Gibson Guitar and the Resurrected Blue Eagle

By: September 01, 2011

In April, 1934, a 49 year old Polish immigrant, Jacob Maged, who had been operating a one man tailor and cleaning shop in Jersey City, New Jersey, was jailed for three days and fined $100. His crime? He had refused to comply with the National Recovery Administration’s “code of fair competition,” which dictated that no one in the cleaning business could charge less than 40 cents for pressing a suit.

The codes had been drawn up by the larger drying and cleaning businesses, in cooperation with the bureaucrats operating under the control of Hugh Johnson, the hard drinking profane administrator of the agency authorized by Franklin Roosevelt to implement the National Industrial Recovery Act, one of the cornerstones of the First New Deal. Compliance with the codes was signfied by the placement of a placard with a Blue Eagle–the symbol of the power of the NRA–displayed in the windows of businesses that voluntarily agreed to accept the codes.

For those independent businessmen who refused to voluntarily comply with the code, it was tough luck. The law allowed the Federal Government to imprison and impose stiff fines on “ruthless competitors” like Mr. Maged who wouldn’t play ball. The uncooperative Maged insisted on charging 35 cents –a pricing policy that had kept him in business for 22 years–and Hugh Johnson and his local minions were upset. How dare this independent operator defy the authority of the Federal Government? As a reward for his defiance, Mr. Maged, who was barely making a living to begin with, was jailed for 3 days and fined $100. He only earned his freedom by meekly accepting the government’s pricing rules.

Last week, when agents of the Federal Government raided the Nashville, Tennessee plant of Gibson Guitar, the premier guitar manufacturer in the world, memories of similar tactics of intimidation designed to force independent businesses into compliance came to mind. The circumstances were significantly different, but the tactics were the same.

Unlike Mr. Maged, who had openly defied the NRA rules, Gibson CEO Henry Juszkiewicz has publicly stated he’s trying to comply with the business codes imposed by the Federal Government. While the NRA rules were ultimately determined to be unconstitutional by the Supreme Court in the unanimous 1935 Schechter Poultry decision, no such challenge has been brought against the law which the Department of Justice claims Gibson has violated.

According to the Department of Justice, Gibson in 2009 illegally purchased ebony wood in Madagascar. The protectionist and corrupt government of Madagascar has decreed that only ebony finished goods can be purchased from their country, and Gibson, so it is claimed, purchased unfinished ebony wood purchased in Madagascar. The raid, which Gibson’s Juszkiewicz said has already cost the company over $2 million, was apparently designed to find evidence of unfinished ebony, and documentation that Gibson knew that the unfinished ebony was purchased in Madagascar illegally.

Why was this illegal? Because in 2008, Congress passed the Food Conservation and Energy Act of 2008,  a law that President Bush signed updating the 1900 Lacey Act that made it illegal to purchase bird feathers in violation of local law. Now, wood cannot be purchased in violation of local law. The United States Department of Agriculture website describes the law in more detail

The Federal Government, in effect, has decided to become the enforcement agency working on behalf of the protectionist policies of the Madagascar and Indian Governments.

Just as the NRA used the threat of imprisonment to reign in independent businessmen during the NRA era, today, the Department of Justice is using the same threat to intimidate regular workers. As the Wall Street Journal reported:

Federal agents first raided Gibson factories in November 2009 and were back again Aug. 24, seizing guitars, wood and electronic records. Gene Nix, a wood product engineer at Gibson, was questioned by agents after the first raid and told he could face five years in jail.

 Mr. Nix went to Madagascar in June 2008 on a trip organized by environmental groups to talk to local officials about selling responsibly harvested wood to makers of musical instruments. Afterward, in emails later seized by the government, he referred to “widespread corruption and theft of valuable woods” and the possibility of buying ebony and rosewood from Madagascar on “the grey market.”

Though the legal basis for this intimidation is different than that which justified actions taken against Mr. Maged almost eight decades ago, the motivation remains the same. Obama’s Department of Justice, like FDR and Hugh Johnson’s NRA, is motivated by an insatiable desire to require submission from those businesses it doesn’t like, and has little regard for their liberties.

Michael Patrick Leahy is the editor of the Voices of the Tea Party e-book series and co-founder of Top Conservatives on Twitter and the Nationwide Tea Party Coalition. His new  e-book, I, Light Bulb: A Death Row Testimonial, was published earlier this week. His new book, Covenant of Liberty: The Ideological Origins of the Tea Party Movement, will be published by Broadside Books in spring, 2012. He can be reached on Twitter at @michaelpleahy .

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