The Great Depression (35 page)

The last thing that Bennett wanted was a man like Harry Stevens poking his nose into the failings of the free-enterprise system. Certainly the committee was not his idea. It came about as the result of happenstance. In January, the Prime Minister had asked Stevens to fill in for him at the annual convention of the Retail Shoe Merchants and Shoe Manufacturers’ Association to be held in Toronto in the middle of the month.

No doubt he expected the usual platitudes – words of encouragement to the shoe men, forecasts that the Depression would soon be over and business conditions on the mend, praise of the individual enterprise of small business. What he got from Harry Stevens was something quite different – a diatribe against big business, notably chain and department stores, for using their immense buying power as a stick to crush the small entrepreneur and bring about sweatshop conditions.

Stevens hadn’t planned it that way. His original speech was prepared three days before the convention. But after listening to three delegations representing small business, he tore it up. At the last minute, working until three in the morning before taking the train to Toronto, Stevens wrote a new speech that brought him roars of applause and a standing ovation. With one stroke, the maverick Tory lit the fuse that touched off an exhaustive investigation into wages, profits, and conditions in the Depression workplace. It led in the end to Stevens’s break with Bennett, brought about the formation of a new political party, and contributed to the downfall of the Conservatives in the election that followed.

At fifty-five, Harry Stevens was not a typical Conservative. In a later day he would have been called a Red Tory. He was the only small businessman in a Cabinet controlled by big businessmen. He was also an outsider, a Westerner, not part of the Eastern establishment. He had been, variously, a grocer, an accountant, and a broker. Elected to five successive terms in Vancouver, he had bounced back from defeat in 1930 to win a by-election in the Kootenays. In his photographs he looks passive and plump, peering benignly through his rimless spectacles, but he was anything
but passive. A grocer’s son, born in England, he was a Methodist lay preacher and reformer. He had represented a middle-class district for almost twenty years and had a distaste for the corporate world.

“The Conservative party’s prospects for victory would be greatly enhanced if the dollar stamp were less pronounced and if a man’s personal wealth were less used as the yardstick to measure his value,” he had written in 1929. The following year, with the Tories in office, he had the temerity to suggest to Bennett that a council made up of representatives from the political, education, labour, and industrial fields be established to cope with the unemployment situation. The Prime Minister squashed that idea. “Why talk such nonsense,” he said. “Do you think I want a lot of long-haired professors telling me what to do? If I can’t run this country, I will get out.”

Stevens had established himself as a muckraker in 1926 when, in a two-hour speech to the House of Commons, he had helped unravel the customs scandal that almost brought the Liberals down. His
bêtes noires
included Sir Joseph Flavelle, the business magnate who had controlled the Robert Simpson Company, and J.S. McLean, the president of Canada Packers. Both men were clearly very much in Stevens’s mind when he prepared his speech to the shoe manufacturers.

Lurking in the background was the powerful figure of Warren K. Cook, a wealthy Toronto clothing manufacturer with a social conscience. A big, handsome, self-made man, Cook had worked his way up through the rag trade with a line of quality merchandise that he sold to a number of independent outlets. He believed in paying his employees a fair wage (he never had a strike) and in producing well-cut suits using good cloth. As a result he found himself in a cut-throat struggle with his competitors who thrived on sweatshop conditions. He had no love for the department stores that would not take his lines, preferring to sell suits of poorer quality for as low as fifteen dollars. Cook’s prices started at twenty-nine fifty.

Cook was convinced that the large concerns were using their massive buying power to cut prices and to squeeze out small businesses that could no longer compete. The previous year, in his role as president of the Canadian Association of Garment Manufacturers, he had launched an investigation of conditions in
the men’s clothing industry and had chosen two prominent radicals – Harry Cassidy of the University of Toronto and Frank Scott of McGill – to undertake it. These two men supplied Cook with the ammunition to pass on to Stevens, who admonished his audience “to face the evils that have developed like a canker. I warn them that unless they are destroyed they will destroy the system.” Stevens went on to hit the large meat-packing firms, whose mark-ups were breathtaking; the farmer was paid a cent and a half a pound for beef, for example, for which the consumer was charged nineteen cents. Stevens praised the small businessmen of Canada, of whom he was one, and declared that “it will be a sorry day for Canada when these independent citizen-businessmen are crushed out.”

Stevens’s audience loved it; the big Toronto department stores didn’t. The speech, which was heard on the radio, elicited a howl of protest from Eaton’s and Simpson’s. “Don’t let the tremendous weight of advertising in the public press muzzle you,” Stevens had told his audience. Some newspapers, he said, “dare not publish these things or denounce them, because of the advertising office receipts that make it impossible for them to talk.” The truth of that charge was evident the following morning when the
Globe
gave its front page not to Stevens’s speech but to denials by both Eaton’s and Simpson’s.

The department stores took their case to the Prime Minister, who called Stevens into his office and told him to cease and desist. Stevens immediately offered his resignation. Bennett back-pedalled. He had been snowed under by a blizzard of letters supporting his maverick colleague. With an election coming up the following year it was no time to have any minister – especially
this
minister – causing a minor scandal, running around the country claiming that Big Business had muzzled him.

Bennett gave Stevens and Cook what they wanted – a special parliamentary committee with Stevens as chairman to investigate mass buying practices by chain and department stores and labour conditions in industry and the baking and meat-packing fields. The press called it “the most sweeping parliamentary probe into industrial conditions ever attempted in Canada,” and so it was.

The final report of the committee and that of the royal commission that succeeded it together run to 9,278 pages of small type or well over three million words. They provide the most
comprehensive picture we have of working conditions and wage rates in Central Canada in the early thirties. The committee was forthright in its criticisms. Of conditions in the needle trades it had this to say: “We cannot, in frankness, refrain from stating that the labour and wage conditions … are such as to merit the most emphatic condemnation. They should not be tolerated in any state that claims to call itself civilized.… The statistics … have shown us that the worker in the clothing industry can expect neither comfort nor security; in many cases he can, indeed, expect hopeless poverty.”

The food chains also came under bitter condemnation: “Hours of labour … are longer than any worker should be asked to endure. They commonly exceed 60 hours per week and in many stores often reach as high as 80 to 84.… There is no excuse whatever for conditions such as these.”

Day after day a regiment of horrible examples was paraded before the committee. In the tobacco industry, for example, where profits were high and wages below the subsistence level, company executives were rewarded with unbelievably fat salaries and bonuses. The president of Imperial Tobacco earned $25,000 a year plus annual bonuses ranging from $32,000 to $61,000. The company’s twenty-four executives received an average of $15,000 a year. Yet the average weekly earnings of the tobacco worker were less than $11 for a 44.7-hour week. No wonder that Imperial was able to show an annual net profit of just under six million dollars.

The tobacco companies were obviously using the Depression as an excuse to cut wages. In one of the factories, hourly rates shrank by 24 per cent between 1931 and 1933. The president of Macdonald Tobacco, however, managed to scrape by on a mere $260,000 in salary and bonuses, still leaving the company an undivided profit of $594,432.

The five-and-dime stores – Woolworth’s, Kresge’s, Metropolitan – kept their employees on a tight leash by staggering hours and using part-time clerks. The women were kept on call, never knowing when they would be offered work and unable to look for other jobs. In the Metropolitan chain, these women clerks averaged a miserable $4.30 a week – less, in fact, than the value of relief payments in Toronto.

The excuse the five-and-dime executives gave for low wages was their inability to pay more, “much as they desired to.” Yet
one chain in Montreal declared an 80-per-cent stock dividend, while Woolworth’s in 1932 showed a net profit of $1,800,000, every cent of which went back to head office in New York. That same year, thousands of Woolworth’s Canadian employees were hit with a 10-per-cent wage reduction.

In those days, the minimum wage laws applied only to women. As a result, women lost out because so many employers preferred to hire men or boys at a lower rate. In Toronto, the National Picture Frame Company fired seventeen of its female employees and replaced them with men at rates as low as ten cents an hour.

The authorities neglected to enforce laws defining the legal work week for fear more discharged employees would be eligible for relief. The Ontario Factory Act, which dated back to 1884, called for a ten-hour working day and a sixty-hour work week. Yet even this antiquated piece of legislation, “a relic of the dark ages of industrialism,” to quote Harry Cassidy, was ignored. In Toronto, at one Red Indian service station the work week was sixty-four hours, the pay a mere $5.55. A worse example came from the restaurant trade. A restaurant on Spadina Avenue paid its kitchen workers and waitresses wages as low as $6.25 for a work week that ran as high as
one hundred
hours.

In Quebec, the Minimum Wage Act was also contravened. Quebec employers were allowed occasional exemptions, and as the Depression deepened these exemptions increased dramatically – from only 94 in 1931 to 1,067 by 1933. Of the thirty-one establishments studied by Harry Cassidy for Warren K. Cook, twenty-four violated the act anyway. In all these shops more than 95 per cent of the women employees were receiving wages below standard. None dared complain for fear of being fired.

Wages in Toronto were low enough to give the committee members pause. A messenger boy at the famous engraving firm of Rapid Grip and Batten, for instance, was paid five dollars for a fifty-five-hour week. Yet this sum seems princely compared with the miserly sums doled out in the needle trades in French Canada. Cassidy shocked the committee with a series of examples, including the story of a nineteen-year-old girl in Ste Rose who earned two dollars for a fifty-five-hour week.

In effect, he said, bargain hunters in Toronto were living off the avails of sweated labour. “The suits we wear, many of them, have been made in sweatshops under disgraceful conditions,” Cassidy
reported. Then, in a dramatic flourish he produced sixteen weekly pay envelopes received by a woman working in a Toronto shop. Printed on each envelope was a pious admonition by the bank, preaching that thrift leads to financial independence:

Cassidy quietly pointed out that the weekly pay amounts in each envelope ranged between four and eight dollars.

Warren K. Cook appeared before the Stevens committee on March 8 to ride his particular hobby-horse. “Retailers were driven to desperation,” he said, by a price-cutting war between Eaton’s and Simpson’s in the winter of 1932–33. Both stores were selling suits made in Montreal under sweatshop conditions. In most cases, the Toronto retailers simply ordered suits from a contractor in Quebec. He cut the cloth and then subcontracted the piecework to families in rural areas, who worked in their homes for a pittance. Again the committee heard evidence of exploitation.

Four women, with their husbands helping at night, managed together to turn out between two and a half and three dozen pairs of men’s pants in a day. For this they were paid sixty cents a dozen, but five cents of that was deducted for thread. In short, each woman was earning little more than forty cents a day.

There were worse examples. A woman and her daughter managed to turn out a dozen boys’ short pants in a day. For all that work the pair was paid a total of twenty-five cents. The middlemen made as much as the farm women, who toiled far into the night with needle and thread. One Montreal contractor subcontracted men’s pants at eighty cents a dozen. The subcontractor turned the job over to rural housewives who received forty cents a dozen; the subcontractor pocketed the rest.

Under such conditions, Simpson’s was able to pay as little as $13 for a man’s suit and sell it for $16.95 – a price no other retailer except Eaton’s could match – advertising that “Only Simpson’s Could Produce a Sale Like This.” That wasn’t exactly true, since Simpson’s was trying to catch up with Eaton’s, which was already announcing unbelievable bargains. This predatory price cutting resulted in a 10-per-cent wage cut across the board
in all union shops in Toronto. Cook told the committee that “these two alleged bargains meant a reduction in wages to at least ten thousand people. As a result of these two special sales the standard of living of everybody engaged in the clothing business – whether as employers, employees or distributors, was definitely lowered and their purchasing power reduced.”

In June it became the turn for scrutiny of the department stores, who had enjoyed continuing profits while cutting salaries and vacation time. Eaton’s employees, for example, had already lost their annual paid vacations and seven of nine statutory holidays. The store’s 25,000 employees were averaging a mere $970 in annual wages – well below the poverty line – while the company’s forty directors averaged an annual $35,000. Stevens said he could not justify in his mind Simpson’s “handsome mark-up … over 100 percent – yet women are working for $10 and $11 a week.”