphia of something less than a year ago. The occasion has already met our attention: the injunction brought against Tobias Butler of the Butler Industrial Research Bureau by the Sherman Service, Inc. And it is well for us to understand that, in this instance, we deal with the present phase of the Sherman enterprise, with the Sherman Service, Inc., not with the defunct Sherman Detective Agency, with Mr. Sherman as harmonizer and conciliator, who aims "only to do good," not with Sherman, the industrial detective. This, in passing, is of interest, because one object with which the exhibits were submitted was that of illustrating to the court the difference between the present Sherman Service and the industrial detective sort of thing, a difference which seems to have been more clear to Mr. Sherman and to the Philadelphia court in which he won his case than it is to ourselves.

The hearings, for all the sensational material they produced, received practically no publicity. The situation in question in the exhibits is a strike in the plant of a Philadelphia clothing manufacturer. The plant has not since been unionized. The quotations follow with as little comment as need be.

The first begins with a canny recommendation for troubling the union.

Upon visiting the hall early in the morning, very few strikers were found to be present. Of those who were there, the majority were gambling in a back room. Apparently this is once again becoming a practice and believe it might be well if you caused a police officer to visit that hall unexpectedly on any morning, prior to the meeting, presumably in citizen's clothes, and no doubt if evidence of this kind were obtained by the officer it would have tendency of discouraging any further meetings in the hall, and, as a matter of fact, they could be prevented from meeting there for the time being at least.

Then follows a practical touch of harmony:

Arguments were advanced relative to the costliness of clothes, all of which has been brought about directly due to strikes that have been in effect not only in the textile industry, but also in the clothing industry, and they were assured of the fact that 90 per cent of the cost of clothing was directly due to the exorbitant cost of labor.

Furthermore, the conditions that are at the present time prevalent in Europe, due to the Soviet form of government and the activities of the Socialists, Bolshevists, etc., have been emphatically brought to their attention for the purpose of endeavoring to convince them of the fact that a democratic form of government was the only one which proved successful and unless they fell into line and endeavored to bring about a normal state of conditions, there would be considerable hardship caused among the workers in this country.

There have been many arguments brought to the attention of your workers, all of which were calculated to cause them to change their views entirely in your interest.

This is propaganda. For present purposes we are, so to speak, looking a gift horse in the teeth. We have to remember that the arguments in question were advanced by some such individual as observed conditions in the Racine plant, and to weigh the value of his argument in the light of that fact. The agency continues to report the radicalism of a speaker at the meeting.

He made a statement to the effect that you were not civilized, due to the manner in which you had treated your employes in the past, and therefore the Amalgamated organization was going to cause you to become civilized and was going to show you the need of a real democracy in your plant, and that if they were not successful in their efforts in bringing this about, you would no doubt be confronted with a gathering of individuals that would be more radical than the Amalgamated Organization ever thought of being.

This statement will plainly indicate to you the type of individuals that are at the head of this movement and we want to assure you at this time that everything possible is being done to discredit these radicals and to cause the rank and file to realize they are being misled and being led into dangerous ground unless they break away.

He further went on to state that the police in Boston were far more humane than those in Philadelphia, for they had seen the necessity of organization and had actually organized, but had been discriminated against as a result.

Such statements as were made by this individual you can see are extremely radical, particularly in reference to the police strike in Boston. No time has been lost in counteracting the effect that might have been made on the minds of the workers by advising them it was the sentiments of the people that rule this country, and the fact that Governor Coolidge was again elected for another term after he had thrown the striking police officials out of their jobs and had elected others to their places, plainly indicated that the rank and file were in back of the Governor.

Very effective in the eyes of the client, but a more convincing bit of propaganda follows, in which the spy is shown in an attempt to create dissatisfaction with the amount of strike benefit paid to a woman striker:

This woman stated she could not continue to live on nine dollars a week, her dissatisfaction being brought about due to the fact that several of the single girls were receiving eleven dollars. These sentiments were encouraged, and she was urged to put into practice the statement she had made.

Then another radical is encountered and the agency must admit failure:

A worker . . . was found to be extremely radical and upon being taken in hand expressed considerable disappointment over the outcome of the strike to date and efforts were made to cause him to return to his duties. Many arguments were tendered at the time calculated to bring this condition about. However, his radicalism got the upper hand of him and, although he expressed considerable disappointment, remarked he would continue this struggle until it was eventually called off.

It is the boast of detective agencies that much of their most successful propaganda work in strike time is accomplished by visits paid the families of the strikers. The spy assumes any disguise which is likely to admit him to the home. He may be a doctor, the sales agent of vacuum cleaners, an insurance man, a gas man. He tenders "constructive advice,'' which is to say "defaitisme" (defeatism). The demoralization of the striker is thus augmented by the opposition of his wife.

Constructive advice was tendered his family and the superior conditions at your plant were featured as well as the great consideration you have shown your workers up to date in matters pertaining to their welfare. . . . She readily agreed that she had been misled and in the future she would let this occurrence serve as an example of what an organization would do for a worker.

She was assured in the majority of instances strikes held by any organization would not have the interest of the workers at heart, but were simply for the further development of the organization.

In one home the striker himself is encountered by the spy and the same sort of thing is offered him.

. . . He was assured conditions at your plant were becoming normal, and, as a matter of fact, that there was very little room for anyone else, and was advised he would never obtain an accurate statement from any of the leaders who, no doubt, would realize he was on the verge of going back to work and would try to cause him to hold out by telling him many lies for the purpose of impressing upon his mind that there was no one working at the plant, when, as a matter of fact, such was not the case.

He was urged to fully consider the situation and was reminded of his family and was assured he would be doing the right thing by seeking reinstatement without further delay. . . .

The report on these visits closes with a paragraph which, despite discreet obscurity, reassures the client that the agency is doing its utmost on his behalf.

This communication will give you a good idea of what is going on at the present time and, although this letter does not fully cover the many constructive arguments that were advanced, you may rest assured that those we have featured on past communications are being daily brought to the attention of the workers, so that they might be caused to think over such advice that has been given them in order to attune their minds, so that they will break away once and for all time from the hold of the radical organization.**

Then our agitator is rebuked and the agency claims that his activities have ceased.

. . . has been inclined to be somewhat of an agitator and has questioned a number of American girls relative to the wages they were receiving, and in the majority of cases he was politely advised to mind his own business by the individuals whom he questioned. He has been taken in hand and caused to refrain from activities of this kind, being reminded that he is only incurring the displeasure of his co-workers, which sooner or later might cause him considerable embarrassment.

The benefit fund appears again in the following. One of the most efficient activities of the spy in the union during a strike is to wreck the strike relief benefit fund, upon which, of course, the success of the strike so largely depends. If the spy cannot himself have access to the fund, his next policy is to spread discontent and cause the strikers to demand higher benefits than the union is able to pay. He will frequently create the impression that the fund is dishonestly handled by the union officials.

A worker who in the past has been a very rabid striker, has been at last caused to have a change of heart and when engaged in conversation on this day was quite profuse in his appreciation of the advice tendered him in the past, stating that, having followed on the general line of thought given him, he had demanded an increase in strike benefit and upon failing to obtain same on last Wednesday, he had returned to work at the plant, adding, to the best of his knowledge, there had been fourteen others who returned for the same reason.

Whereupon the agency proceeds to describe the other side of the benefit question. The spy in the union has, it would seem, been advising retrenchment in the payment of benefits, and the following passage exhibits the result of this advice.

When the meeting was held in the morning, the greater part of the time was spent in the payment of strike benefits, there being but fifty-three persons who were paid benefits. The policy of retrenchment as per advice tendered,*** was carried out to a great extent. It was noticed that none of the female strikers was paid any benefits... [One of these] was extremely put out over this fact and in company with seven other girls, left the hall highly indignant. Furthermore, any young boys who were present under the age of twenty-one were not given any benefits. This tended to further create dissatisfaction and friction and there were many threats made to the effect that an early return to work was to be expected. You may rest assured that these sentiments were fostered among the various individuals and many were caused to realize that the organization was fast weakening and that there could be no hope of future financial aid. Therefore, it behooved them to set about to call the strike off, and return to their former occupations.

One of the individuals was refused a strike benefit, on the ground that he had not been present at the meetings on each and every day. He was accused of working elsewhere, which was an untruth, but nevertheless, this accusation had the desired effect, for instead of continuing to remain an active striker, in his indignation he started to call the officials 'crooks,' and walked out of the hall quite angrily and proceeded in the general direction of the plant. Prior to his leaving he was encouraged to go and seek reinstatement and this he promised to do.

So much will serve to draw the sketch of the detective agency at its work and in its attitude toward the client who must pay the bills.

Since the actual text of the spy's report is the actual return on the investment he represents, it behooves the intelligent employer to question weights and measures very cooly. The two groups of reports which have been here considered are really of exceptional quality, for they were chosen primarily to illustrate the methods of industrial spying. But an examination even of these will show only two things. On the part of the spy, an ability to record infinite unimportant detail. On the part of the agency, a keen instinct for telling the employer-client what, in the terms of the agency's business, he should most profitably be told.

Beyond this, obviously, the information indicates certain obvious trends of union opinion, gives assurance of the energy of the agency in its anti-strike propaganda, informs on the financial conditions of the striking union, and furnishes the substance of the blacklist. Ethics and social expedience aside, a consideration of these reports in their roper aspect (as part of a substitute for real industrial relations between employer and employee) reveals them as singularly valueless.

You may search hundreds of pages of them without finding anything as significant as the passages quoted above. Here is an example of what one usually finds:

Mr. Ernst: Local No. 300 was called to order at 8 p. m. The reading of the minutes were approved except one alteration.

Conductor, inside sentinel and two trustees were absent.

One member was reported on the sick list, his name was . . . and he was not in need of assistance. There was thirty-four applications and twenty-one of the number was from Allis.

I could not get the names as they were read and same turned over to business agent Wilson.

No reports on committees on candidates.

There were, no candidates balloted on at this meeting.

There was one initiation. No installation or election of officers.

Brother Wilson reported on a scab that is in Houston, Texas, who was a member here. A trial committee was appointed to look up the case.

The usual bills were allowed for the secretary. I could not get the amount of them, they were read off so fast.

There was a communication from Minneapolis requesting the union men not to use some air hammers that arc made where there is a strike on. I forgot the name of the firm.

There was also two communications from the grand lodge on question of holding convention, etc., etc."

The quotation has a certain humor, the more when it is remembered that the man who wrote it was paid for the writing and that the labor policy of the employer who read it was, in some measure at least, governed by the information which it failed to furnish.

But this is not a report of unusual emptiness. A director of Kuppenheimer Bros., clothing manufacturers of Chicago, has spoken feelingly of the futility of espionage, complaining that, in the days when his firm utilized the industrial detective agencies, he had never known a spy's report to contain any information of value. He was "ashamed to show the things to the other directors." We have seen reports furnish the basis for statements made before Congress, reports which were founded on absolute inaccuracy, if not on deliberate lying. The instance of the confidential report made to the United States Steel Corporation on the Interchurch World investigators of the steel strike was notable. It contained scarcely a single fact which could have been substantiated. And the Steel Corporation acted directly upon its text. Lately a spy's report of the National Manufacturers' Association described the personal life and opinions of a certain orderly, if liberal, citizen of New York. Beyond a careful description of the apartment in which he lives, there was not a word of truth in it.

It is not here a question of ethics nor of the efficiency of espionage in destroying the labor union. It is a question, merely, of the common sense of substituting espionage for the direct relationship toward which industry must tend, of depending upon the fruits of espionage for the formulation of any labor policy. The testimony of the Kuppenheimer director is only reinforced by that of his fellows who have abandoned the substitute for the real thing.

One final use to which espionage is turned is propaganda by the employer. The following quotation is from one of a series of bulletins circulated by the mill operators of Passaic a year ago. They were printed in four languages to reach that polyglot working population. The evidences of espionage are too obvious to require comment.

Passaic, N. J., Nov. 20, 1919.


At the A. T. W. of A. Convention in Paterson the financial report rendered showed that they have thirty-two locals with 18,000 members, who paid in over $26,000 from May to September 30, 1919.

But there was only $645 left in the treasury! Furthermore, the report stated that these textile locals owe the Amalgamated Clothing Workers of America $5,000.

During the same Convention it was said that Lawrence was fifty per cent organized and that all other locals were equally organized, except Passaic, which was admitted to be the worst of the lot, having only about ten per cent.

This proves that the Passaic workers have common sense.

In Lawrence there are about 30,000 mill workers, and if, the A. T. A. had half of them in the organization you can readily see that that local alone would have nearly the entire membership which they claim for the thirty-two locals.

Somebody evidently has a poor regard for figures, but facts and figures do not lie.

You remember hearing speakers claim that the A. T. W. of A. sepnt $107,000 in Lawrence. In the Paterson Convention it was officially reported that only $2,000 was spent in Lawrence and that only $4,000 was spent in connection with the Paterson strike.

What do you think of these figures and the speakers, who told you differently?

Be careful what you do with dues!

Workers Intelligence Committee.

Blacklists and false propaganda based upon misinformation lead to prejudice! Could anything be more stimulating to the self-respect of even an ordinarily sinful man than a reading of these reports and their appendices? Nothing, unless it be a contemplation of the manufacturing moron who pays for them and believes them.

The New Republic, March 9, 1921.

*Exposed in the Nonpartisan Leader.

**It may also be noted, in passing, that the detective's vocabulary is quick to catch the flavor of the times. During the war, it shouted the platitudes of patriotism. Since the war, "radical" has become its favorite adjective.

***Italicized in setting


Go to: V. Recruiting and Training.