A FAILED FIGHT FOR WORKER-CONSCIOUS GLOBALIZATION: THE CIO RESPONSE TO THE PRIVATE INVESTMENT IMPERATIVE IN US INTERNATIONAL DEVELOPMENT POLICY, 1949-1954 Melanie Sheehan A thesis submitted to the faculty at the University of North Carolina at Chapel Hill in partial fulfillment of the requirements for the degree of Master of Arts in the Department of History Chapel Hill 2019 Approved by: Benjamin C. Waterhouse Erik Gellman Michael Cotey Morgan © 2019 Melanie Sheehan ALL RIGHTS RESERVED ii ABSTRACT Melanie Sheehan: A Failed Fight for Worker-Conscious Globalization: The CIO Response to the Private Investment Imperative in US International Development Policy, 1949-1954 (Under the direction of Benjamin C. Waterhouse) This thesis traces how corporate leaders, industrial labor representatives, and US government officials influenced the formulation of US international economic development policies between 1949 and 1954. It argues that, in the context of an international dollar shortage and the intensification of the Cold War, US government policies favored corporate formulations of international economic expansion over industrial unionists’ alternative, but nevertheless Americanizing, vision of globalization which paid greater heed to wages and working conditions. Congress of Industrial Organizations (CIO) labor representatives welcomed US policies to facilitate the expansion of foreign direct investment (FDI) in developing regions. Yet they insisted that the US government couple such policies with international labor protections to ensure the gains of development benefited workers. The CIO’s inability to place adequate labor protections on the government agenda helped make possible the exploitation of foreign workers by US firms, often as a corporate strategy to reduce labor costs. iii ACKNOWLEDGEMENTS When I began work on this project, I did not foresee writing extensive acknowledgements. Then again, I also did not foresee the literal and figurative year-long journey ahead of me, which touched seven states and saw the incredible generosity of dozens of people. This project would not have been possible without generous funding from the Truman Library Institute, the Eisenhower Foundation, Penn State University Libraries, and Hagley Museum and Library. I am also grateful to the Eisenhower Foundation Host Committee for providing airport transportation, and I owe a particularly enormous debt of gratitude to Mr. and Mrs. Dean and Bernie Nogle for their generous hospitality throughout my time in Abilene. Special thanks also to the wonderful archivists and staff with whom I worked at the Harry S. Truman Presidential Library, the Dwight D. Eisenhower Presidential Library, Penn State University, the National Archives in College Park, the University of College Park at Maryland, and Hagley Museum and Library. I greatly appreciate your diligence, professionalism, and patience. This project would also not have been possible without the support of the History Department faculty at UNC-Chapel Hill. I am indebted to my adviser, Benjamin Waterhouse, for his guidance and commitment at every stage of this project’s development. Among his many contributions, Dr. Waterhouse’s insistence that I consistently consider the larger importance of my research made this thesis far more than it might have otherwise been. I am also grateful to my committee members, Michael Cotey Morgan and Erik Gellman, for their generous willingness to help throughout the thesis process. W. Fitzhugh Brundage also deserves special iv thanks for reading drafts at various points, as well as for offering the gifts of both feedback and time at crucial junctures. Additionally, this project has benefited enormously from my peers at UNC-Chapel Hill and Duke University. Jessica Auer, Robert Colby, Maikel Fariñas Borrego, Ashton Merck, and Joe Stieb read a full draft of the thesis and offered insightful criticisms that helped to improve it immensely. The students of my cohort have also offered feedback throughout the thesis process, and I am especially grateful to Ian Gutgold and Joshua Sipe for reading grant proposals and talking through undeveloped ideas in the project’s earliest stages. I am far more thankful, however, for the friendship my peers have offered through the highs and lows of graduate study. Family and friends outside academia offered a great deal of patience and support. Thank you to James and Anna for hosting me in Washington, DC and for making a potentially mundane research trip a wonderful week spent with family. Thank you also to Vanessa and Amy for always being a phone call away and to Daniel and Pat for making me laugh about anything other than history. My parents deserve an entire acknowledgements section to themselves. They have done more for me than I would ever have space to explain, and I am certain that I could not have written this thesis without their uncompromising support. Everything good in this thesis is as much theirs as it is mine, and all its flaws are mine alone. v TABLE OF CONTENTS List of Abbreviations…………………………………………………………………………….vii Introduction………………………………………………………………………………………..1 Context: The Road to Point IV…………………………………………………………………..11 The Contest over the Act for International Development……………………………………….20 The Gray Commission and Point IV as a Solution to the Dollar Gap Crisis…………………….28 The International Development Advisory Board and Korean War-Era Development Policy…...34 The Randall Report and “Trade, Not Aid” in Eisenhower’s First Term………………………...48 Conclusion: The End of the Dollar Gap…………………………………………………..……..62 Bibliography……………………………………………………………………………………..70 vi LIST OF ABBREVIATIONS AFL American Federation of Labor AFL-CIO American Federation of Labor-Congress of Industrial Organizations CED Committee for Economic Development CIO Congress of Industrial Organizations CTM Confederación de Trabajadores de México ECA Economic Cooperation Administration ERP European Recovery Program FDI Foreign Direct Investment GATT General Agreement on Tariffs and Trade ICA International Cooperation Administration ICFTU International Confederation of Free Trade Unions IDAB International Development Advisory Board ILO International Labor Organization IMF International Monetary Fund NAC National Advisory Council on International Monetary and Financial Affairs NAM National Association of Manufacturers NFTC National Foreign Trade Council TUC British Trade Unions’ Congress UAW United Auto Workers USW United Steelworkers of America WFTU World Federation of Trade Unions vii INTRODUCTION In late May 1951, Ernst Schwartz of the United Packinghouse Workers traveled to Mexico City for a three-week meeting of the United Nations’ Economic Commission on Latin America. He spent the next three weeks “attempt(ing)…from my sickroom” in a Mexican hospital to have the conference papers sent to him, having fallen acutely ill immediately upon his arrival. With assistance from international trade union officials, however, Schwartz managed to piece together a sufficient understanding of the meeting’s proceedings to submit a report on the conference to Mike Ross, the director of the Department for International Affairs of the Congress of Industrial Organizations (CIO). Schwartz reported that, much to the frustration of Latin American delegates, US Assistant Secretary of State for American Republic Affairs Edward G. Miller made clear that the encouragement of private investment rather than large-scale foreign aid would define US economic development policies toward Latin America. Private interests should, in Miller’s view, “be granted full freedom” to develop Latin America as they saw fit to maximize production. Given the region’s rich resources, Miller suggested investors would likely expand the economy most effectively through raw material development, and he criticized tariffs erected to protect burgeoning Latin American industries on the grounds that specialization and trade would most efficiently promote international growth. Miller’s recommendations flew in the face of the expressed desires of the Latin American delegates present, who sought to diversify their national economies to escape their dependence on commodity exports. Frustrated with the United States’ push “for all-out production of raw materials” during the Korean War, they criticized the United 1 States’ “meager” foreign aid appropriations and demanded greater assistance for industrial development. Overall, Schwartz offered a mixed assessment of the conference. He saw “much” that “should be welcomed by labor.” While not rejecting Miller’s stance on private investment outright, he did note “the demand for national planning” and “for restriction of private enterprise and investment to fields suitable to both” as positive developments. He also praised the conference discussions on “better distribution of income,” “just taxation and land reform,” and the elimination of “discriminatory practices.” Yet while he took some comfort in “the repeated assertion” that economic development “must serve the people,” Schwartz expressed concern that “the central position of labor and the human factor were far from being fully understood and appreciated.” Delegates from both the United States and Latin America had devised strategies to promote economic growth. In his view, though, the problems delegates sought to address “only can have meaning while constantly considered in relation to increasing the welfare of the large majority of people represented by labor.” He thus stressed that government planners needed to focus on