In the wake of the Ludlow Massacre in the Colorado minefields of 1917, John D. Rockefeller, Jr. created an organization to foster improved employer/employee relations. In 1926, the organization became a non-profit research and consulting organization known as IRC (Industrial Relations Counselors, Inc.).
An examination of the ideas in IRC’s first (1926) consulting report for the Ohio Oil Company reveal many themes that remain current today; they include:
- The importance of human resources (employees) to organizational effectiveness and competitive advantage
- The need to position the HR function to have clout comparable to that of other business functions
- The difficulty and importance of managing change and the need to balance both technical and social/psychological factors
- Adoption of a “stakeholder” view of the employment relationship; that is, intelligent management requires taking appropriate cognizance of the interests of employees, suppliers, the community, shareholders, etc.
- Recognition that there is no one-size-fits-all approach to managing the employment relationship; different approaches are appropriate for different organizations at different times and entail continuous learning and adjustment
IRC’s mission was and still is “to advance the knowledge and practice of human relationships in industry, commerce, education, and government.” After several decades, IRC spun off its consulting component, ORC Worldwide (acquired by Mercer in 2010).
In 2015, IRC was renamed Innovation Resource Center for Human Resources (IRC4HR), in recognition of its role as a source for innovation and practical insights that advance the interests of people and organizations by promoting a more productive, engaging, and rewarding workplace.
Representation is a principle which is fundamentally just and vital to the successful conduct of industry… Surely it is not consistent for us as Americans to demand democracy in government and practice autocracy in industry… With the developments in industry what they are today there is sure to come a progressive evolution from autocratic single control, whether by capital, labor, or the state, to democratic co-operative control by all three.
Three years before making this statement, John D. Rockefeller, Jr., scion of the wealthiest family in the world, had fleshed out his philosophy of workplace management in an article in The Atlantic Monthly. In it, he called for the equitable distribution of the fruits of industry.
In the next decade, he would go on to spearhead the development of the field of industrial relations at a host of prestigious universities, underwrite the trailblazing management consulting research of Industrial Relations Counselors, and come to be regarded as a friend and even a champion of sensible, balanced relationships with labor.
And yet, as late as 1915, he was frequently decried as a ruthless industrialist, coldheartedly detached from the often harsh realities faced by the workers in his factories and mines. In the words of Helen Keller, he was “the monster of capitalism.”
What led to such a radical transformation in the public image and personal outlook of this remarkable captain of industry? The answer is Ludlow.
On April 20, 1914, gunfire flew over a plain in southern Colorado. By the end of the day, scores of people had been wounded or killed, including many women and children. This tragedy, which came to be known as the Ludlow Massacre, was a signal event in the history of modern industrial relations.
Between 1870 and 1914, immigrants from Italy, Greece, Poland, Russia, and other European nations, searching for steady work and wages, joined a pool of native American workers in the Colorado coal fields near the town of Trinidad. Many of them were employed by the Colorado Fuel & Iron Company (CF&I), a property of the Rockefeller family in New York City.
At CF&I and other coal firms, the men worked for an average of $1.68 a day, digging coal by pick and shovel. Often the miners were paid in scrip, which was redeemable only in company stores that charged inflated prices. There was no pay for “dead work,” such as timbering mineshafts before the coal could be mined. The miners’ families lived in ramshackle two-room houses rented at high rates from the mining companies, which also controlled the local schools and libraries.
Inside the mines, death often came without warning,” according to Silvio Caputo, author of The Death of Spring, a book about the Ludlow Massacre. “Explosions were common in Colorado, which had one of the worst safety records in the country. Between 1902 and 1917, 474 miners were killed in 12 different explosions.
Through the United Mine Workers of America (UMW), the miners in southern Colorado demanded a 10 percent pay increase, an eight-hour workday, freedom to trade at any store and to live in any boarding house, and the right to elect the men who weighed the coal. Previously—in 1883, 1893, and 1903—strikes had been violently suppressed by strikebreakers, militia, and armed guards. The local management of CF&I refused to recognize the union, and on September 23, 1913, about 10,000 men, representing about 70 percent of the workforce, walked off their jobs, which meant they also had to leave their company- owned homes. For shelter from the approaching winter weather, they headed with their families for a nearby plain, where the United Mine Workers of America (UMW) had established five tent colonies. Ludlow was one of them.
CF&I’s local operations at the time were headed by LaMont Montgomery Bowers, chairman of the company’s board of directors. Like most of his peers at the turn of the 20th century, Bowers equated the Wobblies—the Industrial Workers of the World—with anarchists and socialists and saw them as a threat to American society. Charged with maintaining profitability at CF&I, he was convinced that the successful execution of his task would benefit not only the company, but ultimately the entire economy and nation as well.
The coal operators in Colorado hired the Baldwin-Felts Detective Agency to fight the UMW. These detectives were given deputy status and armed by the local sheriffs. Gun battles, some with fatal results, frequently took place because many of the miners were armed as well.
In October 1913, an automobile equipped with three-inch steel plating and two machine guns, nicknamed “the Death Special,” was brought in to spray bullets at the striking miners.
Later that month, Governor Elias Ammons of Colorado ordered his state’s National Guard to police the area.General John Chase was put in charge of more than 1,000 troops. Many of the soldiers, however, were antagonistic to the strikers and harassed them. A subsequent investigation by the Colorado State Legislature’s House Subcommittee on Mines and Mining led to the withdrawal of all but 200 troops from the southern Colorado coal fields in February 1914. Nonetheless, tensions persisted.
Meanwhile, John D. Rockefeller, Jr., saw his role solely as that of a stockholder. He firmly believed at the time that local management should be allowed to make daily operational decisions without interference from New York. In March 1914, he was called to appear before a committee of the U.S. Congress investigating the Colorado strike. And on April 6, 1914, he testified that he had never spoken with any of the CF&I miners nor attempted to personally look into the work or living conditions at the company.
Who or which side fired the first shot on April 20, 1914, is unknown. But a fierce battle against the 1,500 to 2,000 men, women, and children housed in the Ludlow tent colony ensued. To protect themselves from flying bullets, many of the strikers and their families took refuge in bunkers that had been dug beneath the floorboards of the tents. This proved a fatal move when guardsmen began setting fire to the tents. By the end of the day, 40 people were dead and countless more were wounded. The next day, however, the bodies of an additional 13 victims were discovered: Two women and 11 children had burned to death or suffocated in the makeshift cellar beneath their tent. The public was outraged.
Hoping to prevent further violence, President Woodrow Wilson ordered federal troops into the area. Meanwhile, in New York, picketers led by the socialist author Upton Sinclair protested in front of the headquarters of the Rockefeller business empire at 26 Broadway.
From Conservatism to Progressive Reform
Like his father, John D. Rockefeller, Jr., was a traditional 19th-century conservative. The only son of the wealthiest man in the world, he need never to have lacked for material possessions. But despite his privileged position, his upbringing was in an austere Baptist manner, with a strict work ethic. There was no drinking of alcoholic beverages, or dancing, smoking, card playing, or even reading of the Sunday papers in the Rockefeller household. The elder Rockefeller made all his children, including his son, submit a weekly written account for every penny they spent. It wasn’t until the younger Rockefeller was a student at Brown University that he first danced and attended a theatrical performance. All the while, as an undergraduate he continued to teach Sunday school at the Providence Baptist Church.
During his years at Brown, however, Rockefeller Jr. opened up to alternative and more ecumenical points of view. In Titan: The Life of John D. Rockefeller, Sr., biographer Ron Chernow notes that a course in practical ethics gave the young Rockefeller “a finer appreciation for employer responsibility in big business” and that in one essay he “evinced the proclivity for corporate reform that would mark his adult life.” In that essay, Rockefeller the student wrote: “Who can look about upon the millions of laborers whose life is a treadmill, a continuous round of work to which they are driven by dire necessity…without being fired with a desire to revolutionize their condition by adopting the profit-sharing system?”
Like many of his peers in business and industry, the elder Rockefeller, however, “felt that employment was a charity to workers; [he also believed that] faced with unions, captains of industry were justified in taking strict countermeasures,” according to Peter Collier and David Horowitz, authors of The Rockefellers: An American Dynasty.
When the son entered the family business after graduation, he was steadfast in his “decision to subordinate his life to his father’s,” wrote Chernow.
According to Frederick T. Gates, a former Baptist minister who, along with the younger Rockefeller, was responsible for John D. Rockefeller, Sr.’s personal investments and philanthropic activities, Junior’s “whole conduct of life [was] governed by the purpose… of rehabilitating his father’s public reputation.”
Philanthropic work appealed to the younger Rockefeller, who had been disturbed by the antitrust scandals rocking the petroleum industry and besmirching his family’s name. In 1910, he retired as a director of Standard Oil so that he could work full time on philanthropy as head of the Rockefeller Foundation. “To purify himself from all business ties, Junior also retired at the same time from the Board of U.S. Steel,” wrote Chernow. “He had ended his relations with every company except for American Linseed and the one company, ironically, that would defile his name: the Colorado Fuel and Iron Company.”
At this time, he “caught the bracing spirit of Progressive reform,” continued Chernow. “The Progressive movement favored peaceful, incremental change and was infused with unimpeachable ideals: that people should be healthier and better educated and that government should operate in a businesslike manner…. For someone like Junior, who shrank from venomous words and violent confrontation, such clean government promised to transcend the bruising partisan politics that had sullied his father’s reputation.”
What impact could the horrific events at the Ludlow tent colony possibly have had on the young Rockefeller? On the one hand, he felt he had to staunchly support his local managers and thereby uphold the conservative business values of both his clan and his class. On the other, the tragedy in Colorado was all too real for him to ignore.
Stinging from criticism that he had done nothing to help settle the dispute or prevent the disaster, he resolved to take steps that would keep another such catastrophe from happening in the future. In the short term, he also recognized the importance of taking positive steps to present a proactive, positive image of his family.