The New York herald., 1921-01-30
NORFOLK IDEA GOES.
ON FINANCIAL ROCKS.
Plant Taken Over by Labor Is
Thrown Into Bankruptcy
and Sold at Auction.
THEORY is DEFENDED
Union Man Says Big Sums
Were Saved to Workers
by His System.

Special Despatch to THE New YORK HERALD.
NORFOLK, Va. Jan. 29.-Bankruptcy
proceedings against the Crescent Iron
Works to-day brought to an end ''the
Norfolk idea," which gained national at
tention as a panecea for labor troubles
by fighting capital with capital.
The idea came into being last August
when the International Association of
Machinists assumed liability for mort
gage Of $4,000 on the present plant and
operated 1t as n strictly union shop.
Three Norfolk creditors to-day threw the
plant into bankruptcy. and all it's prop
erty, machinery and, fixtures were sold at
auction. The International Association
of Machinists, through It's bank, the
Mount Vernon Savings Bank, bid in the
property for s47.S00 for payment of a
deed of trust it held on the property for
$40. 1000.
1.-THE Norfolk idea" has proved an in
teresting topic for supeculation in all
parts of the country and the plans of
the International Association of Machin-
lists, according totheir secretary, E. c..
Davis. were to try the experiment on the
Pacific coast. Since its failure in Nor
folk, 1t is not known If the original
plans will be carried out.
July 20. 1920. open shop was declared
by Norfolk ironmasters. following a
strike of all members of metal crafts
A strike occurred at the same time in tho
Crescent Machine Works, and labor pro-
ceeded along strategic lines to work out
its experiments.
The outstanding obligations Of the
Crescent were bought UP with capital
furnished by the International Machinists
Association, the money coming from the
ington, which is controlled by tho ma
chinists. Control of the company having
thus been secured, support was furnished
through extension of credit and active
cooperation of affiliated branches of or
ganized labor In explaining the plan
Mr.. Davis said:
Instead of a long struggle. in which
our members each drew So a week in
strike benefits, we succeeded in keeping
them all employed at top wages, the In
dustry in Norfolk was saved an expen-
sive period of inactivity and the city was
saved the loss in trade which would have
resulted"
when the open shop was declared an
Investigation by union leaders disclosed
that an outstanding mortgage of $40, 900
on the Crescent works was few days
overdue. Acting for the union, l at
tempted to buy up the mortgage, but
the bank holding it refused to SELL"
Mr.. Davis said her discovered that
many of the banks depositors were
union men, and he took steps to see that
the deposits of this bank were greatly
reduced. with the result that an offer
to sell the mortgage was made by the
bank.
A showdown with the Crescent man.
agement followed, and the plant was
rpOpaned a STRICTLY nni0n sbon Mr.
Davis says soon after labor took over
the plant Norfolk bankers refused to
advance credit for current transactions
and jobbers refused to sell equipments.
The Machinists Union Immediately de-
posted with banks sufficient funds to
cover immediate needs and met remain
ing problems by arranging with out of
town firms for equipment needed to
complete the work on hand.
One Norfolk bank, however. which
had advanced funds to the Crescent