The labor movement received a big boost during World War I. However, unions lost some momentum after the war as nation went into a recession. Industry on the other hand came up with strategies to counter act the union movement. One of these was the American Plan. The plan had its origins from the labor turmoil of World War I and was first adopted in November 1919 by the metal trades. In time, the Industrial Relation Association of California got behind the movement. It recognized that the model had to be flexible, since there were many variables between industries.
The plan deemed unions a nuisance—a barrier between the employer and the employee. In the simplest of terms, both the employer and employee had to maintain certain obligations. For the employer, one of the critical factors was to design its business wherein the employee was guaranteed steady employment.
In 1921, the Red River Lumber Company adopted the American Plan as a way to stave off the union movement. Actually, during the 1920s Red River’s labor issues were nominal. By the end of the decade, things changed. It was not just from Red River’s own financial turmoil, but the lumber market was headed in a downward
spiral, even before the stock market crash of 1929. Like many lumber operations, Red River was forced to curtail operations. On July 28, 1930, Red River reduced wages by 15% and adopted a five-day week, with an eight hour working day. Red River did make a concession for its employees. It reduced the rents in Westwood accordingly and board at logging camps was reduced to $1.25 a day.
The American Plan at Red River was put to the ultimate test, but circumstances were overwhelming. Red River sought other solutions and company would experience labor turmoils during the 1930s.