The Birth of Federal Prisons Industries
The new Federal Bureau of Prisons could not have achieved its goals of reforming Federal prisons without having a system of inmate work programs in place. But with the economy mired in the Great Depression and the passage of more laws that prohibit the sale of prison-made goods, inmate idleness was looming as a serious threat. James Bennett found that some wardens were so desperate to find tasks to keep inmates busy that they resorted to make - work assignments, such as having prisoners keep salt shakers in straight lines on mess hall tables. Bennett attributed the rash of prison disturbances in the early 1930's to the lack of meaningful work programs.
In order to keep inmates busy, prison administrators would have to create work assignments. The challenge was finding enough work assignments to go around. During the 1930's, the BOP developed four basic categories of work assignments for inmates:
None of the categories by itself could employ all inmates who needed work. Having a variety of job options for inmates, however, helped ensure that there would be enough work for everyone to do - not merely digging ditches and filling them in again, but realistic assignments, with established procedures, regular hours, and definite goals.
At the heart of the work program was prison industries. This was the most difficult to implement, but it made everything else possible. It could employ a large enough percentage of the inmate population to take pressure off other work categories and make it unnecessary to dilute job assignments. Further, prison industries could provide skills training and, hence, was rehabilitative by nature. Finally, it could generate financial support for educational and recreational programs and pay modest inmate wages, thereby easing burdens on the taxpayers. But in the early years of the BOP, there remained powerful opposition to prison industrial programs from labor unions and business interests.
In order to create work programs necessary for prison safety and inmate rehabilitation while avoiding the alienation of labor and business, Bureau of Prisons Director Sanford Bates and Assistant Director Bennett devised plans for Federal Prison Industries, Incorporated. FPI was designed so that it would not interfere significantly with private industry and would involve minimal taxpayer support. The rudiments of the plan for FPI were as follows:
1. Federal Prison Industries, Inc., would make products for sale only to the Federal Government; it would not compete against private sector companies in any other market. The so-called "state-use" system had first appeared in the l9th century but had never before been attempted on such a scale.
2. FPI would be sufficiently diversified so as to avoid having an undue impact
on any particular industry. Not only would the corporation be limited to one
market-the Federal Government-but also within that market it would never be
able to sell more than a certain, minimal percentage of merchandise in any
product area. Moreover, FPI's suppliers would be private, so FPI programs actually
would generate business for private companies, rather than take it away.
4. Industrial work would be an important rehabilitative activity by giving inmates experience in various skilled trades and teaching them good work habits.
5. Inmates would be paid for their labor out of the Corporation's revenues; the inmates could use their stipends to purchase goods from the institution commissary, to help support their families, or to pay fines or restitution. Not only would those inmates who worked in FPI factories receive pay, but FPI proceeds would also be used to pay inmates in other work categories (such as farming and institutional support), albeit at lower pay scales.
6. The profits from FPI sales would go into a revolving fund that would finance all industrial operations (including capital improvements) and also help subsidize programs for inmates. Thus, the financial basis for FPI had the advantage of requiring no additional burdens on taxpayers. A unique, intra-governmental multiplier effect came into play. Government money spent by an agency on FPI-made furniture, for instance, also offset prison expenses. The Government, in other words, got more value for its money; of course, that same money eventually passed back into the national economy, in the form of staff salaries, inmate wages, and payments to private sector vendors.
When legislation authorizing the creation of Federal Prison Industries, Inc., was introduced in Congress, however, the American Federation of Labor (AFL) immediately voiced its opposition. President Franklin D. Roosevelt took a h2, personal interest in the matter, and one rainy morning in 1934, called Director Bates and AFL President William Green to the Oval Office. According to Bates' memoirs, Roosevelt greeted the labor leader with a hearty "Hello, Bill," and said "we have a little problem here that we want you to solve for us." Bates recalled that "I caught up my breath in amazement at this manner of approach."
During the meeting, Bates and Roosevelt were able to draw out Green's objections to the proposed legislation as well as his suggestions for improvement, and, ultimately, the American Federation of Labor withdrew its opposition. Emphasis on the "state-use" system had overcome the skepticism of organized labor. (Subsequently, AFL Vice President Thomas Rickert became a charter member of FPI's Board of Directors. Later, William Green's successor as AFL President, George Meany, also served as an FPI Board member.)
On June 23, 1934, President Roosevelt signed the law that authorized the establishment of Federal Prison Industries, and on December 11, 1934, he issued Executive Order 6917, which formally created FPI. FPI officially commenced operations on January 1, 1935.